Shemberg to resume operations next week

Shemberg Marketing Corporation (SMC), the world’s largest carrageenan supplier announced to resume to its normal operation from running on 75% capacity only for the last few months.

“We are resuming our normal operation next week. The people who were asked to report on three-day work week will, and forced leave will be back on their normal working schedules,” said SMC president and chief executive officer (CEO) Benson U. Dakay in an interview with The Freeman yesterday.

Dakay attributed the strong US dollar, and improving supply of raw seaweed in the Philippines, to the recovery of the plant’s operation.

Now, that the peso exchange settled within the P44 to a dollar, to almost P45, the seaweed exports outlook is rosier, and that Shemberg is slowly getting its feet once again to meet with the increasing demand in the global market.

Last May of this year, about 800 Shemberg workers were forced to avail of their respective vacation leave and sick leave, due to low production capacity caused of the declining supply of seaweed in the country, including supply from Indonesia.

Other workers were asked to report for three days in one week, due to the slowdown of the plant’s operation, brought about by the lack of seaweed supply and difficulties from the strengthening peso to the dollar in the last five months in 2008.

According to Dakay, due to the Ramadan, Muslims are forced to produce big volumes of raw seaweed as “they need money for their holiday.”

At least the steady foreign exchange which settles within P44 to almost P45 per one dollar is a relief for exporters, especially for the seaweed processors, said Dakay, who is also the president of the Seaweed Industry Association of the Philippines (SIAP).

 Early this year, Shemberg’s plant in Zamboanga also adopted a semi-shutdown scheme, operating in a very low capacity.

According to Dakay, even Indonesia has also experienced declining supply of raw seaweed. In the past, Shemberg used to import raw seaweed requirement from other countries like Indonesia.

Indonesia is a source of seaweed for some Philippine carrageenan processors. Philippine cottonii is at $ 1,600 per metric ton (MT) from last year’s $ 800 per MT, Indonesian cottonii is only at $ 1,400 per MT from last year’s $ 600.

About 30 percent of the total carrageenan requirement in world is supplied by Shemberg Corporation, making the company the largest carrageenan supplier in the world.

Meanwhile, Dakay announced that there is also a pressing problem in sourcing out raw seaweed from Indonesia, as prices has becoming more expensive.

Largest seaweed processor in Indonesia PT Bantimurong Makasar warned Philippines and China buyers of Indonesian seaweed to refrain from buying weak quality and expensive seaweed produce from Indonesian farmers.

According to Dakay, although 30 percent of Shemberg’s raw seaweed requirement is sourced from Indonesia, the improving supply of raw seaweed from the Philippines may save Shemberg from buying expensive, but low quality seaweed from Indonesia. — Ehda M. Dagooc