Presentation given to the British Perfume Society in 2016

1. Andrew G. Steel
Chief Executive
The Treedom Group

2. Andrew G. Steel
Chief Executive
The Treedom Group

3. The Treedom Group has operated in plantation management with specialisation in the Oud industry
for over a decade.
 Founded in 2005
 10 years of experience in Agarwood plantation management
 Plantation and factory in Trat, Thailand
 Certified with ISO 9001:2008 for both plantation and factory
THE TREEDOM GROUP

4. LIQUID GOLD
The value of Oud Oil:
 Grade A – Oud Oil (retail)
US $ 50 - 75,000
 Today’s gold price is US $ 1,175 per ounce.
 1 kilogram equal 35.27 ounces.
 Gold per kilogram US $ 37,500

5.  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.
OUD – VERY PRECIOUS WOOD

6.  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

7. OUD USAGE
Perfume and perfume component
 Spa & Aromatherapy for relaxation
 Incense for cultural and religious
purposes
 Traditional medicinal and tea for health
benefits
 natural detoxifier
 natural diuretic
 promotes healthy and clear skin
 helps lower blood sugar and
blood circulation
Various usage for both pleasure
and cultural activities

8. The needs of the European market are mainly from global Perfume houses to create
unique blend with precious Oud oil as selling point.
 As many as 800 Oud based fragrances somewhere in the world
 Oud adds richness and complexity to a fragrance
 Oud works as a fixative making the fragrance last longer
Oud oil are essential oil that can be blended into Spa & Aromatherapy products as well as
cosmetics for relaxation purposes.
 Oud with Rose the effect is ‘honey-like’
 With Jasmine – deep and even ‘animalic’
 With Bergamot (and Mint) – adds freshness
and a cologne quality
THE EUROPEAN & US MARKETS

9. NOTABLE OUD BASED
FRAGRANCES

11.  The most valuable tree in the world
 The best species in producing oud oil
is ‘Aquilaria crassna’
 Found in 11 countries in Asia
 Height 6-20 m.
 Oud oil is a main ingredient in many
world class fine fragrances
 Medical benefits: leaves help reduce diabetes & stress,
cure asthma (Chinese remedies) and allergies, seed oil
can cure dermatologic problems, etc.
 Agarwood sawdust (post distilled powder) can also
be used to produce incense cones, bakhoor and
Steam oil
 Oud
 Denh al oud
AGARWOOD TREE

12. The Oud Oil industry
THE OUD OIL INDUSTRY

13.  The Oud Oil industry is estimated at US$6-8 Billion globally
Source: International Journal of Pharmaceutical and Life Sciences, ISSN 2305-0330, Volume 2, Issue 1:
January 2013
 50% of supply is to the Global Perfume and Fragrance Industry which is forecast to reach US$36
Billion by 2017
Source: Report Linker
 Oud Oil suppliers in the main can be described as minor, a ‘cottage industry’
 Industry is regulated as in only plantation based feedstock is allowed to produce Oud products
 Illegal supply remains a threat to the industry
 Major global perfume houses in Europe have been fined and have switched to legal suppliers as a
result
INDUSTRY OVERVIEW
A MATURING GLOBAL INDUSTRY

14. CITES
 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. 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
 It is a requirement for Agarwood originating from managed
plantations to register with CITES to ensure its origin, a CITES permit
is a prerequisite for the export of Oud products.

15. Source: www.cites.org
GLOBAL IMPORT : MIDDLE EAST
THE MAJOR OUD OIL CONSUMERS
293
455 335
498
100
984
31 18
2,240
1,716
7,582
1,825
121 83
287
108
447
1,285
780
2,236
299 338 258 290
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2011 2012 2013 2014
Bahrain
Malaysia
Saudi Arabia
Singapore
United Arab Emirates
Others
Kg
Year
Oud Oil Import Quantity (All Species)

16. GLOBAL EXPORT :
GROWING DEMAND IN OUD OIL
Source: www.cites.org
232 246 182
109
549
272
470
334
1,813
4,135
7,232
2,785
741 668
99 157 157 26567 53
563
163
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2011 2012 2013 2014
Malaysia
Singapore
Thailand
United Arab Emirates
Viet Nam
Others
Oud Oil Export Quantity (All Species)Kg
Year

17. THAILAND OUD OIL EXPORT :
MIDDLE EAST IS STILL THE BIGGEST MARKET
Source: www.cites.org
14 42
238
75100
983
31 15
283
435
333
498
265
738 663 698760
1,581
5,863
1,178
89 138 103 86
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2011 2012 2013 2014
Thailand Oud Oil Export Quantity (All Species)
Singapore
Malaysia
Bahrain
United Arab Emirates
Saudi Arabia
Others
Kg
Year

18. The Main market is still in the Gulf region but we can see high growth in European market
64%
25%
5%
6%
0% 2012
Middle east Europe
Asia North America
South America
Middle east
38%
Europe
35%
Asia
25%
North
America
2%
South
America
0% 2015
Middle east Europe Asia
North America South America
TREEDOM’S CLIENT BASE

19. Treedom identified the client segmentation as
following;
Raw material supplier for cosmetics and
aromatherapy products
 Fragrance House (FH)
 Trader (T)
 Retailer (R)
 Individual (I)
TREEDOM’S MARKET - SEGMENTATION
Fragrance House
29%
Individual
6%
Retailer
32%
Trader
33%
Customer Segmentation
Fragrance House Individual Retailer Trader

20.  In 2011 Thailand exported 1,511 Kg
 In 2013 Thailand exported 7,232 Kg. A growth of 378%!
Source: CITES export data
 Saudi Arabia, UAE, Bahrain, Malaysia and Singapore are the
largest oud oil importers
 In 2011 Saudi Arabia imported 761kgs from Thailand; in 2013 =
5,863kgs. A growth of 670%
 Singapore is emerging as a small distribution ‘hub’. In 2011 imports
were 13.5kgs; in 2013 = 238kgs!
 Oud oil prices expected to rise due to regulation enforcement and
demand growth
PURE AND BLENDED OUD OIL IS ON
A STEEP DEMAND TRAJECTORY…

21. Plantation Process Distillery Process
OUD OIL PRODUCTION PROCESS

22. PLANTATION OPERATIONS

23. TREEDOM’S NURSERIES
Quality control is one of the essential parts for effective Agarwood plantation management.
Treedom’s Nonsi and Klongkaew nurseries employ vigorous quality standards to our raw material
supply from the outset.

24. Treedom’s plantations occupy over 850 acres in Trat and Chantaburi province in Thailand with over
250,000 units of raw material supply.
TREEDOM’S PLANTATIONS

25. ISO9001:2008

26. OUD FACTORY

27. Treedom is planning to increase production capacity by installing the amount of distilling pots to 360
units towards 960 kg production a year aiming to be the largest premium oud oil production factory
in Southeast Asia by 2019.
EXPANSION TARGET

28. TRADITIONAL DISTILLING PROCESS

29. MODERN DISTILLATION
 Gas heated stills (LPG)
 Distillation time 10 Days
 Production 80 Kg per month
Advantages:
 Consistency of Quality & Quantity
 Economies of scale - lower cost
 Large Volume Supplies

30. INTELLECTUAL PROPERTY
 Treedom’s patented inoculation formula that works as a stimulus to create black resin in the
trunk for Oud Oil extract within one or two years
 Since Oud Oil purity is a prerequisite to successful worldwide distribution, Treedom’s laboratory
focuses on final quality control to meet international standard i.e. qualified density, viscosity,
index of refraction

31. GRADING OF OUD OIL
The value of Agarwood and Oud Oil depends on a set of factors related to the size, resin content,
odour profile, durability, color and purity.
The country of origin is an important aspect for its value in the GCC

32. OIL GRADING AND PRICING

33. GUIDELINE
Grading Guideline for Clients
Conclusion

34. Product specification
1. Batch number
2. Date of production
3. Oil properties detail
- General properties:
Moisture in oil
smell
color shade
- Physical properties:
Refractive index- density of the oil
Relative density
Surface tension
- Chemical properties: allergy test result
4. Oil grading results
QUALITY CONTROL
(PRODUCT CERTIFICATE & ANALYSIS)

35. Sample of test report from Treedom’s Seyufii Cambodian Oil
Certificate of analysis from Gas chromatography (GC) test
QUALITY CONTROL
(PRODUCT CERTIFICATE & ANALYSIS)

36. Certificate of analysis from Gas Chromatography (GC) test
QUALITY CONTROL
(PRODUCT ANALYSIS)

37. RESULTS COMPARISON: Safii Cambodia(B8)

38. 1. Seed to Oil – touch point on the whole value chain to ensure quality
2. International standard of quality with ISO guaranteed on plantation management and distillation
facilities
3. Consistent quality and supply – Batch production
4. GC-MS analysis
5. Legally traded with CITES certified
6. Work with perfumers & evaluators to develop products for the market
COMPETITIVE ADVANTAGE

39. Any questions
DISCUSSION SESSION