Executive Summary

Philippines is the top carrageenan producing country in the world, accounting for 40.6% of
global production with an annual capacity of 36,400 MT. Indonesia is second, producing
17,000 MT per year (19% share) and China is third with an annual production capacity of
12,000 MT (13.4% share). The total annual production capacity of these carrageenan
producing countries is 89,600 MT, requiring an annual supply of 335,000 MT of RDS.
Unfortunately, available RDS supply is just 226,000 MT, resulting in a low capacity utilization
of 68.1% among seaweed processors.

Seaweed export is the country's third dollar earner after tuna and shrimp. At present, the
Philippines ranks third next to China and Korea in the world market in seaweed export.
Seaweed farming only requires low capital investment and short culture period, and yet the
profit is high. Because of these favorable conditions, seaweed farming is continually
expanding and attracting coastal communities to invest in it because of the good opportunity
to increase their incomes and improve their quality of life. As a complementary source of
livelihood for coastal communities, it can reduce pressure in the fishing grounds as well as
reduce the use of toxic chemicals. Cyanide, a toxic chemical is used illegally. The
environment can be preserved since the seaweed farmers have to co-manage the resource

The Province of Palawan being the top producing seaweeds in the country contributes
around 24% of the national output. The seaweed industry of the province is strong, and it
offers employment to many coastal communities and contributes to foreign trade. Around
5,000 families are highly dependent on seaweeds farming with a potential expansion area of
7,171 hectares. Currently, seaweeds are grown in more than 5,698 hectares across twenty
(20) municipalities in the province. Doubling the hectarage of seaweed farms seems highly
feasible based on a recent survey made by the Provincial Agriculture Office. Agutaya, the top
seaweeds producing areas of Palawan can grow almost 2,000 hectares. Cagayancillo and
Balabac, one of the major producing areas can expand about 1,000 hectares.

The seaweeds industry of the Province is constrained with key issues in the entire value
chain (input provision to processing). Among the critical issues in the value chain are lack of
access to good quality seedlings, limited outreach of existing extension services resulting to
lack of know-how in technical aspects of seaweed farming including post-harvest practices,
lack of access to financial resources to grow a business and to facilitate upgrading, lack of
postharvest facilities and logistics, prevalence of unregistered buyers directly purchasing on-
farm, absence of Palawan based processing centers (dried seaweeds were brought to Cebu
or Manila for processing, absence of policy pertaining to water use and permits, continuous
degradation of coral reefs due to illegal means of catching fish and marine products; and
eextension workers have inadequate information on updated technology on seaweed
production, post-harvest, marketing and management

To strengthen its niche as the country’s seaweeds base and frontier for seaweeds industries,
it shall be supported by efficient value chains through organization of seaweeds
associations, establishment of a seedling nursery, provision of post-harvest facilities,
establishment of processing facilities, access to market roads, setting up of financing facility
and enhanced environmental protection.
 Section

1
Introduction
A. Background Information and Objectives

The Department of Agriculture (DA) is implementing the Philippine Rural Development

Project (PRDP), a six-year national project which is jointly funded by the World Bank,
National Government and the Local Government Units.

The PRDP is regarded as the upscale version of the Mindanao Rural Development Program
(MRDP). Unlike the MRDP, the PRDP’s infrastructure is focused on climate-resilient resilient
agriculture and fisheries sector and is linked to priority value chains. In terms of
productivity enhancement, the MRDP is centered primarily on livelihood and subsistence
level while the PRDP is aimed at marketable surplus production.

As a new national government platform, the PRDP is advocating an inclusive, value-chain

oriented, and climate resilient agriculture and fisheries sector wherein innovations are
introduced to support the rural market development in light of the changes in the agriculture
and fisheries landscape particularly the challenges brought by climate change to the sector.

The specific objectives of the PRDP are as follows:

 At least 5% increase per year in real household annual incomes of farmer and fisher
folk beneficiaries;
 30% increase in incomes for targeted beneficiaries involved in enterprise development
 7% increase in value of annual marketed output; and
 20% increase in number of farmers & fisher folk with improved access to DA services.

In order to achieve the aforementioned objectives, the project builds on four (4) major
components, which are:

1. I-PLAN: Investment for Agriculture and Fishery Modernization Plan (AFMP) Planning
at the Local and National levels. The I-Plan component aims to enhance the
Agriculture and Fishery Modernization Plan (AFMP) through science-based tools
including value chain, Vulnerability and Suitability Assessment (VSA), Participatory
Resource Appraisal (PRA), and Climate Change Adaptation (CCA).

2. I-BUILD: Intensified Building-Up of Infrastructure and Logistics for Development. The

I-Build component’s goal is to put in place strategic and climate-resilient rural
infrastructure facilities along the value chain. Improved road networks linking
production areas with markets and increased productivity from irrigation and water
supply system are the key results areas of this component.

3. I-REAP: Investments in Rural Enterprises and Agriculture and Fisheries Productivity.

The I-REAP component is focused on creating marketable surplus of commodities
and elevating agricultural production into the next levels of the value chain by
installing production and market support facilities. It also targets to establish
 enterprises and up-scaling product at the appropriate commodity value-chain
segment, among others with the end goal of creating beyond subsistence production
to alleviate poverty. The key results are increased Smallholder Groups operating
viable enterprises, enhanced producer productivity through formalized arrangements
for marketing and /or technical services and increased smallholder and fisher
resilience to climate change and adverse weather conditions.

4. I-SUPPORT: Implementation Support to PRDP. The I-Support component maintains

the effective and efficient project management. It also aims to institutionalize DA
engagement with stakeholders. The fourth component is expected to introduce
AFMP and PCIPs processes as the means to integrate and achieve synergies between
DA-agency programs, Harmonize Technical and Fiduciary manuals and efficient
program implementation, reporting and loan utilization.

Palawan Province being the top producer of seaweeds in the country was chosen as the
project area for value chain analysis for dried seaweeds. As a priority commodity, the DA in
partnership with the Provincial Government of Palawan and private sector will provide key
infrastructure, facilities and technologies to enhance and improve the coconut sugar industry
in the region through the PRDP.

B.Rationale and Objectives

The Department of Agriculture (DA) has adopted value chain analysis (VCA) as basis for
rural investments. Through the Philippine Rural Development Program (PRDP), the DA uses
VCA for priority commodities to improve market linkage of farm products. The (VCA) is now
the guide of local government units in identifying priority interventions that will enhance
competitiveness of selected commodities. It defines value chain as a full range of activities
to bring product or services to markets.1 The VCA focuses on creating value along the chain
as well as the rational distribution of benefits among participating actors such as producers,
processors, and traders.

Seaweeds was selected as a priority commodity of Palawan second to Cashew nuts. With
the PRDP, DA is partnering with the private sector and the LGUs in providing key
infrastructure, facilities, and technologies to boost farm production.

The VCA for Seaweeds aims to:

 Define the commodity value chain map and determine/identify the major players in the
value chain for seaweeds in Palawan and seaweeds-related areas;
 Identify the opportunities and constraints of the different players along the value chain;
 Set the competitive directions of the seaweeds industry in the province; and,
 Generate a shortlist of interventions that will utilize the comparative advantages and
opportunities to overcome disadvantages and constraints for the benefit of all players
along the value chain.

1
Food and Agriculture Organization (FAO) Guidelines for Value Chain Analysis
 C. Methodology and Approach

The study utilized the following data collection methods:

1. Key Informant Interviews (KII)

Interviews with the following key informants who had provided valuable information:

 DA and its attached agencies’ representatives

 DTI representative
 Provincial Agriculture Office (PAO)and its counterpart Municipal Agriculture
Office(MAO)
 Private sector/Institutional buyer, Tong Ming Aquatic Ventures
 Wholesaler/Retailer representative, Ocean Aquamarine
 Manila and Cebu-based Wholesaler/Processor
 Puerto-based consolidators, traders, processors and retailers

2.Focused Group Discussions (FGDs)

 Seaweed farmers/operators in Agutaya, Taytay, Roxas, Cagayancillo and Balabac

3.Review of Secondary Data

 Production volume trend of seaweeds in the Philippines and Palawan
 Number of seaweed farmers in the Philippines and in Palawan
 Philippine imports of seaweeds
 Philippine exports of seaweeds
 Farmgate price trend of seaweds
 Other relevant statistics

4.Farm and community visits, and visit to processing centers/areas

Ocular visit to seaweed farms and exposure/observation of seaweed processing gave the
PPMIUs a first-hand experience in the processes involved in seaweeds processing and in
seeing the processing equipment and tools.
 Section

2
Overview of the Industry
A. PRODUCT DESCRIPTION

Seaweeds or macroalgae are multicellular eukaryotic algae. They are classified as algae
because these are plants in the sea that have no true roots (rhizoids), stems and leaves.
They are classified into four main groups: the red algae (Rhodophycae), brown algae
(Phaeophycae), green algae (Chlorophycae), and the blue green algae (Cyanophycae).

Among these varieties, Eucheuma or red seaweeds are the most economically important
variety in the Philippines accounting for 98% of the total Philippine production. Eucheuma is
the source of carrageenan, one of the world’s foremost food and industrial additive today.

Carrageenan is a hydrocolloid used as a thickening, gelling, and stabilizing agent in a

varietyof industries but usually in food and pharmaceutical products. The popularity of the
Eucheuma has increased because of declining amounts and quantities and increasing prices
of other sources of carrageenan (e.g. Chondrus, Gigartina etc.), which are mostly only
available from wild crops.

There are three carrageenan types which are of commercial interest because of the various
applications of the hydrocolloid in food and other industrial uses. These are called the iota,
kappa, and lambda carrageenan. The Philippines produces mainly the kappa carrageenan
which uses the Eucheuma cottonii and the iota carrageenan which uses the Eucheuma
spinosum. The kappa carrageenan has a wider range of applications in food and
pharmaceutical products than the iota carrageenan. As such, dried cottonii fetches a higher
price than spinosum. In many of the iota applications, companies have shifted to lower cost
hydrocolloids. Main market for iota carrageenan is the toothpaste companies. However,
toothpaste companies have found substitutes and limit the use of iota carrageenan to their
high end products.

B. FORMS

Within the Philippine seaweed/carrageenan value chain, exporters produce and sell any or
all of the following products (Figure 1):

a) Raw Dried Seaweeds (RDS): These are primarily used for the extraction of the
carrageenan. There are about 21 companies in the Philippines which are engaged in the
trading and/or exporting of RDS.

b) Alkali Treated Chips (ATC): These are dried palletized alkaline treated RDS. Alkaline
treatment enhances the gelation properties of carrageenan. The ATCs are sold to
carrageenan processors for further refining. There seems to be only one company who
has significant export sales in ATC. Most carrageenan processors undertake the alkaline
treatment themselves.
The Bureau of Fisheries and Aquatic Resources is exploring the possibility of developing
community-based ATC production as an opportunity to add-value locally. Demand and
actual market potential of community-based production need to be assessed to determine
the viability of community level production of ATC.

Figure 1
Process Flow of Carageenan Seaweeds and By-Products

c) Semi-Refined Carrageenan (SRC): The SRC is milled dried ATC and sold in powder form.
There are two major grades for SRC, namely: pet and food grade. During the early
years of the carrageenan industry, Philippines produced mainly the pet grade SRC with
Mars and Nestle as the key buyers. Demand for pet grade SRC went down when
consumers increasingly preferred the dried pet food. To date, pet grade SRC comprise
10% of the total SRC production in the country.

Sometime in the 1990s, the United States and Europe approved the use of carrageenan
for food application. Since then, food –base carrageenan applications continue to drive
market growth. Production of food grade SRC requires very high levels of hygiene and
mechanical drying. Food grade SRC comprises the bulk of the country’s exports of pure
carrageenan products.

d) Refined Carrageenan (RC): The RC consists of two types: alcohol precipated and the gel
pressed. Gel pressed RC is cheaper than the alcohol precipated RC. Alcohol precipated
RC is generally used when retaining true color of food is very critical.

e) Carrageenan Blended Products: These are SRC and RC blended with other hydrocolloids
and ingredients (i.e., sugar, salt, gum, etc.) to produce custom-made formulations for
end-user clients. Among the different products, carrageenan blended products generate
the highest margin.
 Palawan and Tawi-tawi dominate the export of dried seaweeds while Cebu dominates
the processing and exporting of carrageenan. Majority of the processing factories for
carrageenan are based in Cebu and Manila.

C. INDUSTRY USES

Carrageenan is now currently used in the following applications (Figure 2).

 milk stabiliser in dairy products like ice cream; prevents whey separation and ice
crystal formation
 binder and foam stabilizer in toothpaste, gels, cosmetics and shampoo
 aid in beer production and keeping quality
 stabilizes ham, sausages, patties and other meat products, sauces and gelatine
 production of medicine capsules, microbicides
 as an ingredient for shoe polish, fire extinguisher, air freshener, soap and fertiliser

Figure 2
Carrageenan Application

Carrageenans are used in a variety of commercial applications as gelling, thickening, and

stabilising agents, especially in food products and sauces. Aside from these functions,
carrageenans are used in experimental medicine, pharmaceutical formulations, cosmetics,
and industrial applications (Figure 3).
 Figure 3
New Applications for Carrageenan

D. PRODUCTION TRENDS

1. Global Production

Global production of brown and red seaweeds more than doubled from nine million (M) tons
in 2003 to 20.9 M tons in 2012. The surge in production was mostly attributed to the
increase in Eucheuma farming. The average growth from 2003 to 2012 was registered at 10
percent per annum. Annual production stood at 13.4 M tons from 2003 to 2012.

Brown seaweeds used to account for 59 percent of the total production per year from 2003
to 2007. Due to higher demand in the industry, red seaweeds production overtook brown
seaweeds in 2008 onwards. In 2012, red seaweeds accounted for 62 percent of the world
production, the rest were brown seaweeds.

Significant increases were reflected during the ten-year period: brown seaweeds jumped by
33 percent from 6 M tons in 2003 to 8M tons in 2012while red seaweeds more than tripled
from 3.1 M tons in 2003 to 12.9 M tons in 2012 (Figure 4).
 Figure 4
World Brown and Red Seaweeds Production, 2003-2012

25
Red Seaweeds Brown Seaweeds

20
Production (M tons)

15

10

0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Red Seaweeds 3.13 3.96 4.68 5.29 6.07 6.70 8.04 8.98 10.84 12.91
Brown Seaweeds 5.98 6.40 6.93 6.64 6.54 6.63 6.73 6.79 7.15 7.96

Source: FAOSTAT

In 2011, about 91 percent of the total world production was produced mainly from China,
Indonesia, Philippines, South Korea and North Korea (Table 1).

Top producers of red seaweeds were Indonesia with 47 percent (5.2 M tons) share of the
total production, China 24 percent (2.6 M tons), Philippines 17 percent (1.8 M tons),
andnthree percent each from South Korea (316,000 tons) and Japan (292,000 tons).

Brown seaweeds major producers were China with 55 percent (6 M tons), South Korea six
percent (675,000 tons), North Korea three percent (314,000 tons), and Norway one percent
(152,000 tons.

Table 1
The World’s Key Producers of Red and Brown Seaweeds, 2011 (in ‘000 tons)
Countries 2011 % Share Rank

Red Seaweeds 10,842

Indonesia 5,176 47 1st

China 2,603 24 2nd

Philippines 1,836 17 3rd

South Korea 316 3 4th

Japan 292 3 5th

Brown Seaweeds 7,7153

China 5,994 55 1st

 South Korea 675 6 2nd

North Korea 444 4 3rd

Chile 314 3 4th

Norway 152 1 5th

Note: 2012 data by country not available
Source: FAOSTAT

From 2002 to 2011, red seaweeds production of Indonesia and China has immensely
improved by 41 percent per year and 21 percent per year, respectively. Annual average
production stood at 1.9 M tons for Indonesia and 1.8 M tons for China. Philippines, which
used to lead in production 10 years ago, only grew by nine percent per annum. Its average
production was 1.4 M tons per year (Figure 5).

Figure 5
World Red Seaweeds Production, 2002-2011
6,000
Indonesia
World Production ('000 tons)

5,000

4,000

3,000 China

2,000
Phils.
1,000 S. Korea
Japan
-
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Indonesia 279 297 419 918 1,175 1,733 2,148 2,967 3,918 5,176
China 588 1,144 1,573 1,659 1,833 1,987 2,028 2,395 2,285 2,603
Philippines 885 985 1,201 1,335 1,464 1,500 1,663 1,737 1,797 1,836
S. Korea 212 194 229 198 218 211 224 211 236 316
Japan 439 350 361 390 371 396 339 343 329 292
Axis Title

Note: 2012 data by country not available

Source: FAOSTAT

For the past 10 years, China has been a consistent top producer of brown seaweeds. It
supplied more than 50 percent of the global production during these periods. China’s
production grew by six percent per annum which averaged at 5.4 M tons every year (Figure
6).
 Figure 6
World Brown Seaweeds Production, 2002-2011
7,000
China
6,000
World Production ('000 tons)

5,000

4,000

3,000
N. Korea Chile
2,000 S. Korea
Norway
1,000

-
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
China 3,687.7 5,171.0 5,541.4 5,953.9 5,553.9 5,415.8 5,396.4 5,543.4 5,587.5 5,994.1
S. Korea 285.02 260.82 312.90 428.53 551.93 589.15 690.10 642.08 663.66 674.50
N. Korea 444.30 444.30 444.30 444.30 444.30 444.30 444.30 444.30 444.30 444.30
Chile 134.47 191.44 229.32 262.17 201.00 183.00 257.95 296.72 271.26 313.74
Norway 182.64 153.21 148.32 153.91 145.43 134.67 154.22 160.36 158.52 152.38
Axis Title

Note: 2012 data by country not available

Source: FAOSTAT

2. Philippine Seaweeds Production

Philippines is the top carrageenan producing country in the world, accounting for 40.6% of
global production with an annual capacity of 36,400 MT. Indonesia is second, producing
17,000 MT per year (19% share) and China is third with an annual production capacity of
12,000 MT (13.4% share). The total annual production capacity of these carrageenan
producing countries is 89,600 MT, requiring an annual supply of 335,000 MT of RDS.
Unfortunately, available RDS supply is just 226,000 MT, resulting in a low capacity utilization
of 68.1% among seaweed processors (Table 2).

Philippine producton of seaweeds has grown steadily at 8 percent per annum, peaking at
1.84 million tons in 2011.

Table 2
Annual Philippine Seaweeds Production, wet basis (1998-2013)
YEAR VOLUME (in MT) VALUE (Php ‘000)

1998 685,336 1,865,104

1999 696,112 2,476,952

2000 707,039 2,378,195

2001 785,795 2,960,196

2002 894,857 3,236,647

2003 988,888 3,671,997

 2004 1,204,808 5,261,401

2005 1,338,597 6,040,899

2006 1,468,906 6,346,723

2007 1,505,070 6,299,347

2008 1,666,556 12,848,369

2009 1,739,995 9,591,252

2010 1,801,272 11,974,745

2011 1,840,833 11,391,077

2012 1,751,071 9,776,297

2013 1,558,378 9,903,232

Source: Bureau of Agricultural Statistics

The Philippines produced 1.55 million MT of fresh seaweed in 2014. During this period,
seaweeds production in the country slightly decreased by 0.5 percent or 8,801 MT. Among
the regions in the country, Autonomous Region in Muslim Mindanao (ARMM) was the top
producing region contributing about 40% or 622,995.60 metric tons of the national output.
MIMAROPA and Zamboanga Peninsula were second and third largest producing regions with
a recorded production share of 361,352.59 and 206,161.12 MT respectively (Table 3).

As the top producing regions of the country, ARMM key production areas are Tawi-Tawi,
Sulu, and Basilan while Palawan and Mindoro for Region IX-B and Zamboanga Sibugay and
Zamboanga City for Zamboanga Peninsula Region. Seaweeds are now produced in all the
regions except landlocked CAR, although production in Regions 1, 3 and 12 are minimal,
estimated to be less than 1,000 MT.

While seaweed production in the country decreased to a little extent in 2014, significant
increased in production was noted in Region XII, XI, III and VI. SOCCSKSARGEN Region
increased by 599% in 2014 from 20.58 metric tons to 144 metric tons. Davao Region also
posted positive increased in production by 62% or 6,005 metric tons against 3,686 metric
tons in 2014. Western Visayas during the period of review registered an increased in
production of 19%. The country’s top seaweeds producer has a production of 622,995
metric tons which is two (2) percent higher than the 2013 production.
Table 3
Volume of Seaweeds Production, By Region, 2013-2014
Annual Production
Increased/
Region
2013 2014 Decreased

PHILIPPINES 1,558,377.74 1,549,575.98

(0.56)
ILOCOS REGION 58.16 34.97 (39.87)
CAGAYAN VALLEY 2,423.86 527.18
(78.25)
 CENTRAL LUZON 1,596.50 2,368.53 48.36
CALABARZON 41,413.27 32,617.74
(21.24)
MIMAROPA 340,691.28 361,352.59
6.06
BICOL REGION 61,089.90 59,863.75
(2.01)
WESTERN VISAYAS 65,173.45 77,466.93
18.86
CENTRAL VISAYAS 124,247.38 104,943.47 (15.54)
EASTERN VISAYAS 27,884.62 17,925.84
(35.71)
ZAMPEN 218,789.70 206,161.12 (5.77)
NORTHERN MINDANAO 42,261.32 40,784.83
(3.49)
DAVAO REGION 3,686.46 6,005.49
62.91
SOCCSKSARGEN 20.58 144.05 599.95
CARAGA 19,876.72 16,383.89
(17.57)
ARMM 609,164.54 622,995.60 2.27
Source: Bureau of Agricultural Statistics

As one of the country’s top seaweeds producing regions, MIMAROPA contributes 23% of the
country’s seaweeds production. In 2014, the region seaweeds production registered
361,352.61 metric tons, 6 percent higher than the 2013 production. Palawan, the country’s
top seaweeds producing countries contribute almost 99% of the regions production. For the
last two years (2013-2014) seaweeds production of Palawan posted a growth rate of six
percent from 334,736 metric tons to 354,128 metric tons respectively. The Provinces that
contributes than one percent were Marinduque, Occidental Mindoro and Oriental Mindoro
while Romblon in 2014 posted a production share of one percent of the region’s seaweeds
production (Table 4).
Table 4
Volume of Seaweeds Production, MIMAROPA Region, 2013-2014
Region Annual Production Increased/
Decreased
2013 2014

MIMAROPA 340,691.28 361,352.61 6.06

Marinduque 213.17 162.84
(23.61)
Occidental Mindoro 2,718.61 3,117.45
14.67
Oriental Mindoro 281.42 277.91
(1.25)
Palawan 334,736.29 354,128.19
5.79
Romblon 2,741.79 3,666.22 33.72
Source: Bureau of Agricultural Statistics
3. Palawan Seaweeds Production

The Office of the Provincial Agriculturist estimated a total of 5,698 hectares planted to
seaweeds in the province. Of this total, 80.02% were located in Northern Palawan of
which the largest seaweeds plantation was in the municipality of Agutay contributing
28.92% to the provincial total. Smallest plantation was in the municipality of Narra with
only 20.70 hectares or 0.36% of the provincial total. The top ten municipalities in terms
of area planted to seaweeds are the municipalities/city of Agutaya, Dumaran, Taytay
Cagayancillo,Quezon, Coron, Balabac, Roxas, El Nido, and Rizal (Figure 7).
Figure 7
Top Seaweeds Producing Area, Palawan, By Municipality

Narra, 20.7
Busuanga, 27
San Vicente, 29.4
Puerto Princesa, 43
Bataraza, 44.8
Espaniola, 45
Magsay say , 48
Cuy o, 50
Culion, 72
Araceli, 77.5
Brookes Point, 79.9
Linapacan, 102
Aborlan, 110
Rizal, 124
El Nido, 225
Roxas, 226
Balabac, 250
Coron, 267
Quezon , 365
Cagay ancillo, 588
Tay tay , 591.1
Dumaran, 664.1
Agutay a, 1,648

Source: Provincial Agriculturist Office

Seaweeds production in Palawan reached to 11,540 metric tons in 2014 as reported
by the Office of the Provincial Agriculturist. Of this total, almost 75.13% came from the
northern municipalities with the municipality of Agutaya as the highest producer
comprising 30.68% of the provincial total. The municipality of Busuanga posted the
lowest volume of production with only 8 metric tons or equivalent to only 0.35% of the
total provincial production volume. The top ten seaweeds producing municipalities were:
Agutaya, Cagayancillo, Dumaran, Taytay, Balabac, Roxas, El Nido, Rizal, Aborlan, and
Quezon (Figure 8).
Figure 8
Volume of Seaweeds Production, Palawan, By Municipality (Metric Tons)

Narra, 65
Busuanga, 40
San Vicente, 120
Puerto Princesa, 190
Bataraza, 150
Espaniola, 170
Magsaysay, 80
Cuyo, 90
Culion, 155
Araceli, 100
Brookes Point, 280
Linapacan, 150
Aborlan, 460
Rizal, 480
El Nido, 525
Roxas, 575
Balabac, 625
Coron, 305
Quezon , 450
Cagayancillo, 1,490
Taytay, 700
Dumaran, 800 Agutaya, 3,540

Source: Provincial Agriculturist Office

 Figure 9
Top Seaweeds Production Areas, Palawan

Figure 4. Major Seaweed Production Areas in Palawan

TAYTAY AGUTAYA

ROXAS

BALABAC

CAGAYANCILLO

Currently, seaweeds are grown in more than 5,000 hectares across twenty (20)municipalities
in the province and roughly 5,000 familes derive income from seaweed farming. Doubling
the hectarage of seaweed farms seems highly feasible based on a recent survey made by the
Provincial Agriculture Office. A total of 7,174 hectares potential expansion areas for seaweeds
prodction in the Province. Agutaya, the top seaweeds producing areas of Palawan can grow
almost 2,000 hectares. Cagayancillo and Balabac, one of the major producing areas can
expand about 1,000 hectares. Some areas of the Province can produce seaweeds all year
round while other areas can grow year-round but need to tranfer from one area to other.
There were some seaweed production areas are seaonal in nature (Table 5).

Table 5
Potential Seaweeds Production Areas in the Province of
Palawan (in Hectares)
LOCATION POTENTIAL CLASS

Busuanga 75 B

Coron 200 B

Culion 100 A

Linapacan 300 A

Agutaya, Concepcion, 1,956 A

Algeciras
 Magsaysay 150 C

Cuyo 30 C

Cagayancillo 1,000 A

El Nido 150 B

Taytay 448 B

San Vicente 100 B

Araceli 200 B

Dumaran 200 B

Roxas (Green Island) 230 B

Puerto Princesa City 198 A

Aborlan 235 C

Quezon 350 B

Espanola 50 C

Bataraza 300 C

Rizal 100 C

Balabac 1,000 A

TOTAL 7,174
Source: Primer on Seaweed Industry in Palawan (2014)
Note: Class A (all year round); Class B (all year round but need to transfer from one area to
other); Class C (seasonal planting).
 Section

3
Nature and Structure of the Industry
A. VALUE CHAIN MAPPING

The seaweeds value chain can be broken down into the following core segments with their
corresponding actors or players: input provision, farm production (seaweeds farmers),
trading (traders/wholesalers/retailers/agents), processing and consumption (consumers or
end users). It also presents the relevant actors of the industry, the government institutions
largely involved in the development of the chain as well as enabling laws and policies that
promotes the competitiveness, productivity and sustainability of the seaweeds industry in the
Province of Palawan (Figure 10).

Figure 10
Seaweeds Value Chain Map

Final
Functions Input Production Trading Processing Sale
Provision

Seedlings Planting Weighing Transporting Transporting

Soft tie Farm Care Transporting Sorting
Rope Harvesting Sorting Quality Control
Task Post Drying Quality Control
Farm Implements Weighing Distribution
(boats) Sacking
Transporting
Distribution

Local Retailers Seaweeds Brgy. Traders/ Processors

(lines, ropes, etc) Farmers based in:
Farmers Export Market
-11,540 MT -Cebu RDS
Brgy Island Traders
-1,684 Farmers -Cavite HK/China (42%)
LGU Managed -5,698 has -Laguna France (15%)
Nurseries -7,171 Potential Local Brokers -Zamboanga City USA (14%)
(Dumaran) Agents -Sabah Malaysia Carageenan
Expansion Area USA (19%)
-5,000 families Denmark (15%)
Farmers Key Producing Local Town Traders France (12%)
Seedlings Municipalities UK (10%)
Supplier Agutaya Large Town
(3,540MT) Traders
Operators Donors/Gov’t Cagayancillo CARGILL 1,200MT
-BFAR (1,490MT) PCI World 1,800MT
-SEAFDEC Dumaran Marcel 5,500MT Local
Noodles
-LGU (800MT) Market
Processors based
-DA (BuB) Taytay(700MT) in Puerto City
Balabac (625MT)
Enablers BFAR, DTI, WPU, PSU,DENR, PCAMRD DTI, DOST, D-BFAR
(MESO)
LGU, Micro Finance Institution, LANDBANK , SIAP, AUS AID-EAI,GTZ Sea Plant.Net, FARMC

Enablers AFMA( 8435), Fishery Code (RA 8550), LGC (RA7160), NIPAS (RA7586), Wildlife Conservation Act
(MACRO) (RA9147), Clean Water Act (RA 9275)
B. KEY PLAYERS AND FUNCTIONS

The segments along the value chain are identified by players and their minimum functions.

Input Suppliers

Good seedling cultivar varieties were mostly supported by DA-BFAR. BFAR provides grants
in the form of free seedlings, ropes and straws. Other investment such as boat,
replacement when ropes and straws have worn out, knives, packing materials, bamboo
poles (for drying facility) will come from the farmers own pocket.

Most of the seaweeds producers often sourced their planting materials from farmer’s
seedlings. In the entire province, only in Dumaran had existing seaweeds nursery operated
by the LGU. However, as of the moment, this was not operating.

Small-scale farmers who have sufficient seedlings for their own use may sell extra seedlings
to other farmers. Currently, seaweed farmers in the Province buy their seedlings at
PhP15/kg. They use motorized boats(which can load up to three tons) in transporting the
seedlings. Cost of transport ranges from PhP3,000 to PhP6,000 per trip.

Seedling sales can be a profitable commercial activity for a farmer. When a farm is affected
by natural calamities—typhoons, big waves, or plant diseases including a common disease
called “ice-ice”—demand for replacement seedlings is high. Limited access to seedlings can
therefore be a serious constraint to expanding production.

In order to address the limited availability of seedlings, a few government and donor-funded
initiatives have started to develop gene banks to identify and collect improved planting
materials. Kappaphycus is the predominant red seaweed species grown in the province.
SEAFDEC also developing pilot farmer-based seaweed nursery enterprises and provided
technical assistance to the seaweeds producers in the form of planting materials. Other input
suppliers are consisting of licensed dealers or agricultural supply stores who offer inputs to
nursery operators and farmers on cash and credit basis. Most of the agricultural suppliers sell
ropes, plastic twines “soft tie”, sacks, floaters, tools and equipment.

Seaweeds Farmers

There were an estimated total of 1,684 seaweeds farmers in the Province of Palawan.
The Municipality of Agutaya (24.23%), has the most number of farmers followed by
Taytay (12.35%), Roxas (10.93%), Dumaran (8.85%), Cagayancillo (8.79%), Coron
(5.17%), Quezon (4.93%), Balabac (4.04%), Puerto Princesa City (3.74%), and El Nido
(2.67%).

The size of most farms in Palawan range from ¼ ha to 1 hectare and the usual farming
method is monoline floating method which consists of approximately 120 lines per ¼
hectare. Peak months for seaweed farming are June to August. Palawan produces on
average a total of 344,432.24 metric tons of seaweeds annually. Seaweed production spans
a total of 5,698 hectares with 5,000 families engaged in seaweed farming.
Farmers in Palawan particularly in Agutaya, the top producing area of the province can select
any site for farming as long as there is no one else claiming the area. Each family maintains
¼ to 1 hectare farms. In general, the community operates on a first-come first-served basis
when it comes to site selection. Families who were pioneers in seaweed farming in the area
have monopoly over the prime spots near the mainland. Others have to compete for areas
farther out in the sea. Since there is no existing regulation by the local government, farmers
can expand their areas anywhere they wish as long as they do not encroach on other farms
or block entry into other farms. There are no fences set up to mark boundaries between
farms.

In most production areas of the Province, farmers use the monoline floating method due to
easier maintenance and cheaper costs compared to the other methods for establishing a
seaweed farm (Net methods).

The monoline method consists of using wooden poles as anchors for the lines. The poles are
secured 10 meters apart to the bottom of the ocean floor and nylon ropes are tied to both
ends of the posts to create a monoline. Seedlings are tied to the monoline prior to tying it to
the posts. A ¼ hectare farm may consist of 100-120 lines.

Farm establishment is usually done by the male head of the household with assistance from
male co-farmers. Farmers help each other out in establishing their farms without monetary
compensation.

The farmers interviewed said that there is an existing local seaweeds farmers association.
However, the organization is mainly inactive and has not fulfilled its purpose of providing
access to financing for its members.

Traders

There are various levels of traders that link seaweed farmers to carrageenan processors. As
a usual practice by seaweeds farmers in the province, after harvesting, farmers generally
sell fresh wet or raw dried seaweed to local barangay or island traders. These traders are
located within the community and buy directly from farmers. In some cases, these traders
may own small general retail (“sari-sari”) stores but buy and sell seaweed as a side
business. Local barangay traders can collect and “stack” up to five MT of RDS per month in
small bodegas, or warehouses, where initial cleaning and further drying may be done to
meet buyer MC specifications. The conversion ratio from fresh/wet seaweed to RDS is
approximately 8:1.

Local barangay traders then sell and deliver RDS to local town traders. Located in Puerto
Princesa and other areas of the province, these traders own or rent warehouses and buy up
to 20 MT per month. They will conduct additional cleaning, sorting, removing of tie-ties, and
drying of seaweed to the required MC (an average of up to 42% max). Non-compliance to
standards translate to price discounts. Traders assume quality-related risks and incur
losses when farmers deliver poor quality seaweed with high moisture content.

Modes of transport used to deliver or pick-up the dried seaweeds are generally by motorized
banca. Farmers meet with barangay-based traders or consolidators to schedule their
delivery or pick-up of their dried seaweeds, and to know the current buying price.

Limited feedback on quality of the farmers’ dried seaweeds are given, along with small
pieces of market information (volume requirements and pricing trends)
From local town traders, RDS is then transported and sold to large traders or exporters in
major port cities who ultimately supply RDS to carrageenan processors based in Cebu City,
Laguna and Cavite Province. In Puerto Princesa City, there are buyers (who are also
processors for dried seaweeds) and traders of raw dried seaweeds. CARGILL and PCI World
are processors whose plants are in Laguna and Cavite, respectively.

Similar to the local town traders, large traders/exporters conduct value addition functions of
cleaning and drying RDS in addition to transporting seaweed to processors.

About 99 percent of total production of the industry is sold outside the region – to
processors in Laguna, Cavite, Cebu and to traders in Manila. Palawan supplies dried
seaweeds to two big processors – the Philippine Bio-Industries, Inc. in Cavite and the PCI.
PCI World which carries the brand name Rico Carrageenan. Rico Carrageenan is a leading
supplier of carrageenan products in the world. In Taytay, Palawan there are six traders and
buyers of seaweeds.

Traders provide the following to seaweed farmers:

 Capital to start-up seaweeds farming

 Financial assistance to buy gasoline and implements for seaweeds faming
 Financial support for health/medical needs, rice assistance and household
consumption needs
 Marketing assistance and technical assistance on the quality of seaweeds

Seaweeds Processors

There are no processing centers operating in the province. There is a plan to put up one in
Batarazza in Palawan. The absence of seaweed processing centers is a critical gap in the
value chain, as indicated by major players in the province processed seaweed sector.

The raw dried seaweeds were shipped and processed in Laguna, Cavite, and Cebu and to
traders in Manila. There were some seaweeds producers shipped their RDS to Sabah
Malaysia due to accessibility.

The value of saving is gradually becoming a pattern of living for the seaweed farmers.
Seaweeds are further developed to become value-added products, such as noodles, pickles,
yema and gelatin. In Puerto Princesa City, a group of women processed seaweeds into
noodles. They are now beginning to save portions of their income from selling their produce.

Many of the local processors started out as RDS trader/exporter and expanded into
carrageenan processing. An example of a RDS trader that is also into manufacturing of
carrageenan product is Marcel Trading, the country’s largest RDS trader based in
Zamboanga City.

The largest SRC processor in the world is Shemberg Marketing Corporation, a Filipino
company based in Cebu. The company produces ATC chips, pet and food grade SRC, gel
RC, alcohol RC, and blended products. It has a production capacity of 7,100 MT/year and is
the world’s biggest buyer of cottonii. Shemberg Marketing and Marcel Trading account for
about 40% of the total demand of dried cottonii.

There are also large multinational processing firms located in the Philippines. In most cases
though, carrageenan production is only a small percentage of their corporate portfolio.
These companies have processing plants in other parts of the world where final refining and
blending are usually done. An example of a multinational firm is Compania Espanola de
Algas Marinas S.A. (CEAMSA) which is engaged in the manufacturing of carrageenan and
pectin products. It has manufacturing plants in Spain and Bulacan – Philippines. The
company also has a buying station in Zamboanga City.

C.NATURE OF INTERFIRM RELATIONSHIPS

1. Horizontal Relationship

Seaweeds Associations have been organized among growers, traders and processor-
exporters as platforms for horizontal collaboration. In case of Palawan Province, there are
existing local seaweeds farmers association. Seaweed growers associations have been
organized in most seaweed production areas to facilitate sharing of best farming practices,
collective marketing and access to government support services. However, some
organization are mainly inactive and has not fulfilled its purpose of providing access to
financing for its members. The Pandan Multi-Purpose Cooperative in Puerto Princesa for
example has been the source of planting materials for other seaweed farming barangays.

Seaweed farmers associations and cooperatives are present at the barangay level.
However, some of these associations are not formally registered yet and are only recognized
by the barangays. SIAP has been very aggressive in pursuing the cluster approach. In
fact, it has been identified as an emerging group in industry clustering, although its focus is
on the processed seaweed industry cluster. In Palawan, the cluster approach is still not
pursued aggressively but the organizing of the farmers is a step towards this approach.

There are also traders association organized in Palawan mainly to regulate the trading
practices in the municipality and for the government to easily monitor seaweed production
and trading. It also works to prevent pole vaulting and the operation of unscrupulous
traders in the province.

The relationship matrix below describes the horizontal collaboration among seaweed
growers and the vertical relations between the producers and the seaweed traders and
processors. This is based on the snapshot assessment of inter-firm relationships in the
seaweeds value chain.

Table 6
Relationship between Seaweed Producers and Buyers
Relationship Horizontal Collaboration Seaweed Producers and
Elements Traders/Processors
 Market information: volume  Farmers’ source of market
and pricing information information is usually the traders
obtained from only one operating in the area
trader is passed on to other  Seaweed growers perception is that
 Information growers in the area traders are making more money
 Sharing and  Production technology is and it would be more
 Transparency passed on from generation profitable/sustainable for them to
to generation within sell directly to processors
farming households  Some traders and processors
 Seaweed farmers do not provide technical assistance to
compare production farmer-suppliers
 performance to elucidate  Some traders provide planting
best practices materials to farmers
 Growers within one  Drying and storage facilities of
barangay share planting traders are exclusively for their own
materials(propagules) use; no common service facilities
 Growers hire members of
 Value Added
other farming households in
 Services /
the area for additional labor
 Cooperation and
during planting season
 Collaboration
 No common service
facilities for drying and
storage; each farmer dries
and stores own produce
  Traders have informal agreements
on exclusivity among seaweed
 Supplier and suppliers but sell to various
 Buyer Selection processors
 and Procurement  Cash advances are provided by the
 Process trader to address household needs
of farmers; deducted from
proceeds during harvest time
 Big potential area for  Long term relations between
 Competitiveness seaweed production growers and traders
 and offer to the  Proximity to major seaweed  Some processors maintain regular
 market processors trader supplier as“suki” supplier but
still buy from other traders

2. Vertical Relationship and Supply Chain Governance

The seaweed/carrageenan value chain is characterized by the informal nature of its

upstream base (growers/village traders) and its better organized and more formally
structured actors downstream (processors and exporters). The value chain operates with
little vertical integration and horizontal collaboration. Transactions between farmers and
market intermediaries, and between intermediaries and exporters/processors, are primarily
conducted on a “cash and carry” basis. Players buy and sell at arm’s length with price as
the main factor and driver.

Buyers generally invest in collaborative relationships with their suppliers if they are able to
offer consistent volume and quality. Likewise, trust is an important element to sustain
relationships. In the 1980s, the industry was highly vertically integrated. Companies such
as Shemberg and Marcel developed extensive supply networks in the major production areas
and provided a range of support services that included financing for farmers. In the 1990s,
demand grew and more companies and traders emerged. Together with growth,
polevaulting became prevalent. Farmers sold their harvests to whoever can offer a better
price despite their previous commitment. Consequently, exporters and processors failed to
recover the advances they provided to the farmers. As more and more exporters “got
burned”, the practice of providing financing to farmers dwindled. The traders then took
over the financing of farmers. Many of the exporters and processors now deal mainly with
wholesalers which in a way is more convenient for them.

Although financing is still provided by traders to increase leverage and ensure a consistent
supply of seaweeds, the level of financing is said to have decreased. With decreasing
availability of financing from traders, farmers face difficulties in sustaining and/or expanding
their farms.
BFAR under its Seaweed Dispesal Program organized farmers into cooperatives and
associations. Each barangay has a BFAR Management Council (BFARM-C) led by a team
leader. One of the functions of BFARM team leader is to participate in conservation,
management, development and protection of fishery resources. In the case of Barangay
Sta. Cruz of Puerto Princesa, this entails a 37-hectare seaweed farm. One of the issues
raised during the FGD with the officers of the association was the large area to protect. It
was suggested that other seaweed farmers be deputized to cover such a vast area to
protect.

D. PRICE AND COST STRUCTURE

1. Income and Profile

There are basically two culture methods for Eucheuma used by farmers. First is the fixed
monoline method. This method requires low investment from farmers. It can be installed
easily in shallow portions of the coastal areas. Many farmers adopt this method because of
its practicality. Second is the multiple longline method. This method is used in deep waters
at 10 meters and above. The lines are installed in areas with moderate to strong water
movement.

The major inputs in seaweeds farming are seedlings, bamboo poles, rope, soft tie/twine and
labor. On the average, a farmer used 2,100 kg of seedlings for a ¼ ha of seaweeds farm.
Farmers use 100 kgs per roll of 120 meters. One roll of PE rope is converted to six lines of
20 meters or four lines of 30 meters long. Together with these, 8 rolls of plastic straw or
soft tile were used to tie the seedlings. Farmer pay PhP100-150 per roll of softie for tying of
seaweeds depending on the agreement and whether including lunch and snacks.

Thirty eight mandays of labor, mostly family labor, from planting, harvesting and drying
were used per cropping.

The production cost of growing ¼ ha of seaweeds amounted to PhP83,926 for the first
cropping. The second to fifth cropping is lower as cost of seedlings and other capital
investment is excluded. The assumption is that farmers will set aside planting materials
from previous harvest and plant in the same area.

Laboris mostly done by the members of the family and this can be considered as family
income. Total cost is about PhP136,893 for ¼ ha or PhP588,524 for one ha of seaweeds
farm. Capital investment includes purchases of boat, rope, floaters, wooden stakes and
knives. These amounted to PhP36,185 for ¼ ha plus additional PhP34,500 for seedling
cost.

The income and costs were computed for ¼ ha and one hectare. The average yield in dried
equivalent was 1,284 kg for ¼ ha or 5,135 kg for one hectare. The average price received
by farmers per kilogram of dried seaweeds during the conduct of the interview was
PhP67/kg (April 9, 2014). Total yield generated gross revenues of PhP430,021 for ¼ ha or
PhP1.72 M for one hectare (Table 7).

Considering five croppings per year, a ¼ ha seaweed farm can generate a net income of
PhP293,131 while a one hectare operation can generate PhP1.13M per year. If excluding
cost of labor, a family can earn PhP1.32M from seaweeds farming.
 Table 7
Costs and Returns for a ¼ Hectare and One Hectare Seaweeds Farm in Bgy. Pularaquen,
Taytay, Palawan, 2014
PARTICULAR ASSUMPTIONS FARM SIZE
0.25 Hectare One
Croppings Per Year 1st 2nd 3rd 4th 5th Total Hectare
REVENUES
Weight of seedlings per module 2,100 kilos at 100 kg per roll of 20 meters
Less: mortality rate 8%
Culture Period 52 days
Estimated Production after 52 days (wet) 8,986

Total Production (wet) 8,986

Wet to dry ratio 7
Total Production (RDS) 1,284 1,284 1,284 1,284 1,284 1,284 5,135
Price (Pesos per kilogram) 67 67 67 67 67 67 67
Total Sales per cropping 86,004 86,004 86,004 86,004 86,004 86,004 344,017
No. of croppings per year 5 5
TOTAL REVENUES 430,021 86,004 86,004 86,004 86,004 86,004 430,021 1,720,084
COSTS No. Unit Unit Price Total
Investment Cost 36,185 144,740
Boat (estimated life of 10 yrs) 1 unit 25,000 25,000
(Depreciation Expense for 1 year) 3,000
Planting lines 21 rolls 255 5,355
Mainline 5 rolls 450 2,250
Floater
Pataw 4 pcs 150 600
Styropor 10 kg 100 1,000
Stainless knives 4 pieces 100 400
Baskets/tiklis 10 pieces 50 500
Wooden stakes 72 stakes 15 1,080
Establishment labor 2,000
Materials
Seedlings Cost
weight of seedlings per module 2,100 kilos
seedlings cost 15 pesos/kilo 31,500 31,500 126,000
Seedling transport from Dumaran 3,000 3,000
Plastic Straw ("tie-tie") 8 rolls 165 1,320 1,320 1,320 1,320 1,320 1,320 31,680
Sacks (dried seaweeds) 18 pieces 17 306 306 306 306 306 306 7,344
Labor
Tying of seedlings 8 rolls tie tie P100/roll 800 800 800 800 800 800 19,200
Harvesting 2 mandays 300 600 600 600 600 600 600 14,400
Drying (3 days x 2 pax) 6 mandays 300 1,800 1,800 1,800 1,800 1,800 1,800 43,200
Crop Maintenance (daily) 30 mandays 150 4,500 4,500 4,500 4,500 4,500 4,500 108,000
Other Expenses
Fuel 1 liter per day 67 3,015 3,015 3,015 3,015 3,015 3,015 72,360
Transport (Marketing) 18 sacks 50 900 900 900 900 900 900 21,600

TOTAL COSTS 83,926 13,241 13,241 13,241 13,241 136,890 588,524

NET INCOME 293,131 1,131,560
Excluding Cost of Family Labor 1,316,360

Source: Office of the Provincial Agriculturist

2. Relative Financial Position of Players

As indicated by the increasing prices of the seaweeds products as they move from the lower
to higher stages of the chain, the analysis shows that there is considerable value addition
taking place in the market chains. However, the seaweeds farmer’s participation in the
marketing activities is quite limited as they remain in the lowest stage of the chain, the farm
market level. Commonly, they sell only the fresh and dried seaweeds and therefore receive
the lowest price among the various actors of the value chain. Although it appears that the
farmers and processors share is quite high at Php11.00 per kilo of RDS, this does not
necessarily translate into high farm income. The shares of farmers are based on per unit
product value and since seaweeds farmers have small farm sizes (almost ¼ hectare on
average) low farm productivity and therefore have low marketable surplus, their incomes
are generally low (Figure 11).

The seaweeds trader generates only Php4.00 per kilo of RDS while Php11.00/kilo for the
processors. Traders and processors incomes are considerably higher because of their large
scale operations. Incidentally, they have considerable advantage over the farmers as they
have the required capital, managerial skills, and access to market and information. On the
other hand, the farmers are in a disadvantaged position. Although seaweed products value
addition is a high-value product, seaweeds farmers do not get high income due to their
inability to undertake other value-adding activities due to huge capital and manpower
requirement.

Figure 11
Cost Contribution and Value Added Captured

Value Added
Production Cost Php11.00
90
80
70 Php4.00
60 Php11.00
50
40
30
Php71.00
20
Php51.00
10 Php34.00

0
Seaweeds Traders Processors
Farmers

Source: Office of the Provincial Agriculturist/Focus Group Discussions

 Section

4
Market and Market Opportunities
World Trade of RDS and RC/SRC

The world supply of RDS (for carrageenan production) is dominated by three countries:
Chile, Indonesia, and Philippines. Over the past 10 years, the volume of world seaweeds
exports increased by 42 percent, from 311,800 tons (US$427.2 M) in 2004 to 442,200 tons
(US$784.4 M) in 2013. Highest level was attained in 2010 (550,000 tons valued at US$790
M) (Figure 12).

Figure 12
World Exports of Seaweeds

Source: UNTrade Map

Note: Volumes from 2007 to 2013were estimated based on the trends of previous years’ data.
Raw Dried Seaweeds (RDS) Exports

By volume, Indonesia ranked as the number one exporter of seaweeds in 2013 (40% of
total seaweeds exports, 176,100 tons valued at US$162.4 M). Other major exporters
include: Chile (82,100 tons), Ireland (38,200 tons), Philippines (37,100 tons), Peru (28,000
tons), and South Korea (26,600 tons) (Figure 13).
Figure 13
World Exports of Seaweeds by Major Supplier, 2013

Note: Total volume was estimated based on the trends of previous years’ data Source: UN Trade Map
Carrageenan Exports

The volume of carrageenan exports (RC/SRC) surged by 86 percent over the past 10 years,
from 98,700 tons in 2004 to 183,600 tons in 2013. Its value likewise more than doubled
(from US$626.4 M in 2004 to more than US$1.4 B in 2013) during the same period (Figure
14).

Figure 14
World Exports of Agar-Agar and Carageenan, 2003-2012*

Source: UNTrade Map

*Carrageenan export data was lumped under classification code 130239 (Mucilages and
thickeners nes,modified or not,derived from vegetable products.

China is a major player in global carrageenan trade. Among the major processors are
Shanghai Brilliant, Green Fresh, and Shelly Food. These companies supply 66 percent of the
Chinese world production of gel press carrageenan.

China accounts for 27 percent of the total volume of carrageenan exports in 2013, roughly
48,900 tons valued at US$425.7 M. Other major exporters include: Philippines with 23,500
tons (US$152.8 M), Germany with 11,900 tons (US$81 M), India with 7,800 tons (US$92.1
M), and Spain with 7,400 tons (US$62.6 M) (Figure 15).

In the global market, carrageenan is competing directly with product substitutes such as
pectin, carboxy methyl cellulose (CMC), and microcrystalline cellulose (MCL). In the US
market, there are 15 hydrocolloids products competing with carrageenan such as: agar,
alginates, gum Arabic, CMC, gelatin, gellan gum, guar gum, locust bean gum, MC/HPMC,
MCL, pectin, starch, tara gum and xanthan gum.
 Figure 15
World Exports of Carrageenan and Agar-Agar by Major Supplier, 2013

Figure
World Exports of Agar-Agar and Carageenan by Major Supplier, 2013

Source: UNTrade Map

RDS Imports

World imports of seaweeds increased by 71 percent from 341,300 tons (US$469.6M) in

2004 to 582,300
tons (US$1.1 Figure 16
World Imports of Seaweeds, 2003-2012
billion) in 2013
(Figure 16). In
2012, China
accounted for 47
percent (281,900
tons valued at
US$425.7 M) of the
global seaweeds
imports. Other
major importers
include: Japan
(46,500 tons), Chile
(40,800 tons),
Ireland (35,200 tons), and USA (30,100 tons).

Note: Volumes from 2009, 2010, 2012, and 2013 were estimated
based on the trends of previous years’ data.
Source: UNTrade Map
 Figure 17
World Imports of Seaweeds by Major Buyer, 2013

Note: Total volume

was estimated based
on the trends of
previous years’ data.

Source: UNTrade Map

Carrageenan Imports

World imports of carrageenan and agar-agar rose by 38 percentfrom 126,600 tons in 2004
to 175,100 tons in 2013. For the same period, its value almost doubled from US$645.9 M in
2004 toUS$1.3 B in 2013 (Figure 17).

Figure 17
World Imports of Agar-Agar and Carrageenan2004-2013*
*Carrageenan import data was lumped
under classification code 130239
(Mucilages and thickeners nes,modified
or not,derived from vegetable products)

Note: Volumes from 2009, 2010, 2012

and 2013 were estimated based on the
trends of previous years’ data.

Source: UNTrade Map

In 2013, the major importers of carrageenan includedGermany (24,100 tons valued at

US$129 M), US (11,600 tons valued at US$131.4 M), Belgium (7,600 tons valued at US$57
M), France (7,000 tons valued at US$45.8 M), and Spain (6,400 tons valued at US$53.4 M)
(Figure 18).
 Figure 18
World Imports of Carrageenan and Agar-Agar by Major Buyer, 2013

Source: UNTrade Map

Philippine RDS and RC/SRC Trade

Raw Dried Seaweeds Exports

From 2004 to 2013, Philippine annual exports of RDS declined by 4 percent in volume and
increased by 15 percent in
value. Annual average Figure 19
volume stood at 18,600 Philippine Seaweeds Exports (RDS), 2004-2013
tons valued at US$30.7
M. In 2013, exports
dropped by 36 percent
from 21,000 tons
(US$30.6 M) in 2012 to
13,500 tons (US$32.4
M). The biggest market
for Philippine RDS is
China, roughly 61
percent of the total
volume in 2013 at
8,200 tons (US$3.3 M). Other markets were USA with 22 percent (3,000 tons); South Korea,
6 percent (800 tons); and, France and Spain, 3 percent each (400 tons each). In terms of
value, Spain was the major buyer at US$13.2 M (Figure 19).
 Figure 20
Seaweeds Exports by Leading Country Buyers, 2013

Source of basic data: BAS

Ninety-one percent (91%) of seaweeds exported in 2013 are in the form of Eucheuma chips
(12,300 tons valued at US$6.3 M) while the rest (9%) are fresh, chilled,or dried (1,200 tons
valued at US$26.1 M) (Figure 21).

Figure 21
Seaweeds Exports by Product Type, 2013

Source of basic data: BAS

Carrageenan Exports (RC/SRC)

Over the past ten years, Philippine carrageenan exports fell by one percent in volume but
increased by 18 percentin Figure 22
value. Average exports stood at Philippine Carageenan Exports, 2004-2013
13,100 tons valued at US$101.5
M. In 2013, volume exported
dropped by 34 percentfrom
12,900 tons (US$152.8 M) in
2012 to 8,600 tons (US$195.2
M). This could be attributed to
the decline in seaweeds
production in the country.The
major markets of Philippine
carrageenan exports include:
USA (32%, 2,800 tons, US$49.8
M); UK (13%, 1,100 tons); Denmark (10%, 860 tons); Belgium (6%, 500 tons); and
Thailand (4%, 300 tons) (Figure 22-23).

Figure 23
Carrageenan Exports by Leading Country Buyers, 2013

Source of basic data: BAS

RC accounted for 70 percent of Philippine carrageenan exports in 2013 (6,000 tons valued at
US$133.7 M), followed by SRC at 27 percent (2,300 tons valued at US$37.3 M), and other
carrageenan products at 3 percent (300 tons valued at US$24.2 M). The US RC market is
composed of meat applications (45-55%), dairy (30-40%), and other applications such as
air freshener gels, gravy, and sauces (Figure 24).
 Figure 24
Carrageenan Exports by Product Type, 2012

Source of basic data: BAS

Figure 25. US Import of Carrageenan by
Indonesia has surpassed the
Country Sources, 2013
Philippines in terms of RDS
production as raw material for
carrageenan, but the Philippines
remains a major supplier of
carrageenan to the United States.
Philippine exports to the United
States increased from 5,824 tons in
2011 to 6,308 tons in 2012.

It is interesting to note the dramatic

shift of Philippine exports from RDS
to RC/SRC. In 1998, 78 percent of
Philippine seaweeds exports are in
the form of RDS and only 22 percent
are processed (RC/SRC). Ten years
later, 87 percentof Philippine
production are already in the form of
RC/SRC and only 13 percent are in
the form of RDS. The shift is mainly due to the price premium (differential) between RDS
and RC/SRC which motivated Philippine processors to invest in higher value-adding activities
(Figure 25).
Raw Dried Seaweeds Imports

To augment the supply of Table 8

RDS for carrageenan Composition of Philippine RDSand RC/SRC
processing, the Philippines Exports (1998 and 2008)
imports from Indonesia. FMC
started importing from
Indonesia in 2000 and
Shemberg in 2004. In 2013,
imports from Indonesia
reached almost 20,000 tons.
Over the past 10 years,
seaweeds import volume and
value (on the average) grew
by 30 percent and 38 Source: Bureau of Export Trade Promotion
percent, respectively (Figure
26).

In 2013, 87% of the Philippine seaweeds imports were sourced from Indonesia (6,400 tons
valued at US$9.6 M). Other sources included: India, Chile, China, South Korea, and Fiji.
Figure 26
Philippine Seaweeds Imports, 2004-2013

Source of basic data: BAS

 Figure 27
Seaweeds Imports by Leading Country Suppliers, 2013

Source of basic data: BAS

By product type, RDS imports in 2013 comprised of 53 percent fresh, chilled, and dried
(4,200 tons valued at US$6.2 M) and 44 percent Eucheuma chips and other form (3,200
tons valued at US$4.9 M) (Figure 28).

Figure 28
Seaweeds Imports by Product Type, 2012

Source of basic data: NSO

Industry Structure

The industry is composed of five (5) multinational companies and nine (9) local processors.
Among the multinationals are: CP Kelco, FMC Health and Nutrition, Kerry Food Ingredients
Phils. Inc, Cargill Specialty Asia, and Ceamsa Asia Inc. Major local players are Shemberg
Corporation, W. Hydrocolloids, Inc., Marcel Trading Corporation, TBK Manufacturing
Corporation, and MCPI Corporation. Multinational companies import raw materials from
Indonesia and other sources. Big local companies also import RDS from Indonesia but prefer
locally sourced RDS.

Multinationals are relatively big and have operations in Europe, North America, Asia, and
Latin America.Local companies, on the other hand, are usually family-owned corporations.
They usually maintain regular (two to five) suppliers of raw materials.
Commercially, seaweed processing can produce two (2) very distinct products: (a) refined
carrageenan (RC);and (b) semi-refined carrageenan (SRC).

In the Philippines, the traditional extraction process involves boiling the seaweed in alkali for
long periods of time under oxygenated conditions. The carrageenan is bleached into
solution, subjected to viscosity control so that the liquor can be pumped and filtered and
then coagulated in alcohol or potassium chloride solution.

SRC is produced by dipping the dried seaweeds in alkali(at moderate temperature).

Processing technologies for SRC is a blend of American and Japanese technologies utilizing
the non-extractive method. The method leaves more than two (2) percent Acid Insoluble
Matter (AIM) in the product, giving cloudier gels than refined carrageenan. The process flow
of SRC Pet Food and SRC Food Grade are presented in Annexes B and C.

RC processing technologies in the country have been adopted from Danish, Japanese,
French, and Taiwanese technologies and utilize the extractive method. This method allows
the extraction of pure carrageenan after alcohol precipitation. The process flow of refined
carrageenan is presented in Annex D.

The Philippines is the second largest SRC food grade manufacturer in the world next to
China. It has lost the SRC pet food market to Indonesia. For refined carrageenan, the
Philippines ranks third, after the United States (FMC Corporation) and Denmark (Hercules,
Inc.).

Currently, there are fourteen (14) carrageenan processors in the country. In terms of RC
process, only Shemberg Biotech Corporation produces the alcohol precipitated carrageenan
(APC) while gel press carrageenan (GPC) is produced by CP Kelco, Cargill (Phil. Bio-
Industries), and W. Hydrocolloids. The rest are producing SRC (Table 9).

Table 9
Philippine Carrageenan Processors (2014)
Carrageenan Processor Products
Multinationals
P Kelco RC -GPC
Ferry Food Ingredients Phils, Inc. SRC
MC Health and Nutrition SRC
Cargill Specialty Asia (Phil Bio-Industries) SRC
Ceamsa Asia, Inc. SRC
Local Companies
Hydrocolloids, Inc. RC-GPC
Chemberg Biotech Corporation RC-APC
Chemberg Marketing Corporation RC-GPCSRC
Marcel Trading Corporation SRC
BK Manufacturing Corporation SRC
Zamboanga Carrageenan Manufacturing SRC
Accel Carrageenan SRC
Mega Polysacharide SRC
Mioka Biosystems Corporation SRC

Note: APC –alcohol precipitated carrageenan; GPC – gel press carrageenan;

SRC – semi-refinedcarrageenan
 Figure 29
Estimated Market Share of Carrageenan
Processors, 2014
The biggest players in the
industry are W. Hydrocolloids
(25%), Shemberg Corporation
(25%), Marcel Trading Corp.
(20%), Kerry Food Ingredients
(10%), CP Kelco (10%), and the
rest are shared by FMC, MCPI
and other players (Figure 29).

Source: Seaweeds Industry Association

of the Philippines (SIAP)

Table 10
Company Profile of Major Carrageenan Processors in the Philippines
Company
Processors Profile

W Hydrocolloids, W Hydrocolloids has more than 30 years experience in the

Inc. carrageenan industry.The company manufactures carrageenan
products through its regional production facilities in Carmona,
Cavite, Philippines. Its products are marketed under the trade
name RICO® CARRAGEENAN (www.rico.com.ph, July 3, 2014)

RICO is available in food and non-food grade semi-refined kappa

and iota carrageenan. The company has partners, affiliates, and
subsidiaries for the production of refined kappa carrageenan and
other carrageenan fractions (iota, lambda, kappa 2). It also
operates regional stations for sourcing and supply of Eucheuma
cottonii and Eucheuma spinosum seaweeds. Rico's team of
experienced and competent carrageenan specialists continuously
develop and create ways of expanding the uses of carrageenan in
various applications truly living up to its aim of exploring "A World
of Possibilities".
Shemberg Shemberg started as a seaweed exporter in 1966.As the demands
Corporation of the market grew rapidly, Shemberg transcended into a one stop
shop of all kinds of carrageenan – Kappa, Iota and Lambda –
rendering different application from dairy, meat, confectionery,
pharmaceutical, cosmetics, water jellies, desserts, beer and
petfood. For over four decades, Shemberg developed its products
with conformance to the Philippine and International Standards
that ensures safe and high quality.

Spanning almost four decades of pioneering experience in

carrageenan production and processing, Shemberg has
maintained its highest standards in producing carrageenan for
various food, pharmaceutical, personal care, oral care and other
nonfood applications. Shemberg is an active participant in
discovering and furthering technologies in the production and
application of carrageenan in response to the everevolving needs
 of the world market. It prides itself as a world-class producer of
carrageenan with the innovative spirit that has allowed it to
further the interest of consumers worldwide by providing
processors and manufacturers with novel technologies, benefits,
cost-effective and functional carrageenan polymers. Its products
are being marketed under the following names: BENGEL,
BENVISCO, BENLACTA, PUREGELL, and BENSTABI. Shemberg has
evolved and developed multitudinous applications of carrageenan
with three facilities catering to world class standards.
(www.shemberggroupofcompanies.com, July 3, 2014)
Marcel Trading Marcel Trading Corporation started business in 1969, exporting
Corporation various sea products. In 1971, Marcel added dried seaweeds to its
range of exports. Because of its policy of strict quality control and
good value, the company quickly established strong supply
relationships with many Carrageenan processors worldwide. As
one of the major suppliers of dried seaweed to the Carrageenan
Industry, Marcel had been extensively involved in seaweed
farming activities, which in turn has helped provide livelihood for
hundreds of farmers and spur economic growth in seaweed
farming areas in the Philippines.

From supplying dried seaweed raw materials, Marcel diversified

into carrageenan processing in 1977, using Kappaphycus alvarezii
(Eucheuma cottonii) and Eucheuma Denticulatum (Eucheuma
spinosum) as the main raw materials for producing Kappa and
Iota Carrageenan.

Through years of experience, Marcel has developed an expertise in raw

material procurement,
carrageenan processing, food ingredients formulation, quality control and
assurance, product
development, financing, marketing, and technical assistance to customers.
Now, Marcel owns and
operates two carrageenan production plants and one blending facility. The
company also has marketing
affiliates for local and worldwide sales and maintains warehouses to carry
stocks of popular products
in the US, Europe, and Asia. (www.marcelcarrageenan.com, July 3, 2014)
CP Kelco CP Kelco is a multinational carrageenan company in the
Philippines. In 1997, CP Kelco established its carrageenan plants
in Cebu as the innovation leader in theproduction of
polysaccharides by microbial fermentation, extraction from land
and sea plants, and modification of cellulose-based raw materials.

CP Kelco’s history spans over 125 years, dating back to when the
J.M. Huber Corporation was founded in 1883. The company’s
products are derived from natural, renewable raw materials, and
CP Kelco strives to provide these products with minimal
modification. These products serve many functions, including
viscosity modification, thickening, suspension, stabilization and
gelation (www.cpkelco.com, July 3, 2014).

CP Kelco has more than 40 years of experience in carrageenan

production. CP Kelco is working with a brand portfolio of
carrageenan products and is well prepared toserve customers as
an acknowledged and reliable partner. CP Kelco can
helpcustomers master the art of creating texture or stabilization of
 consumer products.Commercial carrageenan products are
frequently standardized for obtaining optimalgelling and thickening
properties. By using the appropriate carrageenan product,
theformulator can create textures ranging from free-flowing
liquids to solid gels. In additionto offering standard types, CP
Kelco works in conjunction with customers to developnew
products and formulations for specific applications. Carrageenan
from CP Kelco is marketed under the following names:

GENULACTA® types are standardized for milk applications

GENUGEL® types are standardized for water and meat
applications and are used in personal care and household
products
GENUTINE® types are gelatine alternatives
GENUVISCO® types are used as thickening, stabilizing, gelling
and texturizing agents
GENU® PLUS types are standardized for use in marinated meat
and poultry
GENU® Texturizer types are blends of carrageenan and other
hydrocolloids
Kerry Food Kerry started its operations in 1972. Its history traces the
Ingredients evolution and growth of Kerry Group – from its modest beginnings
(Philippines), Inc. in the south west of Ireland into a leading player in the global
food industry. Commencing from a green field site in Listowel, Co.
Kerry, Ireland over 40 years ago, Kerry Group has realised
sustained profitable growth with current annual sales of
approximately €5.8billion. The dynamics of all food and beverage
markets, lifestyle changes and the internationalisation of food
tastes with a growing preference for convenience, variety and
quality prepared foods or snack products, means the Group's
worldwide businesses are well positioned for continued growth
and development.
FMC Health and FMC Health and Nutrition is the largest and most experienced
Nutrition producer of carrageenan, alginates and Avicel® MCC worldwide.
During the past 60 years, FMC BioPolymer has established a
tradition for providing high quality ingredients to the Food
Ingredients industry.

The company develops and customizes blends of carrageenan for

specific gelling, thickening, and stabilizing properties. FMC is one
of the largest and most experienced producer of carrageenan
extracts worldwide. During the past 60years,FMC Health and
Nutrition has established a tradition for providing high
qualitycarrageenans, technical expertise, and service. FMC
BioPolymer builds quality andperformance into its carrageenan
products at three levels—seaweed sourcing, extractmanufacturing,
and understanding and tailoring the functional properties of each
product.

As a global leader utilizing advanced technologies and customer-

focused research and development, FMC provides innovative and
cost-effective solutions tofood and agriculture, pharmaceutical,
healthcare, pulp and paper, textiles, glass andceramics, rubber
and plastics, lubricants, structural pest control, turf & ornamental
markets, specialty and related industries (www.fmc.com, July 3,
2014)
MCPI Corporation MCPI Corporation launched operations in 1983, initially leasing a
 seaweeds processing facility of Marine Colloids (Philippines), Inc.,
a wholly owned-subsidiary ofa multi-national company based in
Chicago, Illinois. When the subsidiary ceased itsoperations in the
Philippines due to turmoil in the country’s political and
economicenvironment triggered by the 1984 People Power
Revolution, MCPI was awarded itsfirst large exclusive five-year
supply agreement contract for FMC Corporation and itsmajor
customers. This opportunity provided the resources for MCPI to
construct its own plant in Cebu.

The MCPI Corporation manufactures natural grade carrageenan

that can be used for various food and non-food applications. The
company is involved in seaweed cultivation in Danajon Bank and
also supplies seaweed raw materials to carrageenan processors.
Aside from their own farm, the company sources from small
farmers all over the Philippines and operates a plant in Cebu
which produces carrageenan at an annual rate of 1,500 tons with
provisions for expansion to 3,000 tons annually.
TBK Manufacturing TBK Manufacturing Corporation was established in 1999. The
Corporation company has been engaged in the export of marine products for
more than 20 years now and retains a firm foothold in the global
market. TBK aims to earn recognition as one of the best
international suppliers of high quality, cost-effective carrageenan
to customers worldwide.
Situated near the heart of one of the largest seaweed producing
areas of the Philippines, TBK has cultivated supply agreements
with reputable seaweed producingcooperatives and organizations
to ensure the supply and availability of first-rate raw materials.
With more than 30 years of cumulative industry experience, the
invaluable experience and modern facilities of the TBK R&D Team
are also made available tocustomers who require assistance in
formulating new applications and products.
(http://jorgeduquillo.fm.alibaba.com/company_profile.html, July 3,
2014)
Cargill Specialty Asia Cargill Specialty Asia is one of the world’s leading suppliers of
texturizers and emulsifiers to the global food and beverage
industry, as well as the pharmaceutical and cosmetics markets.
Cargill Specialty Asia is a global business with activities in 24
countries over all major regions. The company offers specific
solutions for providing texture in multiple food applications, based
on a wide palette of ingredients, including hydrocolloids, lecithins,
starches, soy flour, functional systems and emulsifiers.
Cargill has two carrageenan (hydrocolloid) production plants in the
Philippines. Located in Canlubang, Laguna, this joint-venture
plant, Philippine Bio-Industries (PBI), is fully automated, produces
gelling carrageenan from locally sourced seaweed and is ISO
9001:2000 certified.
Cargill started doing business in the Philippines in 1947 when the
vegetable oil division started buying copra for export to the United
States. It was Cargill’s first office in Asia. Cargill Philippines now
employs over 460 people throughout the archipelago. The primary
offices are in Makati City (headquarters), Bulacan, Laguna, and
General Santos City, with several satellite offices in strategic
locations all over the Philippines. Operations include grain and
oilseed originating and processing, commercial feeds
manufacturing, texturizing and sweeteners solutions for food and
beverage applications. (www.cargill.ph, July 3, 2014)
CEAMSA Asia Inc. Founded in 1967, Compañía Española de Algas Marinas S.A.,
CEAMSA, manufactures and supplies a comprehensive range of
high quality carrageenan and pectin products to the global food
industry.In February 2009, CEAMSA Asia Inc. was incorporated
and registered in the Philippines to be the first international
venture of CEAMSA. The company is 99.99% owned by CEAMSA
Spain.
CEAMSA Asia Inc. is a semi-refined carrageenan manufacturing
plant that utilizes technology developed by its parent company in
Spain. Products are 100% percentexported. In addition, as an
export oriented firm, CEAMSA ASIA INC. is a bonafideBoard of
Investment registered enterprise.
(http://camaraespanola.files.wordpress.com,July 3, 2014)
Zamboanga Zamboanga Carrageenan Manufacturing Corporation together with
Carrageenan its sister company, LM Zamboanga United Trading, is one of the
Manufacturing Corp. key players in the Seaweed business in the southern part of the
Philippines, specifically Zamboanga City. It has set a very high
standard in the acquisition of raw seaweed as well as in the
processing of semi-refined carrageenan. Zamboanga Carrageenan
is an exporter of semi-refined carrageenan and among the top
exporters of RDS. The company also exports sun-dried white
seaweed which is used in Asian Cuisine, when rehydrated it takes
the form and texture of newly harvested seaweed.
(http://jorgeduquillo.fm.alibaba.com/companyprofile.html, July 3,
2014)
Accel Carrageenan Accel Carrageenan Corporation (ACC) is a new name in food grade
Corporation semi-refined carrageenan. Formerly RICO PHILIPPINES Industrial
Corporation (RPIC), the new company was further enhanced and
expanded to suit the growing demand of quality carrageenan
products.

Established in 1990 through a joint venture of Rico Industrial

Taiwan and Marcel Trading Corporation (MTC) of the Philippines,
RPIC’s initial activities were focused on producing both semi-
refined and refined carrageenan under an exclusive selling
arrangement to MTC.

In early 2000, RPIC, still the sole supplier of MTC, moved up to

producing food-grade semi-refined carrageenan. Seventy percent
(70%) of its output was channeled by Marcel to carrageenan
buyers in Asia, Europe, and the United States. The remaining 30%
was sold to the domestic market through an affiliated distribution
company serving the top food corporations and conglomerates in
the Philippine market.
(http://www.accelcarrageenan.com/index.htm)
Mioka Biosystems Mioka Biosystems Corporation (MIOKA) is a manufacturer and
Corporation supplier of food grade carrageenan. It has its own farming site in
Zamboanga, where there is abundant supply of seaweed raw
materials. Its manufacturing plant is located in Canlubang
Laguna. Carrageenan products from Mioka can be customized
based on each customer’s specific needs. Mioka works with its
customers to develop the best possible functional Carrageenan
system for their products. It manufactures semi refined food
grade carrageenan.
Carrageenan processors are mostly located in Cebu and Luzon. There are currently six
carrageenan processing plants in Cebu, two in Zamboanga, two In Laguna, two in Cavite,
one in Bulacan, and one in Leyte (Table 11).

Seaweeds from Palawan are usually shipped to Cebu and Manila/Cavite via Mindoro-
Batangas. A small volume goes Puerto Princesa then to Manila. Bulk of seaweeds from
Agutaya are delivered straight to Manila/Cavite/Laguna via Mindoro.

Table 11
Spatial Concentration of Carrageenan Processors
Carrageenan Plant
Processor Location

Multinationals
P Kelco Sibonga, Cebu
Ferry Food Ingredients Phils, Inc. Lapu-lapu City, Cebu
MC Health and Nutrition Mandaue City, Cebu
Cargill Specialty Asia (Phil Bio-Industries) Canlubang, Laguna
Ceamsa Asia, Inc. Marilao, Bulacan
Local Companies
Hydrocolloids, Inc. Carmona, Cavite
Chemberg Biotech Corporation Carmen, Cebu
Chemberg Marketing Corporation Mandaue City, Cebu
Marcel Trading Corporation Zamboanga City
BK Manufacturing Corporation Tacloban City, Leyte
Zamboanga Carrageenan Manufacturing Kasanyangan, Zamboanga
Corp. City
Accel Carrageenan Carmona, Cavite
Mega Polysacharide Maasin, Zamboanga City
Mioka Biosystems Corporation Canlubang, Laguna
Source: SIAP

There are important criteria being considered in choosing a processing plant location: access
to raw material source; abundant water supply; reliable power supply; availability of
manpower; with port facilities and good shipping frequency; availability of support
industries; and good peace and order situation.

Most carrageenan processors are now into final blending. In fact, most carrageenan exports
are now blended products (unlike the pure carrageenan exported in the 1990s). Final
blending is done to conform to the demand (requirements, specifications) of users (end
buyers). Usually, carrageenan products are blended with salt or other hydrocolloids as
specified by the buyers.

Benchmarking Seaweed Competitiveness

Overall, Philippines RDS ranked higher than Indonesian RDS with the exception of price and
moisture content. The properties, consistency, percentage of acceptable foreign matter, and
gel strength and color were considered to be relatively better in the Philippines. The ranking
of quantity and reliability of suppliers were fairly close. In terms of quantity, processors
considered the current total national cottonii production and scored the Philippines higher
but this may definitely change as Indonesian production increases.
The relatively higher scores of Philippines RDS did not come as a surprise to traders and
exporters but some questioned why processors were shifting to Indonesia if basic qualities
were perceived to be inferior to the Philippines. It was recognized that for processors, price
and gel strength are ultimate the key CSFs for RDS competitiveness (Figure 30).

These results are only a snapshot of current opinions and comparative advantages today
may be slowly eroding as the Indonesian seaweed industry becomes increasingly more
competitive. RDS is a global commodity that is primarily price-driven but product
differentiation based on a few of these CSFs (availability, consistently superior properties,
etc.) could be promoted to maintain a competitive edge over rival suppliers.

Figure 30
Benchmarking Philippines RDS

Moisture Content
4
Quantity 3 Foreign Matter
2
1
Gel Strength/Color 0 Properties

Reliability Consistency

Price
Phi l i ppi nes
Source: SIAP
Indones i a

Market Potential

The market is huge and growing, especially for dairy and meat. The biggest markets are still
the Americas, Europe and Japan. The Philippines remains a strong supplier of carrageenan
in the US market. According to industry players however, it is expected that the Chinese
carrageenan processors will increase its market share and keep a lid on prices. Chinese
buyers of raw materials are notorious for outbidding most other buyers in search for raw
material.

Carrageenan suppliers are making strong efforts to produce customized and differentiated
products to move away from the “commodity status.” A higher level of specialization is being
done for nutraceutical use. Obtaining approval is likely to be more difficult than in standard
food application, but the barriers to competitive entry will be more difficult to surmount. This
is a specialty and niche (small) market which processors are able to target.Hydrocolloid
consumption in the various food applications amounted to two (2) million tons worth US$7
billion in 2013. For carrageenan, meat application is the most important, at 45-55 percent
share of the food market.
 Table 12
Hydrocolloid Markets – All Applications, 2013
Applications ‘000 Tons US$/Kg US$Million
Industrial 5,460 1.89 10,290
Food 2,080 3.42 7,120
Oilfield 3,020 2.11 6,370
Total 10,560 23,790
Source: Industry Players

Table 13
Food Hydrocolloid Market, 2013
Hydrocolloid ‘000 Tons US$Million
Gelatin 201.3 1,758.1
Starches 1,499.7 1,616.7
Pectin 54.0 856.0
Carrageenan 50.4 615.9
Xanthan 72.1 606.1
Agar 11.9 321.1
Alginates 15.0 306.2
CMC 42.0 225.6
Guar 48.3 223.0
Arabic 49.6 199.7
MCC 12.5 119.3
LBG 11.0 106.6
MC/HPMC 8.3 100.3
Others 6.5 68.4
Total 2,083 7,123
Source: Industry Players

Product Distribution

Dried seaweed are produced in tremendous quantities by 1,684 seaweeds farmers in

Palawan. The marketing channel consists of farmer-producer, small traders or middlemen,
large traders or agents and exporters/processors.

Basically, dried seaweeds are exported locally in Cebu and Manila for further processing.
There are collection centers where seaweeds from various production areas are collected
and sent to local exporting centers. In some areas of the Province, there were presence of
viajeros and collectors or buying agents. They normally went to the production areas or
seaweeds farms to buy dried seaweeds and trade it to the local traders. There were
seaweeds producers in the province who directly trade their products to the processors
based in Cebu or Manila (Figure 31).

Seaweeds from Agutaya, Roxas and Taytay are usually shipped to Cebu and Manila/Cavite
via Mindoro-Batangas. A small volume goes Puerto Princesa then to Manila. Bulk of
seaweeds from Agutaya are delivered straight to Manila/Cavite/Laguna via Mindoro.
 Figure 31

Viajeros

Cebu/Manila
Seaweeds Local Based Seaweed
Farmers Traders Processor

Collectors/
Buying Agents

Source: Industry Players

Prices of RDS and RC/SRC

A. RDS Prices

The Philippines and Indonesia are both trading Eucheuma seaweeds in the international
market. In 2013, Figure 32
Philippine RDS fetched a RDS Price: Philippines vs. Indonesia, 2003-2012

price of US$1,100-
1,200/ton (or $1.0-
1.20/kg.), a little higher
than Indonesian RDSby
US$100-200/ton. This
year, Philippine RDS price
increased to about
US$1,800-2,000/ton, still
performing better than
Indonesian RDS at
US$1,700/ton (computed
at 38% moisture content). Source: SIAP
Comparatively, prices of seaweeds from the Philippines are about 12 percent higher than
those from Indonesia, mainly due to better quality of Philippine seaweeds (Figure 32).

Box 2. RDS Price Spike in 2008

The “cottonii crisis” of 2008 was a result of prices rising sharply to unprecedented levels.
Several factors contributed to the 2008 cottonii crisis but the root cause wasthe shortfall in
supply (lower level of production). The “unusual” aggressive buying by some processors
set off a period of panic buying and prices skyrocketed to US$2,750 per ton.
 B. Carrageenan (RC/SRC) Prices

Carrageenan prices have averaged at US$14/kg for SRC and US$10-11/kg for RC for the
period 2010-2013.In 2013, the average carrageenan prices in the US were pegged at
US$14.19/kg (for refined carrageenan) and US$10.89/kg (for semi-refined carrageenan)
(Figure 33).
Source: SIAP

C.Local Prices

The average price of seaweeds from 2004-2015 is growing at 9.6 percent. In 2014, the
average price of dried seaweeds in Palawan is 67 pesos per kilo, 6 percent higher from 2013
production. The price of seaweeds varies depending on which time of the year. In 2014,
Figure 33
US Prices of RC and SRC, 2009-2014

Source: SIAP

the price of seaweeds according to class is as follows: (1) Class A costs 67 pesos per
kilogram and (2) Class B costs 30 pesos per kilogram. The price of seaweed starts to go up
from August to December. During these months, the volume of production is low due to
strong winds brought about by the northeast monsoon (hanging amihan). While the price
starts to go down come January to June due to increase in the volume of harvest attributed
to hanging habagat. The fresh weight farm gate price of dried seaweed in the first quarter
of 2015 is Php55.00 per kilo in Palawan (Table 14.

Table 14
Dried Seaweed: Prices (In pesos per kilogram)

Year Farm Gate Price

2004 39
2005 19
2006 39
2007 42
2008 65
2009 65
2010 51
2011 58
2012 60
2013 62
2014 67
2015 55
Source: Industry Players
 Section

5
Support Services
The Bureau of Fisheries and Aquatic Resources (BFAR) have made significant contribution
towards increasing seaweeds productivity. Infrastructure and post-harvest facilities were
provided to accelerate the socio-economic condition of the fisher folk in the Province of
Palawan with 5,000 families engaged in seaweeds farming. This development assistance is
designed to develop and manage the fishery resources for food security and ensures socio-
economic acceleration of subsistence fisher folk. The Bureau’s development efforts are
focused on the expansion and revitalization of productivity programs and provision of
support activities through appropriate technology, research, extension and adequate
financial and marketing assistance. An effort on conservation, protection, and sustained
management of the fishery and aquatic resources to ensure it long term sustainability was
also undertaken in prime Marine Protected Areas MPAs in the Province.

Along with the Bureau’s efforts of enhancing the industry productivity and profitability, as
follows were the programs and projects rolled-out in the Province of Palawan:

1. Seaweed Development Project - This project aims to increase seaweed production

and at the same time enhance the R & D projects and activities to further address
the concerns and issues besetting the seaweed industry. The major projects being
undertaken include inventory of seaweed resources, resource assessment, seaweed
farming, product technology development;

2. Organization/Strengthening of Fisheries and Aquatic Resources Management

Councils (FARMCs) - The Bureau support the establishment and/or strengthening of
FARMCs at the municipal levels to ensure the proper management and control over
fisheries and aquatic resources through active and extensive participation of various
stakeholders in the industry;

3. Monitoring, Control and Surveillance (MCS) - This project aims to make effect the
declared policy of the State to keep and ensure the integrity of marine fishery
resources of the country in its optimum productive condition. MCS forms the
backbone of the implementation of any ocean-related policy and serves as a
tool/mechanism for the implementation of the fisheries management plan (FMP). It
has 3 components: a) monitoring - data collection and analysis; b) control-
legislation and administrative ordinances; and c) surveillance - law enforcement;

4. Fisheries Law Enforcement - In order to effectively implement various fisheries laws

and regulations, BFAR encourage fisherfolk communities to police and manage their
own fisheries resources. The enforcement of laws includes, specifically the ban on
the use of explosives, noxious substances and fine-meshed nets, the ban on
commercial fishing within municipal waters and all other measures that will be
instituted for particular fishing areas in coordination with the non-government
organizations and the LGUs in the locality. Included in this project is the deputation
of members of fisherfolk organizations/cooperatives and other qualified fisherfolks
as fish wardens;
 5. Promotion of Value-Added Fishery Products – The project aims to reduce post-
harvest losses and to promote/develop/formulate new value-added products by
utilizing non-traditional fish species. Some women in Puerto Princesa City were now
into noodles processing out from seaweeds.

6. Municipal Fish Ports – This caters to the post-harvest requirements of the

sustenance fishermen, providing smaller fish landing and market facilities in selected
fishing villages in the Province. These ports also serve as satellite ports for the large
municipal fish ports and are mostly managed by the Local Government Units
(LGUs);

7. Small-scale Livelihood Projects – The project is intended to provide the municipal

fishermen with the most appropriate facilities and technologies on processing that
can be used in developing value-added products that are locally and globally
competitive;

8. Market Assistance Project – This project considers the urgent need for a responsive
marketing system from production areas to consumers. Included in this project are
the continuous institutional support to build the capabilities of fisherfolk’s
organizations to undertake marketing functions and provision of support services
such as market information and market matching between buyers and sellers of fish
and fishery products;

9. Fisheries Extension Service – BFAR in collaboration with LGUs will expand and
strengthen existing extension services at the local level. It envisions transfer of new
technologies in fisheries to its clientele, particularly the fisherfolk, to increase their
fish catch and income;

10. Operation of the BFAR Research Outreach Stations (ROS) – The ROS stations serve
as experimental farms for fisheries which will be engaged in technology verification
and adaptation to produce quality breeders and fish stocks and conduct demo trials
for fisherfolk/fishfarmers; and

11. Fisheries Research & Development Projects - In recognition of the important role of
fisheries research in the development, management, conservation and protection of
the provincial fishery and aquatic resources, BFAR conduct research and
development to include technology generation, verification, and adaptation on
aquaculture development, marine fisheries development and management and post-
harvest technology to include product standardization and development of code of
practices for fish and fishery products.

To further advance the competitiveness of the industry, there were key institutions both
public and private that help and promote the productivity enhancement of the industry
through research and development, policy formulation, marketing and other support
services as follows:
 Key Institutions
Organized Seaweeds Associations
Local Government Units
Land Bank of the Philippines
World Wildlife Fund Philippines
The Dugong Research
Conservation Project
Department of Trade and Industry
Programs and Services
The seaweeds farmers organized themselves into
association to access support from BFAR and the
LGU. The role of the association is to organize
members if there are trainings to be conducted.
The association is also important in the
management of the distribution of supports
provided by BFAR to seaweed farmers i.e. seedling
dispersals and farm implements (PE ropes, soft tie,
and floaters) to target member-beneficiaries.
The LGU manages its municipal waters. It has the
power to formulate ordinances, resolution, policies
and programs consistent with the framework of
local autonomy. The LGU also help in organizing
seaweed farmers and in conduct seaweed training
among farmers
Under the BFAR-LBP Partnership agreement, seed
money is required to finance the purchase of the
initial stock to be used for the nursery stock. BFAR
program includes establishing a model farm which
can serve as a training and demonstration farm
and where the harvests shall be used as seedling
for multiplier nurseries, as well as drying facilities
and trading posts with warehouse
Establish an LGU-based marine mammal rescue
network, which has been monitoring stranding and
spearheading rescues of dugongs inadvertently
caught by fishing gears in the area. Green Island
Bay has extensive seagrass beds which are
important habitat for the endangered dugong or
sea cow. The bay is the last few remaining
habitats in the world for the species that is fast
declining in numbers.
WWF-Philippines continue to work with the Roxas
municipality in providing institutional support for
dugong conservation (wwf.panda.org).
and Provided technical support in the culture of
seaweeds to encourage farmers to monitor and
safeguard the seaweed areas-home to the dugong
as well. The support increased seaweed
production in Green Island.
Establish shared service facilities i.e. drying
platforms and
Department of Environment and Issues permits, clearances under the Clean Water
Natural Resources Act and Environment Impact Assessment

Seaweeds Industry Association of Played a major role in the continual development

the Philippines and improvement of the seaweeds industry of the
Philippines.

Support over 200,000 seaweeds farmers, 500 local

and regional traders, 15 carageenan processors
and more than 10 seaweeds exporters

German Technical Corporation Deliver training courses on good aquaculture

(GTZ)
Seaplsnt.net
AusAid-EAI
Philippine Council for Aquatic and
Marine Research and Development
of the Department of Science and
Technology
Philippine
Council for Aquatic and Marine
Research and Development .
practices (GAPs) to LGUs, MAOs and state colleges
and universities in Palawan
Conduct and fund seaweeds R&D in Palawan State
University and Western Philippine University
Provide central direction for the country's aquatic
and marine resources R&D. Its functions include:
(1) Coordination of the National Aquatic Resources
Research and Development System (NARRDS); (2)
Plans, monitors and evaluates R&D projects and
programs of the NARRDS; (3) Capacity-building of
the NARRDS through human resources and
infrastructure development; and (4) Aquatic
resources technology packaging and information
dissemination

Western Philippine University and Conduct research and development to include

Palawan State University technology generation, verification, and adaptation
on aquaculture development, marine fisheries
development and management and post-harvest
technology
Provincial Development Council of Provide fund supports for the development of
Palawan seaweeds industry in the Province
Fishery and Aquaculture Resource Ensure the proper management and control over
Management Council fisheries and aquatic resources through active and
extensive participation of stakeholders or people
directly affected. The subsistence fisherfolk are
seeking the enhancement of their empowerment
through meaningful participation in the
management, development and protection of
fisheries and aquatic resources for sustainable
productivity
 Section

5
Enabling Environment
In the light of the growing industry, the following are enabling mechanism that strengthens
the industry competitiveness, promote policy environment, improve productivity and
profitability, and ensure effective collaboration with the public and private sector.

Relevant Laws/ Mandates/

Ordinances
Republic Act No. 8435, otherwise
known as the Agriculture and
Fisheries Modernization Act (AFMA)
of 1997
Objectives
Outline strategic measures on modernizing
the fishery sectors of the country in order
to enhance their profitability, and prepare
the sectors for the challenges of
globalization through adequate, focus and
rational delivery of support services,
appropriating funds thereof, and for other
purpose.

Proposed House Bill No. 2778 during This bill is about the proposed creation of
the 1st ARMM Seaweed Congress Seaweeds Development Authority. This is
last September 12, 2011 being spearheaded by Hon. Tupay Loong
for the purpose of promoting rapid,
integrated development and growth of the
seaweed industry in all its aspects and to
ensure that the seaweed farmers become
direct participants in, and beneficiaries of,
such development and growth.

Fishery Code (RA 8550) Primary legislation for fisheries

management in the country that grant
powers to the LGU to grant license and
fishing privileges to registered fishers and
seaweed farmers as well as to register
motorized boats with tonnage of three tons
and below.

Fisheries and Aquatic Resource Recommend policies and programs

Management Council (FARMC)
affecting their municipal waters.. Most of
the ordinances that had been enacted were
focused on law enforcement, fisheries
management, establishment of marine
sanctuaries, user’s fee and incentive to law
enforcers.
Local Government Code (RA 7160) Protect and manage the coastal and marine
environment, to impose local fishery
revenues and taxes, to delineate their
municipal waters, and to allocate the use of
resources within municipal waters.

Provide certain autonomy to city/municipal

governments in the management of their
municipal waters.
Wildlife Conservation Act (RA 9147) Provide policies and mechanim for the
management and protection of wildlife and
important habitats.
National Integrated Protected Area Provide protection to biologically significant
System Act (NIPAS ACT- RA 7586) flora and fauna

The Clean Water Act (RA 9275) Provide policies for the management and
protection of bodies of water from
pollution.
Marine Pollution Decree and Solid Enforce of fishery laws within its municipal
Waste Management Act. waters. This all-encompassing mandate
includes the correlative duty to enact
ordinances related to fishery management.

Comprehensive Land and Water Use A local enabling instrument that rationalize
Plan (CLWUP) the utilization, protection and management
of land and water resources within the LGU
political boundary.

Incorporate Coastal Resource Management

(CRM) plan.

Seaweeds Industry Clustering Initiated by DTI and provide directions on

product development, value added
products, application of Good
Manufacturing Practices, and Hazard
Analysis Critical Control Point (HACCP).
 Section

6
Constraints and Opportunities
This section provides an overview of key challenges in development of the seaweeds
industry of Palawan. The Dried Seaweeds Value Chain identifies challenges and constraints
among the different value chain actors: input providers, seaweeds producers, traders and
processors. There are also sector wide issues related to the institutional and regulatory
framework; the need for market niche; access to finance; infrastructure and transport;
improved value chain integration; and the continued protection of the marine ecosystems.

A number of value chain constraints and opportunities were identified and validated by the
stakeholders. Although these constraints and opportunities may not be new, the validation
and prioritization of these issues from the perspective of key private sector players
throughout the value chain was done through series of consultations and focus group
discussions.

Table 15
Constraints and Opportunities
Opportunities Constraints

Input Provision/Supply

LGUs willing to provide counterparts for the Lack of access to good quality seedlings
establishment of seaweeds nurseries (disease resistant/high yield)

Presence of peoples
organizations/cooperatives councils to
manage seaweeds nurseries

BFAR allocation for the establishment of

seaweed nurseries

Presence of large available areas of

seaweed farming and ideal agro-climatic
endowment
On-going trials conducted relative to efficacy Lack of information on appropriate fertilizer
of fertilizer to seaweeds growth for seaweed

Presence of WPU and PSU to undertake R&D

on seaweeds production and post-harvest
management
LGU willingness to provide counterpart for Difficult access of farmers to improved
the FMR program varieties of planting materials and other
inputs due to lack or absence of farm to
Priority sub-projects of Philippine Rural market roads (FMR) and logistical support
Development Project with 10% counterpart
for FMR projects
Seaweed Cultivation
Availability of production-enhancing Limited outreach of existing extension
breakthroughs services resulting to lack of know-how in
technical aspects of seaweed farming
BFAR has matured production technology for including post-harvest practices
seaweeds

Available package of technology for

seaweeds in WPU and PSU

Availability of innovative technical manpower

for product development in processing

Availability of experienced seaweed farmers

LGU willing to provide area for the
establishment of technology demonstration
farms on seaweeds
Availability of production support services
from BFAR
Presence of Government Financing
Institutions in the area
Low adoption of good aquaculture practices
Lack of access to financial resources to
grow a business and to facilitate upgrading
(adoption of better technology/ lack of
economies of scale

PCIC extend insurance support to seaweeds

producers
On-going market support from DTI Current seaweed products (noodles, etc)
have limited markets --- not yet
DOST willing to assist for product handling commercially produced
and packaging
Postharvest Operations
LGU willing to provide counterpart for stilt Lack of postharvest facilities and logistics
seaweeds projects

Presence of organizations/associations to
manage dryers and warehouse projects
Marketing
Increase demand for food due to increasing Lack of price incentives to improve quality
world population

Presence of many players in the processing

and export sectors
Increase demand for health, Prevalence of unregistered buyers directly
pharmaceuticals, nutraceuticals, personal purchasing on-farm
care & beauty products

Opening of markets for new applications

Increasing worldwide GDP/high purchasing

power of some emerging economies

Processing
Presence of large available areas of Absence of Palawan based processing
seaweed farming and ideal agro-climatic centers (dried seaweeds were brought to
endowment Cebu or Manila for processing)
Interfirm Relationship
Presence of value chain players (input Weak horizontal collaboration
suppliers, seaweeds producers, traders,
processors and enablers) to make the value
chain functioning

Presence of many players in the processing

and export sectors
Enabling Environment
Some coastal-based LGUs integrates water-
use plan in the Comprehensive Land Use
Plan
LGUs are already updating their CLUPs with
the assistance from HLURB, DENR and BFAR
Support Services
Availability of fisher folk association to
manage production support and logistics
(e.g warehouse, boat and dryers)
Some part of Palawan particularly Roxas was
Piloted for the Global Environment Facility
(GEF) for the establishment for marine
protected areas and provision of sustainable
livelihood projects along the coastal
communities
Ordinances for coastal resource
management allocation
Most of the LGUs integrates Coastal
Resource Management Plan in the CLUP
Presence of WPU,PSU and BFAR Research
Unit for R&D
Willing of the LGU to conduct training,
Farmers Field School and Season long
Training for seaweeds farmers
Availability of institutions to tap for the
management of the laboratory and pest
clinic (WPU and PSU)
No appropriate water use plan
Absence of policy pertaining to water use
and permits.
Lack of transportation for hauling of
seaweed raw materials
Continuous degradation of coral reefs due
to illegal means of catching fish and marine
products
Lack of budget allocation by LGUs for
coastal resource management
Erosion along coast
Limited research and development for
seaweed
Extension workers have inadequate
information on updated technology on
seaweed production, post-harvest,
marketing and management
Absence of laboratory for microbial analysis
Absence of pest and disease clinic for
seaweed
 Section

7
Competitiveness Directions
A. Competitiveness Vision

Drawing from its vast land expanse for seaweeds expansion of 7,174 hectares, it shall
strengthen its niche as the country’s seaweeds base and frontier for seaweeds industries in
the next three years. This industry
prospects shall be supported by
efficient value chains allowing the
generation of higher economic
productivity that will create 1,794
new family enterprises, increase
seaweeds productivity by 185,136
metric tons per hectare, increase
income of seaweeds farmer by 34-
50% in the value chain, and generate
Php14.3 Billion earnings.

During the stakeholder’s consultation,

the group of stakeholders which
comprised of seaweed producers,
traders, processors and enablers
collectively shared their vision to be
the country’s leading supplier of
reliable good quality dried seaweeds.
This can achieved by developing a
cost-competitive, quality driven
seaweeds value chain to increase
seaweed production, generate
livelihood opportunities and improve
quality of life of the people living in
the coastal communities.

Along with the richness and

biodiversity of Palawan marine Figure 34
resources, part of the over-all vision of Visioning Exercise Output
the stakeholders is to promote
environmentally friendly seaweeds farming technology. Being one of the Global Environment
Facility (GEF) pilot sites for the marine protected areas, the stakeholder’s main concern is
geared towards the protection of the coastal ecosystem and conservation of coastal
resources for sustainable economic development. Emphasis shall focus on restoration of
coral reefs, reduction of coastal erosion and inclusion of budget for coastal resource
management.
 B. Priority Constraints/Opportunities And Interventions

In order to push for higher productivity, competitiveness and take advantage with the
economy of scale, stakeholders were able to rank and prioritize the constraint which when
addressed by the right interventions, would sustainably yield the highest impact and
outreach among the target groups or players in the seaweeds value chain. Concerned
location or areas were also identified were these constraints heavily impacted or influenced
to facilitate the provision of interventions.

As crosscutting concerns in the seaweeds value chain, some critical issues and constraints in
Roxas Marine Protected Areas were also taken into consideration. On top of this, there were
emerging concerns the Province marine and aquatic resources that needs to be addressed
and attention and shall focus on building the capacities of the POs and LGUs for
conservation and integrated coastal management.
Table 16
Summary of Priority Constraints/Opportunities and Interventions
Constraints/ Province Intervention Strategy Who can do it and
Opportunities and Approach Potential Roles

Public Private

Input Provision/Supply

Lack of access to Palawan Establishment of LGUs, DA PO/FARMC

good quality (Agutaya,Cag Municipal nurseries and BFAR
seedlings (disease ayancillo, scion and foundation
resistant/high yield) Dumaran, groves using promising
Taytay , varieties in the
Balabac, municipality
Roxas, El
Nido, Rizal,
Aborlan and
Quezon)
Difficult access of All seaweed Construction of FMR LGUs, DA PO/FARMC
farmers to improved producing
varieties of planting areas
materials and other
inputs due to lack or
absence of farm to
market roads (FMR)
and logistical support

Lack of information Palawan Intensify research activityLGUs, DA PO/FARMC

on appropriate (Agutaya,Cag BFAR,
fertilizer for seaweed ayancillo, Establishment of demo FPA,UP-
Dumaran, farms in strategic MSI
Taytay , locations for farm trials
Balabac, verification and
Roxas, El technology adaptation
Nido, Rizal,
Aborlan and
 Quezon)

Seaweed Cultivation

Limited outreach of All seaweed Establishment of demo LGUs, DA PO/FARMC

existing extension producing farms in strategic BFAR
services resulting to areas locations
lack of know-how in
technical aspects of Conduct of Training
seaweed farming Farm visit to ideal
including post-harvest seaweed plantation
practices
Information Education
Campaign

Provision of incentive to
seaweed farmers (plant
now pay later scheme)
Low adoption of good All seaweed Conduct of Training LGUs, DA PO/FARMC
aquaculture practices producing (FFS/TOT) BFAR
areas
Information Education
Campaign

Establish technology
demonstration farms

Lack of access to All seaweed Provide technical LGUs, DA PO/FARMC

financial resources to producing assistance on loan BFAR
grow a business and areas accessing to FIs GFIs
to facilitate upgrading
(adoption of better Provision of incentive to
technology/ lack of seaweed farmers (plant
economies of scale) now pay later scheme)

Provision of assistance
thru Seaweed Upscaling
Program

Current seaweed Puerto Intensify research activity

DA/LGU
products (noodles, Princesa DOST
etc) have limited Tap DTI and DOST for DTI
markets --- not yet product development,
commercially packaging and promotion
produced
Information Education
Campaign

Postharvest Operations

Lack of postharvest All seaweed Establishment of stilt LGUs, DA PO/FARMC

producing BFAR/DTI
facilities and logistics areas dryers and warehouse PHILMECH

Provide technical
assistance on loan
accessing to FIs

Provide trainings on
post-harvest handling
and management

Marketing

Prevalence of All seaweed Formation and/or LGUs, DA PO/FARMC

unregistered buyers producing strengthening of BFAR/DTI
directly purchasing areas seaweed growers and
on-farm processors’ associations
into cooperatives

Formal trade agreements

with growers and
processors’ association in
coordination with DA-
AMAD

Establishment of trading
centers, warehouse,
transportation facility

Set-up SMS seaweeds

trading price hotline

Lack of price All seaweed Provision of price LGUs, DA PO/FARMC

incentives to improve producing incentive to seaweed BFAR/DTI
quality areas farmers producing good
quality

Interfirm Relationship

Weak horizontal All seaweed Formation and/or LGU, PO/FARMC

collaboration producing strengthening of MLGU,
areas seaweed growers and PLGU, DTI
processors’ associations
into cooperatives

Processing

Lack of mechanized All seaweed Provision of Seaweed LGU, PO/FARMC

processing facility producing FDA compliant MLGU,
areas processing plant PLGU, DTI
(Processor, dryer, and
storage facility) for
Southern and Northern
 municipalities

Enabling
Environment

No appropriate water All seaweed Integrate the seaweed BLGU, PO/FARMC

use plan producing related policy in the MLGU,
areas Comprehensive Water PLGU
Use plan

Absence of policy Formulation of policy BLGU, PO/FARMC

pertaining to water pertaining to water use MLGU,
use and permits. and permits. PLGU

Implementation of
Municipal Zoning
Ordinance

Support Services

Lack of transportation All seaweed Provision of vehicle LGU’s, DA PO/FARMC

for hauling of producing assistance
seaweed raw areas
materials

Continuous All seaweed Ensure conservation of LGUs, PO/FARMC

degradation of coral producing
reefs due to illegal areas
means of catching fish
and marine products
Marine Protection Areas BFAR
(MPAs)
Intensify patrolling
through “Bantay Dagat”

Ensure community
participation in coastal
resource management

Continue IEC campaigns

Lack of budget All seaweed Passage of ordinance LGUs, PO/FARMC

allocation by LGUs for producing and resolution for budget BFAR
coastal resource areas allocation of coastal
management resource management
activities

Erosion along coast All seaweed Reforestation along LGUs, PO/FARMC

producing upland areas BFAR
areas
Mangrove planting and
rehabilitation
 Construction of
protective structures

Limited research and All seaweed Enhancement of DA-ROS, PO/FARMC

development for producing seaweed research WPU, PSU,
seaweed areas development center in DOST,
WPU and PSU- LGU’s
development of climate UP-MSI
resilient variety,
introduce/adopt climate-
smart production
technology and farm
management and related
research undertakings in
partnership with research
institutions

Extension workers All seaweed Capacitate agricultural DA-ATI, PO/FARMC

have inadequate producing extension workers on LGU’s
information on areas seaweed technology, BFAR
updated technology production, marketing
on seaweed and management
production, post-
harvest, marketing
and management

Absence of laboratory Puerto Establishment of DOH & PO/FARMC

for microbial analysis Princesa laboratory for the DOST
City microbial analysis
seaweed products in PSU
or WPU

Absence of pest and Palawan Establishment of plant BFAR PO/FARMC

disease clinic for disease and pest
seaweed laboratory with complete
facilities and technical
personnel
 Section

8
Conclusions and Recommendations
The Philippines is a leading producer of cultivated seaweed (cottonii species) for
carrageenan extraction in the world. It has the largest carrageenan processing capacity
(42% of total global carrageen production) making it the biggest buyer of cottonii seaweed.

The Province of Palawan being the top producing seaweeds in the country contributes
around 24% of the national output. The seaweed industry of the province is strong, and it
offers employment to many coastal communities and contributes to foreign trade. Around
5,000 families are highly dependent on seaweeds farming with a potential expansion area of
7,171 hectares. Though efficient value chains, it is projected to have generation of higher
economic productivity, creation of 1,794 new family enterprises, increase seaweeds
productivity by 185,136 metric tons per hectare, increase income of seaweeds farmer by
34-50% and generation of Php14.3 Billion earnings

The carrageenan processing industry is the second strongest in Asia after China. However, it
is under threat of competition from China and, increasingly, from Indonesia. In order to
survive, it is crucial for the sector to increase domestic production and productivity.
Improved productivity could reduce production costs and make the product more
competitive. To achieve this, the government and private sector need to invest capital and
knowledge in the seaweed farming sector. The sector should also organize itself better and
overcome disputes about competition that hamper cooperation between companies and
suppliers.

To provide efficient value chains and pump prime the competitiveness of the Province
seaweeds industry, government and private sector should focus on the following priorities:

 Farmer Organization. The seaweeds farmers as main actor in the value chain should
be organized into cooperatives or farmer associations. This is envisaged to facilitate the
accreditation of the farmers, fast tract delivery of needed support and extension
services (e.g., BFAR trainings on good seaweed farming practices, detection of ice-ice
and other diseases, etc.), effective participation in the shared services facilities (SSF),
and expedite the award of the tenurial right to develop and maintain the seaweeds
farm.

 Setting Up of a Financing Mechanism. There is a need to set up a financing

mechanism (Production Financing Scheme) to provide seaweed farm development and
production loans to the farmers.

 Marketing Support. Seaweeds associations will enter into MOAs with select seaweed
processors (buyers) to ensure the market for the seaweeds output. On the part of
processor, this arrangement will (a) assure them of reliable supply of quality seaweeds
and (b) prohibit pole-vaulting on the part of the farmers. For the seaweed farmers, this
arrangement provides a ready market for their seaweed production. Finally, on the part
 of the bank, this arrangement will ensure loan repayment as the loan (plus interest) will
be discounted from the farmgate price to be paid to the farmers and will be remitted
directly by the processors to the bank.

 Policy Support through Proper Zoning. Seaweeds Associations together with the
LGUs and BFAR shall implement a geo-tagging system to properly identify the farms.
This will serve as basis for the tenurial certificates that will be awarded to the farmers
(by their respective LGUs). The tenurial certification will entitle farmers not only to the
right (security) to work on the seaweed farm but more importantly, to avail of the
support services provided by BFAR and other entities (e.g., financing, marketing, shared
services facilities, seedlings from the nursery, and trainings).

 Establishment of a Seedling Nursery: To improve the quality of seaweed

production and to ensure the availability of quality seedlings, BFAR shall establish a
seedling nursery in each participating municipality. Farmers may source their inputs
from the nursery to augment their farm-generated seedlings.

 Provision of Post-Harvest Facilities. In partnership with BFAR, LGUs, and the DTI
should establish shared services facilities (SSF) like drying platforms and warehouses in
each participating municipality. This will help farmers achieve better quality of dried
seaweeds

 Establishment of Processing Facilities. Taking advantage of the economies of scale,

the proposed seaweed processing plant will bring economic opportunities to the local
seaweeds communities of the Province. This will catalyze synergy among the area’s
major industrial zones and will increase the pace of economic development and
employment opportunities. Value-adding industries catering to both domestic and
international market demands will proliferate and will inevitably produce a pool of
highly-skilled workers that are at par with anyone in the world.

 Access to Market Roads. In coordination with the LGUs, DA should continue to

implement Farm to Market Roads Development Program. This program envision to
reduce transport cost and fast track delivery of seaweeds product through the
construction and rehabilitation of farm-to-market roads in seaweeds production areas.

 Enhanced Environmental Protection. Seaweeds farmers should protect the marine

ecosystem and minimize destruction to environment. With proper zoning and adoption
of good farming practices (GAP), the seaweeds farms will become a sanctuary (food
base and habitat) for aquatic organisms thereby enhancing marine resources.
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