When James Bond was despatched to Japan in You Only Live Twice, access to the formula for a lucrative seaweed extract was one of many twists to the tale.
The screenwriters who adapted Ian Fleming’s novel could equally have chosen Ireland as an authentic location, given the State’s enlightened decision over half a century ago to take advantage of the commercialisation of sodium alginate in brown algae.
Now, however, recent developments in the seaweed sector have prompted some in the industry to suggest it would make for yet another Bond plot, with one of the "good guys" being modelled on sharp-suited former marine minister Simon Coveney, who now has responsibility for foreshore within the planning section of his new brief.
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The issue relates to the purchase of semi-State seaweed company Arramara Teoranta by Canadian multinational and world leader Acadian Seaplants. The price and terms of the May 2014 deal concluded with ministerial approval are the subject of a ten-year confidentiality clause.
Hailed as a significant boost by Gaeltacht agency Údarás na Gaeltachta, the sale has caused serious upset in an indigenous industry worth €30 million but with the potential to reach multiples of that and outstrip salmon farming.
Demand for certain seaweeds cannot keep pace with the supply of wild material in some countries, and Bord Iascaigh Mhara (BIM) has identified several species suitable for farming here which could cash in on the global market for farmed seaweed, worth €6 billion in the health food sector alone in 2014.
Global food markets
Founded more than 30 years ago by Louis Deveau, Acadian Seaplants employs more than 300 people in eight countries and exports to more than 80 countries. Now run by Louis's son Jean-Paul Deveau, it supplies seaweed-based products to the food, biochemical, agricultural and agri-chemical markets and cultivates seaweed for the Asian and global food markets.
Canada regarded the Irish acquisition as so important that its trade finance agency provided assistance to Acadian Seaplants in the form of a loan guarantee.
Academics at NUI Galway (NUIG), who are collaborating with the new owner on research, say it will give a fillip to a sector which hasn’t reached its potential since Arramara was founded in 1947.
Ireland has more than 500 types of seaweed and has a " long history" of using it as a food source and a fertiliser in places such as the Aran Islands, as experts Prof Mike Guiry and Liam Morrison of NUIG recently wrote in the Journal of Applied Phycology.
Kelp was burnt in many areas for ash to be used in soapmaking, dyeing, paper- and glass-making and bleaching linen in the 18th and early 19th centuries. From 1820, the ash was also a source of iodine for medicinal and photographic use.
The "alginate phase", as Guiry and Morrison call it, dates from the 1940s, when Arramara was founded. Initially, the company focused on carrageen moss and purchased dried sea rods (Laminaria hyperborea) and kelp fronds (Saccharina latissima) for export.
Arramara then became a leading supplier of feamainn bhuí (Ascophyllum nodosum), which contains the gelling agent used in everything from ice-cream to the heads on beer to textile printing .
Arramara built two factories in Cill Chiaráin in Connemara and in Dungloe, Co Donegal in the 1960s, shipping the dried weed to Alginate Industries in Scotland, which held a 49 per cent share in the company, with the government holding 51 per cent. Employment grew through the 1970s to a seasonal high of 700.
Exports to Scotland for alginate dried up in 2009 after synthetic alginate was developed. The Scottish shareholder cut its involvement to 18 per cent. This was then bought by the State as part of an arrangement which transferred responsibility for Arramara from the department of the Gaeltacht to Údarás na Gaeltachta in 2006.
In 2012, Arramara had an average annual turnover of more than €2 million, but Údarás na Gaeltachta opted to seek a new “strategic partner” to take it to a further level. It hired consultants RSM Farrell Grant Sparks to assist.
However, it appeared as if the wheels had been set in motion several years before. On November 4th, 2010, Oireachtas Public Accounts Committee chairman Bernard Allen queried why €30,000 was spent by Údarás on seven different trips by senior officials to look at "seaweed projects" in Halifax, Canada, between 2007 and 2008.
Acadian Seaplants confirmed to The Irish Times that it was "first approached by Údarás na Gaeltachta in 2007". It said it was not until the middle of 2010 that it was formally invited by consultants, acting on behalf of Údarás, to submit an expression of interest in acquiring the Irish concern.
The decision to sell Arramara Teo outright came as something of a shock to an industry which has a number of indigenous players dependent on Arramara for raw material.
BioAtlantis managing director John D O’Sullivan told an Oireachtas committee on environment, culture and the Gaeltacht on July 8th, 2014, that when he became aware of the sale, his company made an offer of €5.7 million for Arramara, comprising €1.5 million initially and €4.2 million in the post-investment phase, and had been given just 12 days to prepare the bid.
Lack of transparency
He said he understood that two foreign companies – Acadian Seaplants and French company Setalg – had been given more than a year to prepare their bids. He claimed that Acadian's bid was €1.8 million and the French bid was €2 million for initial purchase, and that the rating was "changed" when the final bids were in. No details had been released and the lack of transparency was "frightening" in relation to the final sale, he said.
The ten-year confidentiality clause means that these figures can neither be confirmed nor denied, but have not been disputed to date.
The only figure in the public domain is a confirmation by Acadian that it is investing €2 million as part of the sale agreement, while Údarás na Gaeltachta says it has approved a capital grant towards this which is “subject to conditions contained in the legal agreement”.
In another twist, a decision by Arramara to apply directly for harvesting licences on 20 per cent of the coastline between Clare and north Mayo has created further waves.
This is a departure from Arramara’s established practice of relying on individual harvesters, holding a mixture of folio or traditional rights under the Foreshore Act 1933.
Coincidentally, the department of the environment confirmed in 2014 that a review of seaweed-harvesting licensing was in train in the context of amending the Foreshore Act. This review is still ongoing within the new Department of Housing and Planning for which Simon Coveney is responsible. Alarmed at the developments, seaweed cutters attended two public meetings in Connemara. When UN chief of fisheries and aquaculture development Rebecca Metzner visited Galway in February of this year at the invitation of Coastwatch Ireland, a group known as Cearta Feamainne Chonamara, or the Connemara seashore and seaweed rights committee, expressed its fears about the implications for coastal communities of potential "privatisation" of access to the material.
BioAtlantis described it as a “resource grab” by Arramara /Acadian. Acadian’s chief executive Jean-Paul Deveau confirmed at the Oireachtas sub-committee hearing in July 2014 that he had met officials from the departments of marine and the environment as far back as 2007 in relation to “licensing, the regulatory framework, and the process by which one could apply for a licence”.
The company has denied that purchase was dependent on securing harvesting rights.
O'Sullivan and former Arramara chief executive Tony Barrett, who says he had tried unsuccessfully to buy the company out in 2006, are critical of the fact that two former executives of Údarás are now employed by the new owner,
Dónall Mac Giolla Bhríde, who was running Arramara's Cill Chiaráin plant before the sale, has been hired for the same job, as has Jim Keogh, formerly Údarás enterprise and employment manager. Údarás confirmed Keogh was part of a senior executive team that was involved in managing the Arramara sale to Acadian.
Keogh told The Irish Times he saw no conflict and passionately believed in the potential of seaweed and aquaculture for coastal communities. He said he retired from Údarás in 2014, was retained on contract until April 2015 and then stepped down. He said he was "surprised and flattered" to be offered a post as director of European strategic affairs by Deveau in July 2015.
“It’s not easy to get an industry to invest in coastal communities, and this is something I have over 40 years of experience of,” Keogh said.
Keogh said the licensing application by Arramara was aimed to ensure regulation and responsible environmental management and was not intended to exclude any players. He said several Irish seaweed companies also had licence applications filed with the Department of the Housing, Planning and Local Government (formerly environment).
The department has not published Arramara’s application on its website and said this was because it was “not yet deemed complete”. The company understands this is due to a need by the department to check on existing folio rights.
A decision by Arramara to fly in several small vessels to undertake trials on a new method of harvesting has complicated matters. A department spokesman said any new method would require prior approval, and it had received no licence application as of May 13th.
Hand-harvesting is tough, labour-intensive work, and seasoned Connemara cutter Johnaí “Dubh” Clochartaigh from Mweenish says it is not particularly attractive to the younger generation.
Clochartaigh, who was one of a group of Connemara harvesters flown to Canada to witness Acadian’s activities , welcomes the takeover, but says using vessels would not be safe in Connemara.
Údarás na Gaeltachta has defended its handling of the issue and has said that a decision to sell outright, rather than engage with a partner who would invest in the company, was based on “legal advice” . It said it was advised that a “put and call option”, which would give 100 per cent ownership to Acadian, was preferential. This would allow for 40 per cent to be clawed back by Údarás if the new owner didn’t meet its commitments, it said.
It said there was no requirement to publicly advertise the sale or seek Cabinet approval, and the sale was not contingent on price only, nor on the harvesting rights which Acadian is seeking. It said the agreement included protection of existing stakeholders, ranging from the 20 employees to harvesters and hauliers, to customers, including BioAtlantis and Brandon.
‘Fair price’
Acadian/Arramara said it was committed to paying a “fair price” to Irish harvesters, and one of its first actions on acquisition was to increase the price paid per wet ton from €35 to €38.
BioAtlantis said that while Acadian fulfilled an agreement not to increase the supply price in the first year, it has since risen by 7 per cent, a figure confirmed by Arramara.
Late last year, a lawsuit filed on behalf of shorefront property owners in Maine in the US sought a declaratory judgment from Maine’s superior court to determine definitely who has ownership of intertidal “rockweed”.
One Canadian company with experience of Acadian said the Irish industry was right to be upset. Matt Dugas, chief executive of Maritime Rockweed, told The Irish Times that his company had applied for a lease to harvest Ascophyllum nodosum along a 220km stretch of shoreline where there had been little or no activity since the early 1990s.
After it had informed Acadian of this, he said, it learned the company had submitted an application for part of the same area.
“We have no problem with healthy competition, but we do have a difficulty with a competitor seeking exclusive rights,” he said.
Company president Jeramy Boudreau, who formerly worked for Acadian, said the company controlled more than 75 per cent of the resource in Nova Scotia, with the remaining 25 per cent shared by four other companies. A spokeswoman for Acadian said that the lawsuit filed in Maine would take two years to determine. In response to Maritime Rockweed's claims, she said she was "not familiar with that company".
Dugas said the value of Ascophyllum nodosum and other algae is going up all the time due to the rich nutrient content and wide variety of uses.
“Seaweed is a very lucrative business, and I would recommend that you guys keep your industry in-house and try to develop it yourselves,” he said.