Facts and FiguresInvestor's GuideForeign TradeMunicipality ProfilesSpecial ProjectsConsumer WebLibraryContacts in CebuAbout DTI Cebu

 
Profile of Key
Industries

Processed Fruits
Furniture

Packaging
Seaweeds
Fashion Accessories

Profile of Selected RP Industries
Foreign Trade
Statistics

Export
Import
Directory of
Exporters



 




I. INDUSTRY BACKGROUND

People in the far-flung coastal communities need not anymore try their luck in the country’s key cities to live comfortably. For sure, there’s more "wealth" near their homes than in Manila, for instance. This is particularly true for those who depend on the country’s vast coastal areas for a living. The "wealth" is in seaweed.

A renaissance in technology has led to new discoveries on the unique qualities of certain marine plants. One of the most talked about marine plants today is the seaweed. Cebuanos call it "goso". Marine biologists have another term for it – "sea lettuce". "Irish Mosh", some seafarers call it. Chinese culinary experts before were fond of making "gulaman" out of seaweed, providing genial hosts with a favorite "after-dinner mint" for their guests.

Seaweed or halamang-dagat is a red-to-brown grass of the sea that provides nourishment for man. Aside from being consumed as food, seaweed is utilized as a raw material in the manufacture of industrial products such as alginate, agar and carrageenan.

There are five (5) species of seaweed in the country. They are Eucheuma (usually exported fresh), Caulerpa (exported fresh or in salted form), Sargassum (produced as meal for animal feed manufacture), Gelidiella and Gracilaria (both exported dried and/or alkali-tested). Eucheuma, however, has a number of uses and enjoys the heaviest demand in the market, both here and abroad. In addition, Eucheuma can be farmed commercially almost anywhere in the country’s coastal areas.

It took more than 50 years before Filipinos were able to unlock the hidden wonders of seaweed. With the advent of modern processing techniques, seaweed has been transformed into white powder called "carrageenan". The wonder of carrageenan is very much part of modern day living. In fact, many people refer to carrageenan as the "wonder powder" derived form processed seaweed. Food processing firms use it to enhance the quality of certain food products such as poultry, hams, sausages, and other meat products. Its functions as binder, moisture holder, and gelling agent have been acclaimed by food processors all over the world. Sauces, salad dressings and dips require carrageenan to impart body, provide thickness and stabilize emulsions. Carrageenan, likewise, creates a stable gel for canned meat products and shrimp or fish gels. From food products, profound uses of carrageenan have been established in dairy and dessert products. Whipped creams and toppings retain their stable form due to carrageenan. The wonder powder gives body to acid milk product such as cheese and, in case of yogurt, improved fruit suspension. Much of the wonder powder’s fine attributes are also found in milk products. In ice cream, for instance, carrageenan prevents whey separation and ice crystal formation. It is also present in puddings and pie fillings as it creates a stable gel. Even chocolate drinks maintain their quality with the aid of carrageenan.

But the wonders of carrageenan are far from over. Through persistent research, new frontiers are set. Non-food products have been added to the list of beneficiaries of carrageenan. The list includes beauty care product lines and pharmaceuticals that make use of the seaweed derivative. Shampoos have acquired improved foam stability and thickness due to carrageenan. Lotions and creams have attained a special quality in terms of body, slip, and improved "rub-out" sensation. Even in toothpaste, carrageenan is very much at work acting as a binder while improving foam stability in the product.

1966 was a turning point in Philippine exports as it saw the emergence and the eventual recognition of the Seaweed Processing as an industry in the Philippines with a record volume of 800 metric tons (MT). Although initially, no attempts were made to cultivate Eucheuma. People gathered only wild species and, quite surprisingly, it satisfied the foreign market. Each year, the demand for Eucheuma increased but the supply dropped alarmingly in the late 60’s as a result of over-harvesting. It was the Marine Colloid Philippines, Inc. (MCPI), a pioneering industry leader, which took the task of incisively studying the possibility of commercial Eucheuma farming. The experiment was proven to be successful which led to the sprouting of firms specializing in the manufacture of a new grade of carrageenan from seaweed of the Eucheuma variety.

It took exactly another two decades for the Philippine seaweed industry to take a leap forward through Shemberg Marketing Corporation, a Cebu-based exporter of seaweed products, which established the first full-scale carrageenan refinery in the Philippines. In 1986, Shemberg Marketing Corporation has penetrated the markets of Western Europe, Japan and Australia.

Carrageenan exports are expected to increase anywhere between 15-20% this year (1998) as outward shipments get a boost from demand of European countries for the product. Considered one of the country’s next marine-based export winner after shrimps and tuna, carrageenan is a hard-type gel popularly used as suspending agent for various products. It usually accounts for some of product weight for processed food like jams and syrup, baby food, ice cream and coffee creamers. It can also be used as thickener for toothpaste, shampoos, lotions, cream and other toiletries. In the textile industry, it is used as stiffening and binding material for a soft finish.

Thus far, the Philippines is now considered as one of the world’s few which has successfully cultivated seaweeds on a commercial scale. But the road trod by the seaweed industry was not, at all, a bed of roses. The years 1991-1993 were the most turbulent years. It was during this period that the raging controversy on Philippine Natural Grade (PNG) carrageenan’s possible ban in the United States determined the fate of the industry. The issue then was whether PNG is safe for human consumption or not. Fortunately, the issue has been answered in the affirmative in a letter of approval signed by the Director of the Division of Food and Color Additives, Center for Food and Safety and Applied Nutrition of the United States Food and Drug Authority (FDA).

The Philippine Seaweed Industry clinched two big wins in the American market as the US Food and Drug Administration (FDA) reaffirmed its 1991 pro-Philippine Natural Grade Carrageenan decision. The development came as the U.S. FDA’s Office of Compliance rejected the letter-request of two international seaweed-based groups to reverse its 1991 policy decision accepting PNG as food additive and approving the change of name in the American market. These two groups, the US-based International Food Additives Council (IFAC) and the France-based Marinalg, have lobbied for years against the entry of the high fibrous carrageenan in Europe and the US. But, the U.S. FDA has made a third pronouncement in favor of PNG. The first and second pronouncements were issued on July 12, 1990 and July 8, 1991 respectively.

More so, in a historic decision, the Codex Alimentarius Commission (CAC) approved an International Numbering System (INS) - E407a- for Philippine Natural Grade (PNG) on July 1995 in Rome. This new number now classifies PNG as carrageenan in its food additive list. The CAC is a joint international food hygiene agency of the World Health Organization (WHO) and the Food and Agriculture Organization (FAO). On the other hand, the Joint Expert on Food Additives and Contaminants assigned to PNG a temporary allowable daily intake (ADI) of 0-20 mg/kg of body weight.

top
 

A renaissance in technology has led to new discoveries on the unique qualities of certain marine plants. One of the most talked about marine plants today is the seaweed. Cebuanos call it "goso". Marine biologists have another term for it – "sea lettuce". "Irish Mosh", some seafarers call it. Chinese culinary experts before were fond of making "gulaman" out of seaweed, providing genial hosts with a favorite "after-dinner mint" for their guests.

Seaweed or halamang-dagat is a red-to-brown grass of the sea that provides nourishment for man. Aside from being consumed as food, seaweed is utilized as a raw material in the manufacture of industrial products such as alginate, agar and carrageenan.

There are five (5) species of seaweed in the country. They are Eucheuma (usually exported fresh), Caulerpa (exported fresh or in salted form), Sargassum (produced as meal for animal feed manufacture), Gelidiella and Gracilaria (both exported dried and/or alkali-tested). Eucheuma, however, has a number of uses and enjoys the heaviest demand in the market, both here and abroad. In addition, Eucheuma can be farmed commercially almost anywhere in the country’s coastal areas.

It took more than 50 years before Filipinos were able to unlock the hidden wonders of seaweed. With the advent of modern processing techniques, seaweed has been transformed into white powder called "carrageenan". The wonder of carrageenan is very much part of modern day living. In fact, many people refer to carrageenan as the "wonder powder" derived form processed seaweed. Food processing firms use it to enhance the quality of certain food products such as poultry, hams, sausages, and other meat products. Its functions as binder, moisture holder, and gelling agent have been acclaimed by food processors all over the world. Sauces, salad dressings and dips require carrageenan to impart body, provide thickness and stabilize emulsions. Carrageenan, likewise, creates a stable gel for canned meat products and shrimp or fish gels. From food products, profound uses of carrageenan have been established in dairy and dessert products. Whipped creams and toppings retain their stable form due to carrageenan. The wonder powder gives body to acid milk product such as cheese and, in case of yogurt, improved fruit suspension. Much of the wonder powder’s fine attributes are also found in milk products. In ice cream, for instance, carrageenan prevents whey separation and ice crystal formation. It is also present in puddings and pie fillings as it creates a stable gel. Even chocolate drinks maintain their quality with the aid of carrageenan.

But the wonders of carrageenan are far from over. Through persistent research, new frontiers are set. Non-food products have been added to the list of beneficiaries of carrageenan. The list includes beauty care product lines and pharmaceuticals that make use of the seaweed derivative. Shampoos have acquired improved foam stability and thickness due to carrageenan. Lotions and creams have attained a special quality in terms of body, slip, and improved "rub-out" sensation. Even in toothpaste, carrageenan is very much at work acting as a binder while improving foam stability in the product.

1966 was a turning point in Philippine exports as it saw the emergence and the eventual recognition of the Seaweed Processing as an industry in the Philippines with a record volume of 800 metric tons (MT). Although initially, no attempts were made to cultivate Eucheuma. People gathered only wild species and, quite surprisingly, it satisfied the foreign market. Each year, the demand for Eucheuma increased but the supply dropped alarmingly in the late 60’s as a result of over-harvesting. It was the Marine Colloid Philippines, Inc. (MCPI), a pioneering industry leader, which took the task of incisively studying the possibility of commercial Eucheuma farming. The experiment was proven to be successful which led to the sprouting of firms specializing in the manufacture of a new grade of carrageenan from seaweed of the Eucheuma variety.

It took exactly another two decades for the Philippine seaweed industry to take a leap forward through Shemberg Marketing Corporation, a Cebu-based exporter of seaweed products, which established the first full-scale carrageenan refinery in the Philippines. In 1986, Shemberg Marketing Corporation has penetrated the markets of Western Europe, Japan and Australia.

Carrageenan exports are expected to increase anywhere between 15-20% this year (1998) as outward shipments get a boost from demand of European countries for the product. Considered one of the country’s next marine-based export winner after shrimps and tuna, carrageenan is a hard-type gel popularly used as suspending agent for various products. It usually accounts for some of product weight for processed food like jams and syrup, baby food, ice cream and coffee creamers. It can also be used as thickener for toothpaste, shampoos, lotions, cream and other toiletries. In the textile industry, it is used as stiffening and binding material for a soft finish.

Thus far, the Philippines is now considered as one of the world’s few which has successfully cultivated seaweeds on a commercial scale. But the road trod by the seaweed industry was not, at all, a bed of roses. The years 1991-1993 were the most turbulent years. It was during this period that the raging controversy on Philippine Natural Grade (PNG) carrageenan’s possible ban in the United States determined the fate of the industry. The issue then was whether PNG is safe for human consumption or not. Fortunately, the issue has been answered in the affirmative in a letter of approval signed by the Director of the Division of Food and Color Additives, Center for Food and Safety and Applied Nutrition of the United States Food and Drug Authority (FDA).

The Philippine Seaweed Industry clinched two big wins in the American market as the US Food and Drug Administration (FDA) reaffirmed its 1991 pro-Philippine Natural Grade Carrageenan decision. The development came as the U.S. FDA’s Office of Compliance rejected the letter-request of two international seaweed-based groups to reverse its 1991 policy decision accepting PNG as food additive and approving the change of name in the American market. These two groups, the US-based International Food Additives Council (IFAC) and the France-based Marinalg, have lobbied for years against the entry of the high fibrous carrageenan in Europe and the US. But, the U.S. FDA has made a third pronouncement in favor of PNG. The first and second pronouncements were issued on July 12, 1990 and July 8, 1991 respectively.

More so, in a historic decision, the Codex Alimentarius Commission (CAC) approved an International Numbering System (INS) - E407a- for Philippine Natural Grade (PNG) on July 1995 in Rome. This new number now classifies PNG as carrageenan in its food additive list. The CAC is a joint international food hygiene agency of the World Health Organization (WHO) and the Food and Agriculture Organization (FAO). On the other hand, the Joint Expert on Food Additives and Contaminants assigned to PNG a temporary allowable daily intake (ADI) of 0-20 mg/kg of body weight.

 
 

A renaissance in technology has led to new discoveries on the unique qualities of certain marine plants. One of the most talked about marine plants today is the seaweed. Cebuanos call it "goso". Marine biologists have another term for it – "sea lettuce". "Irish Mosh", some seafarers call it. Chinese culinary experts before were fond of making "gulaman" out of seaweed, providing genial hosts with a favorite "after-dinner mint" for their guests.

Seaweed or halamang-dagat is a red-to-brown grass of the sea that provides nourishment for man. Aside from being consumed as food, seaweed is utilized as a raw material in the manufacture of industrial products such as alginate, agar and carrageenan.

There are five (5) species of seaweed in the country. They are Eucheuma (usually exported fresh), Caulerpa (exported fresh or in salted form), Sargassum (produced as meal for animal feed manufacture), Gelidiella and Gracilaria (both exported dried and/or alkali-tested). Eucheuma, however, has a number of uses and enjoys the heaviest demand in the market, both here and abroad. In addition, Eucheuma can be farmed commercially almost anywhere in the country’s coastal areas.

It took more than 50 years before Filipinos were able to unlock the hidden wonders of seaweed. With the advent of modern processing techniques, seaweed has been transformed into white powder called "carrageenan". The wonder of carrageenan is very much part of modern day living. In fact, many people refer to carrageenan as the "wonder powder" derived form processed seaweed. Food processing firms use it to enhance the quality of certain food products such as poultry, hams, sausages, and other meat products. Its functions as binder, moisture holder, and gelling agent have been acclaimed by food processors all over the world. Sauces, salad dressings and dips require carrageenan to impart body, provide thickness and stabilize emulsions. Carrageenan, likewise, creates a stable gel for canned meat products and shrimp or fish gels. From food products, profound uses of carrageenan have been established in dairy and dessert products. Whipped creams and toppings retain their stable form due to carrageenan. The wonder powder gives body to acid milk product such as cheese and, in case of yogurt, improved fruit suspension. Much of the wonder powder’s fine attributes are also found in milk products. In ice cream, for instance, carrageenan prevents whey separation and ice crystal formation. It is also present in puddings and pie fillings as it creates a stable gel. Even chocolate drinks maintain their quality with the aid of carrageenan.

But the wonders of carrageenan are far from over. Through persistent research, new frontiers are set. Non-food products have been added to the list of beneficiaries of carrageenan. The list includes beauty care product lines and pharmaceuticals that make use of the seaweed derivative. Shampoos have acquired improved foam stability and thickness due to carrageenan. Lotions and creams have attained a special quality in terms of body, slip, and improved "rub-out" sensation. Even in toothpaste, carrageenan is very much at work acting as a binder while improving foam stability in the product.

1966 was a turning point in Philippine exports as it saw the emergence and the eventual recognition of the Seaweed Processing as an industry in the Philippines with a record volume of 800 metric tons (MT). Although initially, no attempts were made to cultivate Eucheuma. People gathered only wild species and, quite surprisingly, it satisfied the foreign market. Each year, the demand for Eucheuma increased but the supply dropped alarmingly in the late 60’s as a result of over-harvesting. It was the Marine Colloid Philippines, Inc. (MCPI), a pioneering industry leader, which took the task of incisively studying the possibility of commercial Eucheuma farming. The experiment was proven to be successful which led to the sprouting of firms specializing in the manufacture of a new grade of carrageenan from seaweed of the Eucheuma variety.

It took exactly another two decades for the Philippine seaweed industry to take a leap forward through Shemberg Marketing Corporation, a Cebu-based exporter of seaweed products, which established the first full-scale carrageenan refinery in the Philippines. In 1986, Shemberg Marketing Corporation has penetrated the markets of Western Europe, Japan and Australia.

Carrageenan exports are expected to increase anywhere between 15-20% this year (1998) as outward shipments get a boost from demand of European countries for the product. Considered one of the country’s next marine-based export winner after shrimps and tuna, carrageenan is a hard-type gel popularly used as suspending agent for various products. It usually accounts for some of product weight for processed food like jams and syrup, baby food, ice cream and coffee creamers. It can also be used as thickener for toothpaste, shampoos, lotions, cream and other toiletries. In the textile industry, it is used as stiffening and binding material for a soft finish.

Thus far, the Philippines is now considered as one of the world’s few which has successfully cultivated seaweeds on a commercial scale. But the road trod by the seaweed industry was not, at all, a bed of roses. The years 1991-1993 were the most turbulent years. It was during this period that the raging controversy on Philippine Natural Grade (PNG) carrageenan’s possible ban in the United States determined the fate of the industry. The issue then was whether PNG is safe for human consumption or not. Fortunately, the issue has been answered in the affirmative in a letter of approval signed by the Director of the Division of Food and Color Additives, Center for Food and Safety and Applied Nutrition of the United States Food and Drug Authority (FDA).

The Philippine Seaweed Industry clinched two big wins in the American market as the US Food and Drug Administration (FDA) reaffirmed its 1991 pro-Philippine Natural Grade Carrageenan decision. The development came as the U.S. FDA’s Office of Compliance rejected the letter-request of two international seaweed-based groups to reverse its 1991 policy decision accepting PNG as food additive and approving the change of name in the American market. These two groups, the US-based International Food Additives Council (IFAC) and the France-based Marinalg, have lobbied for years against the entry of the high fibrous carrageenan in Europe and the US. But, the U.S. FDA has made a third pronouncement in favor of PNG. The first and second pronouncements were issued on July 12, 1990 and July 8, 1991 respectively.

More so, in a historic decision, the Codex Alimentarius Commission (CAC) approved an International Numbering System (INS) - E407a- for Philippine Natural Grade (PNG) on July 1995 in Rome. This new number now classifies PNG as carrageenan in its food additive list. The CAC is a joint international food hygiene agency of the World Health Organization (WHO) and the Food and Agriculture Organization (FAO). On the other hand, the Joint Expert on Food Additives and Contaminants assigned to PNG a temporary allowable daily intake (ADI) of 0-20 mg/kg of body weight.

top
 
 

A renaissance in technology has led to new discoveries on the unique qualities of certain marine plants. One of the most talked about marine plants today is the seaweed. Cebuanos call it "goso". Marine biologists have another term for it – "sea lettuce". "Irish Mosh", some seafarers call it. Chinese culinary experts before were fond of making "gulaman" out of seaweed, providing genial hosts with a favorite "after-dinner mint" for their guests.

Seaweed or halamang-dagat is a red-to-brown grass of the sea that provides nourishment for man. Aside from being consumed as food, seaweed is utilized as a raw material in the manufacture of industrial products such as alginate, agar and carrageenan.

There are five (5) species of seaweed in the country. They are Eucheuma (usually exported fresh), Caulerpa (exported fresh or in salted form), Sargassum (produced as meal for animal feed manufacture), Gelidiella and Gracilaria (both exported dried and/or alkali-tested). Eucheuma, however, has a number of uses and enjoys the heaviest demand in the market, both here and abroad. In addition, Eucheuma can be farmed commercially almost anywhere in the country’s coastal areas.

It took more than 50 years before Filipinos were able to unlock the hidden wonders of seaweed. With the advent of modern processing techniques, seaweed has been transformed into white powder called "carrageenan". The wonder of carrageenan is very much part of modern day living. In fact, many people refer to carrageenan as the "wonder powder" derived form processed seaweed. Food processing firms use it to enhance the quality of certain food products such as poultry, hams, sausages, and other meat products. Its functions as binder, moisture holder, and gelling agent have been acclaimed by food processors all over the world. Sauces, salad dressings and dips require carrageenan to impart body, provide thickness and stabilize emulsions. Carrageenan, likewise, creates a stable gel for canned meat products and shrimp or fish gels. From food products, profound uses of carrageenan have been established in dairy and dessert products. Whipped creams and toppings retain their stable form due to carrageenan. The wonder powder gives body to acid milk product such as cheese and, in case of yogurt, improved fruit suspension. Much of the wonder powder’s fine attributes are also found in milk products. In ice cream, for instance, carrageenan prevents whey separation and ice crystal formation. It is also present in puddings and pie fillings as it creates a stable gel. Even chocolate drinks maintain their quality with the aid of carrageenan.

But the wonders of carrageenan are far from over. Through persistent research, new frontiers are set. Non-food products have been added to the list of beneficiaries of carrageenan. The list includes beauty care product lines and pharmaceuticals that make use of the seaweed derivative. Shampoos have acquired improved foam stability and thickness due to carrageenan. Lotions and creams have attained a special quality in terms of body, slip, and improved "rub-out" sensation. Even in toothpaste, carrageenan is very much at work acting as a binder while improving foam stability in the product.

1966 was a turning point in Philippine exports as it saw the emergence and the eventual recognition of the Seaweed Processing as an industry in the Philippines with a record volume of 800 metric tons (MT). Although initially, no attempts were made to cultivate Eucheuma. People gathered only wild species and, quite surprisingly, it satisfied the foreign market. Each year, the demand for Eucheuma increased but the supply dropped alarmingly in the late 60’s as a result of over-harvesting. It was the Marine Colloid Philippines, Inc. (MCPI), a pioneering industry leader, which took the task of incisively studying the possibility of commercial Eucheuma farming. The experiment was proven to be successful which led to the sprouting of firms specializing in the manufacture of a new grade of carrageenan from seaweed of the Eucheuma variety.

It took exactly another two decades for the Philippine seaweed industry to take a leap forward through Shemberg Marketing Corporation, a Cebu-based exporter of seaweed products, which established the first full-scale carrageenan refinery in the Philippines. In 1986, Shemberg Marketing Corporation has penetrated the markets of Western Europe, Japan and Australia.

Carrageenan exports are expected to increase anywhere between 15-20% this year (1998) as outward shipments get a boost from demand of European countries for the product. Considered one of the country’s next marine-based export winner after shrimps and tuna, carrageenan is a hard-type gel popularly used as suspending agent for various products. It usually accounts for some of product weight for processed food like jams and syrup, baby food, ice cream and coffee creamers. It can also be used as thickener for toothpaste, shampoos, lotions, cream and other toiletries. In the textile industry, it is used as stiffening and binding material for a soft finish.

Thus far, the Philippines is now considered as one of the world’s few which has successfully cultivated seaweeds on a commercial scale. But the road trod by the seaweed industry was not, at all, a bed of roses. The years 1991-1993 were the most turbulent years. It was during this period that the raging controversy on Philippine Natural Grade (PNG) carrageenan’s possible ban in the United States determined the fate of the industry. The issue then was whether PNG is safe for human consumption or not. Fortunately, the issue has been answered in the affirmative in a letter of approval signed by the Director of the Division of Food and Color Additives, Center for Food and Safety and Applied Nutrition of the United States Food and Drug Authority (FDA).

The Philippine Seaweed Industry clinched two big wins in the American market as the US Food and Drug Administration (FDA) reaffirmed its 1991 pro-Philippine Natural Grade Carrageenan decision. The development came as the U.S. FDA’s Office of Compliance rejected the letter-request of two international seaweed-based groups to reverse its 1991 policy decision accepting PNG as food additive and approving the change of name in the American market. These two groups, the US-based International Food Additives Council (IFAC) and the France-based Marinalg, have lobbied for years against the entry of the high fibrous carrageenan in Europe and the US. But, the U.S. FDA has made a third pronouncement in favor of PNG. The first and second pronouncements were issued on July 12, 1990 and July 8, 1991 respectively.

More so, in a historic decision, the Codex Alimentarius Commission (CAC) approved an International Numbering System (INS) - E407a- for Philippine Natural Grade (PNG) on July 1995 in Rome. This new number now classifies PNG as carrageenan in its food additive list. The CAC is a joint international food hygiene agency of the World Health Organization (WHO) and the Food and Agriculture Organization (FAO). On the other hand, the Joint Expert on Food Additives and Contaminants assigned to PNG a temporary allowable daily intake (ADI) of 0-20 mg/kg of body weight.

top

II. INDUSTRY STRUCTURE

A. Products Manufactured Under the Industry:

The Philippines offers a wide product range, from the raw dried seaweed and semi-refined or PNG carrageenan, to highly-refined carrageenan otherwise known as conventionally purified (CP) carrageenan. Generally, however, there are four (4) main groups of marine seaweed on the basis of pigmentation: red algae (botanical class Rhodophycae), brown algae (Phaeophycae), green algae (Chlorophycae) and, blue-green algae (Cyanophycae). The red and brown seaweeds which are grown in large are utilized to manufacture four seaweed colloids. These include: agar, alginate, carrageenan and furcellaran.

Agar is a dried colloid obtained from the hot water extraction of red seaweeds. It is produced mainly in Japan (where it is called kanten) and is used in the following;

  1. preparation of food
    • to thicken jams
    • manufacture of sweets
    • mixed with gelatin
  2. pharmaceutical products
    • preparation of suppositories
  3. cosmetic and dental products
  4. industrial products
    • used in small quantities to give resilience to gelatin in photographic films
  5. biological and medicinal research
  6. agriculture

On the other hand, carrageenan is a jelly-like substance obtained by extraction with alkaline of red seaweed which grow abundantly in warm waters. Carrageenan is a yellowish or tan to white, coarse to fine powder that is practically odorless and has mucilaginous taste. It is a valuable substance used mainly in products that need gelling, suspending, thickening or water-holding properties. The various end-uses of carrageenan may be classified into two main headings --- food and non-food --- wherein the former accounts for nearly 70% of the world market demand for the product. The main food uses are as follows:top

1.  instant breakfast foods - bodying, suspending baby foods
2.  dietary foods  
3.  jams  
4.  syrups and gravy preparations  
5.  whipped creams, toppings  
6.  desserts - fat and foam stabilization
7.  acidified cream, cottage - bodying
8.  fluid skim milk  
9.  filled milk - emulsion stabilization, bodying
10. ice cream, ice milk - preventing whey separation, control
  meltdown
11. low calorie diet drinks - suspension, bodying
12. evaporated milk - fat stabilization
13. chocolate drinks - suspension, stabilization
14. coffee creamers  
15. yogurt  
16. peanut butter  
17. baked foods  
18. canned and frozen foods  
19. pudding  
20. pie filling - gelling agent
21. relishes, pizza and barbecue sauces  
22. fruit drink powders - bodying, pulpy mouth feel
23. frozen concentrates - bodying, pulpy mouth feel
24. jellies and dessert gels - gelling agent
25. ham and sausage - gel binder, fat stabilization
26. pet foods - gelation, fat stabilization, thickening
27. salad dressings - emulsion stabilization
28. fish gel - gelling agent

   It can also be used for non-food products like;

1. toothpaste - improves texture and rinseability
2. lotion - as hydrating agent
3. cream - provides greater viscosity
4. cosmetics - provides greater viscosity
5. textiles  
6. paints - thickener
7. air freshener - as a gelatinizing agent
8. soap  
9. shampoo - foam stabilization, thickening, gelling
  brake fluid for 747 jet
10. rubber products  
11. electronic wire coatings  
12. greaseproof paper  
13. foam cushions  
14. fertilizer  
15. pigments - dispersion and suspension
16. salves - bodying, binder
17. medicinal - suspension of insoluble ingredients
18. artificial food for fishes - binder

     
B. Firms Comprising the Industry:

Some 18 small to medium-sized companies have bonded together to form the Seaweed Industry Association of the Philippines. The SIAP is an organization geared towards the promotion of the seaweed and carrageenan industry. Out of the 18 companies, 13 are BOI-registered. At present, there are 11 seaweeds processing companies in the country, foremost of which is the Shemberg Marketing Corporation. Records from the Department of Trade and Industry show that the rest of the seaweed companies in the country today belong to the top 20 exporters.

top
TOP CARRAGEENAN AND SEAWEEDS EXPORTERS

1. SHEMBERG MARKETING CORPORATION
    Paknaan, Mandaue City, Cebu 6014
    Tel Nos. (63-32) 346-0866
    Fax No. (63-32) 346-1892; 346-0863
    Product Lines: Jellies, Icebar, Juices, Carrageenan
    Contact Person: Mr. Benson U. Dakay, Chief Executive Officer

2. MARINE COLLOIDS PHILIPPINES, INC.
    Ouano compound, Looc, Mandaue City, Cebu
    Tel Nos. (63-32) 82611; 346-1811; 86763
    Fax No. (63-32) 346-1812; 346-1887
    Product Lines: Seaweeds

3. SHEMBERG BIOTECH CORP.
    Paknaan, Mandaue City, Cebu, 6014
    Tel. No. (63-32) 346-0866
    Fax No. (63-32) 346-1892; 346-0863
    Product Lines: Jellies, Icebar, Juices, Carrageenan
    Contact Person: Mr. Benson U. Dakay, Chief Executive Officer

4. SHEMBERG FOOD INGREDIENTS CORP.
    Paknaan, Mandaue City, Cebu, 6014
    Tel. Nos. (63-32) 346-0866
    Fax Nos. (63-32) 346-1892; 346-0863
    Product Lines: Carrageenan
    Contact Person: Mr. Benson U. Dakay, Chief Executive Officer

5. MCPI CORP.
    Tugbongan, Consolacion, Cebu City
    Tel. Nos. (63-32) 346-0376; 346-3566
    Fax Nos. (63-32) 346-0138; 346-0588
    Product Lines: Seaweeds/Carrageenan
    Contact Person: Mr. Maximo A. Ricohermoso, President

6. BIOCON PHILIPPINES, INC.
    
G/F SFB PT. 1, Mactan Export Processing Zone, Lapu-lapu City
     Tel. Nos. (63-32) 400-328; 400-319; 400-322
     Product Lines: (Seaweeds, Bread Improvers and Stilling Additives
     Contact Person: Ms. Ernestina Elizalde, Managing Director

top
III. PRODUCTION FACTORS

A. Profile of the Workforce:

In Region VII, seaweed farming is the source of livelihood of at least 20,000 farmer families or over 50,000 people, 70% of which is unskilled. They farm and grow seaweed in Bohol, Cebu and Negros. Seaweed farming has been the alternative source of income of the people in the farm. On the other hand, the seaweed processing industry directly employs 4,000. These workers are spread out all over the region.

B. Qualifications for Employment in the Industry

In seaweed raising, farmers utilize several methods. Most of them use the bottom farm method because it is easier to harvest while others use the broadcast method, the most expensive but the most profitable. Other methods used by some seaweed farmers are mangrove stakes and nets or floating bamboo and tubular nets.

Labor operations for seaweed farming include seed preparations, cleaning of farm, plot layout/farm installation, planting/replanting, harvesting, sorting/cleaning, and drying.

The processing of seaweed into semi-refined carrageenan involves simple technology. With the exception of Shemberg Marketing Corporation, the industry has limited itself to the production and export of semi-refined product where quality control is not as stringent and demanding as refined carrageenan.

Refined carrageenan products are manufactured either through non-extractive or extractive methods.

C. Raw Material Needs and Sources:

Seaweeds are grown in abundance in Philippine waters. The biggest natural ground and the best sources of Eucheuma seaweed are the wide shallow water areas located particularly in the provinces of Cebu, Bohol and Negros Oriental for Region VII and are also present in the provinces of Palawan, Leyte, Zamboanga del Norte and Tawi-tawi.

top
IV. INDUSTRY PERFORMANCE AND TASKS

A. Marketing Practices

Expenditures incurred in seaweed production are: material inputs (pesticides, fuel, oil, nylon-line ropes and seeds); labor (caretaker, hired workers, operator and family labor) and fixed costs/payments (farmhouse and drying platform, pump boat, dugout, hand tools such as crowbar and sledge-hammer), interest on loans, depreciation charges, municipal fees/other fishing permits and maintenance/repair of equipment.

Initial planting of seaweed is costly because planting materials are bought involving high transport cost. However, in the succeeding plant seasons, the operating costs become smaller. Fixed costs constitute mostly of operator and family labor with hired caretaker(s) and some workers.

Based on the findings of a study conducted by the Bureau of Agricultural Statistics on seaweed farms in Cebu and Bohol, seaweed production, especially large-scale production, is a profitable venture and a worthy investment. For an investment of P60,960 for one-hectare seaweed farm, a producer could easily attain a net return of P29,040 for each harvest.

B. Market Structure

Seaweed or seaweed products for export are produced in tremendous quantities by thousands of fishermen. The market structure through which the produce are channeled starts from:
  1. the farmer-producer who may also double as collector or assembler;
  2. to the small traders who act as middlemen or at the same time as small-scale assemblers or wholesalers;
  3. to the large traders who are mainly agents;
  4. to the exporters or the processor and/or exporter.

The produce of the more progressive farmers may pass through a shorter route compared to the small-scale farmer. The progressive farmers have the means to transport and, therefore, can sell direct to the big exporters and/or processors. The produce of the small-scale farmer, on the other hand, has to pass through a series of middlemen before these reach the exporters and/or the processors. Because the buying price is determined by the exporters or processors, the small-scale farmers who represent the majority of the producers receive only a small part of the profit. A large chunk goes to the middlemen, assembler or wholesaler. The large-scale exporters/processors may be subsidiaries of foreign processors or independent exporters or processors/exporters.

The Seaweed Industry Association of the Philippines or SIAP has signed a memorandum of agreement with Land Bank of the Philippines for the organization of farmers’ cooperatives in Eucheuma plantations.

The SIAP, the national association of processors and farmers, believe that the farmers cooperative can effectively reduce the clout of middlemen in the marketing of dried seaweed. The main objective is to give the marine farmers a bigger share of profits in the sale of dried seaweeds.

C. Major Markets

C.1 Foreign

By market, Philippine exports in 1997 had the following markets:

France                                                     - 19.01%
United Kingdom & G. Britain & N. Ireland    - 15.48%
Denmark                                                  - 14.93%
United States of America                           - 14.67%
Germany                                                  - 9.14%
Spain                                                       - 5.82%
Australia                                                   - 4.48%
China, People’s Republic of (Mainland)        - 4.19%
Mexico                                                     - 2.93%
Hongkong                                                 - 2.14%
Others                                                      - 7.21%

Figure 1 top

PHILIPPINE EXPORT PERFORMANCE
TOP 10 MARKETS, 1997

C.2 Domestic

For most Filipinos, seaweed is considered a seaweed delicacy which is eaten raw. Data on actual local demand and consumption of seaweeds/carrageenan are not available.

top
D. Export Performance

EXPORT PERFORMANCE

Philippine Merchandise Export of Export Winners (Carrageenan & Seaweeds)
January – December 1996-1995
FOB Value in US Dollars

PRODUCT

1996 Value

% Share

1995 Value

% Share

TOTAL PHILS.

20,542,546,399

100.00

17,447,186,135

100.00

OTHERS

4,282,083,485

20.84

4,099,848,379

23.50

TOTAL EXPORT WINNERS

16,260,462,914

79.16

13,347,337,756

76.50

OTHER Export Winners Products

16,166,474,286

78.70

13,264,187,700

76.02

CARRAGEENAN/Seaweeds

93,988,628

0.46

83,150,056

.048

Source:BETP

The 1996 export performance of the Philippine Seaweed Industry recorded a total of US$93.98 million, 70% of which comes from Region VII. This shows a 13.03% increase from 1995 export performance.
top

Distribution of World Carrageenan Usaged by Industry Sector



Source: FAO Fisheries Technical Paper,1997

By product breakdown of Philippine exports of seaweeds in1996 was as follows: semi-refined carrageenan, 55%; semi-refined carrageenan, 24%; and raw seaweeds, 21%.

COMPARATIVE ANNUAL EXPORTS
1993-1997
Cebu Port, MEPZ, PhilExport & Negros Port

     

COMMODITY

1993

1994

1995

1996

1997

Marine Products

       

37,258,932

42,914,921

Carrageenan:

  

  

  

17,007,303

18,047,818

Processed seaweeds

28,418,861

11,920,484

28,807,222

     

Frozen Seaweeds

495,758

619,698

758,633

     

Dried Seaweeds

3,570,690

5,752,920

3,729,340

     

    Source: DTI-7 InfoNet

top
E. Industry Prospects:

With the advances in food science technology and with health restrictions against high fat and cholesterol, the use of the lower priced carrageenan as a fat replacement food additive is very practical. Further, increasingly diversified applications have expanded the market for seaweed and carrageenan.

A breakthrough in carrageenan utility is in medical syrups. It provides not only body but also suspends the antibiotic ingredients. The gel form air fresheners have been added to the list of carrageenan’s industrial uses. At this point in time, it is too early to conclude that carrageenan has reached its limit as enhancer and stabilizer of consumer products in the lines mentioned earlier.

Data gathered by AT Business Monthly show that should its export receipts post $100 million in the next two years, Shemberg Marketing Corporation, owned by the Dakay family, shall become Cebu’s largest export earner. Owing to the wide usage of carrageenan, Shemberg Marketing Corporation accounts for only 10% of the total global market, an ironic twist considering that seaweed is extensively grown in the country.

With the present demand, the country’s carrageenan exports will easily double or even triple in the next two years as outward shipments get a boost from demand of Eastern European countries for the product. The approval of the European Union market of the PNG carrageenan has propped up market growth. Some years back, the European blocked the entry of the natural grade carrageenan because of its classification as unfit for human consumption type. Though there were rumors that the move was to protect the interest of major European firms which are involved in the seaweed business, the government together with SIAP successfully lobbied against the anti-PNG carrageenan rule.

As this developed, industry insiders see brighter prospects for the industry, an improvement over the difficulties faced by the industry in the past several years due to the opposition of carrageenan producers in the United States.

The carrageenan industry has likewise proven to be relatively immune from the recent currency depreciation. Imported chemicals like potassium hydroxide and other bleaching agents used in carrageenan processing comprise merely 5% of the total finished product.

Last year (1997), the Philippine total carrageenan harvest reached 120,000 tons. To meet the growing demand this year, the Philippines has to increase its harvest up to 150,000 tons. There is no problem in increasing seaweed harvest since the strong demand for carrageenan has triggered a surge in the price of seaweed. Fresh seaweeds now sell between P20 – P30 per kilo, up from the previous price of P10 per kilo. With a higher income from seaweed farming, more and more families are encouraged to become seaweed farmers.

In addition to the growing export market, the domestic market for carrageenan is also increasing. Many local food and toothpaste companies have already shifted to the use of local carrageenan. Food experts estimate the annual requirements of the ham industry for Philippine carrageenan to reach some 2,000 metric tons or conservatively P375 million. Carrageenan is used as a binder in ham-making.

top
V. INDUSTRY PROBLEMS AND RECOMMENDATIONS

1. The Alleged Environmental Effects of Seaweed Farming

The increasing interest in the open reef farming of seaweed has generated both favorable and unfavorable responses from various quarters. For those who are engaged in farming as a livelihood, the activity is a boon. Because farming is generally sited in open reef areas, it is feared by some quarters that the activities will have some adverse effects on the coral reef environment, i.e., that the influx of farmers in the site and their activities will have negative environmental effects on the local flora and fauna.

The understanding of what seaweed is and its ecological role in the marine environment, and the farming processes are important in order to put the question of the effects on the environment on the correct perspective. Seaweed is one of the main primary producers in the shallow water coastal environment. As such, it is one of the primary agents responsible for the production of organic matter and energy on which the other members and phytoplankton provide the base on which the productivity of the marine communities is built on. As primary producer, it utilizes and dissolves carbon dioxide and water as raw materials in the production of organic matter through the process of photosynthesis. It also absorbs nutrients directly from seawater for their growth and development. Oxygen is a by-product it evolves during the process of photosynthesis which is essential in the process of respiration. The presence of seaweed also enhances the environmental condition for the other members of the community, i.e. , it serves as shelter and habitat for many associated fauna.

2. RP Faces Seaweed Industry Competitors

The highly profitable seaweed export industry is facing stiff competition from other Asian countries, particularly Indonesia, due to the illegal export of dried seaweed and the export of seedlings.

The Philippines, whose annual production of 120,000 metric tons is second only to China’s 275,000 metric tons, might be overtaken by Indonesia. Indonesia’s exports of seaweed is still relatively modest but it can become the second largest producer in the near future if smuggling of dried seaweed and exports of seedlings continue. Thus, the SIAP has asked the government to patrol the Palawan waters and other areas in the south where rampant smuggling of dried seaweeds has been reported in recent months. These smuggled goods obtain better prices abroad. SIAP also said that if the smuggling continues, local processors would be faced with high prices of raw materials.

3. High World Market Prices are Scaring Foreign Buyers

This development might be good for the industry but having very high prices would pressure foreign buyers to find cheaper alternatives. It would tantamount to "pricing carrageenan out of the market". The existence of two major raw materials which, together with carrageenan, comprise the world’s "gum" market. Carbon methyl cellulose (CMC) and santhan are raw materials which could very well replace carrageenan if the price thereof would be so high. While industry players are not against good prices for seaweed, it is incumbent upon them to exercise vigilance that they will not destroy themselves. If some irresponsible industry members price their products too high, the gum users will start shifting from using carrageenan as raw material.
top


   
HOME | LINKS | FACTS AND FIGURES | INVESTORS GUIDE
FOREIGN TRADE | MUNICIPALITY PROFILES | SPECIAL PROJECTS
CONSUMER WEB | LIBRARY | CONTACTS IN CEBU
ABOUT DTI-CEBU
 
 
contact links home