The mystery of Oud « LES MYSTERES DU BOIS DE OUD »
Andrew G. STEEL Director
ASIA FORESTRY MANAGEMENT LTD
Asia Forestry Management
Founded in 2006 Formed for the purpose of investing in and implementing environmentally sound forestry development projects sustaining and strengthening an ecological balance within its operational areas. Our vision is to reduce the pressure on the world's natural forests enabling investments into forestry that will create sustainable plantations over the long term Aim was to be a forestry management company allows the general public to diversify their portfolio and invest in:
- Themselves- The community- The environment
1. Asia Forestry Management
The Asia Forestry Group is engaged in forestry management in Thailand. The group is focusing on Aquilaria plantations and distillation divided into 2 key business units,
Asia Forestry Management Co., Ltd. and Asia Forestry Distillery Co., Ltd.,
Company Name Operation Registered Year
1. Asia Forestry Management Co,. Ltd. (“AFM”)
• Investing in Aquilaria trees plantations (Agarwood trees)
• Offering investment units in Agarwood trees to investors
September 2006
2. Asia Forestry Distillery Co,. Ltd. (“AFD”)
• Producing and selling premium grade oud oil
October 2008
2. Group Business Overview
Summary of Group OperationsI. Plantation: AFM
Initial plantation: AFM invests in both corporate owned plantations and farmer contracts.
Inoculation - the trees, >5 years old, will be inoculated with a particular technique.
Resin development: After 1-2 years of the inoculation process, the dark resin is developed.
I. Distillation: AFD
Harvesting: the wood is cut and transported to the factory.
Wood chip preparation: the log is chopped and grinded, then fermented
Distillation: distill the prepared mix raw material for 10 days to extract Oudh oil.
Oil grading & Stocking: After Inspection oil is classified into quality grades, the bottled oil is stored in secured rooms in safe due to its high value.
Planting/Buying
Harvest & Cutting
Inoculation
Send to AFD
Resin Development
DistillationD
istillery P
rocess
Plan
tation
P
rocess
AFM
AFD
Stocking
3. Summary of Group Operations
Summary of Group Operations
Planting/Buying
Harvest & Cutting
Inoculation
Send to AFD
Resin Development
DistillationD
istillery P
rocess
Plan
tation
P
rocess
AFM
AFD
Stocking
3a. Summary of Group Operations
• Agarwood is a precious resinous wood forming in Aquilaria trees, native to the Southeast Asia region. The dark resin is formed as an antibody for healing after injury or fungus infection. The agarwood is widely used in perfume and cosmetic industry, and religious activities.
• Agarwood trees are registered as an endangered species by CITES due to its precious value, causing illegal wood smuggling.
• Thailand has been recognized worldwide as a source of premium quality agarwood; however, most of agarwood supply is derived from wild cutting or illegal logging.
• In respect of tree conservation, the concept of
Aquilaria plantations was initially developed in Thailand, with inoculation techniques, capable to provide premium quality agarwood comparable to the wild source.
4. What is Aquilaria?
All AFM plantations are located in Trat province, next to the Cambodian border providing perfect growing conditions of agarwood inoculation.
35 plantations currently able to supply more than 40,000 trees and the inoculated trees account for 40% of total trees.
Trat is also known as the ‘Fruit capital’ of the world. The 380 kilometer stretched forest grounds, the very fertile soil and the rainy climate make Trat the most perfect place for our plantations. The best Agar oil from Thailand comes from this region. Trat is situated near the Cambodian border.
Asia Forestry Plantations5. Asia Forestry Plantations
CITES (the Convention on International Trade in Endangered Species of Wild Fauna and Flora)
CITES is an international convention aiming at preserving the wild specimens, both
animals and plants. Aquilaria is considered as endangered species and the trade of such trees is strictly
governed by CITES. The wild agarwood trading has been prohibited since 2004. Appendix II includes species not necessarily threatened with extinction, but in which
trade must be controlled in order to avoid utilization incompatible with their survival.
Around 200 tree species are included in the three CITES Appendices About 85 species
are included in Appendix II Agarwood originating from managed plantations is required to register with CITES
to ensure its origin, and CITES permit is a prerequisite for the export of agar products.
CITES Appendix II: Agarwood - Endangered species
6. CITES
CITES Reporting 7. CITES Reporting - Thailand
8. History of Oud
•There are 5 separate places in the bible where aloeswood is mentioned. In older oral traditions, aloeswood is sometimes referred to simply as aloes (not to be confused with aloe vera).
Aloeswood and the Bible
•“Like valleys that stretch out, Like gardens beside the river, Like aloes planted by the LORD, Like cedars beside the waters.
Numbers 24:6
•Nicodemus, who had first come to Him by night, also came, bringing a mixture of myrrh and aloes, about a hundred pounds weight
John 19:39
•“I have sprinkled my bed With myrrh, aloes and cinnamon.”
Proverbs 7:17
•All thy garments smell of myrrh, and aloes, and cassia, out of the ivory palaces, whereby they have made thee glad
Psalms 45:8
•Spikenard and saffron; calamus and cinnamon, with all trees of frankincense; myrrh and aloes, with all the chief spices.
Solomon 4:14
History of Oud oil9. History of Oud
Book 27 of Sahih Muslim, #5601
• Nafi’ reported that when Ibn Umar wanted fumigation he got it from aloeswood without mixing anything with it, or he put camphor along with aloeswood and then said: This is how Allah’s Messenger (may peace be upon him) fumigated.
Book 55 of Sahih Bukhari, #544
• Narrated Abu Huraira: Allah’s Apostle said, “The first group of people who will enter Paradise, will be glittering like the full moon and those who will follow them, will glitter like the most brilliant star in the sky. They will not urinate, relieve nature, spit, or have any nasal secretions. Their combs will be of gold, and their sweat will smell like musk. The aloes-wood will be used in their centers. All of them will look alike and will resemble their father Adam (in statute), sixty cubits tall.”
Book 26 of Sahih Muslim, #5487
• Umm Qais, daughter of Mihsan, the sister of ‘Ukasha b. Mihsan said: I visited Allah’s Messenger (may peace be upon him) along with my son who had not, by that time, been weaned and he pissed over his (clothes). He ordered water to be brought and sprinkled (it) over them. She (further) said: I visited him (Allah’s Apostle) along with my son and I had squeezed the swelling in the uvula, whereupon he said: Why do you afflict your children by compressing like this? Use this Indian aloeswood, for it contains seven types of remedies, one among them being a remedy for pleurisy. It is applied through the nose for a swelling of the uvula and poured into the side of the mouth for pleurisy.
• Agarwood has a very long history of use as a medicine, incense and as an aromatic oil.
• Agarwood and its essential oil have long been associated with various religions and cultures. While it finds a mention in ancient scriptures of Japanese and Chinese dynasties it also finds mention in the Bible where it is known as aloes or aloeswood.
• It is considered an aid for meditation in spiritual circles.
History of Oud oil
Agar Wood Agar Oil Aloe Oil Oud(h) Oil Gaharu Jinko Aloeswood
11. History of Oud
Product Characteristics:
The resinous wood from the particular trees provide a very pleasant odour highly sought after throughout the world. As a result, the premium-grade Agarwood is extremely precious, being considered as the most expensive product originated from plant.
Agarwood price is subject to quality, purity, and origin of the wood. The premium quality wood price is high as thirty thousand US dollars per kilogram.
Incense for religious purposes Perfume and perfume component Spa & Aromatherapy Traditional medicinal
Value: Agarwood - the most expensive plant product by weight
Usage: Various usage for both pleasure and religious activities
12. Product Characteristics
Plantation Operations
Nursery Stage Site Preparation 2 year old 6 Years Old
Individual ID Infected Wood Inoculation
13. Plantation Operations
AFD Current Target Expansion Future
No. of Distillation Stills 59 141 200
Avg. Distillation Capacity (Kgs./month) 5.4-12 13-28 18-50
AFD Factory is located close to the raw material supply via AFM plantations, to minimize logistic cost.
AFD currently operates 59 stills which is capable to produce Oudh oil of approximately 4,500 - 5,000 tolas/year or 54 -60 kgs./year.
In the near future, AFD plans to expand its capacity to 200 stills, almost 4 times greater than its current capacity, already obtaining the approval from Ministry of Industry.
14. Distillation Process
Distillation Operations
15. Distillation Operations
Factory Storage Preparation
From the tree to the pot – Preparation – PHASE I
Distillation Operations
16. Distillation Operations
Mash Distillation Room Filling 10 days Oil
Extracting the oil from the tree
Fermentation – Phase II
Distillation – Phase III
QA – Phase IV
Testing – Phase V
Traditional Distilling Process17. Traditional Distilling Process
Wood Fired 10 days 32ml per
still
Modern Distillation18. Modern Distillation
•Electrically Heated process•Distillation time - 3Days •Production 50 Kg per month
Advantages:
• Consistency of Quality & Quantity • Economies of scale - lower price
MAIN FACTORS
LocationOdour Buyers Market
IMPROVEMENTS DNA testing International standard
19. Grading Of Oil
Agar Wood and its oil is not always of the same value. The value depends on a set of factors related to the size, resin content, fragrance and color / purity. Also the country where the Agar Wood comes from is an important aspect for its value.
How do the grades differ?
• Oudh oil can be practically classified into 4 grades, i.e. grade A, B, C and D. The grade-A is currently the main product of AFD which is priced approximately $21,000 to $35,000 per litre.
• The retail price of AAA vintage oud, strictly preserved under perfect conditions, is extremely expensive, over $1000 per tora, or $83,000/Litre.
AFD Oudh Oil Recommended Retail Price Wholesale Price
Grade A USD35,000/Litre USD16 - 22,000/Litre
• Asia Forestry Group offers high grade agar products - 100% PURE OIL
20. Premium products
OUD - Liquid Gold
The value of Agar Oil compared with the value of gold:
Today’s gold price is US $ 1,350 per ounce. 1 kilogram equal 35.27 ounces. Gold per kilogram US $ 47,600Grade A – Agar Oil (retail) is US $ 80,000+
1 tola $1000-200084 Tola Per Kg
21. Liquid Gold
The most expensive essential oil in the world!
The Middle East market is the main market for Oudh Oil, mainly the Muslim community, as this is the world’s most popular region for using oudh.
The needs of the target group can be divided into different parts:• Religious: The needs of the Muslim community are related to religious
aspects. They highly cherish the oudh and use it for ceremony purposes.
• Cultural: oudh oil is often used as special gifts and as a welcomingfragrance in their houses.
• Esthetical reasons: Oudh oil is has a very strong and distinct smell and is hardly used anywhere outside the Arabian Peninsula. This distinct smell is adored by both men and women and stands for wealth.
The Middle East market uses Oudh oil for the following end products: Perfumes Incense Medicines
The Middle East Market22. The Middle East Market
23. World Muslim Population
Oud Wholesale market 24. Wholesale Market
Shooting export volume : Surging exports over 102.7% per year to support the global growing demand from Y2005 to Y2009.
Premium grade oil : Thai oud oil, mostly from Aquilaria Crassna, is highly appreciated by the Middle East customers from Saudi Arabia, Bahrain and U.A.E, covering almost 100% of the export volume from Thailand.
• World export increased by 87.7% from Y2005 to Y2007.
• Thailand is the worlds top exporter enjoying the highest market share of 51.1% in Y2006 and 49.3%in Y2007.
World import surged by 92.5% from Y2005 to Y2007.
Most of Oudh importers are located in Middle East region, namely Saudi Arabia, U.A.E and Bahrain, covering more than 90% of world import volume.
Source : www.cites.org
World export : Growing demand in Oud oil
World import : Middle East - the major oudh oil consumers
97
435
754
11
114
371
145
189
253
182
91
134
434
851
1,529
-
500
1,000
1,500
2,000 United Arab Emirates
Singapore
Malaysia
Thailand
Total
Kilograms
405 4286951
287
536
11
112
244
7
53
96
424
880
1,571
-
500
1,000
1,500
2,000 Others
Bahrain
United Arab Emirates
Saudi Arabia
Total
Kilograms
25. Global Imports v Export
• Aquilaria Crassna provides the highest quality resin among all Aquilaria families. This sub species is found natively in Southeast Asia region, especially in Thailand and Cambodia.
• The oudh oil from Aquilaria Crassna is the most sought after with rapid increase in trading volume, according to CITES, growing by 106% during 2005 to 2007.
So
urce
: ww
w.cite
s.org
Global Crassna oil demand : Impressive Growth
322 445624102
435
947
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800 Crassna
Others
Kilograms
Growing 106%/year
26. Global Crassna oil Demand
Shooting export volume : Surging exports over 102.7% per year to support the global growing demand from Y2005 to Y2009.
Premium grade oil : Thai oud oil, mostly from Aquilaria Crassna, is highly appreciated by the Middle East customers from Saudi Arabia, Bahrain and U.A.E, covering almost 100% of the export volume from Thailand.
Thailand: 1st world exporter - both quality & volume
So
urc
e :
ww
w.c
ites.
org
83
284 369604 608
10
112183
244419
1
36
184
118
548
2
2
18
6
51
96
434
754
972
1,627
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800Others
U.A.E
Bahrain
Saudi Arabia
Total
Kilograms
Growing 103%/year
27. Thailand Exports
28. Supply Route to Europe
We Supply all of the relevant paperwork (CITES, Export, GC Analysis)
Bangkok
29. Sustainability
2009 winner of the United Nations SEED Award for
Entrepreneurship in Sustainable Environmental and Social Development
The FSC is a body which pertains only to timber products. The production from our plantations is based on the sale of essential oil, which is a Non-Forestry Timber Product (NFTP) and are not eligible for the FSC certification.
Strategy
30. Strategy
Management Team
1 •Expand operations across SE Asia•Become preferred supplier to the perfume industry
2 •Extend the Value Chain•Direct supply to buyers
3 •Consistent Quality & Quantity•Secure long term supply contracts
ASIA FORESTRY MANAGEMENT
SOCIÉTÉ FRANCAISE DES PARFUMEURS36 rue du Parc de Clagny - 77000 Versailles - Tél : 01 39 55 84 34 - www.parfumeur-createur.com
Asia Forestry Management Co., Ltd. 54 BB Building, # 3705, Sukhumvit 21 Road (Asoke),Kwaeng Klongtoey-Nua, Bangkok 10110 Thailand+66 (0) 2 259 6255| [email protected] | www.asiaforestry.biz | skype| andrew.g.steel | BB PIN 220512B2
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