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Unravelling the mystery of oud
 

Unravelling the mystery of oud

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A story of oud from Asia Forestry Management - 06-03-2011

A story of oud from Asia Forestry Management - 06-03-2011

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Unravelling the mystery of oud Unravelling the mystery of oud Presentation Transcript

  • Andrew G. STEEL Director ASIA FORESTRY MANAGEMENT LTD The mystery of Oud« LES MYSTERES DU BOIS DE OUD »
  • 1. AsiaForestry Management 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 worlds 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
  • 2. Group Business Overview 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 Asia Forestry Management • Investing in Aquilaria trees plantations September Co,. Ltd. (“AFM”) (Agarwood trees) 2006 • Offering investment units in Agarwood trees to investors Asia Forestry Distillery • Producing and selling premium grade oud October Co,. Ltd. (“AFD”) oil 2008
  • Summary of Group Operations3. Summary of Group Operations AFM I. Plantation: AFM Planting/Buying  Initial plantation: AFM invests in both corporate owned plantations and farmer contracts. Plantation Inoculation Process  Inoculation - the trees, >5 years old, will be inoculated with a particular technique. Resin Development  Resin development: After 1-2 years of the inoculation process, the dark resin is developed. Send to AFD I. Distillation: AFD  Harvesting: the wood is cut and transported to AFD the factory.  Wood chip preparation: the log is chopped Harvest & Cutting and grinded, then fermented Distillery Process  Distillation: distill the prepared mix raw material for 10 days to extract Oudh oil. Distillation  Oil grading & Stocking: After Inspection oil is classified into quality grades, the bottled oil is Stocking stored in secured rooms in safe due to its high
  • 3a.Summary of Group Operations Summary of Group Operations AFM Planting/Buying Plantation Inoculation Process Resin Development Send to AFD AFD Harvest & Cutting Distillery Process Distillation Stocking
  • 4. What is Aquilaria? • 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.
  • 5. Asia Forestry Plantations Asia Forestry Plantations 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.
  • CITES (the Convention on International Trade in6. CITES 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
  • CITES Reporting7. CITES Reporting - Thailand
  • 8. History of Oud Aloeswood and the •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 Bible with aloe vera). •“Like valleys that stretch out, Like gardens beside the river, Like aloes planted by the Numbers 24:6 LORD, Like cedars beside the waters. •Nicodemus, who had first come to Him by night, also came, bringing a mixture of John 19:39 myrrh and aloes, about a hundred pounds weight Proverbs 7:17 •“I have sprinkled my bed With myrrh, aloes and cinnamon.” Psalms 45:8 •All thy garments smell of myrrh, and aloes, and cassia, out of the ivory palaces, whereby they have made thee glad Solomon 4:14 •Spikenard and saffron; calamus and cinnamon, with all trees of frankincense; myrrh and aloes, with all the chief spices.
  • 9. History ofof Oud History Oud oilBook 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.
  • 11. History Oud oil History of of Oud• 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.  Agar Wood  Agar Oil  Aloe Oil  Oud(h) Oil  Gaharu  Jinko  Aloeswood
  • 12. Product Characteristics: Product CharacteristicsValue: Agarwood - the most expensive plant product by weight  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.Usage: Various usage for both pleasure and religious activities  Incense for religious purposes  Perfume and perfume component  Spa & Aromatherapy  Traditional medicinal
  • Plantation Operations13. Plantation OperationsNursery Stage Site Preparation 2 year old 6 Years Old Inoculation Individual ID Infected Wood
  • 14. Distillation Process 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. AFD Current Target Expansion Future No. of Distillation Stills 59 141 200 Avg. Distillation Capacity Kgs./month) 5.4-12 13-28 18-50
  • Distillation Operations15. Distillation Operations Preparation Storage Factory From the tree to the pot – Preparation – PHASE I
  • Distillation Operations16. Distillation Operations Extracting the oil from the tree Fermentation – Phase II Distillation Mash Room Filling 10 days Oil Distillation – Phase III QA – Phase IV Testing – Phase V
  • 17. Traditional Distilling Process Traditional Distilling Process 32ml Wood 10 per Fired days 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
  • 19. Grading Of OilAgar Wood and its oil is not always of the same value. The value depends on a setof factors related to the size, resin content, fragrance and color / purity. Also thecountry where the Agar Wood comes from is an important aspect for its value. MAIN FACTORS Location Odour Buyers Market IMPROVEMENTS DNA testing International standard How do the grades differ?
  • 20. Premium products Agarwood - woodchip Agarwood oil Perfumes/Scents/lotions• 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. AFD Oudh Oil Recommended Retail Price Wholesale Price Grade A USD35,000/Litre USD16 - 22,000/Litre• The retail price of AAA vintage oud, strictly preserved under perfect conditions, is extremely expensive, over $1000 per tora, or $83,000/Litre.• Asia Forestry Group offers high grade agar products - 100% PURE OIL
  • 21. Liquid Gold- OUD Liquid GoldThe 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 $ 47,600Grade A – Agar Oil (retail) is US $ 80,000+ 1 tola $1000-2000 84 Tola Per Kg The most expensive essential oil in the world!
  • The Middle East Market22. The Middle East MarketThe 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 welcoming fragrance 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
  • 23. World Muslim Population
  • Oud Wholesale24. Wholesale Market 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.
  • 25. Global Imports v Export World export : Growing demand in Oud oilKilograms 2,000 United Arab Emirates Singapore • World export increased by 87.7% 1,529 1,500 Malaysia Thailand from Y2005 to Y2007. 134 Total 253 • Thailand is the worlds top exporter 1,000 851 371 91 enjoying the highest market share of 189 500 434 182 114 754 51.1% in Y2006 and 49.3%in Y2007. 145 435 11 - 97 World import : Middle East - the major oudh oil consumers Kilograms2,000 Others  World import surged by 92.5% from Bahrain 1,571 Y2005 to Y2007. United Arab Emirates 961,500 Saudi Arabia 244  Most of Oudh importers are located Total in Middle East region, namely Saudi1,000 880 536 53 112 Arabia, U.A.E and Bahrain, covering 500 424 7 287 more than 90% of world import 11 1 695 volume. 405 428 - Source : www.cites.org
  • 26. Global Crassna oil Demand Global Crassna oil demand : Impressive Growth Kilograms 1,800 Crassna Source : www.cites.org 1,600 Others 1,400 1,200 947 1,000 800 435 600 400 102 624 200 445 322 -• 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.
  • 27. Thailand ExportsThailand: 1st world exporter - both quality & volume Kilograms 1,800 Others 1,627 1,600 U.A.E 51 Source : www.cites.org Bahrain 1,400 Saudi Arabia 548 1,200 Total 972 1,000 6 754 118 800 419 18 244 600 434 184 2 183 400 36 96 112 604 608 200 2 369 1 284 10 0 83 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.
  • 28. Supply Route to Europe Bangkok We Supply all of the relevant paperwork (CITES, Export, GC Analysis)
  • 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.
  • 30. Strategy Strategy Management Team • Expand operations across SE Asia • Become preferred supplier to the 1 perfume industry • Extend the Value Chain • Direct supply to buyers 2 • Consistent Quality & Quantity • Secure long term supply contracts 3
  • ASIA FORESTRY MANAGEMENTAsia Forestry Management Co., Ltd.54 BB Building, # 3705, Sukhumvit 21 Road (Asoke),Kwaeng Klongtoey-Nua, Bangkok 10110 Thailand+66 (0) 2 259 6255| andy@asiaforestry.biz | www.asiaforestry.biz | skype| andrew.g.steel | BB PIN220512B2 ANY QUESTIONS? SOCIÉTÉ FRANCAISE DES PARFUMEURS 36 rue du Parc de Clagny - 77000 Versailles - Tél : 01 39 55 84 34 - www.parfumeur-createur.com