The present invention relates to a process for integrated production of ethanol and seaweed biofertilizer from fresh red seaweed, Kappaphycus alvarezii. Specifically, the present invention describes a process for the production of ethanol, as a byproduct, from Kappaphycus alvarezii. The process includes crushing the fresh weeds to release the sap, a proved biofertilizer, and recovering the residual carrageenan rich biomass, hydrolyzing the biomass using dilute acid at elevated temperature, neutralizing the hydrolysate by using inexpensive calcium hydroxide and removing the insoluble salts through filtration or centrifugation, desalting soluble salts from the hydrolysate by electrodialysis, enriching with nitrogen source, inoculating with yeast and fermenting it to form a fermented broth containing ethanol and separating ethanol from the fermented broth by distillation and using residual hydrolysate, generated CaSO4 and reject obtained from electrodialysis as manure.