Large-scale versus family-sized system production: economic feasibility of cultivating Kappaphycus alvarezii along the southeastern coast of Brazil

Abstract

The economic viability of cultivating the seaweed Kappaphycus alvarezii, also known by the commercial name “cottonii,” on the southeastern coast of Brazil was evaluated in large-scale production systems with 13 polyvinyl chloride (PVC) rafts containing 11.44 km of tubular and family-size nets with 4 rafts and 3.52 km of nets. Deployment and operating costs and profitability ratios were estimated for three tonnes per raft production scenarios: (A) 4.0 (pessimistic), (B) 4.5 (normal conditions), and (C) 5.0 (optimistic). A sensitivity analysis simulated the loss of one crop among the five proposed growing cycles, as well as the variation in the number of rafts and selling prices for both systems. At a selling price of US$ 120.00 t−1, the 13-raft, four-crop annual large-scale production system was impractical in all proposed productivity scenarios. In the family-size production system, at a selling price of US$ 120.00 t−1, 4 rafts were not economically viable. Only the three scenarios that reached 11 rafts were viable, displaying, respectively, Internal Rates of Return (IRR) of 38.17%, 70.73% and 87.81%, a Payback Period (PP) of 31, 17 and 14 months with a Break-even Point (BP) at 78.41 tons of fresh algae. It is concluded that the activity is only economically viable on a small scale, carried out in a family-sized production system, starting with 11 rafts or 9.68 km of nets, compatible with an area of 2 ha established by the low impact aquaculture legislation in the region.

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Funding

This study was supported by the Coordenação de Aperfeiçoamento de Pessoal de Nível Superior [Coordination for the Improvement of Higher Education Personnel] – Brazil (CAPES), Finance Code 001.

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Correspondence to Marcelo Barbosa Henriques.

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Nogueira, M.C.F., Henriques, M.B. Large-scale versus family-sized system production: economic feasibility of cultivating Kappaphycus alvarezii along the southeastern coast of Brazil. J Appl Phycol 32, 1893–1905 (2020). https://doi.org/10.1007/s10811-020-02107-2

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Keywords

  • Algaculture
  • Economic analysis
  • Cottonii
  • Areschougiaceae
  • Carrageenan