Dongwon invests in Salmon Evolution, will partner to build land-based salmon farm in South Korea

Seoul, South Korea-based Dongwon Industries, South Korea's largest seafood company and the owner of StarKist, has entered into a partnership agreement with Salmon Evolution for a minority stake in the Romsdal, Norway-based aquaculture firm, which is currently constructing a flowthrough salmon farm in Indre Harøy, Norway.

Additionally, the two companies plan to jointly build a land-based fish farm in South Korea using Salmon Evolution’s flowthrough technology, and will “jointly consider future opportunities to scale similar projects in other Asian markets as well as the North American market,” according to a 27 July press release.

“After considering a number of land-based farming projects, we decided that Salmon Evolution represents the best investment and partnership opportunities in the sector,” Dongwon CFO Kiyun Yun said. “We believe that Salmon Evolution's technology best recreates the natural conditions in the sea, while avoiding the many challenges that conventional farming in the sea faces."

Dongwon will invest NOK 50 million (USD 5.7 million, EUR 5.1 million) for a 9.7 percent stake in Salmon Evolution. Pareto Securities and DNB Markets advised Salmon Evolution in the transaction, according to the release.

The dual commitment of an investment in the company, plus the partnership for construction of additional farms, is “a good indication of our potential,” Salmon Evolution Board Chairman Tore A. Tønseth said.

“Our existing owners have broad experience from the entire value chain for conventional aquaculture and high competence in the various technology concepts for land-based farming,” he said. “This takes us a long step further in the work we must put in to ensure scaling and market access in a world market, where quality and sustainability are becoming increasingly important. Dongwon will also be a very good and important partner in our future distribution network.”

Salmon Evolution CEO Håkon André Berg said the deal had been in the works for months, but that complications related to the COVID-19 pandemic had delayed the process.

“It is therefore extra gratifying that we have now got an agreement in place,” he said.

Dongwon had USD 2.3 billion (EUR 2 billion) in total sales last year, and the company’s financial heft, its knowledge of and strength in Asian markets, and its global sales and distribution channels will be great assets for Salmon Evolution, Berg said.

“This is a very exciting opportunity for us,” Berg said. “Cooperation with a global player such as Dongwon Industries will give us good commercial opportunities, in addition to solid industrial support to scale our concept in new markets.”

Salmon Evolution began construction in May on a land-based fish farm on Indre Harøy in Hustadvika municipality, near Ålesund in Central Norway. The project will use a throughflow system, taking seawater from depths of 95 meters and 25 meters, depending on which needs the least heating at any one time. Sixty-five percent of the water will be reused and the remaining 35 percent supply of supplied water will be filtered and temperate seawater, “which will contribute to optimal operation and reduce the risk significantly compared with other types of land-based plants with almost full water recycling,” Tønseth said.

“Flow with reuse ensures the best possible water quality for the fish at the same time as it provides a very limited operational and biological risk. Is cost effective in terms of both investment level and production costs,” Tønseth said.

The first phase of the project will cost the company NOK 1.3 billion (USD 130 million, EUR 118 million) and will have a projected annual production volume of 9,000 metric tons of salmon. When completely finished, the farm is slated to produce 36,000 metric tons of salmon annually.

“An investment from a major global seafood player [like Dongwon] sends a strong signal to the industry in this early phase,” Tønseth said.

Photo courtesy of Salmon Evolution