CMA CGM and MSC Beat a Path to India Following in Maersk’s Footsteps
India’s efforts to become a world class shipbuilder are taking additional steps forward with media reports that executives from both MSC Mediterranean Shipping Company and CMA CGM Group are holding talks with the industry. It follows the news yesterday, February 17, that Maersk has entered into an agreement with Cochin Shipyard first for repairs of smaller vessels of the fleet and targeting shipbuilding.
Indian Prime Minister Narendra Modi last month spoke of the value of the planned investments into the sector and expected boosts to the economy. He has called for a mega cluster to focus on shipbuilding to take the country to a top 10 shipbuilding by the end of the decade and a top 5 by 2047. Modi said the business could be worth $62 billion by 2047.
The new budget for the country includes a Maritime Development Fund to provide financial assistance and level the costs for India’s shipbuilders to make the industry more competitive. They also provided a concept to leverage India’s well-established ship recycling operations primarily at Alang to attract newbuild business. The budget calls for a credit for shipowners that recycle vessels in India that would be applied to the cost of newbuilds at the Indian shipyards. A 10-year extension till 2025 was also provided on the duty charged on raw materials, components, and parts used in the manufacture of ships.
Modi and Macron received a presentation from Saadé at CMA CGM's Fleet Center (PM Modi)
During his visit to Europe, Modi met with French President Emmanuel Macron at the CMA CGM Group headquarters in Marseille. He also discussed issues with group Chairman and CEO Rodolphe Saadé. CMA CGM highlighted its 34 years of operations in India and Saadé made a presentation and provided a tour of the group’s fleet center.
India media is reporting that Saadé told Modi that CMA CGM was committed to sending a “study team” to look at the shipbuilding capabilities and repair opportunities. They also reportedly agreed to explore registering some ships in India.
The Indian media outlet ET Infra is reporting Christine Cabau Woehrel, Executive Vice-President for Assets and Operations, CMA CGM Group, will visit India this week to explore potential opportunities for shipbuilding and repairs in the country. It is also quoting sources that CMA CGM will sign a similar memorandum of understanding to the one Maersk announced yesterday. CMA CGM and Cochin will according to the report announce plans for ship repairs and newbuilding following Maersk’s lead.
Toft meeting with India's Minister of Commerce and Industry (Piyush Goyal on X)
India’s Minister of Commerce and Industry, Piyush Goyal, posted messages on X this week showing a meeting with Soren Toft, Chief Executive of MSC Mediterranean Shipping Company. He wrote that they had a productive meeting discussing the vast growth potential in India’s shipping and logistics sector, focusing on investments in inland container terminals, shipbuilding, maintenance, and container manufacturing. He said the talks centered around “deep-sea vessel partnerships and policy reforms to enhance the nation’s global maritime competitiveness while fostering growth, innovation and self-reliance in the sector.”
The state-owned Cochin Shipyard is seen as the first beneficiary of the new interest because it is the only yard with a 300-meter dry dock according to ET Infra. However, it notes that Swan Defense and Heavy Industries is also expected to meet with CMA CGM. Another yard, L&T Shipbuilding (Larsen & Toubro) also broke into the international market in the past few years, first winning maintenance contracts for U.S. Navy support ships and recently from the UK Royal Fleet Auxiliary.
Indian shipbuilders have built smaller, specialized ships for Europeans. Maersk is set to start the next level with its agreement which calls for wet dock repairs for ships up to 7,000 TEU and dry dock for ships up to 4,000 TEU. Maersk said plans were underway for the first project to start in 2025.