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Tuesday, October 25, 2005
Shemberg now largest supplier of carrageenan
By Jessica B. Natad
Sun.Star Staff Reporter
WITH the closure of FMC BioPolymer’s refined carrageenan manufacturing plant in Denmark, the Philippines, through Cebu-grown Shemberg Corp., is now the largest producer and supplier of refined carrageenan in the world.
Seaweed Industry Association of the Philippines public affairs director Pete Borja said Shemberg Corp., which comprises Shemberg Marketing Corp. in Mandaue City, Shemberg Biotech Corp. in Carmen and Polysaccharide Corp. in Mandaue City, is one of the very few remaining manufacturers of refined carrageenan in the world.
Of the 30,000 tons average global refined carrageenan market, some 10,000 tons are being supplied by Shemberg.
According to documents furnished to Sun.Star Cebu, multinational seaweed processor FMC BioPolymer closed its refined carrageenan manufacturing in Denmark last July due to increasing competitive forces in the carrageenan market.
Demand
“Aside from strong competitive forces, the announcement cites high labor costs and future waste disposal costs,” a document read.
Borja said one of the major reasons for the closure of manufacturers of refined carrageenan all over the world is the decreasing demand for the product due to its high price compared with the price of semi-refined carrageenan.
“The market is now utilizing the semi-refined carrageenan to save on costs,” he said.
The average price of refined carrageenan has increased from $3.86 to $3.99 per pound. The increases on the prices of semi-refined carrageenan, on the other hand, are more moderate. It rose from $3.51 to $3.57 per pound.
Carrageenan is a thickener, emulsifier, stabilizer and gelling agent in food, beverages, cosmetics and pharmaceuticals. It is extracted from the Euchema seaweed or native “guso.”
The semi-refined carrageenan can be used in food and non-food products. But some products, like beer, needs a clear gel, which can be formed only from refined carrageenan.
Borja said the shrinking of the market for refined carrageenan, coupled with the increasing price of oil in the world market, has resulted in the increase of the price of the product.
Prepared
This is why Shemberg Corp. has prepared for the tough times by investing some P60 million for the conversion of the company’s six bunker-fired broilers into facilities that use coconut shell or coal.
“The new facilities will ensure that we (Shemberg) will continue to produce refined carrageenan for the market (even with the increasing manufacturing cost due to increase in the price of fuel, among others). Aside from helping the country reduce oil consumption, using these alternative sources will also help create jobs in the countryside,” Shemberg president and chief executive officer Benson Dakay said.
The three Shemberg companies have been consuming around one million liters or 5,000 barrels of bunker oil amounting to around P15 million every month.
“When we have had fully converted our boilers, the pressure for oil would ease up. The 5,000 barrels can be used by the other sectors. This volume is enough to run 3,000 cars,” Dakay said.
He said with the coco-fired or coal-fired broilers, Shemberg would be able to avoid the estimated loss of P16 million a month, if it continues to use bunker fuel.
Dakay said he estimates to recover his investment on the conversion of the company’s broilers in just six months.
(October 25, 2005 issue)
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