The companies will use Salmon Evolution’s hybrid flow-through (HFS) technology which the company says ensures controlled and optimal growth conditions and limits the risk of parasites and diseases.
The South Korean project, under the name K Smart, will be developed in two phases, each with an annual capacity of 10,000 tonnes. Construction is planned to start in the second half of 2022, with completion and production start in 2024.
NOK 1.6bn for phase 1
Project costs for phase 1, including investments, project management and working capital building, are estimated at NOK 1.6 billion (£134.5m).
Dongwon Industries will facilitate debt financing for K-Smart. Salmon Evolution will have a 49% ownership interest in the JV, and expects to finance its equity contribution within its existing equity funding plan.
Dongwon Industries already has a stake in Salmon Evolution, investing NOK 50m for a minority shareholding in the company last year, when the intention to build in South Korea was first announced.
36,000 tonnes in Norway
Salmon Evolution’s HFS salmon farm in Norway is currently under construction on the island of Indre Harøy. It is being developed in three phases, with phase 1 due to provide an annual capacity of 9,000 tonnes when completed in the fourth quarter of 2022.
The overall project is designed for a total annual capacity of 36,000 tonnes from its completion in 2028.
Speaking about the JV agreement, Salmon Evolution chief executive Håkon André Berg said: “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.”
Dongwon Industries chief financial officer Yun Kiyun said the agreement marked 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 organisation, will help facilitate a successful project and revolutionise how fresh Atlantic salmon is sold and distributed in South Korea,” said Yun.
As part of the collaboration, the companies will cooperate to establish branding and marketing of Atlantic salmon from K Smart and Salmon Evolution in the Korean market.
Salmon Evolution chairman Tore Tønseth said: “We are thrilled about entering the Korean market together with a tier 1 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.”