With 76.38% of its territory being bodies of water, Indonesia’s agroindustry holds a deeply vast potential. One of the sectors that holds the most potential yet is often overlooked is the seaweed industry, which has grown substantially in recent years.
Based on FAO’s 2019 data, Indonesia holds the second highest production in global seaweed production behind China, with almost all of them being cultivated instead of collected from the wild. For Eucheuma cottonii seaweed, Indonesia is the number one producer in the world, producing more than 80% of its global supply. In 2019, it is recorded that the country’s export of seaweed generated US$324.84 million, growing 11.31 percent from the US$291.83 million figure in 2018. In the five years between 2014 and 2019, the national average seaweed exports rose 6.5 percent per year. While only barely scratching the surface, these statistics show Indonesia’s seaweed industry’s potential of growth.
The opportunities for cultivating seaweed are spread across most of Indonesia, due to geographical conditions that allow almost all types of seaweed to be cultivated in all regions. There are currently at least 550 types of seaweed with high economic value that can be found all over the country. Of all the regions in Indonesia, the ten highest producers of seaweed is South Sulawesi, Central Sulawesi, East Nusa Tenggara, East Java, Southeast Sulawesi, West Nusa Tenggara, Bali, Gorontalo, Maluku, and West Java.
The produce itself is a staple across the globe, particularly in East Asia and Southeast Asia, where it can be found in various forms; as a stock ingredient, wrapping for rice-based dishes, snacks, or food topping. Seaweed can also be processed into food ingredients such as jelly and cakes. It can produce ingredients for algin, carrageenan and fulcelaran that benefit the pharmaceutical, cosmetic and textile industries. In Indonesia itself, carrageenan extracted from edible seaweed is used for various jellies and desserts. Beyond Asia, seaweed is also consumed in South Africa, Belize, Peru, Chile, the Canadian Maritimes, Scandinavia, South West England, Ireland, Wales, Hawaii and California, and Scotland. More than just commodity, seaweed is also valuable for the environment as they produce a significant amount of the world’s oxygen.
Amidst the growth of the industry, there are still challenges to overcome to realize its full potential. Of the aforementioned 550 types of seaweed in Indonesia, we currently only cultivate three types: Gracilaria (for jelly, cultivated in brackish water), Eucheuma cottonii, and Eucheuma spinosum (for carrageenan, cultivated in coastal areas). The raw seaweed material commonly found in Indonesia is also of lower quality. Furthermore, domestic fishermen and industry players alike find the logistic costs for the raw material too expensive. Another problem is fluctuating prices due to the high demand for seaweed.
While the challenges that the local seaweed industry is presently facing still stands, this situation also means that the unrealized potential is very high. With an enormous global market and millions of hectares of potential seaweed cultivation area in Indonesia, investment opportunities in the growing industry are highly promising. Furthermore, the development of the industry is also supported by the Indonesian government, as evidenced by the issuing of Presidential Regulation No. 33 Year 2019 on the Road Map of Seaweed Industry Development 2018-2021.
The government also provides fiscal and non-fiscal incentives, which include tax allowances and import customs relief and a one map policy to prevent overlapping land use, respectively. To accelerate this policy, various government ministries are working together to resolve overlapping problems, including in the seaweed industry.
The national seaweed industry needs to continue diversifying processed seaweed products to offer a variety of high-quality items for domestic and international consumers. Lastly, more research and joint studies on seaweed processed product development between local and global institutions is needed. Beyond foodstuff, seaweed can also be processed into medicine, edible and environmentally-friendly packaging, animal feed, fertilizer, and fuel.
With more investment in the sector, huge opportunities will flow from the development of a healthy, sustainable, and globally competitive industry.