The company told the plant's 135 employees last week that operations will move to Girvan, Scotland early next year.
After 76 years in operation, the San Diego plant represented the country's largest kelp harvesting facility.
Alginates, gums used extensively by the food industry to thicken, gel and bind products such as ice cream and desserts, are derived from alginic acid obtained from brown seaweed (kelp).
Known for its high growth rate, kelp grows in underwater forests, up to 30 cm per day and to a total length of up to 60 metres.
The ISP plant in San Diego, acquired in 1999, processes about 30,000 to 40,000 tons of kelp annually.
But the harvesting business in the US has been hurt in recent years by a rise in the cost of fuel, labour and raw materials.
Unfortunately, persistently increasing production costs have necessitated this action, the firm said in a statement.
The Scottish business, currently the world's largest alginate production facility, is more attractive in terms of cost structure.
Reports in the local press highlight the disappointment and shock expressed by workers at the San Diego plant, from marine biologists to deck hands: many have been with the facility for decades.
But according to Steve Olsen, ISP senior vice president for global marketing, the transition is necessary to ensure the continued, long term supply of premium alginate products.
"Our Girvan plant provides both the economy of scale and over sixty years of alginate production expertise.
Reconfiguring our product sourcing will improve our ability to meet the needs of our customers and help us realise our plans for growth," said Olsen.
Union workers and salaried employees will meet with the company this week to discuss severance packages and transferring jobs to other ISP facilities.
Products not transferred to Scotland will be manufactured under license, concluded ISP.