Looking for a specific product?

Make a search for products & suppliers, articles & news.

Deep Sea Supply and Marine Harvest ASA to establish an aquaculture shipping joint venture

Deep Sea Supply and Marine Harvest ASA (Marine Harvest) have entered into a Heads of Agreement to establish a 50/50 owned aquaculture shipping joint venture (the "JV"). This venture involves building, owning and operating aquaculture vessels. 

The JV represents a unique opportunity for Deep Sea Supply to capitalize on the Company's experience from the OSV sector to enter into a new and attractive market together with an industry leading partner.

 

REDUCTIION IN NEWBUILDING COSTS

 

Marine Harvest and Deep Sea Supply believe 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. Accordingly, Deep Sea Supply and Marine Harvest aims to significantly reduce costs related to vessel services through establishing the JV.

 

Over the past few years aquaculture vessels have increasingly become an integrated part of the value chain. Marine Harvest charters today 44 vessels with a combined cost of approximately EUR 100 million per year, making Marine Harvest the industry's largest charterer of such vessels. 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 entity will be Marine Harvest's preferred provider of aquaculture vessels. The intention of the JV is to also compete for external 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.

 

POSSIBLE CONVERSION

 

The aquaculture shipping industry is fragmented and characterised by lack of competition. Through the JV, Deep Sea Supply and Marine Harvest aim to consolidate the industry to achieve economies of scale. The JV will explore any opportunity that may improve building cost or operating cost, including taking advantage of the current imbalance in the offshore service vessel market through potentially convert surplus offshore vessels into aquaculture vessels if project economics are favourable.

 

Deep Sea Supply sees the establishment of the JV together with Marine Harvest as an attractive opportunity for the Company to expand its business into a related industry where we can benefit from long term charters at attractive rates. The JV also allows the Company to further capitalize on our strong operational platform through management of the JV's vessels. Deep Sea Supply will establish a new 100% owned subsidiary to be the 50% owner of the JV and will seek to finance the JV-investment on a stand-alone basis directly through this subsidiary. With back-end loaded payment terms on the newbuilds, no material upfront investment is expected.  The Company's largest shareholder, Hemen Holding Limited, currently owning approximately 35% of the shares in the Company, has indicated support for the establishment of the JV.  

Associated companies:


Related news

Latest news

BP Awards Schlumberger Contract for Mad Dog 2 Project

Export Conference 2017: A changing world

Register for this year’s most important conference for Norwegian exporters. We can promise you an interesting and inspirational day!

Meet Elkem Silicon Materials at the Ceramics Expo 2017

Elkem Silicon Metrials invites to meet their team at the Ceramics Expo 2017. This is North America’s largest, free-to-attend exhibition for Ceramic manufacturing and applications.

Event - TechnipFMC at Gastech April 4

Most ship owners are now looking very closely at the benefits that digitalization can bring in operational gains.

Deepocean Awarded Surf Contract from BP for the Foinaven Field

DeepOcean today announced that it had received a call-off under its new Master Service Agreement (MSA) with BP Exploration Operating Company Ltd.

Parquet Floor - a Furniture in itself

Read how a Nordic style, maintenance free new floor is a furniture all in itself. 

Haavik in as Sales Director

Tor Henrik Haavik enters the role as Sales Director in Steinsvik AS. Haavik has an engineering education from Høgskolen i Haugesund and has been employed in Steinsvik since 2002. Haavik comes from the position of Sales Man...

Powder Characterization Experts Offer Solutions to Optimize Process Performance

Freeman Technology, the powder characterization specialists, will be exhibiting at the Ceramics Expo for the first time (25 – 27 April, Cleveland, OH, USA). The company offers material characterization solutions aimed at o...