Even though DNB have their own office in Shanghai, they are still very sceptical towards financing land based salmon farms in China.
They are almost everywhere, and you must almost have been in hide if you haven’t noticed. Land based salmon farms are being built in countries like in Poland, USA, Dubai, Japan and China.
Especially Asia, that in the long run may very well become the largest growing market for salmon, is an area where the need for land based production capacity is enormous.
DNB has an annual exposure to seafood of EUR 5,4 billion and follows the land based development closely. But for the moment, only Atlantic Sapphire has received funding from the bank. DNB has provided the company with so-called export financing, which means that the bank shares the risk with an export financing institution.
“Atlantic Sapphire is the only company so far, that has received proper financing of a facility,” says DNB seafood manager Anne Hvistendahl, when SalmonBusiness meets her and senior adviser Dag Sletmo at the bank’s head office in Oslo.
More funding in 2020
But according to Hvistendahl things could soon change in this area.
“We are likely to participate in more financing during the year, and we believe that more banks will be interested in this too,” she says.
When asked where these funding will come from, Hvistendahl answers:
“It will be easier to get funded somewhere else than in Norway and Europe, but we will probably also do Europe”.
No to China
According to Hvistendahl, the bank says no to most requests for financing land based salmon farms. This also applies in China, where the bank is present in the financial capital Shanghai.
“It is difficult for us as a bank to finance anything in China, even though we have offices in Shanghai. There are many initiatives in China. But we do not have enough expertise in this market and therefore it is difficult for us to be an investor for this sort of projects in China. Although the investment case itself may be great,” Hvistendahl explains and continues:
“It has to do with the country’s laws and regulations. As a bank, we must be familiar with the business culture and the legal system as well, not only the seafood industry.
But Hvistendahl does not rule out that they might get involved in some projects in both China and Japan.
“I believe we’re going to raise equity for some of these projects, but we usually do not finance loans,” Hvistendahl concludes.