Seatrade Maritime: Indian shipbuilding forges ahead with $2bn nod from HD Hyundai

HD Hyundai plans to invest up to $2bn in the development of a new shipyard in India, according to reports, as the company signed a  partnership with local government on shipyard development and operation.

The South Korean chaebol’s partnership with Tamil Nadu state to build a new shipyard is a major step forward in the country’s drive to become a top-10 shipbuilding nation by 2030, and to reach the top five by 2047.

The Indian Government’s Maritime Amrit Kaal Vision 2047 requires not only expansion of existing facilities  such as Cochin Shipyard, which has just won a four-ship order from Svitzer for electric tugs, but also entirely new shipyards built from scratch. 

However, the investment is also part of a much broader South Korean strategy to expand across a range of industrial sectors in what is now the world’s most populous country. Major Korean companies including Hyundai Motor and Samsung Electronics have already established major facilities in the Thoothukudi region of Tamil Nadu. 

The state is one of five regions that have been shortlisted for new shipyard construction. They include Gujarat and Andhra Pradesh. But HD Hyundai’s commitment to Tamil Nadu state could prove to be a key strategic winner. The company has highlighted the Thoothukudi region’s climatic conditions, similar to its Ulsan headquarters in Korea, and its proximity to other maritime developments nearby.  

The shipbuilding deal follows the signing of a Memorandum of Understanding by HD Hyundai and Indian state enterprise, Bharat Earth Movers Limited, earlier this month. The companies plan to break what is seen as the monopoly held by China’s ZMPC group in the provision of heavy cranes for Indian port facilities, industrial sectors, and shipyards.  

Earlier this year, HD Hyundai signed another MoU with Cochin Shipyard. The two parties plan to collaborate on ship design, supply chain management, labour resources and manufacturing efficiency.  

Nevertheless, for India to break into the top ten of shipbuilding nations within four years presents a huge challenge. Different sources currently pitch the country at between sixteenth and twenty-second in the global shipbuilding league, holding a world share of well below 1%.  

Yet analysts point to the surging scale of international investment in Indian infrastructure. Examples include Maersk’s $2bn commitment to expand APM Terminals in Pipavav; DP World’s $5bn to develop sustainable coastal shipping, shipbuilding and ship repair facilities; and MSC’s plans to transfer 12 ships to the Indian registry.