THE PHILIPPINES : A Fortune from Seaweed 

A Fortune From Seaweed
An Eco-Millionaire’s Algae Empire


Text & photography by Eric Pasquier 


Between the Filipino islands of Palawan and Cebu, more than half a million people work in the seaweed industry on the farms, in the factories and laboratories of the Shemberg Corporation.

They harvest, process, and package for export carrageenin derived from the red algae that thrive in these waters. Few of us are aware of how common seaweed derivatives are in our daily lives.  

They are in processed foods, pharmaceuticals, cosmetics and industrial liquids, beverages and ice-creams. 

One man has made a fortune from seaweed - without hurting the environment, and whilst bringing benefits to the whole community. Carrageenin – a mixture of sodium, potassium, calcium and magnesium salts – can be found almost in every mass-consumption product. In beer for example, carrageenin clarifies and gives body to the liquid.

It also acts as a stabilizing agent for the foam, creating the so-called head.

When injected into beef, it makes the flesh juicier and tastier, allowing for longer conservation periods. It also plays a fundamental role as an emulsifier in ice creams, a suspending agent in sauces and gelatine products, and a preservative in toothpaste and deodorants. 

The word “carrageen” comes from the name of the island in the south of Ireland – Carragheen where the properties of the algae euchema were first discovered. For the last 20 years, it has been primarily in the waters around the Philippines islands situated between Palawan and Cebu.

 

Lines of Styrofoam floaters stretch as far as the eye can see over the turquoise waters of Arena Atoll. Just a few centimetres beneath the surface, enormous clusters of cotonii seaweed sway in the current, ready to be harvested, while young sprouts are set in place.

These farms are accessible only by aeroplane or private boat. It is a 12-hour boat ride from Puerto Princessa, the capital of Palawan. On this atoll, 235 families work on the algae farms. Men, women and children go out each day to attach young sprouts of red algae to nylon lines that float around their houses, perched above the water on pilings. Each family takes care of about 1.5 hectares of farm, and aboard their little boats called bancas, keep a watchful eye on the growth of their precious marine livelihood. After just 45 days, two-kilo clusters are harvested and laid out to dry on bamboo racks. 

On Cavili, an island located an hour’s banca-ride from Arena, the locals place their lines into the much shallower water, just off the shoreline of the beach.

This system is less labour-intensive, but also less productive. The algae grown here will take 60 days to reach maturity and will have to be dried on the beach for a longer time, also involving an extra cleaning process, not necessary for the algae dried on bamboo racks. 

 

Behind these bucolic scenes of farming the sea, is a giant multinational corporation whose empire is involved in every aspect of life.

The Shemberg Corporation began to organize hundreds of families into teams of algae processors in the 1970s.

Each family is responsible for the cultivation of a maximum of one hectare of farmable sea area, which translates into an output of one metric ton per month of dried product, which is sold to the Shemberg Corporation for 10 /15 pesos per kilo. 

On average he buys 4,000 tons every month. From company headquarters located in Carman, on the island of Cebu, Shemberg manages a multitude of farms, several factories and as many laboratories. Shemberg is the largest producer of carrageenin in all of Asia, and number one in the world in terms of volume. Their annual sales turnover is around 65 million dollars.

The head of this gigantic empire is a Filipino of Chinese ancestry: Benson Dakay. He created the name of his corporation from the first letters of the names of each of his seven brothers and sisters, as well as his own, to keep him in touch with his modest background.  He started selling seaweed at the age of 11, and was soon swamped with orders for increasingly larger quantities. By the time he was 13, he was exporting five tons of seaweed annually and by the age of 19, he was already a millionaire. In 1968, he found his first major purchasing agent: Michel Folcher, a Frenchman who had worked in Sanofi laboratories and taught Dakay everything there was to know about the business. It was Folcher who helped Dakay turn his modest local business into the multinational giant it is today.

While continuing to expand his business the young entrepreneur was also taking graduate science and business courses at the University of San Carlos at Cebu City. In 1970 he created his very first algae farms and began exporting to Europe in 1975. His turning point was the creation of his first processing plant in Cebu, in 1978. Some 14,000 people are employed here, extracting carrageenin from red algae.

Once the dried algae arrive at the factory it must be cleaned and cut finely. The by-product is cooked in alkali, a hydroxide acid, to change its genetic structure and stabilize the carrageenin. Alcohol and potassium chloride are added to the carrageenin to give it body. Pressed again it looks like cotton and can be moulded and reduced into powder or different textures, depending on the final use. 

Benson Dakay is fiercely proud of his Chinese heritage and believes that he and other Chinese entrepreneurs can turn around the Filipino economy. “If there were more Chinamen in this country, the Philippines would be amongst the richest nations in the world,” he says. 

A devout Catholic, he often invites priests to come along with him on inspections of his vast network of algae farms: it is important for him that his isolated workers are not deprived of spiritual nourishment. For his son Pierre, 14, he has the very highest expectations. After his intensive chemistry studies, he will be able to help his father run the family business and, one day, take over.

To judge the Shemberg Corporation’s financial success take a look at the company yacht: a 70-metre beauty, equipped with four jet-skis, two outboard motorboats and everything necessary for extensive diving expeditions.  Benson Dakay’s business dealings don’t allow him more than three days of leisure every four months and those precious three days are invariably spent indulging in Dakay’s favourite sport: scuba diving. 

Benson Dakay has won many awards for the ecological and socio-economic benefits that the Shemberg Corporation has brought to the region. There are no chemical additives, preservatives, pesticides involved in the farming of red algae. The industry encourages Filipinos to protect their own marine environment as the quality of the algae depends on the quality of the water. Therefore techniques such as dynamite fishing are no longer practised. 
In a poor country that suffers from dreadful unemployment, Benson Dakay’s contribution to the socio-economic situation is extraordinary. He provides farmland for 75,000 families, granting them a stable income, which many Filipinos would envy. Workers can re-invest their salaries in their children’s education, as they have limited expenses on the self-sufficient farms. By continuing to create more and more algae farms, Benson Dakay is contributing to the creation of a new generation of educated, self-sufficient skilled workers. 
And his empire may grow. Already an indispensable ingredient in the world’s food processing industry, carrageenin is used more and more in other fields, the cosmetics industry alone is a vast potential market.