Potential scale of Scottish seaweed-based industries: research paper

E Status of the Current Seaweed-based Industry in Scotland – Method and Detailed Results

E.1 Introduction

E.1.1 This appendix provides further detail on the approach to, and outcomes of, the desk-based review and stakeholder consultation undertaken to inform the Scottish seaweed-based industry baseline presented in Section 4 of the main report.

E.1.2 The baseline information presented is based on information sources reviewed and 22 interviews with seaweed-based businesses and wider stakeholders, conducted in early 2020. It is therefore important to note that the baseline presented is based on information provided at that time and as such may underestimate the current level of activity. This is acknowledged as a limitation of the study in Section 4 of the main report.

E.2 Historic Context

E.2.1 Seaweed harvesting in Scotland has been ongoing for hundreds of years, being used as fertiliser for poor coastal soils, and for soda ash derived from burning kelp and wracks (Angus, 2017). Its main industrial use was for a source of phycocolloids; alginates were first extracted from seaweed in Scotland in 1883 but industrial production was not established in Scotland until 1930 by Cefoil in Kintyre (Burrows et al., 2018). This industry expanded and factories were built in Kames, Barcaldine and Girvan during World War II with new seaweed sources obtained from Norway, Iceland, Chile and Tasmania (Burrows et al., 2018).

E.2.2 As summarised by Burrows et al. (2018), in the late 1970s the alginate industry began to decline in Scotland due to increased competition from China. The Scottish alginate industries were taken over by Kelco/Alginate Industries Ltd. and the Barcaldine plant was closed in 1996 with Scottish alginate production concentrated in Girvan. The alginate arm of Kelco was then sold to International Speciality Products (ISP) in 1999, who then sold the alginate business in 2009 to FMC Corporation which became part of Pronova, a Norwegian producer. The factory at Girvan was downgraded from production to product blending/finishing, with production moved to Norway and with raw material supply coming from Iceland (Cefas, 2016).

E.2.3 Today, the volume of seaweed production from Scotland is not specifically recorded in the FAO database. Previous estimates of seaweed production in Scotland indicated that approximately 5,000 tonnes per year of wild A. nodosum are harvested in Scotland, with unknown quantities of subtidal kelp and storm-cast seaweeds collected (James, 2010). Another estimate suggests approximately 5,500 tonnes of seaweed was harvested in the Outer Hebrides with small amounts also harvested (mainly for food and agriculture) in the Orkney and Shetlands Islands (Viking Fish Farms Ltd., 2012).

E.2.4 Seaweed cultivation in Scotland remains a nascent industry. It started with trials to investigate their potential use as a form of bioremediation at fish farms, namely the Calbha salmon farm site at Loch Duart on the north west coast in 2004 (Sanderson et al., 2012). The Scottish Association of Marine Science (SAMS) established trial sites in the Sound of Kerrera, Oban, in 2012 and a grid system based at Port a' Bhuiltin in 2014 (Stanley et al., 2019). Other small-scale cultivation in Scotland has taken place as far south as Loch Fyne and as far north as Lewis and Shetland (Stanley et al., 2019).

E.3 Current baseline

E.3.1 The following sections describe the current status of seaweed-based industry activity in Scotland with regard to the types of businesses involved, the range of processing undertaken, the species and products produced, and the industry's locational distribution. An estimate of the socio-economic value of the sector per product market is also presented (i.e. turnover, GVA and employment).

Definition of the seaweed-based industry

E.3.2 For the purposes of this report, the baseline evaluation has considered companies, community groups or other types of organisation whose core business^[55] relates to seaweed with regard to the harvesting, cultivation, processing and/or production of goods containing seaweed^[56] within Scotland. Other actors within the seaweed-related industry, such as upstream supply chain companies providing equipment, or institutions/organisations involved in enterprise and R&D, are also described but are not considered quantitatively in the baseline.

Approach to characterising the current baseline

E.3.3 The information presented is based on publicly available information (e.g. from business websites; Companies House register; outputs of the Seaweed Review Steering Group) as well as information provided through consultation with seaweed-related businesses/organisations (n=12; note not all provided quantitative information) and wider stakeholders (n=10).

E.3.4 Seaweed-related businesses identified through searches and liaison with the Project Steering Group (PSG) were contacted via email and invited to engage with the study via a telephone interview^[57]. This invitation was circulated by the Scottish Seaweed Industry Association (SSIA) to its members (n=27)^[58] whilst another 8 seaweed-related businesses and an additional 15 wider stakeholders identified by the project team were contacted through direct approach^[59]. During interviews with businesses directly involved in the seaweed-based sector, information on the following was sought (see Appendix D for the full questionnaire):

• Type of products and proportion of business that relates to seaweed;
• Location of business;
• Location of markets;
• Type, source and volumes of raw material used;
• Processing of raw material and supply chain requirements;
• Current volume and value of activity (turnover);
• Operational and capital costs;
• Employment (number of FTE, skills shortage, location of the workforce);
• Constraints to current business;
• Future vision for the company, including identification of opportunities/new markets and any potential constraints, and vision for the sector as a whole in Scotland.

E.3.5 For the wider stakeholders, semi-structured telephone interviews were held, focussed on obtaining further information around their area of expertise or knowledge to further inform the analysis of the current status of the industry, future products, emerging market opportunities and growth potential.

E.3.6 A total of 22 interviews were conducted comprising seaweed-related businesses/organisations (n=12) and wider stakeholders (n=10). For confidentiality reasons these stakeholders are not listed in the report.

E.3.7 Whilst to the best of our knowledge the data presented captures most key seaweed-related businesses in Scotland, the General Data Protection Regulation and privacy issues meant obtaining an exhaustive list of seaweed-related businesses in Scotland, for example from CES or the industry association, was not possible. As such, it is likely that the data presented underestimate the scale of the sector, especially given the reported interest in the seaweed-based industry in Scotland and potential new entrants to the sector. Furthermore, it should be noted that for commercial confidentiality reasons, it has not been possible to provide disaggregated data for all sub-sectors of the industry, for example where 5 businesses or less are involved in the production of a specific product type.

E.3.8 Throughout the text, businesses are categorised by size using Companies House definitions which are shown in Table E1.

Table E1. Definition of company sizes

Company size and definitions

Micro-entities are those that meet at least two of: annual turnover of not more than £632,000; balance sheet total of not more than £316,000; and average number of employees must not be more than 10.

Small companies must meet at least two of: annual turnover of not more than £10.2 million; balance sheet total of not more than £5.1 million; and average number of employees must not be more than 50.

Medium-sized companies must meet at least two of: annual turnover of no more than £36 million; balance sheet total of not more than £18 million; and average number of employees must not be more than 250.

Any companies that do not meet the criteria for micro-entities, small or medium are large companies.

Source: Companies House (2019)

Overview of the current seaweed-based industry in Scotland

E.3.9 The vast majority of the current sector in Scotland utilises wild harvested seaweed sourced from Scottish waters, rather than cultivated seaweed. Therefore, the baseline text is necessarily focussed on these businesses, describing the type of businesses, supply chains, seaweed species used and products. The emerging industry activity related to cultivating seaweed is then described separately.

Businesses and supply chains – wild seaweed harvesting

E.3.10 Of the nine seaweed-related businesses involved in harvesting and/or processing of wild seaweeds in Scotland (for which information was sourced), seven are classed as micro-entities and two are classed as small companies as per Companies House (2019) definitions (Table E1).

E.3.11 The majority of micro-entities operate at a small-scale, harvesting wild seaweed by hand. Most of these businesses can be considered as artisanal operations, harvesting small amounts (up to a tonne of seaweed per annum) where the production process (harvesting, processing, production, and packaging) is done entirely in-house. In general, equipment requirements are low-tech (e.g. air-drying racks, drying ovens, mills, sieves and packaging material). Packaging, labelling and delivery logistics are also requirements. A generic schematic representation of the production and supply chain for these types of businesses is shown is Figure E1.

E.3.12 Some of the micro-entities harvest or process slightly larger quantities of seaweed (up to 50 tonnes per annum) and also employ the use of external businesses in the manufacture and packaging of their products (Figure E2). One company has more than one seaweed supplier, including one outwith Scotland, to ensure a reliable (constant) supply of seaweed (i.e. to de-risk the supply chain which in general is considered under-developed due to lack of investment in Scotland).

E.3.13 The companies defined as small by Companies House definitions, operate at a relatively large scale compared with the micro-entities, whereby seaweed is harvested mechanically (using a specially modified vessel with cutter) and/or by hand (sometimes with the use of a rake and vessel). These businesses harvest larger volumes of seaweed (over a thousand tonnes per annum) which are processed by drying and milling to individual end-user specifications which can be used directly or are subsequently sold to supply other companies that make seaweed-based products (depending on the application). A generic schematic representation of the production and supply chain for these types of businesses is shown in Figure E3.

Seaweed species and product markets

E.3.14 The species harvested in the greatest quantity in Scotland is A. nodosum (egg wrack), which is harvested both by hand and mechanically from the intertidal area.

E.3.15 A. nodosum is processed for direct use as animal feed and soil conditioners, as well as being used to produce liquid seaweed fertiliser extracts. It is also processed to customer specifications to supply other companies with A. nodosum for the production of human food products, and bioactives within the nutraceuticals and cosmetics industries.

E.3.16 Many of the micro-entities in Scotland tend to hand harvest a diverse range of intertidal seaweed species, including kelps, wracks, red and green seaweeds. Of these species the kelps L. digitata (oarweed), S. latissima (sugar kelp) and the red seaweed P. palmata (dulse) comprise the largest proportion of the total harvest. The uses and products produced in Scotland from these species include human foods and cosmetic products containing seaweed material. Aside from where seaweed is harvested and sold fresh (in one instance), these types of products are considered higher value 'speciality' seaweed products (see Figure 14 in Cefas, 2016).

E.3.17 The range of seaweed species harvested, the method of harvest and the maximum allowable harvest tonnage under Crown Estate Scotland licence^[60] are shown in Table E2. It should be noted that the maximum CES licensed harvest tonnages provided here only represent volumes of seaweed taken from CES-owned foreshore (i.e. approximately 50% of foreshore in Scotland) and are only stipulated for licensees where they intend to harvest larger amounts (i.e. 10's or 100's of tonnes per annum and above). The maximum licensed tonnages are based on stock and sustainable harvest assessments supplied by the licensee. It therefore does not necessarily represent actual harvested volumes and does not account for species harvested on private land not owned by CES, or for species harvested on smaller scales.

E.3.18 The seaweed 'activity mapping' exercise undertaken by the Seaweed Review Group in 2019 indicated that, at that time, there were 13 locations in Scotland in which wild seaweed harvesting was undertaken for commercial purposes. At nine of these locations landownership falls in some areas to the CES and in others to private landlords. A further four areas are solely under private landownership. The mapping exercise indicated that a total of up to 15,000 tonnes of seaweed was consented for harvest (per annum) under CES licence. The volume of seaweed harvested from privately owned land is not reported and hence not known.

E.3.19 Whilst information on the actual volume of seaweed harvested per business was sought during the consultation exercise in this study, this information was not always provided (especially where a large range of species are being harvested bit also due to commercial confidentiality), and not all businesses contacted engaged with the consultation. However, the outputs of the consultation (undertaken between February and May 2020) suggested that, at that time, businesses were not harvesting wild seaweed at the maximum volumes allowed under the CES licence. Based on information provided during the consultation it was estimated that in 2020, approximately 8,000 tonnes of wild seaweed was harvested (approximately 50% of the maximum allowed tonnage under CES licence) although it is acknowledged this is likely to be an underestimate for the reasons stated above and operations potentially being constrained in 2020 by COVID-19 restrictions..

E.3.20 The majority of seaweed-related businesses identified in this study sell their products mainly to retailers, and direct to consumers (e.g. cafes, restaurants, markets, or via online or shop sales). These are primarily within the locale of the business in Scotland, or otherwise within the UK. A few of the larger businesses also sell products to processors and wholesalers, sometimes via distributors, in the UK as well as internationally such as in Europe, the Middle East, and United States of America (USA).

Table E2. Species, method and maximum volumes of seaweed harvest under CES licence per annum in Scotland and seaweed product categories based on the consultation undertaken as part of this study (n=9)

Species	Harvest method	Maximum harvest tonnages under CES licence (tonnes) *	Product category
Ascophyllum nodosum (egg wrack)	Hand (including rake and nets from vessel) Mechanical using modified vessel	11,520.11	Horticulture Animal feed Bioactives (cosmetics, nutraceuticals) Human food
Fucus vesiculosus (bladder wrack)	Hand	249.47	Human food Bioactives (cosmetics, nutraceuticals)
Fucus serratus (serrated wrack)	Hand	200.65	Human food Bioactives (cosmetics)
Himanthalia elongata (thong weed)	Hand	101.46	Human food
Laminaria digitata (oarweed)	Hand	413.16	Human food Bioactives (cosmetics)
Laminaria hyperborea (tangle / cuvie)	Hand	50.94	Human food
Saccharina latissima (Sugar kelp)	Hand	9.76	Human food
Alaria esculenta (dabberlocks)	Hand	61.72	Human food
Porphyra sp. (laver species)	Hand	9.80	Human food
Palmaria palmata (Dulse)	Hand	55.98	Human food Bioactives (cosmetics)
Osmundea pinnatifida (Pepper dulse)	Hand	2.17	Human food
Chondrus crispus / Mastocarpus stellatus (Carrageen)	Hand	8.14	Human food Bioactives (cosmetics)
Ulva sp.	Hand	8.24	Human food Bioactives (cosmetics)

Maximum consented harvest volume per species under Crown Estate Scotland licence was provided by CES. It does not account for species harvested on private land not managed by CES, for which the volumes harvested are not known.

Note: The CES licensed harvest tonnages only represent the consented maximum volumes of seaweed to be taken from CES-owned foreshore (i.e. approximately 50% of foreshore in Scotland). Such licences are only required for licensees who intend to harvest tens or hundreds of tonnes of seaweed per annum and the maximum licensed tonnages are based on stock and sustainable harvest assessments supplied by the licensee (Appendix A). The tonnages presented therefore do not necessarily represent actual harvested volumes and do not account for species harvested on private land not owned by CES, or species harvested at smaller scales. Whilst information on the volume of seaweed harvested per business was sought during consultation for this study, volumes per species were not always provided and thus are not presented here. Furthermore, not all seaweed-related businesses that operate in Scotland were able to input into the study.

Source: Data provided by Crown Estate Scotland (May, 2020) and stakeholder consultation

Current seaweed cultivation activity in Scotland

E.3.21 At the time of the consultation (February to May 2020), there was only one company commercially cultivating seaweed in Scotland. No information regarding the species cultivated or the tonnage harvested was available. The farm is owned by a vertically-integrated company that acts as the producer organisation, intermediary and end-user selling products for human consumption (Stanley et al., 2019).

E.3.22 There are also two experimental seaweed farms off the west coast of Scotland (the Cutter's Rock farm in the Sound of Kerrera and the Port A'Bhuiltin in the Forth of Lorne between the mainland and the island of Lismore) managed by the Scottish Association of Marine Science (SAMS). The Cutter's Rock farm is the smaller of the two farms, comprising of a total 60m of double longlines (set up similar to a mussel farm). The site at Port A'Bhuiltin is 30 hectare in total, currently with a single 100 x 100 m grid system for growing of seaweed and pre-permission in place for another gird system. It should be noted that although the site is 30 hectare in size, not all of this area is suitable for cultivation due in part to the seafloor structure. The main species cultivated currently are Alaria esculenta, Saccharina latissima and Laminaria digitata. Biomass harvested from the Port A'Bhuiltin farm in excess of that utilised for R&D may be available to feed into the current supply chain. Information on the tonnages currently harvested were not available for confidentiality reasons.

E.3.23 Hence, some seaweed cultivated in Scotland is currently being used within the supply chain in Scotland, albeit in low volumes (no specific information on tonnages was obtained due to commercial sensitivities). Information obtained through consultation indicated that there are companies in the seaweed value chain in Scotland who are keen to utilise seaweed cultivated in Scotland in their products. Currently the high cost of cultivated seaweed (compared to wild harvested seaweed) does not make this economically feasible, although the higher cost could potentially be acceptable if cultivated seaweed only comprised a small proportion of the overall volume of raw material needed (e.g. enabling the business to indicate that the product contained some seaweed farmed in Scotland). However, these supply chain businesses are currently able to source seaweed from the global market (i.e. outwith Scotland) and hence are neither impacted by the lack of Scottish cultivated seaweed nor currently directly driving the demand for cultivated seaweed in Scotland (Stanley et al. 2019).

E.3.24 In general, information regarding potential seaweed cultivation activity 'in the pipeline' is not in the public domain and therefore cannot be disclosed. However, information obtained through consultation indicated that there were a number (< 10) of marine licence applications for seaweed farms around Scotland currently in process^[61].

E.3.25 The recent seaweed farming feasibility study undertaken for Argyll and Bute Council (Stanley et al., 2019) indicated that there are several companies that currently harvest wild seaweed that are interested in transitioning to cultivating seaweed. Consultation undertaken for this study (not exclusively with businesses currently wild harvesting seaweed) supported this to an extent. Three companies expressed an intention to cultivate seaweed, four had no current plans to cultivate seaweed although they would potentially be interested in the future if it was economically viable or higher value species could be farmed, whilst four companies did not express an intention to cultivate seaweed in the future. Some companies indicated that they had previously set up or been involved in R&D trials for seaweed cultivation but as cultivation was not currently economically viable, their focus in the immediate future was on product and market expansion or development from wild harvested seaweed. The primary species of interest to cultivate in the immediate future was S. latissima, A. esculenta (both of interest for the food market) and L. digitata.

E.3.26 Other seaweed species that stakeholders expressed an interest in being able to cultivate included green seaweed species (e.g. Ulva lactuca, Ulva linza and Undaria pinnatifida) and higher value the red seaweeds such as P. palmata, Osmundea pinnatifida, Chondrus crispus, Gracilaria spp. (G. gracilis), Gelidium and Gracilariopsis longissimi, although such species would likely need to be cultivated in tanks on land. Whilst such red seaweed species are considered high value species and would only be required to be cultivated in small volumes (e.g. for use within the cosmetics industry) tank-based cultivation has high energy demands (for example to maintain specific temperatures or constant bubbling (tumble culture), requiring these costs to be offset.

E.3.27 The industry's and wider stakeholder opinions on the key drivers and constraints to developing the seaweed farming sub-sector in Scotland are presented in Section 5 of the main report.

Distribution of seaweed-based businesses in Scotland

E.3.28 The majority of seaweed-based businesses, which harvest seaweed, or currently utilise wild harvested seaweed are located on the west coast of Scotland (primarily within the Local Authority areas of Comhairle nan Eilean Siar and Argyll and Bute, but also the west coast of the Highlands) (Table E3). A lesser number of businesses are based on the east coast (within the Highlands and Fife), whilst one is based outwith Scotland (in England).

E.3.29 The majority of businesses that harvest seaweed do so within the same locale in which seaweed is processed and/or their business is located. However, a few harvest or source seaweed outwith the immediate locale in which they are based; this includes harvesting taking place in the Western Isles and Orkney. A few businesses that rely on specialist supply chain companies to manufacture or package finished seaweed products also use other businesses located outside of Scotland (see Figure E2).

Table E3. Location of businesses using seaweed wild harvested in Scotland

Local Authority Area	Number of businesses
Argyll and Bute	4
Comhairle nan Eilean Siar	5
The Highlands	2
Fife	1
England	1

NB: This table shows the location of businesses that use seaweed wild harvested in Scotland as opposed to where seaweed is harvested (though in the majority of cases these are within the same locale for each business).

E.3.30 The one established seaweed farm in Scotland, at the time of consultation (2020), is based within the Local Authority area of Argyll and Bute. Most of the seaweed cultivation activity in the pipeline (i.e. currently seeking consents) would predominately be located off the west coast of Scotland (given the more sheltered nature of the coastline) although there is also interest off the east coast (wider stakeholder input).

Other actors in Scotland

E.3.31 A wide range of other organisations are also involved in supporting and developing the seaweed-industry in Scotland, although their core business does not relate to seaweed as per the definition presented above. Such actors are involved in R&D (e.g. SAMS, The James Hutton Institute, North Atlantic Fisheries College), Innovation (e.g. SAMS, IBiolC, Scottish Aquaculture Innovation Centre (SAIC)) and Enterprise (e.g. Highlands and Island Enterprise, Scottish Enterprise) (see Stanley et al. 2019). Whilst a monetary value of such actors has not been incorporated into the economic evaluation of the current seaweed-based sector in Scotland (presented in Section E.4 below), where information was obtained from such stakeholders during the consultation it has been incorporated into the review of the current status of the seaweed-based industry in Scotland (above) and in the development of plausible scenarios for the seaweed-based sector in Scotland (see Section 6 in main report).

E.4 Current baseline – economic analysis

E.4.1 The economic analysis is divided into the following aspects:

• Scale and viability of existing companies, including turnover, profit and projected growth;
• GVA based on difference between turnover and operational costs;
• Employment based on full-time equivalents currently employed;

E.4.2 The economic analysis is presented by product grouping where possible (e.g. food for human consumption, animal feed, horticultural products, bioactive products for the cosmeceutical and pharmaceutical industries, and innovative applications or biotechnology). However, in some cases, it is not possible to report monetary estimates by product group due to confidentiality issues arising when there are a small number of companies involved. Where this is the case, quantitative data for that specific product group is not presented and a more aggregated summary is given, combining more than one product group to protect confidentiality. A small number of additional companies involved in seaweed harvesting and/or cultivation that were not interviewed were identified during our data search, but information on these companies (e.g. from Companies House) was very limited. Hence it is known that some companies who generate turnover from seaweed have not been captured within this analysis (for example, if they did not engage, did not provide quantitative information and/or no information was available on Companies House), and as such the estimated turnover and GVA are likely to be an under-estimate and should be regarded as indicative.

E.4.3 It should also be noted that any businesses which are not yet trading commercially were not considered in the current economic analysis other than for enabling the number of businesses per product group to be estimated (see below), although their potential value and growth potential were considered in the projected future scenarios (Section 6 main report).

Scale and viability of existing companies

E.4.4 The scale of the current market is based on the number of companies operating in a product category, turnover, profit and growth over the past three years. Growth potential is also considered, as reported by companies during the interviews or taken from information submitted to Companies House. The results are provided in Table E4.

E.4.5 Nine companies were identified that are producing human food. The economic baseline is based on nine companies, all of which are identified as being micro-entities or small companies under the Companies House (2019) definitions (see Table E1). Five companies only produce human food, while four others also produce other product types.

Table E4 Scale of markets by product type

Product category	No. of companies1	Turnover		Profit		Growth
		Mean	Median	Mean	Median
Human food	9	£210,000	£190,000	£34,000	£21,000	↑
				(but some companies report losses)
Animal feed	2	Confidential		Confidential		→
Horticulture	2	Confidential		Confidential		↗
Bioactives (cosmetics, pharmaceuticals, and nutraceuticals)	7	£87,000	£125,000	£15,000	£13,000	↑
Hydrocolloids	None in Scotland	-		-		-
Biofuels	None identified	-		-		-
Innovative/ biotechnology	2	Not applicable		Not applicable		↑
Key: ↑	Growth reported to at least double in next few years
↗	Growth expected but to be less than double in next few years
→	Little or no growth expected, expected to remain more or less at the same level
↘	Potential reduction in production expected

Notes:

¹ Companies producing more than one product category are counted for each category. Thus the total number of companies recorded in the table exceeds the total number of producers identified: 13. Turnover has been allocated to the different product categories to avoid double counting. Number of companies includes both those interviewed and those identified as producing seaweed-based products based on publicly available information. Note information on turnover and/or GVA was not available for all of these companies, hence, total turnover is likely to be an under-estimate

E.4.6 There are seven companies producing bioactives. Of these, three produce cosmetics, three produce nutraceuticals and one produces both cosmetics and nutraceuticals. Four of these companies also produce human food. As with human food, all of these companies are micro-entities or small companies.

E.4.7 For horticulture and animal feed, there were two companies that reported producing these products, both of which are relatively large-scale harvesters and processors. As there are only two companies identified for these products, no quantitative data is presented for this category to protect commercial confidentiality.

E.4.8 Turnover varies by type of product but is also highly variable within any one product category. Average (mean) turnover for companies involved in production of human food is around £210,000 per year (median £191,000)^[62]. Average (mean) profits reported are around £34,000 per year (median £21,000)^[63]. Some companies reported losses (which have been excluded from the mean profits) for example due to investment in equipment.

E.4.9 For bioactives, average (mean) turnover is estimated at £87,000 per year (median £125,000)^[64] with profits estimated at £15,000 per year (median £13,000)^[65]. None of the companies reported losses.

E.4.10 For innovative products and biotechnology, there is some development that is on-going both through start-ups. These businesses are at an early stage so no turnover or profit information is available.

Gross Value Added

E.4.11 Overall turnover across all companies where data are available (or can be estimated) is around £4 million with an average (mean) turnover of £500,000 and a median of £270,000 per company^[66]. Gross Value Added (GVA) can be extrapolated across the remaining companies, based on average GVA for small-scale, medium-scale and large-scale companies^[67] but ignoring start-ups as these are not currently generating any GVA.

E.4.12 Total GVA from the seaweed industry in Scotland can then be estimated at £510,000 per year, with this based on weighted average GVA of 13% of turnover. This is expected to be an under-estimate as some companies producing seaweed-based products may not be captured and turnover data was not available for all due to gaps in both the information provided via interviews and from publicly available data such as from Companies House. This compares with GVA in Scotland (for 2018) of £485 million for fishing and aquaculture, £1,609 million for manufacture of food products and £1,036 million for manufacture of pharmaceutical products (ONS, 2019).

Employment

E.4.13 Ten of the companies responding to the survey reported the number of employees. This gives a total of 59 employees, with an average (mean) of 7 per company and median of 4 employees. There is a significant range with some companies having no staff other than the owners, up to a maximum of 20.

E.4.14 Based on 59 employees, GVA per FTE can be estimated at £8,600 per FTE. This compares with the following GVA per head for the local authority areas in which the seaweed businesses are currently operating (data for 2017) (ONS, 2018):

• Lochaber, Skye and Lochalsh, Arran and Cumbrae and Argyll and Bute: £25,025 per head
• Na h-Eilean Siar: £19,694 per head
• Orkney Islands: £23,752 per head
• Clackmannanshire and Fife: £21,165 per head
• Revenue per FTE (estimated as turnover ÷ number of FTEs) is around £68,000.

E.5 References

Angus, S., 2017. Seaweed Harvesting and Gathering in Scotland: the Legal and Eco-logical Context, Scottish Geographical Journal, 133(2), 1-14.

Burrows, M.T., Fox, C.J., Moore, P., Smale, D., Sotheran, I., Benson, A., Greenhill, L., Martino, S., Parker, A., Thompson, E., Allen, C.J., 2018. Wild Seaweed Harvesting as a Diversification Opportunity for Fishermen. A report by SRSL for HIE, pp. 171.

Cefas, 2016. Seaweed in the UK and abroad – status, products, limitations, gaps and Cefas role. [Online] Available at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/546679/FC002I__Cefas_Seaweed_industry_report_2016_Capuzzo_and_McKie.pdf (accessed April 2020).

Companies House, 2019. Company accounts guidance [Online] Available at: https://www.gov.uk/government/publications/life-of-a-company-annual-requirements/life-of-a-company-part-1-accounts#small-companies (accessed May 2020).

James, M.A., 2010. A review of initiatives and related R&D undertaken in the UK and internationally regarding the use of macroalgae as a basis for biofuel production and other non-food uses relevant to Scotland. Report commissioned by Marine Scotland; pp.79.

ONS, 2018. regional economic activity by gross value added (balanced), UK: 1998 to 2017: interactive map: gross value added per head for NUTS3 local areas, available at: https://www.ons.gov.uk/economy/grossvalueaddedgva/bulletins/regionalgrossvalueaddedbalanceduk/1998to2017

ONS, 2019. Regional gross value added by industry: all NUTS level regions, release date 19 December 2019, available at: https://www.ons.gov.uk/economy/grossvalueaddedgva/datasets/nominalandrealregionalgrossvalueaddedbalancedbyindustry

Sanderson, J. C., Dring, M. J., Davidson, K., and Kelly, M. S. 2012. Culture, yield and bioremediation potential of Palmaria palmata (Linnaeus) Weber and Mohr and Saccharina latissima (Linnaeus) C.E. Lane, C. Mayes, Druehl & G.W. Saunders adjacent to fish farm cages in northwest Scotland. Aquaculture, 354-355: 128–135

Stanley, M.S., Kerrison, P.K., Macleod, A.M., Rolin, C., Farley, I., Parker, A., Billing, S-L., Burrows, M. & Allen, C., 2019. Seaweed Farming Feasibility Study for Argyll & Bute. A report by SRSL for Argyll & Bute Council. pp. 190.

Viking Fish Farm Ltd. 2012. UK macroalgae industry. Poster presentation, Interreg program Netalgae. [Online] Available at: http://www.netalgae.eu/uploadedfiles/UK_1.pdf (accessed April 2020).