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 (People’s Organization, Cooperatives & other groups).

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 PO/Cooperative on specified time, date and venue.

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.

1.3 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.

1.3.4 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 : 5 has (500 sq. m. per cluster)

Culture period : 45-50 daysHarvesting : total harvest by cluster

(rotation)Drying time : 2-3 daysDrying technique : hangingDrying device : bamboo slats, fish netsMoisture content : 37%Impurities : 2%Storage : well ventilated place, stored in sacks

Ave. weight after harvest : 22,050 kgs per clusterAve. 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 50,000 square metersTotal area including access ways 1,500 square metersLength of culture lines  25 metersNo. of culture lines 2,000No. of plants per line 100Total No. of plants 200,000Planting density 4 plants in every meterGross Production  Harvest interval 55-60 daysMean seed cutting weight 50 grams

Mean harvest weight 500 gramsModule harvest weight 500g×200,000 100,000 kgLess cuttings for re-planting (100,000-10,000kg) 90,000 kgLess 2% (1,800kg)for reject/impurities 88,200 kgDry weight production (1:7 ratio)   12,600 kgAnnual production (4 harvests per year) 50,400 kgFarmer price @ P 25.00/kg (pick-up price)  1,260,000.00

Gross product per module P 1,260,000.00

A.TECHNICAL ASSUMPTION  10,000kg/ 10t of living cuttings @ 10.00/kg 100,000.00 culture lines/Nylon #200 25m length + 1m for tying26m × 2,000 lines = 52,000m/ 520kg (100m/kg) @ 250.00

130,000.00

Plant holder/ Nylon #50 (0.35m length/plant)0.35m x 200,000plants/5ha = 35,000m/ 70kg(500m/kg) @ 260per kg

18,200.00

Soft ‘tie-tie’/Plastic straw (0.70m length for every ½ of the total no of plants/cuttings)0.70m x 100,000plants = 70,000m/ 70kg(1,000m/kg) @ 75/kg

5,250.00

Soft ‘tie-tie’/Plastic straw (0.35m length for every ½ of the total no of plants/cuttings)0.35m x 100,000plants = 35,000m/ 70kg @ 75/kg 5,250.00

Farm Inputs per Module - Capital costs for 100 clusters/5ha

Tying straw/soft ‘tie-tie’ 10kg @ 75/kg

750.00

Styrofoam float ( 4inches diameter by 4,000 pc @ 10.00/pc)

40,000.00

Polyethylene rope # 8for sinker (20m length x 1,400 sinker = 21,000m/140 rolls @ P1.80/m

37,800.00

Sinker (20 kg each) 1,400 pcs. @ 40.00/pc 56,000.00Bamboo (500 pc @ 40.00/pc) 20,000.00Summary Cost of Storage including labor 21,595.95

B. CULTURAL PRACTICES

B.1 Preparing of Materials

* Purchased of supplies(Transportation) 3,000.00

* Delivery of supplies (Transportation) 3,000.00

* Construction of Floating Monoline (labor: P800.00/ cluster x 100 clusters)

80,000.00

B.2. Planting 20,000.00

( 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

129,600.00

* Knives 2 pc @ 100/pc 200.00

* Sharp Bolo (2 pc @ 150 /pc) 300.00

* Chargeable Flashlight ( 1 pc @ 3,500/pc)

3,500.00

B.4. Harvesting * Labor: P 200.00/cluster

20,000.00

C. POST HARVEST

Empty sack( 2,000pc @ 5.00/pc) 10,000.00

D. DRYING METHOD/ Needed materials

Bamboo post 30 pc @ 25.00/pc 750.00

Round timber 200pc @ 7.00/pc 1,400.00

Construction of drying structure (labor: P 5.00/line @ 200 Lines)

1,000.00

Labor for Drying and Packing(200.00/cluster) 20,000.00

Empty sack for packing at 200pc @ 5.00/pc x 4 4,000.00

E. Marketing (Pick-up Price and no financial needed) ---

Total capital costs 731,595.95

Gross Income 1,260,000.00

Less Investment Capital 728,065.95

Net Income P 528,404.05

Assumption for 7 sites

Total Capital Cost (7 sites)731,595.95 x 7 5,121,171.60

Gross Income (7 sites)1,260,000 x 7 8,820,000.00

Less Investment Capital for 7 sites 5,121,171.60

Net Income for 7 sites P3,698,828.40

List of Materials for Storage1. Round timber#6 @ 12 ft tall 6 pcs 1,800.002. 1. Coco Lumber

= 2x4x16 = 2x4x10 = 2x4x8 = 2x3x10 = = 2x2x8 = 2x2x10 = 1x5x8 = 1x4x8

4 pcs5 pcs9 pcs10 pcs24 pcs8 pcs14 pcs4 pcs4 pcs

41.00400.00382.00400.00240.00170.00374.00110.0085.00

3. Steel Bar= 12 mm 14 pcs 1,680.004. Tie wire= # 16 1 kg 80.005. Sand with Gravel 6 cubic 2,500.006. Cement 20 sacks 3,460.007. Plain Sheet= #12 2 pcs. 560.008. Flywood 8 pcs @ 280 2,240.009. Besagra ( loss pain) 6 pcs 300.0010. Nails = #1

= #4 = # 2 = #1 ½ = # 2

½ kg2 kgs3 kgs

4 2 kgs5 1 kg

250.00150.00100.00100.00 50.00

11 Nipa 150 pcs 450.00Material Cost 15,997.00

35% labor cost 5,598.95Total Cost 21,595.95

Dried Seaweeds Storage Box

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. REGISTRATION1. 1 processing legal papers:

1.1.1. BIR License1.1.2. Business Permit

1.1.a. Barangay Clearance1.1.b. Police Clearance1.1.c. Medical Clearance

1.1.d. Sanitary Clearance1.1.e. Treasury Clearance - Certification of Gross Receipt of Applicants - Payments of Permit Fee & other Licenses

Fees - Certification of Previous Obligation - Certification of Real Property Tax

2. OPENING CEREMONY of SNCAT Buying Stations 2.1 Set schedules for the opening ceremony.

2.1.a the ceremony shall be scheduled tentatively on 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 Ceremony2.2.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

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.

SEAWEEDS FARM and COOPERATORS

SNCATBUYING STATION

WHOLESALER/PROCESSORS

1.1. c. Identified Suppliers: - Seaweeds farmers and cooperators shall attain a

minimum of 3 tons joint production.

2. Market Plan/strategies 2.1 Promotion and Advertisement

- promote the buying station through billboards, streamers, posters pamphlets, radio advertisement, conference, meetings and symposium.

2.2 Trading and Marketing process - 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/kgClass 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 supplier’s farm- Evaluate product by taking 20kg production sample- Sorting and classification- Pricing (based on location):

Island : P20.00/kg – Class AP15.00/kg – Class B

Main Land : P22.00/kg – Class AP12.00/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 Volume/site

Price/kilo Total Sales(Percentage)

Class A(80%)

Delivered P25.00Pick-up 3,150

kilos 20.00 50,40.00

Class B(20%)

Delivered 20.00Pick-up 3,150

kilos15.00 9,450.00

Volume of dried will be multiplied into 7 (site). It is expected that 20% of the total volume will be classified as Class B.

2.3 Mode of Payment is in cash basis.

2.3.1 Selling dried seaweeds2.3.1.1 Product enhancement (for Class B)

It is expected that the stock would depreciate to 3%.

2.3.2. Eliminate impurities through hand picking2.3.2.1 Re-drying of seaweed

- 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

Fig.1. Re-drying of seaweed through direct sunlight2.4 Packaging and Labeling (fig.2).

- Mold the dried seaweed into a squire-like shape measuring 1x1m.

- prepare a plastic inside a 1x1m box - place the molded seaweed inside the plastic bag-cover

and label the 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

Specification Items Amount/CostRegistration (legal papers) P 2,000.00Opening Ceremony Inauguration 10,000.00Promotion & Advertisements (for one time)

Billboard, Pamphlets, Radio, Conference, Seminars, Symposium & Internet Websites

100,000.00

Labor and Wages For one (1) rotation 20,000.00

*Transportation

SNCAT Buying Station to ASIAGEL CORP. (transport fees- Port to Port transaction)

23,262.00

Pick-up island (“Lancha”- lease) for one (1) rotation

10,000.00

Facilities

Warehouse, Fax machine, Telephone, Cell phone, Exhaust fan, Container Van and Weighing machine

500,000.00

Tools & EquipmentMoisture Tester, Sealer, Bolder(compressor), and PC with internet access

200,000.00

Office Supplies and Materials

20,000.00

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 EXPENSESBelow is the presentation of Income statement for (1) rotation:

Revenue:Sales P 12,854,797.20Class A (3,150kilos x. 80%, equal 50,400kilos x 7(sites) x P36)

P 12,700,800.00Class 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 SalesDried Seaweeds (farmers)Class A (80%) P 50,400.00 x 7 (sites) x P 20 P

7,056,000.00Class B (20%) P 1,890.00 x 7 (sites) x P 15 P

198,450.00

Operational Cost:Transportation 1. (SNCAT Buying Station to ASIAGEL CORP)

23,262.00 2. Fuel and Gasoline 20,000.00 3. Island “Lancha”

10,000.00

Packing & Labeling (Supplies & Materials, Cellophane, Boxes) 20,000.00 Legal papers 2,000.00 Inauguration 10,000.00 Promotion and Advertisement 100,000.00

TOTAL EXPENSES (P 7,439,712.00)

TOTAL NET INCOME P 5,415,085.00