Deep Sea Supply and Marine Harvest have started plans to establish a 50/50 owned aquaculture shipping joint venture (JV) that is to build, own and operate aquaculture vessels.
Deep Sea Supply will establish a new 100 per cent owned subsidiary to be the 50 per cent owner of the JV and will seek to finance the JV-investment on a stand-alone basis directly through this subsidiary.
The JV expects to enter into contracts for the construction of aquaculture vessels which will be chartered by Marine Harvest upon delivery. Current discussions indicate a substantial reduction in newbuilding cost compared to solutions provided by alternative aquaculture providers. The JV will be Marine Harvest's preferred provider of aquaculture vessels but it will also compete for other contracts.
Deep Sea Supply will enter into management agreements with the JV covering all necessary management services, including technical management, ship management and other corporate services.
Marine Harvest charters 44 vessels for aquaculture operations, with a combined cost of approximately €100 million per year.
Marine Harvest and Deep Sea Supply said in a statement that, “There is significant room for efficiency improvements across the value chain in aquaculture shipping, ranging from reduction in newbuilding cost to more cost-efficient operations.”
“The aquaculture shipping industry is fragmented and characterised by lack of competition,” the statement concluded.