Cyprus-based Deep Sea Supply and Norwegian seafood company Marine Harvest have agreed to establish a 50/50 shipping joint venture (JV) company to build, own and manage aquaculture vessels.

With the establishment of the aquaculture shipping JV, the companies aim to consolidate the otherwise fragmented aquaculture shipping industry while significantly reduce costs related to vessel services.

Both the companies believe that there is enough scope to make efficiency improvements, such as reduction in newbuilding cost and more cost-efficient operations, across the value chain in aquaculture shipping.

The new entity expects to secure contracts to build aquaculture vessels that will be chartered by Marine Harvest, while Deep Sea Supply will enter into management agreements with the JV to provide a range of services including technical management, ship management and other corporate services.

"The companies aim to consolidate the otherwise fragmented aquaculture shipping industry."

Currently, Marine Harvest charters 44 vessels with a combined cost of approximately €100m per year. Additionally, the JV will seek to capitalise on the current imbalance in the offshore service vessel market by potentially converting surplus offshore vessels into aquaculture vessels.

In order to exercise 50% ownership of the JV, Deep Sea Supply will create a new wholly owned subsidiary and intends to fund the JV on a stand-alone basis directly through this subsidiary.

The company’s largest shareholder, Hemen Holding, will support the establishment of the JV.