Background of the Study

Seaweeds are mass growth of marine algae from natural shock or form pond
culture. Unlike other terrestrial and aquatic plant roots, stems and tealeaves are
widely distributed in the ocean, occurring from the tide level to considerable depths,
floating trees or attached to substrates such as sand, mud rocks, shells, corals and
others. Generally there are four (4) main groups of marine seaweeds; (1) red algae
(rhodophycae) (2) brown algae (phaeophucae) (3) green algae ( chlorophycae) (4)
and blue algae (cyanophycae).

The most important variety of seaweeds is Eucheuma of the red algae which
accounts for 98% of the total Philippine production of seaweeds. Eucheuma is the
source of carrageenan, one of the world’s foremost food and industrial additives
today. Its valuable substance is used in gelling, suspending, thickening or water
holding properties in various products. These red algae grow on sandy bottom of
marine water in terrestrial or sub tidal zones where the water is very salty, clear,
and fast moving. Its soft body is light brown to light green in color with erect to
prostate branches.

Seaweeds in the Philippines was recognized as an industry in 1966 when the

unprecedented commercial exploitation of then widely growing Rheumatoid
seaweeds boosted the countries expert with a record volume of 800 metric tons
initially, no attempts where made to cultivate Eucheuma.

The researchers will farm the seaweeds to support the growing seaweeds
industry here in Palawan, and to promote the province not only to be the number
three but to become number one seaweeds producer in the country.

Objectives

A. General and Specific Objectives of the Study

a) General Objectives of the Study

To determine the feasibility of establishing of one hectare seaweeds from
Barangay Nicanor Zabala, Roxas, Palawan.

b) Specific Objectives of the Project

1. To determine the market viability of dried seaweeds.
2. To determine the technical feasibility of seaweeds farming in Barangay
Nicanor Zabala.
3. To determine the organization that fits the project.
4. To determine the financial viability of the project.
5. To asses the socio-economic impact of establishing seaweed farm.

B. General and Specific Objectives of the Project

a) General Objectives of the Project

To generate income from the operation of a one hectare farm.

b) Specific Objectives of the Project

 1. To introduce the seaweeds in Barangay Nicanor Zabala, Roxas, Palawan.
2. To generate employment opportunities for the people of Barangay Nicanor
Zabala, Roxas, Palawan.

TECHNICAL ASPECTS

A. Product
The product of the proposal study is dried seaweeds (Eucheuma Cottoni). It
will be 70% dried and 30% moisture content. Dried seaweeds must be clean, free
from sands and salts, free from foreign weeds such as Glacilaria, Gelidium. The
product must be free from plastic straws, tie-ties, nylon lines, etc.

B. Production Process

The proponent will secure an operation permit from Local Government and
Bureau Fisheries and Aquatic Resources (BFAR), Department of Science and
Technology (DST), Department of Local Interior and Local Government (DILG) and
Department of Agriculture (DA).

A one-hectare, which serves as farm, will be chosen for the initial operation,
which should have clean and clear environment for the seaweeds growth is
unaffected. The sea water must not blackish type that may affect the seaweeds.
The saltiness of the water must not be less than 30 to 33 (1000:1% part per 1000
saline); this measures must be maintained to ensure the fast and robust growth of
the seaweeds.

The place must be protected from turbulent sea waves in order to disturb the
growth of the seaweeds. The substitute or depth must depend on the firmness of
sea bed covered with firm rough sand or covered with corals where algae may live
(low tide at least 0.5 to 1.0 meter); this is to keep seaweeds within the water level
and not exposed to sun and wind in order to prevent retardation and avoid
discoloration which may affect its quality. During high tide, the water level should
be 2.0 and not more than 3.0 meter deep in order to maintain care and cleaning of
the products easy. Also, the place must be neither be muddy nor of very fine sand.

b.1 Methods in Planting

Fixed Monoline Method. This method is applicable in deep sea water area.
Bamboos will be used to tie its end with nylon thread to form a square structure.
The structure will be tied firmly so as not be taken away by the waves and should
be positioned that goes along the movement of the waves. This structure has a
wave that will hold the square structure in the water. This structure will be tied with
some kind of sign floater that will serve as a warning to other boats passing near
the area that seaweeds farm exists in the sand area. A 150 mm nylon thread, in
tying 2 opposite bamboos will be used and where the 100 grams eucheuma will be
tied, thus keeping a safe distance.

b.2 Cleaning and Maintaining

 Cleaning and Maintaining must be done every day to check the condition of
the seaweeds if there is any sickness like pitting and ice-ice.

b.3 Harvesting

Harvesting of the seaweeds will be done when it reaches 1 kilo each and
more. One pump boat, gathering sticks, basins, notebook and pencil, weighing
scale, platform for drying, wick baskets covered with banana leaves and sack cloth
for cover will utilized for harvesting. The seaweeds will be harvested by rows and
will put all the harvest in the boat which will bring the seaweeds in the drying areas.
The seaweeds will be kept from sunlight, wind and rain and protect it from
destructive chemicals.

b.4 Post Harvest Handling

1. Cleaning and Weighing. This is one very important step in the preparation
of seaweeds before marketing. The cleaning will be segregating the seaweeds from
other sea plants and sea wastes.

2. Drying. The seaweeds will be served thinly on a platform, and will be

covered the platform with fine or dried leaves of coconuts. It will be turned over
from time to time to get the desired dryness but not over drying it. It will also be
protected from evening dew or rain.

3. Washing and Re-Drying. After 2 to 3 days of drying, the seaweeds will be

washed. It will be places in a basket, wash the seaweeds in sea water in five
minutes, and spread in a platform for one day.

4. Packing and Storing. The dried seaweeds will be put in the sack with 20%
moisture in it, then its weight in the sack and keep I the storage area.

Production of Flow Chart

Planting
 CLEANING/
MAINTAINING

HARVESTING

POST
HARVEST
HANDLING

C. Plant Size

Initially, the size of the project area is one hectare. It will increase gradually
as operation becomes bigger in terms of number of monolines thus, requiring
bigger area. The one hectare will be composed of 42 modules.

D. Machinery and Equipment

A bangka or pump boat will be used when cleaning the farm. Big basket and
thermometer will be also needed in the operation.

E. Plant Location

The site is located specifically in Barangay Nicanor Zabala, Roxas, Palawan.

The proponents chose the area because it is desirable for farming in as much as the
water condition has moderate current flow and is free from pollution. The location is
105 kms. Away and is just a one and half hour ride from Puerto Princesa City, the
capital of Palawan, where the transportation facilities are accessible in marketing
the product.

F. Structures

The area of the project is about one hectare along the shore. A stockroom will
be built for the dried seaweeds that is ready for delivery, also drying area, ware
house, small office building we built.
 G. Materials and Supplies

The following are the materials and supplies needed for the operation
of seaweeds farming.

Materials Cost per unit(PhP)

P.E rope # 10 250
P.E. rope # 7 300
Plastic straw 300
Wash out net 200
Stakes 100
Styrofoam floaters 40
Laminated sack 500
Nylon rope # 9 200
Nylon rope # 7 20

H. Utilities

To obtain its purpose, the project needs utilities to support the operations.
Hence, the project will have its own generator as a source of electricity. Also, to
ensure sanitation and steady supply of water the business will have its water
connection from the Paltubig Corp.

I. Water Disposal

Proper disposal of waste which is to select the biodegradable from non

biodegradable. Garbage cans are provided to stock the waste products that are
collected by a garbage truck on weekly basis.

Management Aspects

A. Forms of Ownership

The proponents of this project agreed to put up a partnership form of

business. Each of us should give share of P160, 000.00 to operate seaweeds
farming. A partnership business is preferred because it promotes equal sharing of
profits and encourages participation and sharing of ideas especially when it comes
to management of the business. As the saying goes, “two heads are better than
one.”
Thus, no aspect of the business should be overlooked.

B. General Qualification of workers

1. Job Description
a. Manager
* Responsible for managing the overall operation of the business
* Responsible for decision making and supervision of the project
* Responsible for giving salaries to employees/ workers
b. Caretaker
* Responsible for monitoring the condition of the seaweeds and the farm
* Responsible for informing the owner of all the problems and developments
on the project
* In charge of the farm in the absence of the owner/ manager
c. Contractual
* Responsible for cleaning the seaweeds
* Responsible for planting
* Responsible for harvesting
d. Laborer
* Responsible for cleaning the seaweeds
* Responsible for planting
* Responsible for harvesting
e. Accountant
* Responsible for keeping the records, systematically and chronologically, on
all business transactions or events on the books of the company

2. Job Specifications
a. Manager
* With experience in managing the business
* With technical knowledge on seaweeds
* Physically and mentally fit
* Responsible and hardworking
b. Contractual
* Male or female
* Responsible and hardworking
* In good health condition
C. Accountant
* Male or female
* At least of 21 years old
* Certified Public Accountant

C. Compensation Plan
The salary of each employee depends on the position held. All regular
employees are granted benefits such as SSS, Philhealth, EC and 13th month pay. The
employee’s on SSS, Philhealth and EC are deducted from the sum of their salaries
and the 13th month pay to arrive at the total salary expense for each year.
The table below shows the employee compensation on the first year of operation.
The salary is expected to increase annually.

Compensation of employees for 2009

Position Monthly SSS EC Philhealth 13th Month
 Salary Pay
Caretaker P6,000 364 10 75 6,000
Laborer 4,000 242.70 10 50 4,000
Laborer 4,000 242.70 10 50 4,000
Laborer 4,000 242.70 10 50 4,000
Monthly P18,000 1,092.10 40 225 18,000
Total
Annual P216,000 13,105.20 480 2,700 18,000
Total

i. Place

The project will follow a very simple channel of distribution that is the farmers
directly to traders/ exporters.

ii. Price
The pricing is based on the going rate of the seaweeds in the market. The
going rate of the dried seaweeds in the local market is php 30.00 per
kilogram. The partnership will also sell fresh seaweeds that have to be used
in planting by php P12.00

iii. Promotion
The dried seaweeds will be sold to the traders and exporters personally.

Financial Aspects

A. Major Assumptions

1. Marketing Aspects
• The price of the seaweeds is expected to increase.

2. Technical Aspects
• An initial of one hectare or a total of 42 modules for the first year and
an additional of one hectare each year is assumed.
• There will be four cropping per year.
 • Depreciation is computed using the straight-line method.
• Cost of module is expected to increase in proportion to the increase in
number of modules by 42 yearly. Cost incurred on the 2nd year and
every year

3. Organizational and Management Aspects

• The form of business is partnership and initial capital is figured at
P799, 518.33 which will be divided by partners.
• Additional of one worker per year starting on the second year is
assumed.

4. Financial Aspects
• Supplies are assumed at 1% of sales.
• All expenses are paid in cash.
• Tax rate is assumed at 32%.

B. Sources of Financing

In order to finance the project, the amount of P799, 518.33 will be

provided by the owners on equal sharing. The following is a breakdown of
expenses on the total cost of the project including the pre-operational
expenditures and the other related expenses to commence the project.

Financial Statement

The following are the basic financial statements of the seaweeds farming
project over the five-year period to show among others! The results of the
operations of the business by simply matching the possible revenues the business
expects to earn with the possible expensive to be incurred in its operations; as well
as the financial conditions of the project as of the given date showing the properties
and resources owned by the business, the obligations owed to creditor and the
whole worth of the business. The financial statements are Income Statements, Cash
Flow Statement and Balance Sheet.

Total Project Cost

FIXED ASSETS

Furniture sans fixtures

Table 1 5,500
Chairs 2 1,000 6,500
Warehouse and drier
450,000
Paddle boat 2 4,000 8,000
Motor boat 1 50,000
Tools
 Bolo 1 300
Knife 1 100
Maso 1 400
Bara 1 200
Sakop 20 75 1,500
Tiklis 6 100 600
Styrofoam box 1 500
Weighing scale 1 2,500
Net Basket 3 150 450 6,550

Fixed Monoline (840)

1,680 pcs.
Wood post 12/pc 20,160
25 kgs
Nylon thread 130/kg 3,250
600 kg
Styrofoam 8/kg 4,800
25 m.
Coralon net 80/kg 2,000
100 m.
Fish nylon net 60/kg 6,000 36,210
TOTAL FIXED ASSETS
557,260

INITIAL WORKING CAPITAL (840 Fixed Monoline for 1 Hectare)

Seedlings (100 gms per tie, 1,000 tree per fixed
Monocline, 840 fixed monocline per
Hectare at P10/kilo)
Direct labor (5 month)
Laborer/Farmer 3 workers 60,000
Contractual (first cycle with total
Of 6 days for 10 persons
during planting and
harvesting) 12,000 72,000

Overhead (5 months)
Office rental 12,500
Gasoline and oil 5,000
Depreciation 29,008.33
Plastic straw 6,250
Salaries 30,000
Miscellaneous (10% materials) 3,500
86,258.33

TOTAL PROJECT COST P

799,518.33

Conclusion and Recommendation

After the series of data and analysis and based on the different aspects of
this study, it is found that establishing the “Seaweeds Farming Enterprise” is a
viable and feasible.
There is still no existing local seaweed industry at this scale in the city of
Puerto Princesa and demand for the product is more than enough to suffice the
projects viability. Various literatures point that the demand for dried seaweeds in
increasing continuously at rate corresponding the increase in human population.
Since the project requires tediously organizing a group of farmers, it would
entail large scale planning but eventually once the partnership is formed, it is
viewed that it will help the city specifically through self-employment generation.
Each farmer- family involved in the project will earn an additional income. This will
also bring great contribution to our country because the final product- the
carrageenan- producing seaweeds- is an exportable good.
The venture is geared toward not only for profit generation but also for social
benefits. The realization of the project can contribute to improve the standard of
living and bring community development to the society.
Seaweeds farmer can also gain additional income by selling their produce
products through the partnership.
From these statements, it is recommended that:
Foe the business to be feasible and become competitive in the global market,
it would have to ensure that its products are in the highest grade of quality, so it
can demand for a higher price than competitors.

Inventing a technology that will make the seaweeds processing less labor
intensive can be a good investment by private individuals, academic institutions or
by the government to help processors minimize their costs. This is the need that
was identified in the conduct of this study.
It will also be a plus factor if the government can support the seaweeds
industry palavers by making legislative moves to subsidize the technical aspect like
selection and water temperature monitoring, as well as, granting micro loans to
increase the productivity of seaweeds farmers; provide incentives to inventors and
investors who are been on developing technologies for the seaweeds farming/
processing/ seaweeds industry for it to become globally competitive; and adapting
measures to protect the prices of farmer produce.

C. Financial Analysis

Payback Period
Payback period is the period wherein the invested capital will be totally recovered.
The payback period of this project is 4 years and 4 months. This only indicates that
after such period, the invested capital of P800, 000 will be recovered.

COMPETATION OF PAYBACK FORMS:

Total Project Cost Year
Net Cash in Flow P797, 518.33
2009 (66, 275.20) 733, 243.13
 2010 (12, 127.88) 712, 115.25
2011 (130, 425.76) 590, 689.05
2012 (393, 395.44) 197, 294.05
2013 (628, 911.18) (431, 671.13)

PAYBACK PERIOD 4 years and 4 months

Return on Investments (ROI)

The return on investment as far as this project is concerned is 7.8%

ROI= Average Net Income = P62, 020.29

Average net investment P 800, 000

As shown in the table, there is a gap between the projected demands and the
projected supply of seaweeds in the province of Palawan. This huge gap should
readily translate into business opportunities for seaweeds growers. The projects
own seaweeds production intends only to capture a little share of the gap as
indicated by the percentage in the same table. Expectedly, the project output
increases to 2010 up to 7.8 to 2013.