Report on a Proposal to Manufacture Semi-refined Carrageenan (PES E407a) on Pulau Kaledupa, SE Sulawesi, Indonesia

Report on a Proposal to Manufacture Semi-refined Carrageenan (PES E407a) on Pulau Kaledupa, SE Sulawesi, Indonesia

Contents: Introduction Page 3 - 4 Background Page 5 - 8 Quantitative Aspects of the Process Page 9 - 44 Business Model Page 45 - 65 Summary Page 66 - 68 References Page 69 - 72 Appendix 1 Description of Manufacture Page 73 78 Appendix 2 Correspondence with Regulators Page 79 - 83 Appendix 3 Commodity Prices Page 84 - 85 Appendix 4 Fertiliser Calculations Page 86 - 89 Appendix 5 Methodology Page 90

Prepared by: Piotr Kalinowski Oaklea Ltd June 2009

Introduction In November 2007 we produced a report A proposal to increase the value of farmed seaweed in Kaledupa, SE Sulawesi, Indonesia which suggested that the development of a carrageenan processing plant on Kaledupa would have the potential to double the annual income for 600 fishers who also have seaweed farms in the Kaledupa area.

Participation in the scheme would be tied to surrender of fishing licences so that it provides an alternative income for those coming out of the fishery. This proposal could provide the mechanism to enable the Kaledupa reef fishery to recover - so Maximum Sustainable Yields could be achieved for the remaining fishers, rather than the current significantly depressed catch rates. As a result we were asked by the Operation Wallacea Trust, as part of the Darwin Initiative (Project Ref.No: 162/16/002 Building Capacity for sustainable fisheries management in the Wallacea region), to further provide additional information on the quantitative chemistry of the process and to create a comprehensive business plan that would give sufficient confidence for

securing financial support from government (eg. the Wakatobi Regency and COREMAP) and from business sectors. Successful implementation of a project such as this could have significant benefits for other coastal communities by providing value-added income from their seaweed production. This report therefore intends to provide a Proof of Concept - a milestone on the way to a fully functioning prototype - that could then be rolled out into the wider Indonesian seaweed-growing communities.

Background Kappa Carrageenan is a hydrocolloid found in Kappaphycus alvarezii, the commonest tropical farmed seaweed and the dominant farmed species on Kaledupa. When transformed by alkali treatment into Processed Eucheuma Seaweed E407a (PES) or Semi Refined Carrageenan (SRC)) it has a great variety of uses in the food and petfood industries because of its ability to make gels and as a thickener in prepared foods. New uses are constantly being discovered. A current search through United States Patents reveals 12,491 patents issued containing the term carrageenan or one of its several variants. Only a few are for its initial manufacture from seaweed. The vast majority are for an improvement or modification of its properties or for its incorporation into a multitude of food, petfood or nonfood (e.g. toothpaste) formulas or recipes. From its first beginnings in the late 1960s in the Philippines to 1990, world production rose from zero to about 67,000 MT/annum (MT = metric ton) of dried seaweed. About 50,000 MT was from the Philippines and 14,500 MT from Indonesia (1). By 2001 world production had risen to 110,000 MT/annum and in 2005 expanded to 150,000200,000 MT/annum, resulting in an estimated 100m USD/annum farmgate income to many tens of thousands of farmers (2). By 2007 the estimated production in Indonesia was matching the Philippines at about 85,000 MT/annum each. However, the significant difference between these two countries was that in the Philippines about 86% of the dried crop had undergone value-added processing whereas in Indonesia the figure was nearer 23% (2). Much of Indonesias burgeoning production of dried seaweed was and is currently exported to the Philippines, where there are 16 large processing factories (3). However, this may well change if the Indonesian Government fulfills its declared aim to stop exports of dried seaweed. Dr Martani Huseini, Director-General of Marine Processing and Marketing, Indonesia Ministry of Maritime (Marine) Affairs and Fisheries has been quoted "It's definite, we're putting a stop soon to the exports of dried seaweed as soon as we're ready with our own carrageenan processing plants." (3).

Indonesia has ambitious targets to be the main world supplier of tropical seaweed by 2012. In a keynote speech at the Seaweed International Business Forum and Exhibition in 2008, Fishery and Maritime Affairs Minister, Freddy Numberi, said he was optimistic seaweed could be developed further in the future and reap a large profit, alleviate poverty and improve people's well-being. He said local administrations should issue ordinances that regulated areas allocated for cultivation and provide capital assistance. "The central government will assist in counseling, training and process technology, while we count on local administrations for the rest," said Minister Numberi. South Sulawesi Governor Syahrul Limpo said that as the biggest producer of seaweed in the country, the province would continue to develop the plant not only in production and quality, but also in establishing processing facilities so it would have added value (4). The General Chairman of the Indonesian Seaweed Association, Jana Anggadiredja said that Indonesia had become the world's biggest seaweed raw material producer for the Eucheuma species type (i.e. including K.alvarezii). According to him, Indonesia is expected to become the world's biggest seaweed producer and leading nation in the seaweed industry in 2010 (5). The worlds biggest carrageenan importer is North America which imports around 53 percent, combining the annual consumption of both Canada and the United States, according to the Food and Agriculture Organisation (FAO). Other big importers of carrageenan include Europe - 24 percent, Latin America - 10 percent, Australia - 8 percent and Japan - 5 percent. The European Union alone needs about 1,500 metric tons monthly, FAO data show (3).However, caution should be exercised when assessing such statistics. Up-to-date, reliable and official statistics for seaweed and processed carrageenan production are notoriously hard to find (6) (7). For example, the above data does not include China or India! Even if the absolute accuracy of such production statistics is in doubt, what is certain is that the world demand for seaweed products such as carrageenan is inexorably rising. Not only are new uses being found for the product in developed countries but the existing usage is constantly increasing as a result of globalisation and rising income levels, especially in the BRIC countries (Brazil, Russia, India & China). This is because hydrocolloids are fundamental, albeit minor, components of a large variety of processed foods and toiletries. Until recently the farmgate price for dried seaweed was relatively steady, showing slight highs and lows in what was a generally rising trend. However, in early 2008 the seaweed market

started soaring. The price for Indonesian seaweed more than tripled, from about IDR 5,000 to as much as IDR 18,000 (USD 1.80) per kilogram (8). Then, almost as quickly, the seaweed bubble burst, adding this commodity to the list of the world's assets such as stocks and shares, oil and houses that fell in value. By October 2008, it was down to IDR 10,000/Kg. This crash was well forecast as early as April 2008 (9).

The current price for dried seaweed (ex-Kaledupa - May 2009) is, once again, about IDR 5,000/kg (10). One explanation for the jump in prices is that traders were responding to rising demand from China, with its boost from the Olympics, while supplies from some sources, especially the Philippines, weren't available because of bad weather. Another theory is that Chinese foodingredient companies were engaged in a trade war, with some colluding to drive up the cost of seaweed in order to knock competitors out of the business. A yet further view is that speculators

and traders saw the mid-year surge in crude oil and other commodity prices and expected seaweed would follow, filling their warehouses in the hope that prices would keep climbing (8). Some farmers and traders may have made matters worse by adulterating raw seaweed with sand or cement to increase the product's weight, and hence its selling price, upsetting buyers in China and sending prices into a downward spiral. These so-called trading-games have been a longterm concern within the industry, undermining buyer-seller confidence (11). Whatever the reason, or mixture of reasons, high prices resulted in farmers selling immature or low-quality seaweed into the market, flooding buyers with too much supply at a time of world recession. This recent bubble and its subsequent bursting may possibly and beneficially result in all the participants - growers, traders and factory buyers organising a more transparent market in the future. For example, the Chairman of the Indonesian Seaweed Association, has recently been pressing to create a certificate-of-origin program designed to force farmers to maintain minimum quality standards (8).

Quantitative Aspects of the Process In our first report we summarised the conversion process of dried seaweed to PES (Processed Eucheuma Seaweed) product as follows: (a) Pre-rinsing carrageenan-containing seaweed to remove surface impurities and contaminants

(b) Cooking the seaweed in a tank containing an aqueous solution of Potassium Hydroxide (KOH) so as to cause desulphation at the 6-position of the galactose units of the carrageenan, and so as to create recurring 3,6 anhydrous galactose polymers by dehydration and reorientation

(c) Washing the seaweed in a neutralising bath of dilute Hydrochloric Acid (d) Washing the seaweed in an optional bleaching step

(e) Rinsing the seaweed in water

(f) Drying and chopping the seaweed into chips or milling into powder To these we have now also added further sections: (g) Crane hoist and tank sizing (h) Waste disposal (i) Power, heat and fuel (j) New versus second-hand (k) Quality assurance and quality control (l) Safety

In this report we will attempt to quantify these stages, insofar as is reasonably possible and in the light of laboratory experiments. These were undertaken using air-dried cottonii (i.e. K.alvarezii) seaweed provided by Opwall Trust staff from local Kaledupan sources (12). Note: Important aspects and statistics are underlined. It should be understood that, because of the scale effect, there is a measure of uncertainty when applying laboratory findings to a pilot plant and especially to a full-sized plant. The original general process description is re-shown as Appendix 1 - to allow for ease of reference yet avoiding unnecessary repetition in this text. (a) Pre-rinsing carrageenan-containing seaweed to remove surface impurities and contaminants Two samples of dried seaweed were sent for testing. They differed greatly in the amount of impurities, or trash, present. The first contained considerable quantities of man-made debris, mostly derived from the farming operation. This included plastic twine, used to tie the weed to the carrier rope and, to a lesser extent, expanded foam pieces from the floats. It also contained an amount of epiphytic algae. These plastic items, in particular, will fully resist subsequent chemical treatment and still be present in the final chopping, drying and milling stages. It is anticipated that such items may severely clog the chopping/milling machines or possibly even melt in the drier. They will pose a serious threat to the quality of the finished carrageenan product. In sharp contrast the second, later, batch was almost totally free of such trash items.

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The conclusion is that participating seaweed farmers and their staff (usually family members) will need to be well-trained to carefully strip the mature weed fronds from the carrier rope to avoid such contamination in the first place. As a second step, at the factory site, after the initial receiving, weighing and sampling of dried weed from growers, there should be a wide sorting stage in the form of a slow-moving belt conveyor at waist height. It should have adequate staff present to pick out extraneous matter a boring but necessary task. If done properly, any growers not fulfilling pre-determined quality standards will thus be quickly identified and should then be penalised by a proportionate fine, deducted from their crop payment. These quality standards should also include moisture content and sand contamination, to be measured by the quality-control laboratory that is envisaged onsite. The ultimate sanction for persistent problem growers should be refusal to accept their crop.

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There may be times, perhaps because of seasonal variations, when some of the incoming raw material needs to be stored. All such stored material should be tagged so as to identify the grower, weight of crop and delivery date. Payment should be dependent on the growers previous quality record. If subsequently the stored batch is found to be below standard then that person should be notified and an appropriate deduction in payment be made from their next delivery. It will be readily apparent that any attempt by growers to play the destructive trading-games mentioned previously will be quickly caught out by such a comprehensive checking system. It is to be hoped that the great majority of member growers will see that such selfish actions are totally counter-productive to the aims of the co-operative and not engage in them from the outset.

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It would be expected that the moisture content of the incoming seaweed would be about 35% 38%, the industry norm. If a batch appears excessively wet then this should be confirmed by moisture content measurement in the quality-control laboratory. Again, as with contaminants, the grower should be penalised by a proportionate fine deducted from their crop payment. However, mutatis mutandis, growers should also be rewarded for delivering crop that is drier than the norm after all, they are, in effect, taking a lower price otherwise.

Unlike the (wholly avoidable) allowing of debris to remain in delivered seaweed or the (deliberate) introduction of contaminants, the presence of excessive moisture content can be an unavoidable and universal problem at certain times of year i.e. during the monsoon period. It is envisaged that quality standards would allow for a general derogation in such circumstances. Whilst every practical step should be taken by the growers to minimise contamination of the seaweed by sand, some will inevitably be present. It must be removed to ensure that the acidinsoluble ash content is at the low levels demanded by food regulations. The white crystals that are present on the surface of the dried weed are of Potassium Chloride (KCl) and are of value at

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the next process stage and beyond. One possible solution (literally) is to hose down the crop as it is taken to the next stage pre-using the make-up water required for that stage. The washings can be allowed to settle in a small tank and the supernatant fluid (rinse-water), containing dissolved KCl, may be drawn off and used in stage (b). The settled sand would be removed at appropriate intervals. (b) Cooking the seaweed in a tank containing an aqueous solution of Potassium Hydroxide (KOH) so as to cause desulphation at the 6-position of the galactose units of the carrageenan, and so as to create recurring 3,6 anhydrous galactose polymers by dehydration and reorientation The first report made a cautious assumption to design for a plant taking in 3,000 MT dried seaweed/annum i.e. 600 farmers and half of the areas production. A further assumption is that there will be 300 working days a year. This maximises the local workforces (seaweed growers and factory staff) desire to earn an income yet fulfils their religious and social requirements of a free day a week and for their other longer religious festivals and holidays, such as Lebaran, which can take seven days in one block (10). It also allows an additional few days for unexpected stoppages due, for example, to bad weather or mechanical breakdowns. Using these two factors the factory needs to process 10 MT/day of dried seaweed. The process as described previously is a batch design, using a series of open-topped vessels and the seaweed moved between them in a perforated basket. It will be shown later that the seaweed requires to be heated in hot alkali solution for two hours or more and to be rinsed three times for half an hour at a time. Using these figures a further assumption is that each batch will take four hours. This allows half an hour above the 3.5 hours minimum process time in order to load and unload and also lower and lift the basket full of seaweed through its various stages. A yet further assumption is that there will be three eight-hour shifts a day in order to maximise throughput whilst reducing the size and maximising the use of high capital-value machinery. There will therefore be six batches processed in a day, each of 1.66 MT of dried seaweed.

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The bulk density of reasonably compressed dried seaweed was found to be 250 g/litre, which equates to 250 kg/m3. Therefore the net tank volume needed to accommodate 1.66 MT is 6.64 m3 (1000/250 x 1.66) The gross tank volume, allowing for a safe liquid level below the tank top, should be 7-7.5 m3, dependent on the tank shape. The seaweed at the end of this stage has increased in weight because of water-absorption. The bulk density of wet compressed seaweed after processing with 5% aqueous KOH at 60C for two hours was found to be 515 g/litre, equating to 515 kg/m3. Therefore the weight of the basket contents at the end of this stage of the process will be 3.42 MT (6.64 x 0.515). According to our extensive Patent searches and published references, some of which are quoted in Appendix 1, a variety of strong alkalis (water-soluble bases) may be used to achieve the chemical transformation step required. Thus not only Potassium Hydroxide (Caustic Potash KOH), but also Sodium Hydroxide (Caustic Soda - NaOH) and Calcium Oxide (Quicklime - CaO) which transforms in water to Calcium Hydroxide (Slaked Lime Ca(OH)2) are commonly mentioned. Food-grade NaOH and CaO are very significantly less expensive than food-grade KOH. Currently NaOH is 70% cheaper and CaO is 62.5% cheaper than KOH see Appendix 3. However, careful examination of the European Union E407a specification for PES E407a carrageenan reveals that it only mentions KOH. Extract from Commission Directive 96/77/EC, amended as 2009/10/EC:

Definition: Processed eucheuma seaweed is obtained by aqueous alkaline (KOH) treatment of the natural strains of seaweeds Eucheuma cottonii and Eucheuma spinosum, of the class Rhodophyceae (red seaweeds) to remove impurities and by freshwater washing and drying to obtain the product. Accordingly, we asked the UK Food Standards Agency and the European Commission Directorate-General for Health and Consumer Protection to interpret the definition see correspondence in Appendix 2. They have adopted a narrow, if predictable, view that only KOH treated carrageenan may be used or sold within the EU. Whereas the important and authoritative

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FAO/WHO Codex Alimentarius simply mentions soaking the cleaned seaweed in alkali for a short time and the USA Code of Federal Regulations is silent on the use of alkali. Thus these two major alternative food-regulating bodies do not specify KOH as a process requirement in the manufacture of carrageenan. Therefore, a less than straightforward situation exists, where in the great majority of world markets, especially the USA, these other alkalis may be used - but for carrageenan destined for the EU only KOH may be used. The possibility of asking the European Commission to review and amend their Directive does exist, but it is a prolonged and tedious route with an uncertain outcome. For the purpose of this report the use of alternative alkalis is therefore acknowledged but not explored much further. Another factor needing consideration at this stage of the process is whether freshwater or saltwater is to be used. The argument for salt water is that it is almost a limitless resource. Against it is that disposal of waste-water would have to be into the surrounding coastal water forming part of the Wakatobi Marine National Park, famously rich in biodiversity. Whilst the quantities of waste released from the process are likely to be minute in relation to the huge volume of ocean, it may create an undesirable precedent.

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The argument for using freshwater is that the waste-water can be made valuable, by using it to fertilise locally grown terrestrial crops. Against it is that freshwater is a limited resource on Kaledupa. There is no surplus in Buranga though there is a spring within 2 km of the village (10). Later in this report an estimate of freshwater requirement is made. Either way, freshwater will be still needed for the later rinsing steps. Technically there were differences between our results from seawater and freshwater experiments. In almost all cases viscosity and gel-strength measurements were higher when processed in freshwater. Only occasionally did seawater results equal freshwater equivalents and very rarely did they exceed them. These findings applied to KOH and CaO test runs at different temperatures and concentrations. The results make the argument for freshwater processing greater. It should be noted - given the natural seasonal variability of the raw material, seaweed, at one end and the ability of commercial end-users of the carrageenan PES product at the other end to

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significantly amend its properties, particularly by the addition of gums such locust-bean gum - that the precise strength of the alkali solution will also be equally infinitely variable. The staff operating the plant will need to closely monitor the product, using the quality-control laboratory to constantly give them feedback and then making appropriate adjustments in order to provide an optimal product. Thus what is about to be recommended here is merely indicative, to give a basis to the process. It is to be hoped that such future adjustments will allow for greater efficiencies in inputs of both energy and chemicals. Whilst several texts suggest the use of quite severe alkaline conditions, of the order of 8 12% w/v, we suggest that 5% w/v is a good starting point. The laboratory gels made using this lower concentration of alkali easily matched the gel strength of a commercial sample of Philippine foodgrade PES that was used as a benchmark. They far exceeded that same commercial sample in the viscosity test, strongly suggesting that the commercial sample was made in chemically harsh conditions (13). Interestingly, when comparing KOH and CaO it was found that 5% KOH gels always made stronger gels but the 5% CaO gels always had higher viscosities. This offers an opportunity to use the process parameters to match the end-user requirements at least in non-EU countries, where both alkalis are permitted. One crucial feature of the process that must be fully understood is that the temperature (and to a lesser extent time and dissolved salt concentration) settings are critical. The purpose is to allow for the required chemical transformation to take place within the seaweed structure (gel or heterogenous process) but not for the carrageenan to solubilise (sol or homogenous process). Thus, at the end of this stage of the process the residual liquor (liquid produced during cooking), if cooled to ambient temperature, should remain liquid. To ensure this the process temperature must be kept in the 60-65C range. As the temperature nears or exceeds 70C then progressive solubilisation will occur, leading to costly loss of PES product from the seaweed mass and the possibility of rapid thickening of the liquor, giving rise to severe pumping problems, especially if an external heat exchanger is used. This stage of the process should take about two hours. Insufficient time may lead to incomplete conversion and excessive time may render the process inefficient. Practical experience will lead to more accurate timing.

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Our initial experiments used 150 g quantities of loosely packed seaweed, which required 1,500 ml of alkali solution to fully cover the weed - a rather large ratio of 1:10 w/v. In order to reduce the size of the process tanks to a minimum, we have found that this seaweed:liquid ratio can be decreased to 1:3.6 w/v by using compressed seaweed. This is achieved by exploiting a particular physical property of dried seaweed. When compressed for a short period the weed relaxes and remains in its compressed shape, even after the original pressure has been removed. This property is already advantageously used by growers and traders to compress the weed into naked bales for shipment (11). Thus the process requires the seaweed to be strongly compressed into the holding basket and for a lid to be secured to resist any swelling during the hot liquor stage. No pre-chopping of the seaweed fronds is envisaged. Were it to take place then the bulk density may beneficially increase further but at the possible cost of lowered porosity, leading to poorer circulation of liquor. In view of the seaweeds compressed state, the possibility of using mixing devices such as tank propellers to circulate the liquor is compromised. The preferred solution would be to lift and lower the basket several times during this cooking stage. This will allow for an even distribution of liquor concentration and heat within the entire mass of seaweed material. At the end of the heating process it was found that there was an about 30% reduction in volume of liquor - that amount having been absorbed by the dried seaweed. Therefore this needs to be replaced by fresh liquid. This will be sourced from the previous rinse step thus its volume will need to be 2 m3 (6.64 m3 x 0.3). After this pre-use, the rinse-water, enhanced with dissolved KCl from the seaweed, would be heated to the required temperature and treated with an appropriate quantity of KOH to become the top-up liquid for this stage. This means that there is at least a 30% continuous refresh rate. However, it remains to be seen if unexpected build-up of minor components leaching from the seaweed interfere with the process and therefore require a higher refresh rate. As a precaution, it is suggested that twice a day (i.e. after three heating cycles) the residual 4.65 m3 (6.64 m3 x 0.7) of hot liquor is discarded and a fresh batch of 5% KOH liquid used. The daily 9.3 m3 (4.65 m3 x 2) of water required for this purpose can usefully come from the discarded counter-current wash tank water with its existing low KOH content see section (c & e) below. This will create a waste-stream of 9.3 m3 per day of <5% caustic liquor that will require neutralisation. The liquor has become less caustic because the chemical transformation of the seaweed involves two steps. The first is desulphation, which requires the presence of potassium

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ions thus the earlier requirement to conserve the KCl crystals present on the surface of the dried seaweed if using alkalis other than KOH. The second step is dehydration, which utilises hydroxide ions, thus reducing the alkalinity of the solution, whilst releasing sulphate ions from the seaweed, producing soluble Potassium Sulphate, a useful fertiliser (14). It is envisaged that this tank will be well insulated, to minimise heat losses. A further factor to consider is whether to specify for the tank to be fitted with external heating coils using steam or for the heat transfer to be carried out separately through a heat-exchanger using hot water a slightly more complex solution. For safety reasons, it is suggested that a hot-water boiler is used, rather than a steam boiler. However this choice does severely reduce heat-transfer rates because pressurised steam has a much higher temperature e.g. at 30 bar pressure it boils at 234C and it also has three times more enthalpy (total heat) than water and so can be used very effectively in the relatively small surface-area of heating coils on the side of the tank. The hot-water boiler decision tips the balance in favour of using a large external heat-exchanger. Importantly, it also allows for the possibility of utilising surplus heat from the electricity generator on site. This energy-efficient use of combined heat and power (CHP) is discussed later.

(c & e) Washing the seaweed in a neutralising bath of dilute Hydrochloric Acid & rinsing the seaweed in water The washing of seaweed in a neutralising bath of dilute acid is advocated in numerous texts and patents. However, it does give rise to the risk of unnecessary depolymerisation of the carrageenan and would also be an added complication to what should be a simple process. Accordingly we tested a simple rinsing process in fresh-water at ambient temperature of 5% KOH-treated seaweed. Because the water temperature was at about 20C no leaching of carrageenan was expected and none was seen. As a more rigorous test, Propane-2-ol (Isopropyl Alcohol) was added to the used wash water. If any carrageenan was present in solution, the alcohol would precipitate it as a floc. Almost no floc was seen. Three half-hour washes at a 1:3.6 w/v dried seaweed:water ratio were made. The pH reduced from 12.68 in the first wash to 12.37 in the third wash. Whilst not an apparently great reduction in pH, the seaweed by the end of final rinse stage did not taste of alkali and the pH of a standard 1% carrageenan solution was 9.47, thus falling well within the pH 8-11 range specified by the

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FAO/WHO Codex Alimentarius, quoting the 68th JECFA (2007) monograph. Curiously, the EU Directive 2009/10/EC for E407a is silent on pH. It is therefore recommended that the neutralisation stage is based on three half-hour washes of seaweed in fresh-water at about a 1:3.6 w/v dried seaweed:water ratio. This will be carried out in three stainless open-topped and unheated tanks, each with a net volume of 6.64 m3. It is standard practice in such cases to use countercurrent flow techniques to minimise water usage. Thus with each new batch the water is transferred to the next upstream tank and water in the most upstream washing tank is subsequently discarded to waste or used to contribute the daily 9.3 m3 required in the heated vessel. As with the previous stage, the lifting and lowering of the basket at intervals will allow for proper circulation of the rinse water. The seaweed at the end of this stage has increased in weight because of further waterabsorption. The bulk density of wet compressed seaweed after the three half hour rinses was found to be 547 g/litre, approximating to 550 kg/m3. Therefore the weight of the basket contents at the end of this stage of the process will be 3.65 MT (6.64 x 0.55). It is important to note that by the end of the washing stage the seaweed is almost fully rehydrated and has a moisture content of about 83%. The moisture content of fresh K. alvarezii seaweed is typically 88% (13). (d) Washing the seaweed in an optional bleaching step Generally speaking, darkening of the processed seaweed would be a function of excessive storage time and/or harsh process conditions. Since it is anticipated that the seaweed will be delivered to the factory and processed within days of drying it will be in the best possible state to avoid age-related deterioration. The use of reasonably mild process conditions addresses the second circumstance. A further consideration is that the end-use of carrageenan is usually in very small quantities in very opaque and well-coloured foods such as meat pies and dairy products. Thus perfect whiteness would be a spurious requirement. The laboratory-made carrageenan, for the reasons just given, was a pale cream/tan colour after the washing stage and oven-drying and probably acceptable in the market-place. Nevertheless

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the use of two recommended bleaching agents, Hydrogen Peroxide and Sodium Hypochlorite, was tested. Hydrogen Peroxide, though much used for bleaching wood pulp and paper (and blondes) is both expensive and unstable. In its concentrated form it is highly corrosive and can be a fire risk or even explosive under certain circumstances. Given its hazardous nature, it was satisfactory to note that as a 1% solution for one hour it did not have much effect on the colour of laboratorymade carrageenan. Sodium Hypochlorite is not only much cheaper and relatively safer than Hydrogen Peroxide but, as a1% solution for one hour, was found to be a much more effective bleaching agent on laboratory-made carrageenan. However, the final product, though paler and whiter than a comparable commercial sample, smelled strongly of chlorine. This could possibly be overcome by neutralising the free chlorine with Sodium Thiosulphate - if permitted under all the various food regulations. Not only would this bleaching be an added process complication and cost, but subsequent testing of the carrageenan showed it to be greatly compromised. Thus one batch of untreated 1% carrageenan gel had a viscosity of 960 centipoise (cP) and a gel strength of 374 Oaklea units (see Appendix 5 for definition). Hypochlorite-treated carrageenan gel from the same batch had a viscosity of only 112 cP and a gel strength of just 47 Oaklea units. It could be speculated that using lower concentrations of Hypochlorite for shorter periods of time would reduce such dramatic deterioration of the carrageenan to more acceptable levels. We ask why allow any deterioration in the fundamental functional properties of carrageenan when there is so little justification in using it at all, given the points made in the introductory paragraph? It is therefore suggested that, unless there is an overwhelming argument and demand from enduser customers for bleaching, this stage is omitted from the process. (e) Rinsing the seaweed in water This stage has already been discussed in paragraph (c & e) above.

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(f) Drying and chopping the seaweed into chips or milling into powder In the last paragraph of (c & e) above, it was pointed out that the moisture content of the seaweed after the final stage of rinsing was 83%, only slightly less than that of fresh seaweed - 88%. It is necessary to visualise that, in effect, drying it will be nearly the same as daily drying of half of the entire Kaledupan fresh crop all over again. For food-grade product it would be mandatory to consider an enclosed industrial-type drier to ensure regulatory limits on bacterial and fungal contamination are adhered to. Even for nonfood-grade sale, the small area of land at Buranga set aside for this project would be too small to contemplate air-drying outdoors. Despite its near-equator location advanced current solar power technology will be totally insufficient to cope (15). In (b) above, it was shown that the daily input into the factory would be 10 MT/day of dried seaweed. After processing and resulting rehydration it is calculated that production will typically be about 25 MT/day of wet seaweed by this stage of the process. Accordingly, advice was sought from the major UK company, specialising in crop drying throughout the world, including the tropics - Alvan Blanch Development Company Limited (16). Samples of the laboratory processed seaweed were sent to this company for evaluation, together with details of start and finish moisture content values and proposed daily production capacity. Their advice and budget quotation, based on one of their standard drier designs, has been incorporated into the costings. It is technically possible to incorporate a moisture recovery unit to the Alvan Blanch drier, using seawater to cool the warm moist exhaust air via stainless steel heat exchangers. This may need to be an option if sufficient local freshwater for the process is not available. Such driers are inherently noisy (<80dB(A)) because of the size of burners needed. The hammer mill will be yet noisier (>80dB(A)). It will be necessary to ensure that an acoustic enclosure (3 metre high solid or wooden wall with sound-deadening internal surface) is incorporated into the design. In view of the adjacent housing in Buranga the design criteria for the drier and mill have additionally ensured that the 25 MT daily drying requirement can be completed within a 16 hour period - i.e. two 8 hour shifts. This will allow for shutdown between 10pm and 6am. The drier can handle material as large as 150mm. However the seaweed fronds may well be larger individually and also would interlink into bigger bunches, giving rise to blockage problems.

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Because of their leathery and springy nature when dry it is also greatly preferable to pre-chop them before the drier stage rather than after. It was found that a conventional meat-mincer, with an appropriate choice of plate-hole e.g. 8mm, would readily break the wet fronds down to a suitable crumb size (10mm). At this particle-size the material becomes free-flowing. Mincing or grinding machines are commonly made in large sizes for industrial food-processing purposes and are probably ideal for this function. They often have tin-plated worms and bodies and these must be avoided stainless steel versions exist. The milling of dried product would be done with either a hammer-mill or pin-mill. The advantage of the pin mill is a gentler action with a consequent lower temperature-rise of product during milling. (g) Crane hoist and tank sizing This additional section is devoted not to a process stage but to an important piece of equipment the hoist. It will be expected to do much work. It is envisaged from the above process description that four tanks will be required, one for the hot caustic stage and three for the rinsing stages. They will be inline and separated by a minimum distance - for access purposes. There is also a need for a space for the basket to be lowered to ground level for filling and emptying. Not only will the hoist be needed to lift the basket into and out of each tank but also to regularly raise and lower the basket for the mixing purposes described previously. This may require perhaps 11 lifts and lowering in each 4 hour cycle - if it is decided to lift the basket every half-hour in the hot caustic tank and every quarter-hour in each of the rinse tanks. This would be 66 lifts each 24-hour day. This number of lifts plus the need for accuracy of placement at each progressive stage suggests that an electric hoist would be preferable to a manual one. Such lifts can now be operated via a control box and proximity switches that would allow partial automation of the process. The hoist would stop at each of a precise set of preset positions over the tanks, removing the risk of guesswork or error. They can be fitted with two lifting speeds, allowing for quick yet precise lowering. A further consideration is how this may relate to tank size. A tank with a 2.2 m diameter would have a gross capacity of about 3,800 litres for each meter of height. Using the earlier requirement for a 7-7.5 m3 tank this would suggest a 2 m wall height. To this would need to be added a further 1 m allowance for support legs and cone or slope bottom. Space above the tank of over 2 m

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would be needed to allow for the basket to be lifted clear of the tank. Finally the hoist itself, its hook and a spreader bar above the basket requires more space, possibly 1 m. The total height to an overhead steel rail would therefore be 6 m. If the rail height is considered excessive - since it would need to be incorporated within a yet higher building - then a solution may be to double the number of tanks but give them a 1 m wall height. This would reduce the height requirement by 2 m to 4 m. For the purposes of this report the former, taller, option will be used for costing purposes. The weight of the basket would be 3.65 MT for the fully-wetted contents and an estimated 0.5 MT for the stainless steel basket and lid, totalling 4.15 MT. This is well within the range of such hoists and their gantry supports. These gantry supports create an internal steel frame and ensure that no part of the weight to be lifted is transferred to the building structure. (h) Waste disposal This additional section covers the very important consideration of best-use of the major waste streams from the process. It has been established that KOH will be required for carrageenan product made for the European Union. Also it is suggested that a major waste stream of 9.3 m3 of <5% KOH per day of caustic liquor will require neutralisation. This contributes a gross maximum 0.465 MT of KOH daily, not allowing for the OH- used in the chemical dehydration of the carrageenan or KOH retained by the carrageenan. Since the food-grade KOH is actually 90% strength then the net KOH daily value is maximally 0.419 MT. The amount of Potassium present in KOH is 70.0% by weight, using its molar mass formula. Therefore the amount of Potassium ion contributed by the addition of KOH in the process is 0.29 MT per day However, the Potassium concentration in the major waste stream will be greatly increased by the substantial KCl content derived from the original dried K.alvarezii. The percentage of Potassium ion in dried Kappaphycus seaweed has been given as 4% (17). Assuming 10 MT of dried seaweed is processed each day, the daily input of naturally-derived Potassium ion is 0.4 MT. Previously (in (b) above) it was stated that Potassium was required in the process for the desulphation step. According to one source it is not taken up by the seaweed (14). It serves to remove sulphate ions (SO4--) from the carrageenan molecule and creates Potassium Sulphate

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(K2SO4) - or more likely Potassium and Sulphate ions, since K2SO4 is readily soluble. However, analysis of PES carrageenan shows it to contain about 4% Potassium. Some of this may be from retained KOH (13). Assuming 3.5 MT of PES carrageenan is produced daily then 0.14 MT of Potassium ion is conserved within the product. To this can be added the minor waste stream of wash-water from the trio of counter-current wash tanks. This will be a rate of one tankful per run and will total 39.8 m3 (6.64 m3 x 6) per day in volume terms. However 9.3 m3 will be needed for topping-up the main process tank (see section (b) above) so the net result will be a surplus of 30.5 m3 of very low concentration KOH solution leached from the washed KOH-treated seaweed. If it were added to the main waste stream then its contribution of KOH will already be accounted for in the previous paragraph it is merely recovered at a different point. Combining the Potassium contribution from both sources (the natural content present in seaweed and the added-chemical content) and subtracting the amount retained in the PES product results in a waste stream containing 0.55 MT a day of valuable ionic Potassium. The volume of liquid in the combined major and minor waste-streams will be 39.8 m3/day. It would however make sense to keep these separate in order to make a most useful compound fertiliser from the main (concentrated) waste stream. Therefore the annual requirement for process freshwater will be 12,000 m3 (39.8 x 300). To this needs to be added water for drinking & cooking, laboratory and washing-down.

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It is not within the remit of this report to discuss the detailed agronomy of Kaledupa. However some simple comments can be briefly made.

Census data indicate that 81% of fishing households on Kaledupa grow cassava and 62% grow coconut. In addition, 13% grow corn, 12% grow cashews, and 9% grow garlic. Cacao is grown on a few farms and fruit trees and green vegetables are grown most commonly in house gardens, or yards (18). Elsewhere in Indonesia it has been noted that Potassium deficiency often becomes a problem when cassava is planted continuously on marginal soils. The reasons quoted for this are that the crop extracts a large amount of K; that many cassava soils have a low K content and that farmers rarely apply K fertilisers (19). A high response of other food crops (rice and maize - i.e. sweetcorn) to Potassium fertiliser application in Indonesia was also found (20).

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It has been shown Potassium Chloride application of up to 200 kg KCl/ha linearly increased cassava yield, and would indirectly reduce soil loss due to erosion (19). This translates to approximately 100 kg of Potassium ion/ha/annum. Thus the daily output of Potassium in the waste-stream is sufficient to fertilise 5.5 ha (0.55 MT of K x 1,000 / 100) of local crop. This translates to 1,650 ha annually from the 300-day production output. It is estimated that fishing and farming households utilise an estimated total of 5,000 ha of land on Kaledupa, or 65% of the land area (18). The conclusion can be made that the optimal Potassium crop requirements of one third of the entire island of Kaledupa might be met from this waste stream.

Clearly the practical difficulties of distribution and terrain will reduce the potential benefit. A fourwheel drive tractor and tanker-trailer will be required to provide a delivery service. It may be necessary to temporarily store the waste-stream during the monsoon periods, due to difficulty of transport and spreading at that time and possible excessive leaching from the soil.

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It has also been shown that Nitrogen and Phosphorus are also important in increasing cassava yields. Yield increases, ranging from 4 to 24 MT/ha fresh roots, have been reported when 200 kg of urea (a source of Nitrogen) and 100 kg of Triple Super Phosphate were applied, compared to that without fertiliser (21).

For cassava crops, the main cultivated plant on Kaledupa, opinions differ as to the optimal proportions of NPK required though Potassium is always noted as the most important nutrient. These vary from 1:3:3 N-P-K (22) to 1:1:2 N-P-K (23) - the former recommendation being the most recent and using least nitrogen. Excessive application of nitrogen fertilisers can lead to high Hydrocyanic Acid (HCN) content and bitterness of the tubers (24).

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Coconut palms are also responsive to high potash fertiliser (25). Given these potential crop benefits, it would be clearly beneficial to consider neutralising the very alkaline (pH 12-14) waste-streams with acids that could contribute, at least in part, to creating such a balanced fertiliser. Therefore Nitric Acid (HNO3) and Phosphoric Acid (H3PO4) would be ideally suited to this purpose. The process of neutralisation is fundamentally the balancing of H+ and OH- ions to create a pH of 7. In this case the excess alkaline OH- ions are entirely derived from the KOH added during processing. So each OH- ion remaining in the waste stream requires a matching H+ ion from an acid. From the formulae of the two acids (Nitric Acid (HNO3) and Phosphoric Acid (H3PO4)) it can be seen that Phosphoric acid could theoretically contribute three H+ ions per molecule and so neutralise three OH- ions - compared to the one H+ ion present in a Nitric Acid molecule.

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However the situation is not so straightforward because Phosphoric Acid is considered a relatively weak acid and does not dissociate in water as well as Nitric Acid - a strong acid. This means that such simple proportions cannot be applied. Because Phosphoric Acid is polyprotic it can nevertheless loose more than one proton (H+) and so has three Acid Dissociation Constants (pKa values) for its three protons. However two of these protons are fairly reluctant to appear. From an examination of these pKa values for Phosphoric Acid it can be concluded that it will fairly readily provide one H+ ion but much less readily its other two. So it is safer to anticipate its neutralising power to be similar to Nitric Acid i.e. one to one. Returning to the neutralisation requirement for the process, previously it was calculated that the waste-stream had a maximum net KOH daily output of 0.419 MT. A mixture of the two acids should be used in order to try to achieve the preferred 1:3 N:P ratio mentioned previously. The calculation needs to be based on their standard commercial strengths of 68% for Nitric Acid and 85% for Phosphoric Acid. Accordingly, Appendix 4 sets out the data and calculations.

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The conclusion is that, using a required 1:1 mix of concentrated Nitric and Phosphoric Acids, about 9.3 m3 of high-potash compound fertiliser solution could be derived from the waste stream with a N-P-K value of about 0.8 : 1.6 : 5.9 by weight or, more accurately, as would be officially termed in the UK, 0.8% (0.8% N) - 3.7% (1.6% P) - 7.1% (5.9% K). See note in Appendix 4 for explanation. By estimating a monetary value for this N-P-K in Appendix 4 and costing a tractor/trailer delivery service it is calculated that about 66% of the cost of chemicals used in the process can be recovered as a valuable and non-polluting fertiliser.

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Note: An unknown but useful extra quantity of Sulphate will also be added from the dehydration reaction step during hot KOH treatment, creating soluble Potassium Sulphate compound. The beneficial use of seaweeds as fertiliser has been known for centuries. Apart from their high Potash levels and their organic and cellulose content, the benefit is often due to the minor components (e.g. Magnesium) and the trace elements (e.g. Iron & Zinc) present. It can be reasonably expected that the neutralised waste-stream will have a considerable percentage of these micronutrients. These would contribute to reducing any soil mineral deficiencies that may be present on Kaledupa. For example, cassava is sensitive to Zinc deficiency (26).

Important plant growth regulators and promoters present in seaweed, such as auxins, cytokinins, abscisic acid, betaine and gibberellins, may survive the process conditions and also contribute to the fertiliser value.

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Note: The alternative and cheapest way to neutralise the waste stream would be to use concentrated Sulphuric Acid, which would give a daily equivalent of 402 kg of dissolved (ionised) Potassium Sulphate, derived from 180 kg of the Potassium present. This would still leave 370 kg of Potassium ion in the waste stream. It would be a very unbalanced fertiliser and only useful where adequate nitrogen and phosphorus are already present in the soil probably unlikely on much of Kaledupa. (i) Power, heat and fuel In order to process 10 MT a day of dried seaweed - causing it to fully rehydrate and then drying it in order to produce 3.5 MT of carrageenan product, the factory will require substantial amounts of energy for heat and power. Calculations suggest the following: Boiler size for process heating = 110 kWh assuming 95% boiler efficiency Generator for operating mill, drying fans, pumps, mincer, minor machinery, lighting, office equipment, etc = 150 KVA = 120 kWh electrical output, requiring 300 kWh input assuming 40% efficiency Burners for product drier = 1.2 MWh

So at peak demand there is a maximum requirement of just over 1.61 MWh for 16 hours and then about 260 kWh for the remaining 8 hours a day. This equates to 27.84 MWh a day and 8,350 MWh a year. This will need to be supplied from within the factory premises and the choice of fuel is critical for cost and environmental reasons. This choice appears to be between diesel and liquefied petroleum gas (LPG). This is because natural gas in the form of compressed natural gas (CNG) or liquefied natural gas (LNG) does not yet appear to be available on Kaledupa. It may become so, in the future, as Indonesian energy companies like PT Pertamina further develop the countrys large oil and gas reserves. Indonesia has 1.7% of world reserves of natural gas and 0.4% of oil (27). In 2008 it produced 69.7 billion cubic metres of natural gas and 366 million barrels of oil. By comparison the UK is rather similar, producing 69.6 billion cubic metres of natural gas and 564 million barrels of oil in 2008 (27).

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Appendix 3 shows that diesel is double the cost of LPG when expressed in volume terms. However, diesel @ 38.6 MJ/litre is more energy-dense than LPG @ 26.8 MJ/litre - i.e. 44% more. When the cost is adjusted to reflect this, the price difference between these fuels is 39%, the LPG still being significantly cheaper. The drier is by far the greatest consumer of fuel, because it needs to evaporate over one tonne an hour of water during its 16 hour daily cycle. It is the most expensive consumable and any savings, however small, will have a large impact on production costs. When the alternative fuel is 40% more then the argument for LPG becomes overwhelming, if all other considerations are equal. But they are not, they are even more persuasive. Another powerful financial reason for choosing LPG is that, because it is a clean-burn fuel, it can be used to direct-fire the drier i.e. the exhaust gases are efficiently allowed to pass through the drying product. Diesel, on the other hand, is a relatively dirty-burn fuel, even with good servicing of burners and choice of a high-quality low-sulphur diesel fuel. For a food-grade product it would be mandatory to use diesel only as an indirect source of heat. So there would be an added and substantial capital cost of providing a large air-to-air heat-exchanger - plus a huge drop of 40% in drying efficiency as a result (16). Thus the diesel version would consume 40% more fuel than the LPG choice a very significant added cost. It will also require frequent cleaning to maintain its original efficiency, due to sooting by diesel smoke.

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There are also considerable very environmental benefits in using LPG, a highly important consideration in the near pristine and unpolluted atmosphere of Buranga - and with the village adjacent to the proposed factory. These can be briefly listed as follows: LPG is a low carbon emitting hydrocarbon fuel available in rural areas, emitting 17% less CO2 per kWh than diesel, due to its lower Carbon/Hydrogen ratio (28). LPG engines produce 120 times less PM (Particulate Matter) than diesel engines (28). LPG engines produce 20 times less NOX (Nitrogen Oxides) than diesel engines (28). LPG engines produce 9 times less SO2 (Sulphur Dioxide) than diesel engines (28). LPG engines produce 5 times less CO (Carbon Monoxide) than diesel engines (29).

The numerous health concerns from the above air pollutants are well summarised on the US Environmental Protection Agency website (30).

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LPG engines are generally quieter than diesel engines, due to reduction of diesel knock (31). As well as environmental benefits there are technical advantages to LPG engines. They have longer service intervals and longer service life due to the less polluting effects of the fuel on the engine oil and lower vibration levels (31). Diesel does have a minor advantage over LPG in some respects: Storage of diesel, although requiring 110% bunding to safeguard from catastrophic leaks, is relatively simple, using double-wall plastic or steel tanks. Conversely LPG tanks are pressure vessels and have to be made of steel to strict international safety standards e.g. ASME Sect. VIII Div.1 and possibly requiring a CCS Certificate in Indonesia. Previously it was shown that diesel is 44% more energy-dense than LPG. So for the same amount of stored energy diesel tanks need to be about 44% smaller than LPG tanks. Diesel may initially be more acceptable to local opinion. Unless reassured, Burangan citizens might have concerns over LPG explosions the reaction sometimes found in the current Indonesian government-sponsored Kerosene to LPG Conversion Program using PT Pertamina (32). Fuel storage requirements need to be considered. If LPG is selected then, using the above 27.84 MW/day consumption rate and the energy-density of propane being 7.5 kWh/litre (33), the total volume of LPG consumed will be 3,712 l litres/day or 111,400 litres/month. Because of the weight limit at Buranga dock, the tank must weigh no more than 10 MT in order to be unloaded (34). The largest LPG tank to fulfill this weight requirement is 24,000 litres. This is sufficient for about 6.5 days of production. So five such tanks will secure a minimal 33 day (>month) supply. If diesel were to be the sole fuel source then, having an energy density of 10.75KWh/l but requiring 40% extra for drier heat-exchanger losses) there would need to a storage requirement of 3,626 litres /day (27.84 x 1,000 x 1.4 / 10.75) or 108,770 litres/month. Typically, a fully-bunded (110%) twin-wall steel horizontal tank of 40,000 litres capacity would weigh 8.5 MT net. Therefore three such tanks would be required for a minimal 33 day (>month) capacity. There is a limited argument for a hybrid system LPG for the drier and diesel for the generator. The environmental arguments against diesel still remain, though the quantity of diesel fuel used

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would be significantly less 560 litres/day. The problem is that LPG generators of the required size are difficult to source they generally are smaller - with natural gas models taking their place at or below this 120KW size point. However a solution would be to have two smaller LPG generators create the total power requirement. A possible advantage is that one of these could be shut down during the night-time when lower electrical power is needed. It has been assumed above that the generator will be powered by a conventional reciprocating piston engine. These are easy to source and relatively straightforward to maintain, often using local labour. However, as the source of prime power, rather than on stand-by duties, they will need considerable maintenance input. A typical diesel-engine would require an oil and filters, etc, service every 500 hours (or 21 days @ 24 hours/day), an intermediate top-end overhaul every 10,000 hours (costing 35% of the purchase price) and the most major top and bottom-end overhaul at 20,000 hours. The cost of this last overhaul can be as much as 70% of the original purchase price. The top-end and top and bottom-end overhauls are too complex for local servicing and will require the use of specialist staff provided by the manufacturers agent. In view of its critical contribution to the daily operation of the factory and the near-new cost of major servicing it would be our recommendation to fully replace the generator at that stage - rather than risk a major failure in the future. The generator annual running time is 7,200 hours (300 x 24 hours). This equates to a life expectancy of about 2.75 years for such a prime-power unit. This is an average figure, very much dependent on the quality of servicing and fuel used. There is a good argument for alternately running two such generators, which would substantially increase the margin of safety of the process, allow for maintenance downtime and for breakdowns. It would also double the life expectancy to 5.5 years. A (surprising) alternative to the use of a piston engine is to use a micro-turbine. Its components include a compressor, a recuperator (exhaust gas heat-exchanger), a combustor, a turbine, and a generator. The turbine engine is air-cooled and supported on air-lubricated compliant foil bearings. The compressor impeller, turbine rotor and generator rotor are all mounted on a single shaft, which comprises the only moving part in the engine. Power electronics are solid-state producing three-phase alternating current output power from the high-frequency alternating current engine output. It is therefore an extremely simple, if sophisticated, piece of engineering.

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Micro-turbine generators are very compact, vibration-less and quiet. Because of these qualities, together with their inherent reliability and long maintenance intervals, they are much-used on offshore oil rigs and in remote user-critical locations. They can be provided in a CHP configuration see below. Micro-turbine service intervals are air-filter change and injector-clean every 8,000 hours or 333 days (they use no oil). Injector replacement and turbine exit temperature probe replacement at 20,000 hours. Replacement of turbine wheel and air bearings every 40,000 hours and whole engine change every 80,000 hours - at about 33% of original purchase price. All maintenance would need to be carried out by specialist staff, provided by an existing Jakarta-based supplier/distributor. When considering generator specification, one common optional extra is Combined Heat and Power (CHP). As with all power supplies, the conversion of fuel energy to electrical energy is only about 40% efficient - at best. The rest is lost as heat. By using heat exchangers, up to 50% of the heat input can be usefully recovered, with just 10% losses i.e. totalling 90% fuel efficiency. The maximum benefit from CHP is gained if heat is always required as well as power. This is exactly the case in the hot-water alkali conversion stage of the process, which will operate 24 hours a day. As with LPG/Natural gas generators, it is difficult to source reciprocating powered generators with this additional feature below a breakpoint of about 150KW total output. However the micro-turbine does come with the CHP option at a smaller size. For 16 hours a day the generator will by running at high load, powering the drier fans and mill as well as the rest of the process. This is beneficial for a conventional piston-powered generator, which works more efficiently and with fewer maintenance issues when under full load. For the remaining 8 night-time hours the generator will only be on part load, powering the early, less power-hungry, stages of the process. It might be approximated that overall the generator is used at 75% of maximum i.e. providing about 110KW of heat (300KW x 0.75 x 0.5). This would provide (by coincidence) exactly the expected heat required (see above) for raising tank temperature to 60C, eliminating the need for a boiler, except for emergency or standby purposes.

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(j) New versus second-hand There are a few good reasons for seeking and installing second-hand equipment. It represents environmentally beneficial re-cycling and sometimes can be a cheaper option However our experience of second-hand process plant for a food additive manufacturer in the UK has been mixed. The following are some points to consider: Whilst the initial purchase price will be cheaper than new, it will rarely be cheap. When the costs of modification, including replacing out-of-date, unreliable or worn-out items like motors, bearings, seals or flanges are added then even the real price saving can be marginal. The delay in design and construction of the factory can be very considerable if the size, shape or utilities requirements of the items are not known in advance. For example, the existing entry and exit points for valves, drains etc on second-hand tanks are usually in the wrong place to what is now required. The outcome is an often less than ideal compromise, requiring much modification and resulting in a much more protracted build time and, in this example, more complex and less efficient plumbing than necessary. The management time and effort spent looking for suitable items can be very considerable. It can often be better spent on other priorities. Items coming from non-food factories will not be permitted in food factories, limiting choice yet further. Sourcing of suitable or nearly suitable items will depend on the dumb luck of them happening to be available at that precise time. Luck should not be a part of factory design. There is a strong likelihood that major customers operating due diligence schemes and regulatory authorities concerned about, for example, food hygiene or personal safety, will want confirmation that all parts of the factory conform to appropriate current international standards. Old or out of date equipment may well not pass such scrutiny. In the context of this project the great distance from Kaledupa to major cities where spares or repairs may be sought means that new, reliable equipment and machinery, guaranteed by their manufacturers or suppliers, must be the preferred option. The prolonged breakdown of any link in the production chain will have disastrous consequences on the credibility of the factory, both to the suppliers of the raw materials and to the customers for the finished product.

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(k) Quality assurance and quality control Providing that all staff and workers are diligent, conscientious and use their common-sense there is nothing in this section that should be of concern. Quality assurance (QA) refers to planned and systematic production processes that provide confidence in a product's suitability for its intended purpose. It is a set of activities intended to ensure that the products satisfy customer requirements in an ordered, reliable fashion. Unfortunately QA cannot absolutely guarantee the production of quality products, but makes this more likely. Two key principles characterise QA: Fitness for purpose - the product should be suitable for the intended purpose Right first time - mistakes should be eliminated. QA includes regulation of the quality of raw materials, products and components; services related to production; and management, production and inspection processes. It is important to realise also that quality is determined by the intended users, clients or customers, not by society in general - it is not the same as 'expensive' or 'high quality'. Even goods with low prices like carrageenan can be considered quality items if they meet a market need. So QA should represent an attitude of mind by all employees but especially by management, whose actions or lack of action can be critical. Whilst quality control (QC) emphasises testing and blocking the release of defective products, quality assurance is about improving and stabilising production and associated processes to avoid, or at least minimise, issues that led to the defects in the first place. However, QA does not necessarily eliminate the need for QC - some product parameters are so critical that testing is still necessary just in case QA fails. It will be essential for a QC laboratory to be located within the factory premises though preferably not the factory itself. The existing harbour-masters disused building would be an ideal place for the laboratory, as well as for offices and possibly storage of finished product.

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The laboratory staff will undertake a number of activities including: The analysis of incoming dried seaweed raw material for moisture and contaminants. The measurement of process parameters such as pH at the various intermediate stages and moisture content of product exiting the drier. Analysis of product for gel-strength and viscosity to fulfill customers requirements. Analysis of product for conformity to international food-additive standards such as EU E407a, the USA Code of Federal Regulations and the FAO/WHO Codex Alimentarius (which refers to JECFA specifications). Testing the waste-stream for conformity to pre-determined standards. Providing rapid feedback to workers and managers of out-of-specification products or process materials. The laboratory should be well equipped to carry out these measurements efficiently and accurately, using the fundamentals of Good Laboratory Practice (GLP). This is a set of principles that provides a framework within which laboratory work is planned, performed, monitored, recorded, reported and archived. GLP helps assure customers and regulatory authorities that the data submitted are a true reflection of the results obtained and can therefore be relied upon. GLP should not be confused with the standards of laboratory safety - wearing appropriate gloves, protective glasses and clothing to handle materials safely. The management should also implement Good Manufacturing Practice (GMP) insofar as it applies to food-additives. GMP requires a quality approach to manufacturing, enabling factories to minimise or eliminate instances of contamination, mix-ups, and errors. This in turn, protects the customer from purchasing a non-conforming product. GMP addresses issues such as record-keeping, sanitation, cleanliness, equipment verification, process validation, and complaint handling. Most GMP requirements are very general and openended, allowing a manufacturer to decide individually how to best implement the necessary controls. This provides much flexibility, but also requires that the manufacturer interprets the requirements in a manner which makes sense for each individual business.

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(l) Safety The process requires the storage and use of relatively simple chemicals but these can be highly dangerous to people and property because of their strongly acidic or alkaline nature, their quantity and often their concentrated form. Likewise the fuels are commonplace but are stored and used in large volumes, representing another potential hazard. It is highly advisable for an assessment of these the risks to be made. There will be a need to: Identify the hazards. Decide who or what might be harmed and how. Evaluate the risks and decide on precaution. Record these findings and implement them. Regularly review the assessment and update if necessary.

In the UK, The Health and Safety Executive expects any business employing more than 5 people to have a Health & Safety Policy and operate appropriate health and safety systems (35). Also in the UK, the Control of Substances Hazardous to Health (COSHH Regulations 2002) require employers to assess the risks from hazardous substances and take appropriate precautions (35). All manufacturers of chemicals are required to provide a material safety data sheet (MSDS) with their product. At the very least, this MSDS should be the starting point for the risk assessment. All workers must be provided with protective clothing and trained to use them at all times. Warning notices of hazards must be displayed. Emergency wash-down showers and eye-wash stations must be provided. The extreme isolation of the site from the nearest hospital means that a properly equipped emergency room is required for treatment of major or minor accidents. At least one person on every shift must be well-trained in first-aid. The local medical service must be made aware of the chemicals being used and be equipped and trained to respond quickly and effectively. General training of all workers on safety issues must be regularly carried out. No new worker should be permitted to commence work without a proper induction course.

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Members of the public and especially children must be kept out of the site by providing a secure fence and gates. The aim of all these precautions is to have an accident-free site permanently.

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Business Model Note: For standardisation purposes all prices quoted are in US Dollars (USD). Approximate exchange rates at time of finalisation of this report (early June) are 1 USD ($) = 10,000 IDR = 0.60 GBP. Wherever possible prices have been derived from Far East suppliers, using websites such as Alibaba and EC Plaza the two premier B2B online marketplaces. All chemical prices are from these Asian sources and are quoted FOB (Free On Board) the country of origin see Appendix 3. They assume FCL (Full Container Load) quantities. Elsewhere, particularly for specialist equipment, UK suppliers have been approached for their budget estimates. These have been converted to USD and are FOB the suppliers local port.

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1. Capital Investment Note: All company product specifications or model numbers or equipment photos are provided for illustrative purposes only. No endorsement of such products is implied nor are any of the companies mentioned contracted to supply at the prices indicated.

There is an assumption that the land and existing harbour masters building and two other smaller buildings at the dockside in Buranga are being donated to the project by the Wakatobi Government.

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The main building can be well-utilised as offices and laboratory. These offices will require excellent and reliable telephone and fast broadband (IT) communication links perhaps via satellite.

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The smaller building could possibly be used as the finished-product store. An additional building is required to house: The process machinery (high-roof) At least a weeks worth of incoming dried seaweed raw material At least a months worth of the process chemicals

It will need to be vermin-proof and bird-proof.

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OZ-UK American-barn steel-frame building - erected & fully clad 600 m3 @ $130 /m3 = $78,000

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Secure perimeter fencing and gate 400 m @ $50 /m = $20,000 Peal stainless sorting conveyor 2 m x 0.6 m variable speed = $9,600

Abus Cranes triple goalpost gantry & monorail 4MT electric hoist - with automation = $32,000 Suncombe Tanks (ST) single insulated 8,000 litre stainless tank open-top = $27,000 ST Three uninsulated 8,000 litre stainless tanks open-top = $67,000 ST Two stainless baskets and lids for above tanks = $12,000 Note: Indonesian-sourced tanks & baskets may be significantly cheaper @ $2,500 each uninsulated per tank and $350 per basket. However, are only available in lower-grade 304 grade stainless not suitable for food processes. Suncombe UK tanks are higher-grade 316 stainless. APV stainless steel plate heat exchanger = $18,000 Miscellaneous pumps for process = $12,000 Kolbe Stainless mincer-grinder 15KW with feed hopper = $49,000 Alvan Blanch (A-B) belt conveyor to feed drier = $24,800*

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A-B SPD-19,000 crop drier complete with 1.2 MW LPG furnace and fans = $221,000* A-B Additional air-to-air heat-changer if diesel fuel is used = $31,200* A-B Hammer-mill with 30KW motor = $20,800* Note: This hammer-mill and associated cyclone, etc, in stainless is about $150,000

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Stainless Alpine Hosokawa Sugarplex 315 pin-mill with improved performance and more compact design is about $160,000 A-B Cyclone with 15KW motor = $17,500* A-B Centrifugal sifter = $13,000* A-B Returns screw = $4,600* A-B Magnet = $1,100* A-B Screw discharger & sacking hopper = $10,000* A-B Sack weigher = $10,500* A-B Sack stitcher = $2,400* A-B Control panel for drier and hammermill = $21,600* Note:

A-B prices listed are for mild-steel suitable for petfood grade product A-B stainless steel contact parts option for foodgrade product = $240,000 extra.

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Either: Hubei ChengLi 5 x 25,000 litre LPG storage tanks = $60,000 Or: Dale 3 x 40,000 litre 110% fully-bunded twin-wall diesel tanks = $96,000 Viessmann Vitodens 2 x 60kW cascade-type LPG boilers = $11,100 Generator: Note: All prices are for two units Alternative 1 (USA/UK - Finning) Caterpillar Olympian GEP165 diesel (120KW prime power) generators + fully acoustic container (super-quiet) = $132,000 Alternative 2 (USA/UK Qingdao China agent) Deutz/Stamford 160GF-T LPG (158KW prime power) generators + canopy = $124,000 Alternative 3 (USA Global Power Systems India agent) GM/Kohler 80RZG LPG (64KW prime power) generators including synchronisation panel = $56,500 Alternative 4 (USA Capstone Solusi Mitra Jakarta agent) C65 (65KW prime power) LPG micro-turbine generators = $130,000 (diesel option + $46,000)

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Alternative 5 (USA Capstone Solusi Mitra Jakarta agent) C65 ICHP (65KW prime power) LPG micro-turbine generators + CHP function = $181,600 (diesel option + $46,000). Using LPG, this is the preferred generator option.

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TCM 2-wheel-drive LPG forklift = $22,500 JCB 2155+ 4-wheel-drive/steer tractor (150HP) and 10,000 litre trailed-tanker = $114,000 Harlequin 10,000 litre twin-wall plastic 110% fully-bunded diesel tank for 4WD tractor = $6,200

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Laboratory equipment; typically moisture balance, precision balance, viscometer, water-bath, gelstrength tester, pH meter, benching and glassware = $23,000 Construction labour costs and incidentals electrical wiring, plumbing, etc = $60,000 Sub-Total: In foodgrade (stainless) option using LPG = $1,390,300 (add $31,200 if diesel fuelled for heat-exchanger) In petfood (mild steel) option using LPG = $1,150,300 (add $31,200 if diesel fuelled - for diesel heat-exchanger) Note: All above prices FOB - add 20% for transportation.

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Capital Investment: Full Total Cost including transportation: In foodgrade (stainless) option using LPG = $1,668,000 (add $31,200 if diesel for additional heat-exchanger) In petfood (mild steel) option using LPG = $1,380,000 (add $31,200 if diesel - for additional heat-exchanger)

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2. Running Costs

Note: Appendix 3 summarises April-June 2009 commodity prices for all items. 2.1 Raw material

The following is extracted from our November 2007 Report: Factory buying-in price is typically 1,000 IDR/kg above farm-gate price, this differential being the costs and profit margin of two tiers of sub-regional and regional collectors. The farmers closest to the plant (factory) site may immediately benefit from this by delivering their crop in person. Even the more distant ones will cut out the regional collectors buyers margin and only incur the subregional collectors margin of 300 IDR/kg - so should benefit by about an additional 700 IDR/kg.

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Thus the average farmer producing 400kg/month would instantly gain an extra 280,000-400,000 IDR or 15-21 per month. It remains entirely reasonable to buy-in at factory-gate prices. To do otherwise would be to give the factory the advantage of a de facto subsidy, equivalent to the intermediarys price margin. Furthermore the growers need an inducement to sell to this factory rather than to their existing collectors. If the factory only paid the farm-gate rate then no such incentive would be on offer. These figures were based on the then current farm gate price of 4,500 IDR/kg. It is now over 10% more at 5,000 IDR/kg - or $0.49/kg. To this should now be added the above differential of 1,000 IDR/Kg or $0.10/kg. The buying-in price will therefore be 6,000 IDR/kg or $0.59 /kg. The annual crop requirement has previously been given as 3,000 MT. The annual purchase cost of dried seaweed will be $1,770,000 (3,000MT x 1,000 x 0.59) 2.2 Chemicals Note: All prices are FOB the suppliers local port. Earlier it was calculated that 419 kg/day of 90% KOH was required for the process. For a 300 day/year production this equates to 125.7 MT/annum of 90% KOH dry prills or flakes (Note that most of the 10% impurity is NaOH). The annual purchase cost of 90% Potassium Hydroxide @ $1,241/MT is $156,000 Adding 20% for transportation - annual purchase cost of 90% Potassium Hydroxide is $187,000 In Appendix 4 calculations suggest that a mixture of 259 litres of 68% Nitric Acid and 280 litres of 85% Phosphoric Acid will be required to neutralise daily output of KOH of 419 kg in 9,300 litres water. For a 300 day/year production this equates to: 77,700 litres of 68% Nitric Acid @ relative density of 1.4 kg/litre = 109 MT The annual purchase cost of 68% Nitric Acid @ $455/MT = $49,600

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Adding 20% for transportation - annual purchase cost of 68% Nitric Acid = $60,000

84,000litres of 85% Phosphoric Acid @ relative density of 1.69 kg/litre = 142 MT The annual purchase cost of 85% Phosphoric Acid @ $680/MT = $96,600 Adding 20% for transportation - annual purchase cost of 85% Phosphoric Acid = $116,000 The combined delivered cost of Nitric Acid and Phosphoric Acid is $176,000 Note : The cheaper alternative, though not adding beneficial nitrate and phosphate to the waste stream, is to use Sulphuric Acid. In Appendix 4 calculations suggest that 230 litres of 98% Sulphuric Acid will be required to neutralise daily output of KOH. For a 300 day/year production this equates to: 69,000 litres of 98% Sulphuric Acid @ relative density of 1.84 kg/litre = 128 MT The annual purchase cost of 98% Sulphuric Acid @ $182/MT = $23,300 Adding 20% for transportation - annual purchase cost of 98% Sulphuric Acid = $28,000 This represents a cost saving of $148,000 when compared with the Nitric Acid - Phosphoric Acid mixture but gives a highly unbalanced and possibly unusable fertiliser.

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2.3 Fuel Note: Prices include delivery. Earlier it was calculated that 3,712 litres/day of LPG was required for the process. For a 300 day/year production this equates to 1,113,600 litres.

The annual purchase cost of LPG @ $ 0.36/litre = $401,000 If diesel were chosen (despite its poor environmental credentials) then it was previously calculated that 3,626 litres/day would be required for the process. For a 300 day/year production this equates to 1,087,800 litres. The annual purchase cost of diesel @ $0.60/litre = $653,000 This represents an additional cost of $252,000 when compared with LPG

30,000 litres/annum diesel will be required for 4-WD tractor @ $0.60/litre = $18,000

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2.4 Labour There will be three 8-hour shifts a day. The numbers of persons will vary according to shift time. For example, it is visualised that during the 06:00 - 14:00 and 14:00 - 22:00 shifts there will be additional drier, administrative, sales and laboratory personnel. The 22:00 06:00 night-shift would be limited to the relatively quiet chemical treatment process. The two senior managerial staff would alternate so as to cover both daytime shifts. Whilst speculative, the following might be a reasonable assessment of labour requirements, multiplied by number of shifts per day: Two workers to receive, weigh and store dried seaweed delivered by growers x 2 = 4 Two workers on sorting conveyor segregating contaminants from seaweed x 3 = 6 Two workers to operate chemical process and fill/empty process basket x 3 = 6 One worker to operate drier and sacker x 2 = 2 One worker to operate fork-lift within factory and to and from dockside x 2 = 2 One tractor driver to distribute waste-stream fertiliser across island x 2 = 2 One mechanic/fitter for maintenance and repair x 1 = 1 One cook x 1 = 1 This totals 24 personnel @ $200/month = $57,600 / year One laboratory technician x 2 = 2 One clerical/sales/receptionist/secretary x 2 = 2 One deputy manager x 1 = 1 This totals 4 personnel @ $300/month = $18,000 / year One manager x 1 = 1 This totals 1 person @ $400/month = $4,800 / year The net annual wage bill for 30 persons will be $80,400 / year Add 15% on-costs for national and local taxes, pensions, etc and the gross annual wage bill = $92,000

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2.5 Water

A freshwater spring is located 2 km from the factory site (10). To pipe to site and provide for filtration and chlorination equipment = $20,000 2.6 Stakeholder payment The fundamental objective of this project is to: (a) reduce fishing pressure on the extraordinarily diverse but fragile coral-reef ecosystem in this area to prevent a possible catastrophic decline.

(b) provide the mechanism to enable the Kaledupa reef fishery to recover so Maximum Sustainable Yields could be achieved for the remaining fishers rather than the current significantly depressed catch rates.

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The introduction to our first report stated training and the development of a carrageenan processing plant on Kaledupa would have the potential to double the annual income for 600 fishers who also have sea weed farms in the Kaledupa area. Participation in the scheme would be tied to surrender of fishing licences so that it provides an alternative income for those coming out of the fishery. It is therefore the intention of this project to provide sufficient funding from the turnover of the factory to double the growers gross income from seaweed farming. On the basis of 400 kg/month production by the average seaweed farmer (quoted earlier) and the current price of 5,000 IDR/kg - or $0.49 /kg the annual gross value of the crop is 24M IDR or $2,350 per individual family.

Therefore, in order to match their gross income, each contributing farmer in the co-operative must be made a stakeholder creditor and receive 24M IDR or $2,350 as an annual or equivalent monthly payment taken from the turnover, not the profit, made by the factory. This totals $1,410,000. It will vary in the future as the farm-gate price of dried seaweed changes and needs to be adjusted accordingly.

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3. Profitability Preliminary indications show that, providing a good-quality PES product is consistently manufactured, a reasonable profit might be made. This is subject to further and additional financial stress-testing and this extra work is currently being undertaken. However the following can be stated with reasonable confidence: 1. The primary aim of the proposal, to double 600 seaweed growers income so that they can surrender their fishing licences, can very probably be met. 2. Such a proposal would provide well-paid local employment for thirty or so local persons, at double the rate of Government minima. 3. Thirdly, a valuable liquid fertiliser may be a by-product of the process - that should benefit the general community. Over and above this, there still remains a possibility that a reasonable profit and return on capital may be made. Given that some profit needs to be retained to provide a cash-flow cushion - to what purpose will this remaining surplus profit be put? The following options are suggested in descending order of preference: Improvement of infrastructure such as investment in schools, medical care, sanitation, roads, electricity and water supply, dock facilities. Such redistribution is vital to prevent a two-tier class developing of relatively prosperous stakeholder seaweed growers versus the rest of the island community of Kaledupa, Lintea and Hoga, and especially the Bajau on Sampela (38).

Development of other wealth-generating schemes such as ecotourism or aquaculture that will in themselves reduce fishing pressure. A preliminary strategy for the latter has already been described by us A proposal to create an aquacultural facility Wakatobi Marine National Park, SE Sulawesi, Indonesia 2007.

A third-party business invests in and manages the factory and takes the profit.

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Summary The first purpose of this report has been to characterise the quantitative aspects of production of PES E407a, using a laboratory-scale model of the process to design a full-scale factory on a site in Buranga, Kaledupa. Careful consideration has been given to make the process as simple and as reliable as possible. A comprehensive description of the process, both qualitative and quantitative has been given. It will still remain the task of the factory management to ensure that the product fully matches the requirements of the marketplace. They will have a huge advantage over the entire remainder of carrageenan producers in SE Asia because of the inherent freshness of the dried seaweed and of their ability to impose strict quality standards directly onto the growers within the cooperative. In their turn, the management will need the self-discipline to ensure that the process is continually adjusted on a daily basis to allow for seasonal variation in the crop and for the changing demands of their customers. Much attention has been given to ensuring that environmental issues such as air pollution, noise pollution and water pollution have been addressed. It is shown in the report that the waste products of the production process can be transformed, at modest cost, into a valuable byproduct liquid fertiliser. Despite the apparent certainty of the process description, much further and useful experimentation should take place beforehand and, once it is in operation, be ongoing within the factory and its laboratory. This will further improve product quality and make the process yet more efficient and cost-effective - especially as regards energy consumption and use of chemicals. The apparent good profitability of the project should not be a justification for lack of action in this respect. It may well be that the use of fresh undried seaweed can give rise to even better quality PES carrageenan product. It will create rather different processing parameters and problems. Consequently it should be viewed as a wholly different process, requiring preliminary experimentation. The biggest practical obstacle is the isolation of the location and the great distance and travelling time to major towns or cities. For this reason all equipment must, above all else, be chosen for its quality and reliability. We have occasionally pointed to such (usually more expensive) choices in the report. Adequate and strategic stocks of spares must be held. Manufacturers maintenance

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schedules must be understood and rigidly observed. Ordering of fresh stocks of fuel and chemicals must be done well in advance of requirement. A storage cushion of expensive excess stock of raw materials has to be accepted as a necessary investment that protects against delays in delivery due to bad weather or sourcing problems.

For this proposal to succeed, it will require the support of all local people. It is a concern that especially the Bajau community, essentially wholly fisherfolk, may not directly benefit from this new-found wealth. This could place a severe strain on inter-community relationships and, without their cooperation, undermine the fundamental raison dtre of the project - which is to create a sustainable fishery (38). An equitable re-distribution, whether in cash or in kind, would need to be put in place. The second purpose of this report has been to provide a costed and detailed business plan for the production of PES E407a carrageenan for export directly to the European Union from seaweed grown in the Kaledupa Island region. As an alternative strategy, it also gives financial estimates for petfood carrageenan production. This business plan contains detailed estimates of capital costs for the establishment of the plant, revenue income and costs.

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By doing so it provides information that will allow for political support and funding for the carrageenan proposal from the Wakatobi Government, National Park Authorities, COREMAP and other relevant NGOs and Government departments. Since it is believed that it will be the first of its type, conventional funding from the banking sector for set-up costs may well be difficult because of the perceived risk of an unproven business plan. Therefore it may fall to government and NGOs to provide part or all of the initial financial support. It is to be hoped that recognition is given to this project as a trailblazer, which, if successful, may be rolled out to the many other small seaweed-growing communities in Indonesia. Outside investment could be sought from Socially Responsible Investment (SRI) funds. The purpose and the structuring of the business - to prioritize the ecological and environmental benefits and the needs of the stakeholders - already conforms to the Triple Bottom Line concept of people, planet, profit or more succinctly, 'doing well by doing good'.

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References 1. Regional Workshop on the Culture and Utilisation of Seaweeds FAO Technical Resource Papers - Volume II 1990 2. World Aquaculture Symposium 2005 (3) Unattributed. Philippines & Indonesia Going Head to Head in Seaweed Production Filipino News - Balita Pinoy December 2008.

http://100roses.wordpress.com/2008/12/31/philippines-indonesia-going-head-to-head-inseaweed-production/ (4) Andi Hajramurni. 19 Countries Take Part in First Seaweed Forum, Expo The Jakarta Post, Makassar 29 October 2008 (5) Press Release: Jakarta (Antara News) October 2008 http://www.antara.co.id/en/arc/2008/10/10/indonesia-to-become-world-biggest-seaweedproducer-in-2010/ (6) Professor Thierry Chopin (Canada). The 19th International Seaweed Symposium (KobeJapan, 2007) (7) Dr Iain Neish - Eucheuma Seaplant Commerce 2005 (8) Wall Street Journal. October 2008. Text: http://online.wsj.com/article/SB122454073909251775.html Video: http://online.wsj.com/video/indonesia-seaweed-bubble-burst/1F114F65-0FBA-4121-A86C432490AB5643.html (9) Dina Saragih The Danger Behind Rocketing Prices for Seaweed Raw Materials in the Carrageenan Industry. 28 April 2008 http://www.seaplant.net/index_free.php?page=detail_news&recordID=29

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(10) Edi Purwanto Opwall Trust - pers comm (11) Dr Iain Neish - The Eucheuma Seaplant Handbook 2005 (12) Dr Tim Coles Opwall Trust - pers comm (13) Dr Iain Neish Process Technology for Eucheuma Seaplants 2005 (14) Rideout C. & Bernabe M. - WIPO Patent no: WO 98/40412 1998 (15) Darshan Mehta - UNESCO-Daimler Mondialogo Engineering Award pers comm. (16) Simon Shaw - Industrial Products Manager, Alvan Blanch Development Company Limited pers comm. (17) Krishnaiah D. et al 2008 Mineral Content of Some Seaweeds from Sabah`s South China Sea. Asian Journal of Scientific Research Vol: 1(2) (18) Kemen G.A. 2008 Can Small Island Communities Harness Emerging Carbon Markets for Conservation? Thesis - Brown University (19) Suyamto and Howeler R.H. 2001 Cultural Practices for Soil Erosion Control in Cassavabased Cropping Systems in Indonesia In: D.H. Barker, A.J. Watson, S. Sombatpanit, B. Northcutt and A.R. Maglinao (Eds.). 2004 Ground and Water Bioengineering for the Asia-Pacific Region. Intern. Erosion Control Assoc. Science Publishers Inc., Enfield, NH, USA. pp. 291-297. (20) Suyamto and Sumarno, 1993. Direct and Residual Effect of Potassium Fertilizer on Rice maize Cropping Rotation on Vertisol. Indonesian Journal of Crop Science Vol: 8(2) (21) Hartojo K. 1997 Effect of NP Fertilization on Fresh Tuber Yield of the Diverse Cassava Based Intercropping Systems and its Adoption Prospect. In: K. Hartojo, Y. Widodo, Sumarno and B. Guritno, eds. Research Accomplishment of Root Crops for Agricultural Development in Indonesia, 905. RILET, University of Brawijaya. Malang, Indonesia

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(22) Venugopal J.K.S. & Nair V.K. 2005 Crop Growth, Yield and Quality Parameters Associated with Maximum Yield Research (MYR) in Cassava. Journal of root crops Vol: 31(1) (23) De Geus J.G. 1967 Root Crops: Cassava. Fertilizer Guide for Tropical and Subtropical Farming. Centre d'Etude de l'Azote. Zrich (24) De Bruijin, G. H. 1973 The Cyanogenic Character of Cassava. In: Chronic Cassava Toxicity Proc. Interdisciplinary workshop. London (25) Magat S.S. Agricultural Research and Development Branch, Philippine Coconut Authority In:

World Fertilizer Use Manual 1992. The International Fertilizer Industry Association (IFA) (26) Howeler R. CIAT Cassava Programme, Regional Office for Asia, Bangkok, Thailand In:

World Fertilizer Use Manual 1992. The International Fertilizer Industry Association (IFA)

(27) BP Statistical Review of World Energy 2009 http://www.bp.com/productlanding.do?categoryId=6929&contentId=7044622 (28) LPG A Simple and Effective Way to Reduce Your Carbon Footprint http://www.calor.co.uk/about-calor/press-room/local-authorities.htm

(29) Submission by Calor Gas Ltd to UK Parliament Transport Select Committee 2005 http://www.parliament.the-stationery-office.com/pa/cm200304/cmselect/cmtran/319/319we53.htm (30) Six Common Air Pollutants US Environmental Protection Agency http://www.epa.gov/air/urbanair/ (31) LPG Guides Buses to Cleaner Environment Calor Ltd http://www.lpg-vehicles.co.uk/lpg_case_studies/lpg_buses_2.htm

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(32) The Swiss Association for Energy Economics http://www.saee.ethz.ch/events/cleancooking/Pertamina_LPG_Story.ppt (33) Energy Density of Propane - The Physics Factbook Edited by Glenn Elert http://hypertextbook.com/facts/2002/EricLeung.shtml (34) Abdul Manan - Head of Bappeda Wakatobi pers comm. (35) COSHH Risk Assessment Guide http://www.method-statement template.com/COSHH.html?gclid=CKzaqfaGg5sCFZ4U4wodWy21sw (36) Dr Iain Neish. Assessment of the Seaweed Value Chain in Indonesia - United States Agency for International Development - RAISE Plus IQC No. EDH-I-00-05-00004-00 - 2007 (37) Mehta A.S. et al 2008 Preparation of Semi-refined K-carrageenan. Indian Journal of Chemical Technology 15 (38) Crabbe M.James.C. 2006 Challenges for Sustainability in Cultures where Regards for the Future May Not Be Present. Sustainability: Science, Practice & Policy Vol: 2 (2) http://ejournal.nbii.org (39) James Brundle Omex Agriculture Ltd - pers comm. (40) New Zealand Institute of Chemistry - The Fate of Phosphate Fertiliser in Soils http://nzic.org.nz/ChemProcesses/soils/2D.pdf (41) Department of Plant Agriculture Ontario Agricultural College University of Guelph Sulfur and Sulfate Fertilizers - Do We Need Them? http://www.plant.uoguelph.ca/performance_recommendations/ofcc/pub/sulfur.htm

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Appendix 1 A detailed description of the Purified Eucheuma Seaweed (PES or E407a) manufacturing process
Taken from: A proposal to increase the value of farmed seaweed in Kaledupa, SE Sulawesi, Indonesia 2007 Summary Environmentally sensitive production of kappa carrageenan (PES) by the simple processing steps of: (a) pre-rinsing carrageenan-containing seaweed to remove surface impurities and contaminants (b) cooking the seaweed in a tank containing an aqueous solution of Potassium Hydroxide (KOH) so as to cause desulfation at the 6-position of the galactose units of the carrageenan, and so as to create recurring 3,6 anhydrous galactose polymers by dehydration and reorientation. (c) washing the seaweed in a neutralising bath of dilute Hydrochloric Acid (d) washing the seaweed in an optional bleaching step (d) rinsing the seaweed in water (e) drying and chopping the seaweed into chips or milling into powder

Adapted and Modified From: 1. FAO Fisheries Technical paper 441 A guide to the seaweed industry 2003 2. SEAPlantNet - The South East Asia Seaplant Network Carrageenan production methods 2007 3. SuriaLink - The ABC of Eucheuma Seaplant Production Basics of alkaline modification 1-0703-C 2003/2004 4. Method for extracting semi-refined carrageenan from seaweed - United States Patent 5801240 5. Process for cultivation of algae - United States Patent 6858430 6. Integrated method for production of carrageenan and liquid fertilizer from fresh seaweeds - United States Patent 6893479 7. Carrageenan-containing product and a method of producing same United States Patent 5777102 8. Carrageenan compositions and methods for their production United States Patent 6063915 9. Process of preparation of biodegradable films from semi refined kappa carrageenan United States Patent 7067568

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10. Removal of trace heavy metal contaminants from algae and the carrageenan contained therein United States Patent 4112223

Note: For those patents that are still in date (20 years from filing date) only their general descriptions of the process have been used, because these quote prior art. Their novel inventive steps have either not been incorporated or, if mentioned, are made clear in the text. Nevertheless, some of these inventive steps may have a useful contribution to make to any PES process and would require, if the patent is applicable to Indonesia, the seeking of a Licencing arrangement with the inventors and/or their Assignees. Whilst, for simplicity, only US patents are quoted, several also have world coverage under the procedures of World Intellectual Property Organization.

The Process A commercial scale method for producing PES should combine traditional simple methods for the semi-refining of kappa carrageenan with optimizing equipment and cycle reduction techniques to provide consistent, robust, high quality, costeffective production of PES, substantially independently of raw material feedstock variations. Cycle time reductions are achieved by reducing the number and duration of handling points, by consolidating the material handling process through the use of transportable processing baskets for movement of feedstock through the various process steps, and by eliminating or reducing time oriented activities. Cost efficiencies are realized via throughput increases, via the recycling of process fluids, and via process controls based on relative reaction performance, as opposed to reliance on absolute values, such as processing time alone. The essential goal of the semi-refining process is to improve the gel properties of carrageenan present in seaweed. Carrageenan contains galactose units which are sulfated in the 6-position. These can be converted into 3,6-anhydro galactose units by treatment with a base (alkali such as Potassium Hydroxide - KOH). The resulting carrageenan product containing 3,6-anhydro galactose units exhibits desirable improved gelling and strength properties. A pre-cursor step of sorting generally refers to the removal of plant materials and other debris to leave only the seaweed that is desired for processing. Kappaphycus alvarezii is the preferred raw seaweed feedstock for the production of kappa carrageenan and Eucheuma denticulatum for iota carrageenan, and other types of plant material would typically be removed during sorting. If sorting occurs off-site, then bags of dried and sorted full length seaweed will be shipped to the location of carrageenan processing. Testing is preferably conducted to determine the quality of the raw supply of seaweed prior to processing. Information gained regarding the characteristics of the raw starting material will be used at later stage in the process to adjust process controls for cycle times.

Note: United States Patent 6893479 describes an alternative starting procedure that involves mascerating, squeezing and filtering the raw seaweed. This produces a solid feedstock that has a higher yield and quality of PES while at the same time producing a liquor that has excellent plant fertiliser and growth promoter properties. It is crucial that each batch of seaweed is true to species. There must be no mixing of (a) Kappaphycus alvarezii and (b) Eucheuma denticulatum. Such mixing would significantly or totally compromise the final product. Each of these species yield carrageenans that have specific and differing physical and chemical gelling properties. Both seaweed species can be processed by this method but in entirely separate batches.

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Note: Kappaphycus alvarezii was previously and is still commonly (but incorrectly) called Eucheuma cottonii and yields kappa carrageenan. Eucheuma denticulatum was previously and is still commonly (but incorrectly) called Eucheuma spinosum (which yields iota carrageenan). The sorted seaweed is weighed out into pre-determined batch lots for processing. A typical target batch weight would be, for example, 1,000 kg. This is accomplished by loading the seaweed into a processing basket located on a load cell scale. The processing basket is preferably substantially cylindrical in shape and is constructed from a corrosion resistant structural material, such as stainless steel, as are the tanks into which it will be lowered. When the target net batch weight of seaweed is obtained, the loading is stopped. (The seaweed will remain in the single processing basket until after it has been removed from the final rinse, is drained and the seaweed is ready for final chopping, drying and optional further milling.) It is preferable that the seaweed is chopped into shorter lengths prior to processing. The pre-chopping step increases the surface area available for reaction and improves the homogeneity of the reaction mixture and ultimately accelerates the reaction progress. The pre-chopping step is preferably carried out in a KOH environment, as the potential for carrageenan "leaching" will be lessened. Since kappa carrageenan will precipitate (gel) in the presence of K+ ions, chopping in the presence of KOH will render the carrageenan insoluble in the water present in the plant materials, thus minimizing losses of carrageenan at this stage. It is preferable to chop the seaweed into lengths of approximately 5-8 inches to reduce process cycle times by exposing an increased seaweed surface area to the alkali modification reaction. The recommended seaweed chop length of approximately 5-8 inches balances the benefits of increased surface area (theoretical optimal chop length being at 1/4" to 1/2") with the carrying/holding limitations of the basket (since optimally finely ground seaweed material will not be retained in the basket). The KOH environment can be achieved by exposing the seaweed to a KOH moisture spray in an enclosed area prior to bringing the seaweed in contact with the knives of a pre-chopper. The single processing basket containing the batch weight of seaweed is lifted by overhead crane or hoist and is then seated in a seaweed pre-rinse tank for the pre-rinse step. The seaweed pre-rinse tank should preferably contain an aqueous KOH pre-rinse solution which can be obtained as a product recycled from re-purified spent KOH solution generated from cook step, which will be discussed in greater detail below. If spent KOH solution wash is being re-used in the pre-rinse tank, the expected concentration of such KOH pre-rinse solution would be approximately 4-8%. The water, which maybe seawater, and/or dilute KOH solution, is recirculated through the processing basket during the pre-rinse to dissolve sea salt and Potassium Chloride (KCl) deposits and to wash sand and other particulate matter from the seaweed. Preferably, the seaweed is agitated during this process to enable maximum contact between the pre-rinse solution and the salt residues on the seaweed, and to enable sand and other particulates to be loosened and released from the seaweed. The processing basket is hoisted by crane from the pre-rinse tank, drained, and then lowered into a cooking tank for the KOH cook step. The cooking tank preferably contains 8-12% by weight KOH aqueous solution maintained at approximately 75C (minimally 60C and maximally 80C). The KOH solution is recirculated through the seaweed in the processing basket to provide agitation of the seaweed. The agitation is beneficial in that it ensures that the hot KOH contained in solution will readily reach the entire batch of seaweed. Preferably the cooking vessel should also be equipped with an agitator, to provide additional mechanical mixing during the cooking process. This can be a simple propeller-type clamp-on stirrer.

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Two chemical transformations occur while the carrageenan containing seaweed is subjected to the cooking step in the presence of KOH. The first transformation is desulphation. Desulphation occurs when a sulfate group bonded to the 6position of the galactose units of a carrageenan polymer molecule is removed by the K+ ions to form KSO4 (Acid Potassium Sulphate) in solution. The moderate temperature of the KOH cook sufficiently weakens the tertiary sulphategalactose bonds to enable the strong K+ ions from the KOH solution to remove the sulphate group from the galactose by creating potassium sulphate salt, in solution. The second reaction step is a dehydration of the desulphated product to create the recurring 3,6 anhydrous galactose polymers. The OH- ions from the KOH solution react with the tertiary and secondary bonded H+ groups at the 3 and 6 positions to form the anhydrous kappa carrageenan polymer plus water. Subsequently, a reorientation of the polymer occurs to create a more stable geometry. The net result of the two reaction steps and the subsequent reorientation is sulphate removal by ring formation. The chemical reactions are optimised below the melting point of the carrageenan within the seaweed (at approximately 80C) and above the minimum dissolution temperature of the carrageenan (which is approximately 60C). If cooking temperatures are maintained in this range (i.e. between 60 - 80C), then both steps will readily occur. Through each of these chemical changes, a change in the monitored energy is expected, due to activation energy requirements for each of the reactions.

Note: The US Patent 5801240 is based on using, at this stage, a redox meter to monitor the process and determine the endpoint efficiently. In its absence the duration of cooking will need to be determined by experience. According to the strength of the KOH solution that is used, it will be between 2-3 hours approximately. The choice of temperature will also influence cooking time. The refractive index of the aqueous KOH cooking solution can be monitored by conventional means, e.g. a refractometer, in order to track changes in the concentration of salts in the KOH. Once the reaction equilibrium of the reorientation step has been reached, the KOH cooking process is complete. Typically a cooking time of about 2 hours for 12% KOH w/w, or 3 hours for 8% KOH w/w can be expected. This KOH concentration results in a cook mixture having a pH of between 12-14, which is very corrosive and must be handled with extreme caution. The processing basket is removed from the KOH cooking tank and is allowed to drain solution back into the cooking tank. Upon contact with the carrageenan, the KOH solution will take on a brown, brackish appearance. The pigments which contaminate the KOH will discolour future batches of carrageenan processed in the KOH. Colouration impacts negatively upon the perceived value of the PES product, so efforts need made to limit the extent of colouration due to pigment transfer from the aqueous KOH solution. To that end, the aqueous KOH solution is recirculated through an active carbon filter. In this way, dissolved sugars, cellulose, and seaweed pigments are removed from the KOH solution. The KOH solution can then be titrated to determine its concentration, and then buffered with KOH powder to re-establish an 8-12% by weight KOH solution for the processing of subsequent batches of seaweed. When the KOH solution has been sufficiently spent during the processing of repeated batches of seaweed, it will no longer be practical to filter and buffer the KOH solution for re-use in the cooking tank. The cooking tank will then be refilled with fresh 8-12% by weight KOH solution for further seaweed cooking cycles. The old spent solution can be diluted to form the pre-rinse solution mentioned earlier.

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Note: Eucheuma denticulatum cooking treatment may preferably be undertaken with Calcium Hydroxide (CaOH) at about 7% by weight or Sodium Carbonate (Na2CO3). The use of Sodium salts for making iota carrageenan appears to be covered in United States Patent 6063915 It is important from this stage onwards to maintain clean and sanitary conditions to prevent bacterial and fungal recontamination of the product, if it is to be of Food Grade standard. The processing basket, after draining, is moved by overhead crane over and lowered into a neutralizing wash tank for the neutralising step. The wash tank can contain fresh water, or preferably should contain a dilute solution of mineral acid of a type which will not denature the carrageenan. The use of dilute Hydrochloric Acid (HCl) is preferred, as it will significantly decrease the time required for the neutralisation of the residual KOH and its removal from the seaweed. The effective wash cycle time can be reduced from between 1-2 hours to less than 1 hour with the use of dilute (approximately 0.1M) Hydrochloric Acid. In order to increase the efficiency of the neutralisation process, the pH of the neutralising wash tank requires monitoring. This can be efficiently carried out using a conventional pH meter. As soon as the desired pH (of approximately 8-9) is reached, the neutralising process will be stopped by removing the processing basket from the neutralising wash tank. At this point the crane or hoist will lift the processing basket out of the neutralising wash tank, which will allow excess wash to drain back in to the tank, and then lower the processing basket into a final rinse tank containing fresh water. If required, a further bleaching step, using for example, dilute Sodium Hypochlorite (NaClO) solution, can take place at this point to remove undesirable colours from the product. The final rinse step will remove any significant amount of residual KOH and mineral acid residues from the carrageenan containing seaweed. The spent rinse solution from the final rinse step will be somewhat alkaline, and might also be recycled for use in the pre-rinse step discussed above. After the final fresh water rinse step, the processing basket is removed by crane, drained, and the seaweed is dumped from the processing basket onto a clean platform. It is placed onto a conveyor belt and is fed into a hammermill with a 2" screen for a wet chop. After wet-chopping, it is then necessary to remove a large quantity of water from the seaweed product by drying. The water content is reduced from approximately 90% to approximately 12%. Mechanical drying means, such as a drum-roller, or a drying centrifuge can be used to force excess water from the seaweed prior to airdrying. The regulatory requirements for food-grade PES are for a moisture content of 12-15% (see Appendix 2). This can be achieved in a variety of ways, usually involving blowing warm dry air through the product, for example, over a grating or in a fluidised bed, or by using a drum-drier. If a lower-value non-food grade product is needed, then outdoor drying on concrete pads is sufficient it will become contaminated by inert ash, bacteria and fungi. Further processing of the PES product will generally be to particular customer application specifications. For example, it may be further dry chipped and/or milled to a specified particle size. Additionally, the product may be passed over magnets in order to remove any metal impurities prior to being bagged or placed in drums for sale. The yield for the process is typically in the order of 40 - 45% on dry seaweed basis. Gel strengths may typically be 550 g/cm (at 1% solution strength) but will vary according to the quality of the incoming dried seaweed feedstock and the skill and experience of the processing staff.
-2

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The chemicals used in the process are commonplace commodities. Nevertheless they should be sourced with care and only Food Grade quality used, to ensure, amongst other issues, that they contain only low or zero levels of heavy metal impurities. This is because the UN, European Union, Chinese and USA, specifications for food grade PES require low heavy metal analyses

Flow chart for the production of seaweed flour and PES/PNG carrageenans

Source: Bixler, H.J. 1996. Recent developments in manufacturing and marketing carrageenan. Hydrobiologia, 326/327 pp35-57. Notes on Flow Chart:

1. The use of the term Extraction in the flow chart is incorrect. The KOH acts on the carrageenan within the cellulose matrix of the seaweed and no extraction takes place. Quite to the contrary, active steps are taken to minimise extraction, since this would lead to production losses.

2. PES and PNG are equivalent terms. PNG is Philippines Natural Grade. Seaweed Flour (SF) is typically Petfood Grade.

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Appendix 2 Email Correspondence with European Commission Directorate-General for Health and Consumer Protection and with the UK Food Standards Agency
Note: This is an email strand, therefore is in reverse order. Dear Mr Kalinowski, The recent Directive 2009/10/EC has updated the purity criteria for E 407a. The section related to the "definition" has not been modified and no party has expressed its concerns over the alkaline source (namely KOH) during the manufacturing process of E 407a. According to this section, it is stated that "Processed eucheuma seaweed is obtained by aqueous alkaline (KOH) treatment of the natural strains of seaweeds Eucheuma cottonii and Eucheuma spinosum, of the class Rhodophyceae (red seaweeds) to remove impurities and by fresh water washing and drying to obtain the product..//..". I therefore also share the view that KOH has to be considered as THE only permitted alkaline treatement during the manufacturing process of E 407a. Although EU specifications tends to align with other sources, like JECFA specifications, there are quite often deviations between the two set of specifications. Best regards Stphane Brion European Commission Directorate-General for Health and Consumer Protection Unit E3 - Chemicals, contaminants and pesticides. 101 rue Froissart 1049 Brussels tel. +32 2 29 84 968 fax : +32 2 29 91 856 New E-mail: stephane.brion@ec.europa.eu

From: mail@oaklea.co.uk [mailto:mail@oaklea.co.uk] On Behalf Of pk@oaklea.co.uk Sent: Tuesday, June 02, 2009 2:02 AM To: BRION Stephane (SANCO) Subject: Opinion on E 407a (Processed Eucheuma Seaweed) Dear M. Brion, We would appreciate your help and advice.

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We asked the UK Food Standards Agency to give an opinion on the specific use of potassium hydroxide (KOH) in the manufacture of E407a. You will see from the string of correspondence below that their interpretation of COMMISSION DIRECTIVE 2008/84/EC is that only KOH may be used as an alkali. We would argue that many written descriptions of the process in journals and patents mention the use of other (much cheaper) alkalis like NaOH and CaO or Ca(OH)2. Furthermore, it is almost impossible to purchase food-grade KOH without NaOH being present as an impurity. We would also draw your attention to the current FAO/WHO Codex Alimentarius, which quotes the 68 JECFA (2007) monograph and states Processing consists of soaking the cleaned seaweed in alkali for a short time . Further, the USA Code of Federal Regulations (Revised 2007) Title 21 Section 172.620 Carrageenan is silent on the use of alkali. Finally, DIRECTIVE 2008/84/EC does not stipulate the use of KOH (or indeed any alkali) for E407 production - yet E407 is simply a purer form of E407a! Could it be possible that when drawing up the original Commission Directive 96/77/EC, the authors simply meant to indicate (KOH) as an example of an alkali that might be used? If they had meant it to be absolutely specific and exclusive would they not have used a stronger wording and not merely brackets? We have no vested interest in the outcome of this argument, since we are merely consultants advising the UK Governments Darwin Initiative to support measures to protect biodiversity in poorer countries. We are anxious to give them the best advice possible and create a persuasive Business Plan. The use of cheaper (yet scientifically and technologically acceptable) alkalis will clearly improve the chances of this project becoming reality. We look forward to your response. With Kind Regards, Piotr Kalinowski. Director. Oaklea Ltd ------------------------------------------------------------------------------------------------------------------------------th

From: Mohammed.Din@foodstandards.gsi.gov.uk Sent: 21 May 2009 15:10 To: pk@oaklea.co.uk Subject: RE: Opinion on E 407a (Processed Eucheuma Seaweed) - (Our Ref ADB 33/203 CL)

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Dear Piotr, The purity criteria specification only states alkaline treatment with KOH in the process. Therefore, the use of alternative alkalis in the process, or the sterilisation and drying of the seaweed without alkali treatment would not comply with the legislation. If you wish to amend the purity criteria specifications to include alternative processes, then the European Commission should be contacted directly. Regards, Mohammed Din Food Additives Branch Novel Foods, Additives and Supplements Division --------------------------------------------------------------------------------------------------------------------------------Dear Mohammed, Thank you for your quick and concise reply. I understand your interpretation of this legislation and will, of course, ensure that our recommendations for Eucheuma processing, in order to make E407a for EU destinations, will fully comply with the Purity Criteria as published.

Can I ask if your reply also covers our second question i.e. can non-alkali treated but sterilised and dried K. alvarezii (syn. Eucheuma cottonii) seaweed, be used as a food additive in the EU? With Kind Regards, Piotr Kalinowski. Oaklea Ltd.

From: Mohammed.Din@foodstandards.gsi.gov.uk [mailto:Mohammed.Din@foodstandards.gsi.gov.uk] Sent: 18 May 2009 13:04 To: pk@oaklea.co.uk Subject: Opinion on E 407a (Processed Eucheuma Seaweed) - (Our Ref ADB 33/203 CL) Dear Piotr, Thank you for your email query to my colleague Clifford Gedling, regarding the Processed Eucheuma Seaweed (E 407a ). All additives approved within the EU have to comply with specific purity criteria, which define the chemical composition of each additive and ensure the quality and safety of additives used.

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The definition of Processed Eucheuma Seaweed (PES) in COMMISSION DIRECTIVE 2008/84/EC, laying down specific purity criteria on food additives other than colours and sweeteners (codified version) states that "E407a is obtained by aqueous alkaline (KOH) treatment of the natural strains of seaweeds Eucheuma cottonii and Eucheuma spinosum, of the class Rhodophyceae(red seaweeds) to remove impurities and by fresh water washing and drying to obtain the product". The specifications allow further purification, which "may be achieved by washing with methanol, ethanol or propane-2-ol and drying." These three substances are only allowed to be present at a level "Not more than 0.1 % singly or in combination" in the final specification of E 407a. The purity criteria specification only states alkaline treatment with KOH and therefore, the use of alternative alkalis in this process would not comply with the legislation. If you wish to amend these specifications to include alternative processes or enquire further on the status of E 407a, you should contact the European Commission directly via the following contact:

Stephane.BRION@ec.europa.eu I trust the information provided is beneficial. However, if you require any further assistance, please do not hesitate to contact me. We are conducting a customer survey and would like to know whether you are happy to be contacted. If you are happy you need do nothing further, if you do not wish to be contacted please respond to this email with "No" in the title. Regards, Mohammed Din Food Additives Branch Novel Foods, Additives and Supplements Division --------------------------------------------------------------------------------------------------------------------------------Dear Mr Gedling, I would welcome your advice as to the interpretation of Commission Directive 96/77/EC, amended as 2004/45/EC, relating to food additive E407a Processed Euchema Seaweed. As part of the Darwin Initiative (funded by DEFRA and managed by the Operation Wallacea Trust) my company is contracted to create a business plan that would encourage local Indonesian seaweed farmers to gain value-added from their raw product. This would increase their income - with the anticipated effect of reducing their ever-greater fishing pressure, which is now endangering some of the most ecologically diverse coral-reefs in the world. Currently, such Euchema cottonii seaweed (now renamed Kappaphycus alvarezii) is dried by the farmers, baled and sent to large factories located in the major cities of Indonesia or elsewhere in SE Asia for conversion to the finished food additive. Our intention is to set up a small-scale factory to directly process the seaweed, dried or fresh.

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Information on this chemical conversion process is largely limited to certain FAO publications and examination of patents which reveal prior art. It would seem from these documents that a number of alternative alkalis, calcium oxide (CaO), calcium hydroxide (Ca(OH)2), sodium hydroxide (NaOH) and potassium hydroxide (KOH) can be used in the process, either singly or as mixtures. KOH is sometimes used, because it can both act in desulphation by K+ ions and in chemical dehydration of the galactose units of the carrageenan polymer by OH- ions. This same effect can also be achieved, often at much less cost, by using the other hydroxides quoted, together with a very small percentage of added potassium chloride (KCl). The dried raw seaweed already contains a substantial quantity of KCl (8%), so by carefully choosing the process steps, even the need for KCl can be reduced significantly when using alkalis other than KOH. The Commission Directive states Processed Euchema Seaweed is obtained by aqueous alkaline (KOH) treatment of natural strains of Euchema This suggests that only KOH may be used. Yet, as mentioned above, other common (foodgrade) alkalis are as effective, and often cheaper. I note that the FAO/WHO Codex Alimentarius quotes the 68 JECFA (2007) monograph and states Processing consists of soaking the cleaned seaweed in alkali for a short time Further, the USA Code of Federal Regulations (Revised 2007) Title 21 Section 172.620 Carrageenan is silent on the use of alkali. Thus these two major alternative food-regulating bodies do not specify KOH as a process requirement.
th

Can you please enlighten me on how to interpret this EC Directive? To add a further complication, a recent World Patent (WO 2004/016656 A1) suggests that by using fresh seaweed the need for any chemical processing is unnecessary. This option may be a possible alternative in our report.

Can you therefore please also advise on the status of non-alkali treated, but sterilised and dried K. alvarezii seaweed, as a food additive in the EU? Thank you for your help. With Kind Regards, Piotr Kalinowski. Director. Oaklea Ltd

email: pk@oaklea.co.uk

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Appendix 3 Current Commodity, Fuel and Labour Prices

These prices have been established by contacting manufacturers or sellers in the Asian area using Alibaba and EC Plaza websites - two premier B2B online marketplaces. In some cases, specific to Indonesia, Opwall Trust local staff have been used. Prices are current for April - June 2009. Whilst currency exchange rates are always changing, an approximation for June 2009 is 1USD = 10,000 IDR = 0.6 GBP

All prices at bulk rates e.g, Full Container Load (FLC*) and Free on Board (FOB**) basis see Note below.

Carrageenan (PES/SRC): Food-grade USD 5.97 /kg Petfood-grade USD 5.19 /kg Note: Average of two quotations for each grade from Indonesia, Philippines and China to provide broadest coverage. Dried Seaweed (K. alvarezii): IDR 5,000 /kg ex Kaledupa (USD 0.49 /kg)
(10)

KCl: USD 738 /MT Note: From Indian sources - China is applying 105% export tax!

CaO: USD 554 /MT

KOH:

90% strength - USD 1241 /MT

95% strength - USD 1478 /MT

NaOH: 99% strength - USD 466 /MT

HNO3:

68% strength USD 455 /MT H2SO4: 98% strength USD 182 /MT

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H3PO4: 85% strength: USD 680 /MT Note: Use Food Grade only - Technical Grade attracts penal Chinese taxes! LPG: IDR 3000 /litre (USD 0.30 /litre)
(11)

+ 20% for delivery = USD 0.36 /litre

(10)

Diesel: IDR 5,358 /litre (USD 0.53 /litre) FOB or IDR 6,028/litre (USD 0.60 /litre) delivered to Kaledupa

Labour: The Indonesian Government has determined that the minimum monthly wage of labour in Kaledupa is IDR 900,000 per month
(10)

We propose a salary for manual labour of IDR 2,000,000 per month (USD 200 per month) Manager and Technical (e.g. Quality Control) staff should be at least one and a half to double the manual rate - about IDR 3 4 million (USD 300 400 per month) Note:

* FCL (Full Container Load) is a standard twenty-foot (or forty-foot) container that is stuffed (loaded) under the risk and
account of the shipper or consignee - in practice it means whole container is intended for one consignee. Typically a twenty-foot container holds 20-22 MT net. In general, a FCL container attracts lower freight rates than an equivalent weight of loose (break bulk) cargo. Also called full trailer load (FTL)

**FOB (Free On Board) is the price offered on condition that the seller meets all costs until the goods are loaded on the
ship at the port of export. The buyer meets all further costs. Note:

The prices for liquid raw chemicals (the concentrated acids) reflect packaging in relatively small manhandleable plastic drums. Not only will this result in a disposal problem once all local households and seaweed farmers have taken their needs, but prices are invariably higher than when purchased in bulk. Therefore consideration should be given to buying in larger transportable tanks called Intermediate Bulk Containers (IBCs), usually about 1,000l in capacity. This would require a forklift with pneumatic tires or a rough terrain forklift. As with diesel fuel, bunding to contain spillages would be essential. Purpose-made IBC plastic bunds are commonly available. If they were to be supplied on a non-returnable basis then they would make ideal storage tanks for the farmers of Kaledupa to store the delivered liquid fertiliser.

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Appendix 4 Fertiliser calculations of daily waste-stream output

Mass per liter of 5% KOH solution = Molarity x Molar Mass So Molarity (M) = Mass per litre of 5% KOH solution / Molar Mass So Molarity of 5% KOH = 50 g/litre / 56 = 0.89M Daily Output KOH = 419 kg in 9,300 litre water Molarity of 68% Nitric Acid = 16M Molarity of 85% Phosphoric Acid = 14.8M Molarity of 35% Hydrochloric Acid = 11.3M (estimated) Molarity of 98% Sulphuric Acid = 18M All Nitric, Hydrochloric or the assumed Phosphoric Acids have a normality (N) of one and thus a single H+ donor. The single H+ and OH- are self-cancelling and neutralisation will result: Note: Sulphuric acid is 2N (2 x H+) Neutralisation formula: A(H+) + B(OH-) = AB + H2O Where: A = Acid and B = base For neutralisation to occur: Am x Av = Bm x Bv Where: m = molarity v = volume So Av = Bm x Bv / Am x n So for Nitric acid Av = 0.89 x 9,300 / 16 x 1 = 517 litres of conc acid n = normality

So for Phosphoric acid Av = 0.89 x 9,300 / 14.8 x 1 = 559 litres of conc acid So for Hydrochloric acid Av = 0.89 x 9,300 / 11.3 x 1 = 732 litres of conc acid So for Sulphuric acid Av = 0.89 x 9,300 / 18 x 2 = 230 litres of conc acid Molecular weight HNO3 = 63 N = 22.2% Molecular weight H3P04 = 98 P = 31.6% Concentrated HNO3 is 68% pure acid so 517 litres = 315.6 litres of pure acid = 78 kg of N Concentrated H3PO4 is 85% pure acid so 559 litres = 475.2 litres of pure acid = 150 kg of P

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Therefore a near 1:2 ratio of N:P as would be wanted for fertiliser. So adding 50% of each acid requirement gives required 1:2 ratio. Therefore 259 litres of 68% Nitric Acid and 280 litres of 85% Phosphoric Acid will be required to neutralise daily output of KOH of 419 kg in 9,300 litres water. However 550 kg of K present in waste stream. So final dry fertiliser N-P-K ratio (by weight) = 78:150:550 = 1:2:7 approximately. In 9,300 litres of water (9.3 MT of concentrated waste stream) the resulting N-P-K ratios (by weight) become 0.8:1.6:5.9 a high-potash fertiliser. But see note below Note: There is a reporting convention for N-P-K fertilisers:

Such fertilisers are named according to the content of these three elements. For example, if nitrogen is the main element, the fertiliser is often described as a nitrogen fertiliser.

Regardless of the name, however, they are labelled according to the relative amounts of each of these three elements, by weight (i.e. mass fraction).

The percent of nitrogen is reported directly. However, phosphorus is reported as the mass fraction of phosphorus pentoxide (P2O5), the anhydride of phosphoric acid, and potassium is reported as the mass fraction of potassium oxide (K2O), which is the anhydride of potassium hydroxide.

Mass fraction conversion to elemental values:

Since the NPK reporting basis just described does not give the actual fraction of the respective elements, some packaging also reports the elemental mass fractions. The UK fertiliser-labelling regulations allow for additionally reporting the elemental mass fractions of phosphorous and potassium, rather than phosphoric acid and potassium hydroxide, but these must be listed in parentheses after the standard values. The regulations specify the factors for converting from the P2O5 and K2O values to the respective P and K elemental values as follows:

In phosphorous pentoxide, the element phosphorous constitutes 43.6% of the total mass of the compound. Thus, the official UK mass fraction (percentage) of elemental phosphorus is 43.6%. [P] = 0.436 x [P2O5] or [P2O5] = 2.29 x [P] Likewise, the mass fraction (percentage) of elemental potassium is 83%. [K] = 0.83 x [K2O] or [K2O] = 1.21 x [K]

Applying these mass fraction percentages, the above 0.8:1.6:5.9 N-P-K in the waste stream should be officially termed 0.8-3.7-7.1 N-P-K fertiliser but still contains, by weight, 0.8% elemental nitrogen (N) 1.6% elemental phosphorus (P) and 5.9% elemental potassium (K).

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The monetary value of this waste stream can be calculated, using current world prices N @ $0.84 /kg of N P (as P2O5) @ $0.96 /kg $0.42 /kg of P K (as K2O) @ $1.60 /kg $1.33 /kg of K Using these values: 78 kg of N = $66 150 kg of P = $63 550 kg of K = $732

(39)

for:

Total N-P-K value of waste stream = $861 daily or $258,000 per annum. Alternative calculation when using Sulphuric Acid. Molecular weight H2SO4 = 98 S = 32.7% Concentrated H2SO4 is 98% pure acid so 230 litres = 225 litres of pure acid = 74 kg of S Molecular weight K2SO4 = 174 S = 18.4% 2K = 44.9% So for 74 Kg Sulphur there will be 403 kg of Potassium Sulphate present, utilising 181 kg of K from the waste stream. Therefore if Sulphuric Acid were used on cost grounds, then the equivalent of 403 kg of Potassium Sulphate would be created. Since it will be in a fully ionised solution it is only a theoretical compound. Note: An unknown but useful extra quantity of Sulphate will also be added from the dehydration reaction-step during hot KOH treatment, creating yet more Potassium Sulphate compound. Note: The use of CaO in the manufacture of carrageenan is permitted in non-EU countries. This is beyond the scope of this report but, in the event of its use, careful consideration must be given to choice of acid for neutralising the waste stream.

If it is proposed to use the waste stream as fertiliser then only Nitric Acid will give rise to soluble Calcium Nitrate (Ca(NO3)2) according to the following reaction:

Ca(OH)2 + 2HNO3 = Ca(NO3)2 + 2H2O

The use of Phosphoric Acid may give rise to sparingly soluble Tricalcium Phosphate (Ca3(PO4)2 - apatite) according to the following reaction:

2 H3PO4 + 3 Ca(OH)2 = Ca3(PO4)2 + 6 H2O

(40)

It is particularly insoluble in soils above pH 6 and particularly in those containing free calcium carbonate be found in Karst areas such as Kaledupa.

. These are to

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However, by adding Sulphuric Acid at the same time it may well then form the more soluble Calcium Dihydrogen Phosphate plus also Calcium Sulphate (gypsum) according to the following reaction: Ca3(PO4)2 + 4 H2SO4 + 2 H2O = 2 CaSO4.2H2O + Ca(H2PO4)2.H2O This mixture is known as superphosphate of lime.

The sole use of Sulphuric acid may give rise to sparingly soluble Calcium Sulphate (CaSO4 gypsum and/or anhydrite) according to the following reaction: Ca(OH)2 + H2SO4 = CaSO4 + 2 H2O In drier parts of the world some soils are high in sodium (sodic soils). High sodium soils often have serious structural problems or develop them when irrigated and cropped. Calcium sulphate is commonly added to these soils and aids markedly in their reclamation by replacing the sodium with calcium unlikely that its application will be of benefit.
(41)

. Unless such soils are found on Kaledupa it is

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Appendix 5 Methodology
Moisture Content: Weighed material was placed in oven @ 110C until no further weight change was observed usually 1-1.5 hours. Viscosity: An analogue LVF Brookfield viscometer (recently serviced and re-calibrated by Brookfield Viscometers Ltd) was used. All measurements were made in a 1% solution (either with or without 1% KCl) at 75C in a 600ml beaker - as recommended by Brookfield. Gel Strength: A commercial texture analyser was too expensive to buy or to sub-contract third-party measurements. A rig was designed, using the Brookfield adjustable stand and their No.1 spindle to bear down on the gel plate, located on a tared Ohaus electronic balance. The maximum weight reading at the point of breakthrough was noted and termed Oaklea units. Whilst absolute values of gel strength were not possible, this method allowed for reasonably accurate comparisons to be made between gel samples. pH: A Thermo Fisher Scientific 2 Star benchtop pH/redox meter was used with a special combination electrode designed to operate in the high pH and temperatures of the process. A test run usually consisted of placing a known weight (150 250 g) of dried seaweed in a 2litre Pyrex beaker and adding sufficient solution to cover the solid. It was placed in a SciChem waterbath at a pre-determined temperature and for a known time. The pH was measured before and after. The seaweed was rinsed in tapwater until pH was about 11. After weighing, it was coarsely chopped using a domestic meat mincer. The moisture content was determined and used to calculate the weight required for a 1% solution. This was made up using either tapwater, or tapwater + 1% KCl, and heated with continuous stirring on a Heidolph MR 3004 magnetic hotplate stirrer to 80C. The hot gel was briefly blitzed using a stick blender to break up any remaining solid pieces and reheated to 80C. The hot solution was placed in a dish and allowed to set for three days at about 10C, so as to temper the gel.

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