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Grow seaweed - add value - win markets
SEAPlanet Foundation
The South East Asia Seaplant Network
Tuesday, Jun 09, 2026
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Table of contents | Introduction | Value chain structure | Foundation links | Process links | End links  | Anatomy of an enterprise | Features of SME | Specialty crops & trust | The nature of transactions | The nature of governance | Types of governance | Governance games | Alliance structure | Forming alliance networks | Enabling solutions | Crop production tools | Value-adding solutions | Metamediary functions | SEAPlant.Net websites | Glossary | Acknowledgements
Process links in eucheuma seaplant value chains

 Eucheuma Seaplant Value Chains and SME Alliances
SEAplant.net Technical Monograph No. 0804-6a

Process links in eucheuma seaplant value chains

Page 6


Process functions of eucheuma seaplant value chains may occur either within or outside the same jurisdictional region as seaplant farms. Process facilities tend to cluster close to seaplant sources or close to markets.

During early stages in the development of eucheuma seaplant value chains virtually all finishing links occurred outside the tropical regions where farms are located. Until the late 1970s cold water carrageenophytes were dominant raw materials in the carrageenan industry, most processing was done in the USA, Europe or Japan and the market was dominated by three companies, namely Marine Colloids (now FMC), Copenhagen Pectin (a.k.a. GENU; now CP-Kelco) and Sanofi (now Degussa). These companies shared world markets essentially on a 4:2:1 ratio, and smaller producers played a role in small market niches. The advent of eucheuma seaplant cultivation and consequent development of PES technology caused a shift in value chain dynamics that is still underway. The advent of massively expandable raw seaplant sources and technology for making PES caused a step-change in the industry and the increasing availability of enabling solutions is making it possible for small regional manufacturers to compete on an increasingly "level playing field" especially if they tie up with skillful blenders that have a strong position in their regional market niches.

There is a growing trend for eucheuma seaplants to enter international commerce as "chips" or "meal" rather than as DES. minimization of PHT trading games is one incentive for this trend and economics of production are another. The desire to avoid expensive effluent treatment in developed urban areas is a further incentive for using modified materials as raw material. Supply proximity can give comparative economic advantage to local processors.

Sources of comparative advantage include:

1. The PES process does not have significant economies of scale and low-cost human resources can confer a substantial advantage.
2. Only about 20-35% of raw eucheuma seaplant composition is realized as finished product so transport cost savings result from processing near seaplant sources.
3. Processing close to seaplant sources also provides savings in the form of quality retention; process control; inventory control; and minimization of processing steps.

There is an emerging trend for strategic alliance networks to develop among processors. Consequences of alliance network development include:

1. “Tolling" and barter arrangements occur among processors in different jurisdictions.
2. SME are increasingly able to realize competitive advantage based on local comparative advantages.
3. Alliance networks have increasing access to enabling solutions formerly available only to large multinational firms.
4. Eucheuma seaplant value chains are steadily spreading into emerging markets such as China, India, SEAsia and South America.
5. Entrepreneurial and innovative initiatives are better able to achieve sustainable success.