Marine Harvest in shipping joint venture

MARINE Harvest and Deep Sea Supply have established a shipping joint venture to build, own and operate aquaculture vessels.

The two companies believe that through the fifty-fifty owned joint venture there is significant room for efficiency improvements in the market, ranging from reduction in newbuilding costs to more cost-efficient operations.

Marine Harvest charters 44 vessels with a combined cost of approximately EUR 100 million per year, more than any other company in the industry.

The joint venture 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 Efficiency improvements

solutions provided by alternative aquaculture providers.

The new group will be Marine Harvest’s preferred provider of aquaculture vessels. The intention is to also compete for external contracts.

Norwegian shipping magnate John Fredriksen is a major shareholder in Marine Harvest and in Deep Sea Supply, which has been affected recently

by the slump in the oil sector. Deep Sea Supply is a leading owner and operator of supply vessels.

It will cover all necessary management services for the joint venture, including technical management, ship management and other corporate services.

The aquaculture shipping industry is fragmented and characterised by lack of competition. Under the new deal, Marine Harvest and Deep Sea Supply aim to consolidate the industry to achieve economies of scale.

This could include taking advantage of the current imbalance in the offshore service vessel market by converting surplus offshore vessels into aquaculture vessels if project economics are favourable.