Seaweed firm shifts to coal to cut growing fuel expenses

Faced with a mounting fuel expenses, Shemberg Marketing Corporation (SMC) has taken the initiative of making an indigenous shift towards using coconut shell coal as fuel alternative.

SMC president and chief executive officer (CEO) Benson U. Dakay said the global oil crisis served as a wake-up call to the manufacturing companies to return to the basic of addressing fuel requirements by using indigenous materials such as the coconut shell.

The company, which uses bunker-fired boilers used to spend about P20 million a month for fuel expenses. If the company shifts to coal or coconut shell-fired boilers it would only spend about P6 million a month.

Shemberg is set to invest around P60 million to convert its six bunker-fired boilers of its seaweed processing companies - Shemberg Marketing Corporation in Mandaue City, Shemberg Biotech Corporation in Carmen, and Polyssacharide Corporation in Zamboanga City - into solid-fired boilers

By November this year, these Shemberg plants will start using coco shell to power its plants' machinery.

"We won't use oil anymore, we are poised to shift to coal made from coconut shell in the next three months," Dakay announced during the recent business forum hosted by the Mandaue Chamber of Commerce and Industry (MCCI).

Dakay further foresees other benefits with the shift, aside from just cutting on fuel cost, the move would also benefit the rural communities giving them a means of livelihood while the demand for coconut shell increases.

Dakay said Shemberg's plants would need about three million kilos of coconut shell a month. Pegged at P2 per kilo, the total expense would be P6 million a month.

He said converting bunker-fired boilers into facilities that use coal or coconut shell requires a substantial investment, however, he stressed that the benefit will manifest in the long run as coal and coconut are cheaper.

Coconut shells cost about P1.7 per kilo while coal costs about P1.8 per kilo. The price of bunker oil today is P20 per liter. But this may soon go up to P30 per liter.

Shemberg is the largest carrageenan exporter in the Philippines. Dakay said it has to adopt a more practical system, such as using the coal and coconut shell materials in order to stay competitive in the world market.

"We cannot pass on the increasing cost of fuel to the customers. We are also fighting for cost issues with other countries producing carrageenan," Dakay said.

The three Shemberg companies have been consuming around one million liters or 5,000 barrels of bunker oil amounting to around P15 million every month.

"When we have had fully converted our boilers, the pressure for oil would ease up. The 5,000 barrels can be used by the other sectors. This volume is enough to run 3,000 cars," Dakay cited.