Salmon Evolution establishes land-based fish farm joint venture with seafood giant Dongwon Industries

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Named K Smart, the project cost for phase 1 is estimated to be EUR 150 million.

In September, it was reported that the seafood giant Dongwon Industries acquired a minority share in the land-based salmon farmer Salmon Evolution. Then in September, it was reported that the two companies would build a 20,000 tonnes land-based salmon farm in South Korea.

On Friday, more details on the project were published:

  • 20,000 tonnes production facility in South Korea using Salmon Evolution’s HFS technology, developed in two phases of 10,000 tonnes each.
  • Ownership through joint venture structure with seafood giant Dongwon Industries where Salmon Evolution will hold 49 per-cent ownership.
  • Project cost for phase 1 is estimated to about EUR 150 million, which will be funded by financial institutions as well as Dongwon Industries and Salmon Evolution.
  • Salmon Evolution expects to finance its equity contribution within the company’s already communicated equity funding plan.

The project will be developed in two phases, each with an annual capacity of 10,000 tonnes. The planned start of construction is set for the second half of 2022, with completion and production to commence in 2024.

Håkon André Berg. PHOTO: Salmon Evolution

“We are honoured to team up with a well reputed and experienced partner like Dongwon. This collaboration is in accordance with Salmon Evolution’s overall strategy for international expansion, leveraging our in-house experience and HFS competence in developing close-to-market salmon production in collaboration with local first-class partners,” said Salmon Evolution CEO Håkon André Berg.

“This Joint Venture Term Sheet marks a major milestone in the relationship between Salmon Evolution and Dongwon. K Smart is of strategic importance for Dongwon and we are confident that Salmon Evolution’s low-risk HFS technology coupled with its highly competent organization, will help facilitate a successful project and revolutionize how fresh Atlantic salmon is sold and distributed in South Korea,” said Dongwon Industries CFO Yun Ki Yun.

As part of the collaborations, the parties shall cooperate to establish branding and marketing of premium, land-based Atlantic salmon from K Smart and Salmon Evolution in the Korean market. K Smart will be responsible for all development costs and investments related to the project. The Joint Venture Term Sheet also contains a comprehensive set of corporate governance principles, aimed at serving as a solid foundation for a long-term partnership between Salmon Evolution and Dongwon.

Salmon Evolution chairman Tore Tønseth said he was “thrilled about entering the Korean market together with a tier one seafood player like Dongwon.”

“Through K Smart we will be able to serve the highly attractive and fast-growing Korean market with Atlantic salmon of superior quality and unmatched freshness 52 weeks a year. The joint venture structure with Dongwon also ensures a strong local credibility for the project and offers Salmon Evolution a capital efficient and accretive model for growing our business,” he added.

The parties expect to enter into definitive agreements during Q2 2021.