Shemberg is now world's top carrageenan supplier

The recent closure of Denmark-based multinational seaweed processing plant has put Cebuano-owned Shemberg Marketing Corporation as the world's number one supplier of refined carrageenan.

This development would mean increased demand for raw seaweed requirement, and employment opportunities especially for the Cebuanos.

Shemberg president and chief executive officer (CEO) Benson U. Dakay said the company now captures 30 percent of the total refined carrageenan market globally, rest of the demand are served by other seaweed processing plants across the globe.

Carrageenan is a hydrocolloid extracted from red seaweeds that is used as an ingredient in food, dairy, air freshener, oral care, pharmaceutical products, personal care products, biotechnology research and other industrial consumer product applications.

It is a jelly-like substance obtained by extraction with alkaline of red seaweeds which grow abundantly in warm waters. It is a yellowish or tan to white, coarse to fine powder that is practically odorless and has mucilaginous taste.

The product is also used in a variety of commercial applications such as gelling, thickening and stabilizing agents, especially in food products such as chocolate milk, cottage cheese, frozen deserts, yogurt, pet foods and sauces. It is also used in pharmaceutical formulations, cosmetics and industrial applications. About 70 percent of the world demand for the product is for food purposes.

Last year, Shemberg exported a total of US$38.6 million refined and semi-refined carrageenan combined. This year the worth of exports is expected to double as its share in the refined carrageenan market had increased significantly.

However, what worries the carrageenan exporters in the Philippines especially Shemberg is the limited supply of raw seaweed from farmers and unpredictable natural calamities which will hamper exporters' potential to grow its export distribution.

In 2004, the seaweed industry exported a total of US$144.02 million a little percentage increased from US$143.59 million export value the year before, large part of which was contributed by Shemberg Corporation.

Significantly, Dakay said the continued rise of fuel price has threatened the continued profitability of the company, thus, he decided to shift from using bunker fuel for the processing plants, and purely utilizes coal and coconut shell fueled machines come December 2005.

With this alternative innovation, which cost the company an investment of P60 million for new coal and coconut shell compatible machines, Shemberg is bound to save a possible loss of P16 million a month.

Shemberg's growth opportunities in the next few years, is largely anchored by the growing health-conscious consumers, wherein most of them are demanding for vegetable-based food additive or gelling material, rather than animal base.

For the pharmaceutical industry for instance, Dakay said Shemberg is currently developing a technology that could provide the raw material demand for the capsule market, in which, carrageenan product will be used as the coating ingredient of medicine capsules, vitamins, rather than the traditional pork and beef derived gelatin.

Soon, he said Shemberg, would be able to grab part of the US$8 billion dollar gelatin business.