Fredriksen mashes his fish and ships

Deep Sea Supply and Marine Harvest have entered into a heads of agreement to establish a 50/50 owned aquaculture shipping joint venture that is to build, own and operate aquaculture vessels.

Deep Sea Supply is an offshore supply vessel firm controlled by John Fredriksen, and Marine Harvest is a massive fishing firm, in which the Norwegian tycoon is a big investor.

“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,” Deep Sea Supply said in a statement.

“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,” the release continued.

Marine Harvest charters today 44 vessels with a combined cost of approximately EUR100m 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 release claimed.

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, shipmanagement and other corporate services.

“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,” Deep Sea Supply said today.

The Fredriksen vehicle said it might also look at converting surplus OSVs into aquaculture vessels, something Dutch shipbuilder Damen had mooted earlier this year as a way for the offshore industry to counter the downturn.