South Korea’s HD Hyundai Heavy Industries is likely to opt out of a proposed ₹4,000 crore block fabrication joint venture with Cochin Shipyard Ltd (CSL), with the state-owned shipbuilder now planning to develop the facility on its own, according to industry sources.
The proposed facility, planned on land leased from the Cochin Port Authority and the Kerala government, is intended to support the third dry dock being developed by CSL at Kochi.
Sources said HD Hyundai Heavy Industries has “almost” decided against participating in the project as it is focusing on establishing a $4 billion greenfield shipyard at Thoothukudi in Tamil Nadu, with a planned capacity of 2.5 million gross tonnes. A final decision on its participation is expected shortly.
The block fabrication facility will be used to manufacture large sections of ships by cutting and welding steel plates into blocks. These blocks can be fitted with piping, electrical systems and other equipment before being moved to the dry dock for final assembly, helping improve construction efficiency and shorten vessel-building timelines.
The likely withdrawal of HD Hyundai Heavy Industries is not expected to affect CSL’s construction of six 1,700-TEU feeder container ships ordered by French shipping major CMA CGM for around $360 million.
“The CMA CGM order has nothing to do with the proposed block fabrication facility,” a source said, adding that CSL will continue to procure major equipment, including engines, from Hyundai Heavy Industries.
The CMA CGM vessels will be powered by Everllence engines manufactured in South Korea by Hyundai under licence. The ships will therefore be constructed in India with South Korean design, equipment and technical support.
CSL had last year signed a Memorandum of Understanding with HD Korea Shipbuilding & Offshore Engineering (KSOE), the holding company of HD Hyundai Heavy Industries, for long-term cooperation in shipbuilding and maritime development.
The agreement covered joint exploration of newbuilding opportunities, technical expertise sharing, productivity and capacity enhancement, workforce development and potential collaboration on other shipbuilding projects.
The collaboration between CSL and Hyundai was also seen as an important factor in giving CMA CGM confidence to place its first major feeder container ship order with an Indian shipbuilder.
The proposed block fabrication facility is expected to strengthen CSL’s capabilities to handle large vessels, including LNG carriers, Capesize and Suezmax vessels, oil rigs and semi-submersibles.
The development comes amid the Centre’s major push to expand India’s shipbuilding capacity. In September 2025, the Union Cabinet approved a ₹69,725 crore package for the sector, including ₹24,736 crore under the Shipbuilding Financial Assistance Scheme, a ₹25,000 crore Maritime Development Fund and a ₹19,989 crore Shipbuilding Development Scheme.
The Shipbuilding Development Scheme includes ₹9,930 crore for greenfield shipbuilding clusters, ₹8,261 crore for brownfield expansion, ₹305 crore for the India Ship Technology Centre and ₹1,443 crore for risk-related credit cover.