Market analysis: China’s Seaweed Industry (市场分析: 海藻产业在中国)
Seaweed has been integrated in Chinese culture for a long period of time and was used for food, feed and even building houses. The current seaweed industry in China, being the largest seaweed producer worldwide, began with two phases. The first phase is from 1960s when People’s Republic of China just founded and lacked access to iodine. Then, scientists started to grow kelp and extract iodine from it. Since then, the scale of kelp cultivation reached a new level. The second phase is after the economic reform in China from 1980s until now. During this phase, the cultivation area and production volume grow rapidly due to high demand for alginate, mannitol and processed food. These two phases of growth shaped the modern seaweed industry in China.
According to latest Chinese fishery yearbook (2016), the yearly seaweed yield is over 2.1 million tons dry weight, which is nearly 50% of world seaweed yield. By looking into this volume from an economic perspective, the total value of seaweed in China is 8.64 billion USD (FAO, 2016). In terms of the species growing, kelp, as the largest species produced, accounts for 67% of the national seaweed yield. The second largest one is Gracilaria which belongs to red algae, accounting for 13%. As for the production region, Fujian, Shandong and Liaoning, dominated the seaweed production, accounting for nearly 90% of total yield. However, the cost and wholesale prices are extremely low because of massive cultivation. Based on our market analysis, the cost for producing one kilo dried kelp in China is around 0.54 euros and the yearly average sales price is almost the same. Thus, to increase added values, countless applications are developed covering food supplements, medical matrix, medicines and skin care products.
Despite well-established seaweed sector in China, the new entrees in Europe could still find a profitable and valuable position. Firstly, the business based heavily on labor is not sustainable. Although the cost of producing seaweed is low, it is mainly relied on cheap labors which consist about 50% of the total cost. Hereby the cheap labors are becoming increasingly difficult to find since people prefer to work in more profitable sectors and this makes seaweed business lack sustainability. Secondly, the costal pollution is having impacts on the growing efficiency of seaweed and decreasing the quality of seaweed. Thus, it’s urgent to develop new ways to grow seaweed sustainably which are the chances for European companies. Highly automated operations support the business to be sustainable in the long term and less polluted costal water assured the quality of seaweed. Lastly, the increasing concern from consumers on health and sustainability also drives seaweed to be developed locally because of its versatility.
In short, the seaweed industry in Europe is not quantitatively comparable to China but it could be qualitatively competent. This could be the chance for European entrepreneurs to stand out in the vast seaweed market.
Percy Peishun He
Intern at the North Sea Farm Foundation
Master Candidate, Erasmus Mundus Master of Food Innovation and Product Design
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