Prospect and Perspective of the Seaweed Industry for Building Capacities of Local Communities to Cope with Globalization Seaweed Industry Association of the Philippines

Legend: % Production Highly-developed – 88% Semi-developed – 10% Under-developed – 2%

Commercial Species of Seaweed in the Philippines Carrageenan Bearing Red Seaweed – Eucheuma Cottonii – Eucheuma Spinosum Agar-Agar Bearing Red Seaweed – Gracilaria – Gelidium

Types of Carrageenan Extracted Eucheuma Cottonii – Kappa – Applications Dairy Products Meat and Poultry Water gels Processed Human foods & Pet Foods Pharmaceutical Personal Care Eucheuma Spinosum – Iota – Applications Toothpaste Other Dairy Products Pharmaceutical

Products Produced by the Philippines(Eucheuma) Refined Carrageenan Semi-Refined Carrageenan Food Grade Semi-Refined Carrageenan Pet Food Alkali Treated Chips Raw Dried Seaweed

Philippine Position to World Market Refined Carrageenan – No. 4 Semi-Refined (Foodgrade) – No. 1 Semi-Refined (Pet Food) – No. 2 Alkali Treated Chips – No. 1 Raw Dried Seaweed – No. 1

Countries Producing Eucheuma Seaweed Philippines – 72% – Cottonii – 97.7% – Spinosum – 2.3% Indonesia – 22% – Cottonii – 92.3% – Spinosum – 7.7% Malaysia – 2.7% – Cottonii – 100% Zanzibar – 3.3% – Cottonii – 23% – Spinosum – 77%

Philippine Exports as of 2003 Raw Dried Seaweed – Volume, 27,540.0 M/tons – Value, US$15,067, Refined Carrageenan – Volume, 4,874.0 M/tons – Value, US$41,421, Semi-Refined Carrageenan – Volume, 22,201.0 M/tons – Value, US$87,103,214.00

World Demand on Eucheuma Seaweed Specie of Seaweed Eucheuma Cottonii 169,000m.t.180,000m.t.220,000m.t. Eucheuma Spinosum 15,000m.t.18,000m.t.22,000m.t. Projected increase in demand: E. Cottonii – 10% Annually E. Spinosum – 7% Annually

World Supply Situation Countries Philippines a. Cottonii b. Spinosum 118,460.0 m.t. 4,120.0 m.t. 125,254.2 m.t. 5,500.0 m.t. 127,693.2 m.t. 3,000.0 m.t. Indonesia a. Cottonii b. Spinosum 28, m.t. 3, m.t. 35, m.t. 3, m.t. 36, m.t. 3, m.t. Zanzibar a. Cottonii b. Spinosum m.t. 2, m.t m.t. 2, m.t. 1, m.t. 4, m.t. Malaysia a. Cottonii 3, m.t.3, m.t.4, m.t. Total a. Cottonii b. Spinosum 151, m.t. 10, m.t. 165, m.t. 11, m.t. 170, m.t. 10, m.t.

World Market FOB Price Specie of Seaweed Cottonii US$650.00/ Metric ton US$700.00/ Metric ton US780.00/ Metric ton Spinosum US$250.00/ Metric ton US$250.00/ Metric ton US$230.00/ Metric ton

World Market FOB Price PRODUCT PRICES PER KILO Refined CarrageenanUS$11.00 SRC-Food GradeUS$6.00 SRC-Pet FoodUS$3.25 ATCUS$2.80

World Market Trend There is high demand on Eucheuma Cottonii than Spinosum. Carrageenan Market for Kappa is big, making eucheuma cottonii seaweed high. There is more available supply of spinosum against demand. Demand for eucheuma seaweed continuous when prices is competitive & quality is good.

The Prospect of the Seaweed Industry In the Philippines

Supply and demand situation in the Philippines for Cottonii. YearSupplyDemandShortage , Metric Tons 155,000.0 Metric Tons 27, Metric tons The annual increase in demand is 10%

Philippine advantage over other countries. Cottonii quality is higher both in recovery and viscosity. Philippine has wider coastal areas and sea water is more suitable to eucheuma cottonii culture. Filipinos are used to sea type of livelihood. Advance technology on farming and extraction of carrageenan. There are 3 Refineries and 12 Semi-Refined Processing plants for Carrageenan. Philippine and private sector forged a partnership agreement to develop the seaweed industry. SIAP is a member of Marinalg International that helps solved Non-Tariff Barriers for Carrageenan.

What action to take? Focus in seaweed production development to fill the shortage of supply on raw eucheuma cottonii. Research and Development program for good quality seaweed production and more product applications for carrageenan. Strengthen organization of industry players, seaweed farmers, traders and processors to maintain good quality seaweed for carrageenan production. Government full support to the industry needs.

Non-Traditional Areas Intensive Seaweed Production Program Chart Fishermen’s Group Commercial Farming Starts 60 days after Block module was set PSDC (Provincial Seaweed Development Council) Municipal Government Orient LGU on Seaweed Farming Development LGU organize PSTFA Municipal Chapter Zone Municipal Waters & Enact Seaweed Culture Ordinance Issue Permit to Culture Seaweed to Seaweed Farmers Conduct Technology Seminar & put up one Block Module (10m. X 25m.) to PSFTA

SIAP PROPOSAL ON BFAR NURSERY FARMS Use the nursery farms as techno demo module in new municipalities targeted for development. Award 250 square meters module to an interested family beneficiary & operate to own. Make this as show case to others and a good venue for lakbay aral training once successful. This can also serve as initial source of seedlings for further development of the area. BFAR training funds can be used in training beneficiaries.

TARGETED AREAS FOR DEVELOPMENT 14 New Provinces Sultan Kudarat, South Cotabato, Sarangani, Agusan del Norte, Misamis Oriental, Siquijor, Biliran, Capiz, Aklan, Romblon, Oriental Mindoro, Catanduanes, Albay & Aurora 36 Provinces for Expansion Sulu, Basilan, Maguindanao, Davao del Sur, Davao City, Davao Oriental, Agusan del Sur, Surigao del Sur, Surigao del Norte, Camiguin, Lanao del Norte, Misamis Occidental, Zamboanga del Norte, Bohol, Cebu, Negros Oriental, Southern Leyte, Leyte, Eastern Samar, Western Samar, Northern Samar, Iloilo, Guimaras, Antique, Negros Occidental, Masbate, Sorsogon, Camarines Sur, Camarines Norte, Quezon, Marinduque, Occidental Mindoro, Palawan, Batangas, Zamboanga del Sur & Pangasinan

FINANCING COMPONENT Leader/ Trader LBP QUEDANCOR Initiate Loan Application (Loan issued not in cash but materials) Issue Permit on Seaweed Culture Issue Permit to operate business FARMERS LGU Issue Accreditation Papers & Market Linkage to Processors SIAP Prepare farmers’ information sheet for loan application

ROLE OF LANDBANK & QUEDANCOR LANDBANK COOP FARMERS Process & Release Loan Prepares Application & Release Loan (Materials not cash) QUEDANCOR LEADER/ MUNICIPAL TRADER FARMERS Process & Release Loan Prepares Application & Release Loan (Materials not cash) Rediscount Loans

FINANCING LOAN TO TRADERS TRADERS LAND BANK QUEDANCOR Inspect Inventory of seaweed PROCESSORS Raw Exporters Delivers Seaweed under Marketing Agreement And Purchase Order Payment of deliveries Directly paid Excess from Loan Is returned

SIAP ORGANIZATION AND ACREDITATION PROGRAM Accredited SIAP Carrageenan Processors Raw Seaweed Exporter Provincial Traders Municipal Traders Farmers Certifying Office SIAP Certifying Office PSFTA Certifying Office Municipal Chapter PSTFA Accredited

SIAP SOCIAL PROGRAM Force Savings Land Bank Municipal Traders Farmers Authorize to collect deposits Deduct 10% of farmers’ sales for deposit Individual Farmer’s Savings Account PHILHEALTH Register Farmers & Remit Monthly Premium Collect Monthly Premiums S.S.S.

As a result…. Philippines will be the major leader supplier of raw dried cottonii seaweed and Kappa Carrageenan worldwide. There is a ready and continuous market for all seaweed produced by marginal fishermen or seaweed farmers whereby providing them a lucrative and sustainable livelihood. Seaweed will be the major dollar earner for the country. More coastal areas are protected from Illegal Fishing.

PERFORMANCE TARGET YearProduction in Metric Tons Number of Families Total Area In Hectares Value of Exports In US$ , , , ,699, , , , ,930, ,184.OO309, , ,782,444.00

GOALS In 2004, to fill the requirement of Philippine Carrageenan Processors and in 2006 to fill the world demand of Dried Eucheuma Cottonii Seaweed. Increase livelihood opportunities among marginal fishermen and exports. Minimize Illegal Fishing Activities.

What field of Activity in Eucheuma/Carrageenan industry affect the Philippines? In terms of Community Development and environment.

PROCESSING It generates employment. It opens the market for raw dried seaweed produced by farmers. It can contribute to the Philippine economy by increasing exports. It adds a higher value to seaweed.

TRADING It generates employment in the country side. It links farmers to the processors and even world market for seaweed. It directly help farmers in term of their domestic needs (either foods or cash advances for healthcare or farming.)

FARMING Over a million marginal fishermen are engage in seaweed farming with an average annual income of P120, Opening of new markets increase the shortage of raw supply by as much as 45,000 metric tons annually in 2004 and is an opportunity for 23,000 families of new and unemployed marginal fishermen to engaged in seaweed farming livelihood. Contract farming scheme developed fishermen into an entrepreneur. More coastal areas are protected from illegal fishing. It improves the economic condition of the community.

Intensive Eucheuma Seaweed/Carrageenan Industry Development, Developed marginal fishermen capacities in facing the challenge of globalization in the field of additives.

ON THE AGAR-AGAR PRODUCING SEAWEED

Present Situation Gelidium Seaweed – High Commercial value and dried seaweed is exported to Japan, Korea and even Taiwan. – Agar-Agar produced locally is in demand in the local market. – Gathered wild, there is no commercial farming technology that invite fishermen to engage into the activity. Gracilaria Seaweed – Commercial farming technology has been adopted. – Lower commercial value that farmers are discouraged to culture. – Agar-Agar content has lower viscosity compared to other countries.

Is there a future for the agar industry? Gelidium – More research for farming technology that is lucrative to fishermen in terms of income. – The market for dried gelidium seaweed is big. – Intensive product applications both in the local and foreign market. Gracilaria – Culture of gracilaria can be done in Bangus or shrimp ponds. – Identify the best specie of gracilaria with higher viscosity. – More research on how to blend agar increasing its viscosity. – The trend for agar uses is now focused on soft gel than the traditional hard gel produced by South America and other European or Asian Countries.

“IF” GOVERNMENT AND PRIVATE SECTOR COOPERATES HONESTLY (WITHOUT CORRUPTION) PROSPECTS OF THE SEAWEED INDUSTRY TO COPE WITH GLOBALIZATION IS ATTAINABLE Thank you !!!!!!