FEASIBILITY STUDY OF RAISING AND TRADING OF DRIED EUCHEUMA

I.0 EXTENSION ACTIVITIES ON SEAWEEDS FARMING 1.1 Organization 1.1.1 Presentation of the project to LGU(Make organizational structure)  Send communication letter to LGU asking permission to organize and train their people for seaweeds farming in their coastal Barangays;  Follow up approval of the proposed activities such as organizing and training on seaweeds farming; 1.1.2 Identify existing community organizations Organization, Cooperatives & other groups). (Peoples

 Interview with the Barangay officials for the existing organizations of their Barangay;   Meet with the chairmen and arrange possible fishermen assembly including the date, venue and time; 1.1.3 Conduct meeting with identified specified time, date and venue. PO/Cooperative on

 Send communication letter to the chairmen of the different organizations in the agreed time, date and venue;   Give feedback to Brgy. Officials for the agenda and the training; a) Schedule of training and seminar on financial assistance from QUEDANCOR and Capability Building of the organization and seaweeds production technical training.

1.2

Presentation and Signing of MOA with SNCAT, LGU, PO and QUEDANCOR. Conduct of training and seminar (identify types seminars and training) 1.3.1 Quedancor Financial Assistance and Capability Building  Communicate with the association for the date and venue of training;   Send communication letter to Quedancor for their representative to discuss about loan;   Tap experts who will conduct capability building seminar; and,   Conduct seminar with speakers and members of the organization. 1.3.2 Seaweeds Production Technical/Financial/Marketing/Record Keeping Training. 1.3.3 Production technical training;      Communicate with the association for the date and venue of training; Tap experts who will conduct technical training; and, Conduct training with expert and members of the organization.

1.3

 1.3.4 Financial Mgt. Training 1.3.5 Marketing Strategy 1.3.6 Record Keeping 1.4 Community-Based Seaweeds Production A. Cultural Practices

1.5

Establishments of the Farm 1.5.1 Raft Long Line Method (Multiple) Experimental set-up composed of 25m x 20m long line in each cluster (500sq. m.) and a total of 100 clusters in 5 have area. Each monocline is attached to 2 opposite fixed sinkers. The distance from each monocline will be 1 meter and provided with 5 plastic buoys in every 5 meter interval to prevent it from settling down.

1.5.2

Fixed Off Bottom Stake will be driven deep into the substrate and spaced 10 meter and at 0.5 meter interval in every row. The nylon is tied at the end of the stake and to another end of the stake in the opposite row. Ten monoline are constructed to form plots or units of known sizes.

1.5.3

Source of Stocks Supply will be taken from a farm raised for supplying stock or in any nearest seaweeds distributors.

1.5.4

Planting of Seedlings/Cuttings Each eucheuma cuttings are tied to the monocline at the distance of 25 cm apart using soft plastic tying materials.

1.5.5

Care and Maintenance Prior to cleanliness, regular cleaning will be done to eliminate grazers (siganids), epiphytes (ice-ice disease) attaching to the thalli of the cultured seaweeds. This must be done everyday by dragging the monocline.

1.5.6

Growth Monitoring The culture period will last 45-50 days. Sampling will be done twice a month. Random selection of the cultured seaweeds will be detached for weighing every sampling period. The average weight of the collected samples will be recorded.

1.5.7

Harvesting Harvesting will be done manually by cluster. A total of 22,050 kgs fresh seaweeds harvested per rotation. However, 10% of the total harvest is allotted to seedling for the next culture period. The maximum increase in productivity is 5% in first year. Subsequently it will increase in succeeding years to 10% per cycle.

2.0. Construction of Drier Construct a 50 m x 10 m (500 sq. m) drier with several bamboo slats. Prepare the stock for drying by hanging it to the bamboo slats.

3.0

Production 3.1. Drying method 3.1.1 Solar Drying The newly harvested fresh seaweeds will be dried under the heat condition of the sunlight. The fresh seaweeds (22,050 kgs) will reduce its weight when it is already dried, which is in every 7 kilos of fresh seaweeds it reduce to 1 kilo of dried seaweeds. And it takes 2-3 days of drying and has a total of 3,150 kgs dried seaweeds after drying. 3.1.2 Handling The dried seaweeds will be packed with polyethylene cellophane or empty sacks to maintain the quality and moisture content of the product. The products will be anchored to SNCAT buying stations by picking up from the farm site. 3.1.3 Storage The dried seaweeds will store in well ventilated area to avoid damage and to maintain the quality of the products.

Assumptions: Total Area Culture period Harvesting Drying time Drying technique Drying device Moisture content Impurities Storage sacks : 5 has (500 sq. m. per cluster) : 45-50 days : total harvest by cluster (rotation) : 2-3 days : hanging : bamboo slats, fish nets : 37% : 2% : well ventilated place, stored in

Ave. weight after harvest : 22,050 kgs per cluster Ave. weight after Dried : 3,150 kgs per cluster 4. 0 Community Production of Seaweeds Technical & Financial Assumptions Financial Return of Seaweeds Growing at the Farm Level Farming Method: Raft Long Line (multiple) Planted area Total area including access ways Length of culture lines No. of culture lines No. of plants per line Total No. of plants Planting density Gross Production Harvest interval Mean seed cutting weight Mean harvest weight Module harvest weight 500g200,000 Less cuttings for re-planting (100,000-10,000kg) Less 2% (1,800kg)for reject/impurities Dry weight production (1:7 ratio) Annual production (4 harvests per year) Farmer price @ P 25.00/kg (pick-up price) Gross product per module A.TECHNICAL ASSUMPTION 50,000 square meters 1,500 square meters 25 meters 2,000 100 200,000 4 plants in every meter 55-60 days 50 grams 500 grams 100,000 kg 90,000 kg 88,200 kg 12,600 kg 50,400 kg 1,260,000.00 P 1,260,000.00

10,000kg/ 10t of living cuttings @ 10.00/kg culture lines/Nylon #200 25m length + 1m for tying 26m 2,000 lines = 52,000m/ 520kg (100m/kg) @ 250.00 Plant holder/ Nylon #50 (0.35m length/plant) 0.35m x 200,000plants/5ha = 35,000m/ 70kg(500m/kg) @ 260per kg Soft tie-tie/Plastic straw (0.70m length for every of the total no of plants/cuttings) 0.70m x 100,000plants = 70,000m/ 70kg(1,000m/kg) @ 75/kg Soft tie-tie/Plastic straw (0.35m length for every of the total no of plants/cuttings) 0.35m x 100,000plants = 35,000m/ 70kg @ 75/kg Farm Inputs per Module - Capital costs for 100 clusters/5ha Tying straw/soft tie-tie 10kg @ 75/kg Styrofoam float ( 4inches diameter by 4,000 pc @ 10.00/pc) Polyethylene rope # 8for sinker (20m length x 1,400 sinker = 21,000m/140 rolls @ P1.80/m Sinker (20 kg each) 1,400 pcs. @ 40.00/pc Bamboo (500 pc @ 40.00/pc) Summary Cost of Storage including labor

100,000.00 130,000.00

18,200.00

5,250.00

5,250.00

750.00 40,000.00 37,800.00 56,000.00 20,000.00 21,595.95

B. CULTURAL PRACTICES B.1 Preparing of Materials * Purchased of supplies(Transportation) * Delivery of supplies (Transportation) * Construction of Floating Monoline (labor: P800.00/ cluster x 100 clusters) B.2. Planting ( Labor: P 200.00/cluster) B.3 Security & Maintenance (3 persons @ P120.00/day for 1 year contract) Note: the duty are effective after the last day of planting * Knives 2 pc @ 100/pc 3,000.00 3,000.00 80,000.00 20,000.00

129,600.00 200.00

* Sharp Bolo (2 pc @ 150 /pc) * Chargeable Flashlight ( 1 pc @ 3,500/pc) B.4. Harvesting * Labor: P 200.00/cluster C. POST HARVEST Empty sack( 2,000pc @ 5.00/pc) D. DRYING METHOD/ Needed materials Bamboo post 30 pc @ 25.00/pc Round timber 200pc @ 7.00/pc Construction of drying structure (labor: P 5.00/line @ 200 Lines) Labor for Drying and Packing(200.00/cluster) Empty sack for packing at 200pc @ 5.00/pc x 4 E. Marketing (Pick-up Price and no financial needed) Total capital costs Gross Income Less Investment Capital Net Income Assumption for 7 sites Total Capital Cost (7 sites)731,595.95 x 7 Gross Income (7 sites)1,260,000 x 7 Less Investment Capital for 7 sites Net Income for 7 sites ---

300.00 3,500.00 20,000.00

10,000.00 750.00 1,400.00 1,000.00 20,000.00 4,000.00 731,595.95 1,260,000.00 728,065.95 P 528,404.05 5,121,171.60 8,820,000.00 5,121,171.60 P3,698,828.40

3. 4. 5. 6. 7. 8. 9. 10.

11

= 2x2x10 = 1x5x8 = 1x4x8 Steel Bar= 12 mm Tie wire= # 16 Sand with Gravel Cement Plain Sheet= #12 Flywood Besagra ( loss pain) Nails = #1 = #4 =#2 = #1 =#2 Nipa

14 pcs 4 pcs 4 pcs 14 pcs 1 kg 6 cubic 20 sacks 2 pcs. 8 pcs @ 280 6 pcs kg 2 kgs 3 kgs 4 2 kgs 5 1 kg 150 pcs Material Cost 35% labor cost Total Cost

374.00 110.00 85.00 1,680.00 80.00 2,500.00 3,460.00 560.00 2,240.00 300.00 250.00 150.00 100.00 100.00 50.00 450.00 15,997.00 5,598.95 21,595.95

IV.

Trading and Marketing Processes

A. SEAWEEDS FARM and COOPERATORS 7 sites (Placer, Day-asan, Dapa, General Luna, Libjo, Socorro and Loreto) B. BUYING STATION - SNCAT-Institute of Marine Science and Fisheries (IMSF) Day-asan, Surigao del Norte. The Buying Station will perform the following: 1. REGISTRATION 1. 1 processing legal papers: 1.1.1. BIR License 1.1.2. Business Permit 1.1.a. Barangay Clearance 1.1.b. Police Clearance 1.1.c. Medical Clearance

September 1, 2008; 2.1.b invites potential participants seaweeds farmers and cooperatives, linkages such as: DTI, DOST, MFITS, LGU and other related agencies and celebrant Rev. Fr. Virgin , Placer Priest. 2.1.c prepares a program and distributes. 2. 2 Conduct Opening Ceremony 2.2.a inauguration of the Buying Station. 2.2.b introduction of Buying Station and its goals and objectives (speakers time). 2.2.c open forum (questions and answer portion)

C. BUYERS - ASIAGEL CORPORATION - purchase the stocks from SNCAT buying stations. D. TRADING and MARKETING FLOW SEAWEEDS FARM and COOPERATORS E. MARKETING ASPECT 1. Seaweed Market Demand and Supply 1.1. ASIAGEL CORPORATION, the proposed buyer, requires the ff: 1.1.a. Submission of 2kg representative sample for evaluation of quality - 40% moisture content.. - 3% max impurity 1.1. b. Product will be sold at P36.00 - Dried seaweed is to be delivered by SNCAT to ASIAGEL CORPORATION warehouse in Malvar, Batangas. 1.1. c. Identified Suppliers: SNCAT BUYING STATION WHOLESALER/ PROCESSORS

- trading and marketing has two (2) mode of delivery. 2.2.1 Buying dried seaweeds - accommodate the farmers and offer some refreshment. - Product sampling to measure moisture content at least 40% - Pricing (based on the market prevailing price set by the standards of the Buyers) below are the expected current price. Class A P25.00/kg Class B P20.00/kg.

2.2.2. Pick-up Products(at least 3tons) - Seaweed Farm Cooperators inform SNCAT through telephone communication or personal contact when having readily stock, dried seaweed. - proceed to suppliers farm - Evaluate product by taking 20kg production sample - Sorting and classification - Pricing (based on location): Island : P20.00/kg Class A P15.00/kg Class B Main Land : P22.00/kg Class A P12.00/kg Class B 2.2.3 Sales volume per cropping (Rotation basis) - it is expected that the seaweed farm cooperators would come up with the following production volume as stated below: Mode Delivery Class A (80%) Class B (20%) Delivered Pick-up Delivered Pick-up Volume/ site 3,150 kilos 3,150 kilos Price/kilo P25.00 20.00 20.00 15.00 Total Sales(Percentage) 50,40.00

9,450.00

Note: Pricing on Island (pick-up) is seaweeds higher of P2.00/kilo.

- hang the seaweed in a modified hanging structure (fig.1) exposing it to the direct heat of sunlight - re-dry seaweed through the use of drying machine

DRIED SEAWEED

MOLDED

PLASTIC BAG

Da

y-a sa

n,S urig

ao

C it

y, S DN

Day-asan,Surigao City, SDN

BOX

Fig.1. Re-drying of seaweed through direct sunlight 2.4 Packaging and Labeling (fig.2). - Mold the dried seaweed into a squire-like shape measuring 1x1m. - prepare a plastic inside a 1x1m box

Fig. 2.Packing and Labeling procedure. 2.5 Deliver product to ASIAGEL CORPORATION warehouse in Marvar, Batangas. - place the seaweed product inside the container van and transport from SNCAT to the pier of Surigao City. - ship the seaweed product together with the container van from port of Surigao to port of Manila. - drive the container van to Malvar, Batangas where the warehouse of ASIAGEL CORPORATION. 2.5 Storage - stores stocks in case of selling delay due to fluctuation or climatic events. 2.6 Payment arrangement can be: - Bank to bank transaction - Cash - Check 2.7 BUDGETARY REQUIREMENTS Items (legal papers) Inauguration & Billboard, Pamphlets, Radio, Conference, Seminars, Symposium & Internet Websites Labor and Wages For one (1) rotation SNCAT Buying Station to ASIAGEL CORP. *Transportation (transport fees- Port to Port transaction) Pick-up island (Lancha- lease) for one (1) rotation Facilities Warehouse, Fax Specification Registration Opening Ceremony Promotion Advertisements (for one time) Amount/Cost P 2,000.00 10,000.00 100,000.00

20,000.00 23,262.00

10,000.00

Materials Miscellaneous

Fuel and gasoline

20,000.00

* 3,150 kilos of dried seaweeds x 7 (sites) = 22,050 kilos (volume) divided by 10 Equal to 2,205 -1 (first 10 kilos) = 2,204 x P 10.50/succeeding 10 kilos of dried Seaweeds, equal P23,262.00 as the total transportation expense during delivery from SNCAT buying station to ASIAGEL CORPORATION. Further, First 10 kilos has an equivalent fees of P120.00. 2.8 SALES AND EXPENSES Below is the presentation of Income statement for (1) rotation: Revenue: Sales P 12,854,797.20 Class A (3,150kilos x. 80%, equal 50,400kilos x 7(sites) x P36) P 12,700,800.00 Class B (3,150kilos x 20%, equal 630kilos less 3% enhancement, equal 611.1kilos x 7(sites)x P 36) 153,997.20 Less: Cost of Sales Dried Seaweeds (farmers) Class A (80%) P 50,400.00 x 7 (sites) x P 20 Class B (20%) P 1,890.00 x 7 (sites) x P 15

P 7,056,000.00 P 198,450.00

Operational Cost: Transportation 1. (SNCAT Buying Station to ASIAGEL CORP) 2. Fuel and Gasoline 3. Island Lancha Packing & Labeling (Supplies & Materials, Cellophane, Boxes) Legal papers Inauguration Promotion and Advertisement TOTAL EXPENSES TOTAL NET INCOME

23,262.00 20,000.00 10,000.00

20,000.00 2,000.00 10,000.00 100,000.00 (P 7,439,712.00) P 5,415,085.00