Developing essential oils in Malaysia

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Developing essential oils in Malaysia - A list of potential oils to develop. (This is a 2006 presentation to MIFB Agro-Business Conference, PWTC Kuala Lumpur, July 2006)

Developing essential oils in Malaysia

  1. 1. Developing Essential Oils in Malaysia as a Global Industry Mohamed Murray Hunter School of Bioprocess Engineering Northern Malaysian University College of Engineering
  2. 2. Introduction <ul><li>Essential oil industry </li></ul><ul><li>almost non-existent in Malaysia – WHY? </li></ul><ul><li>Industry unknown </li></ul><ul><li>Crops Unknown </li></ul><ul><li>Economics Unknown </li></ul><ul><li>Benchmarking </li></ul>
  3. 3. Essential Oil <ul><li>A volatile oil obtained from a </li></ul><ul><li>wide variety of plant, scrub, </li></ul><ul><li>and tree species and from </li></ul><ul><li>various parts of the plant </li></ul><ul><li>anatomy, such as the roots, </li></ul><ul><li>rhizomes, wood bark, leaves, </li></ul><ul><li>stems, fruit, flowers and seeds. </li></ul><ul><li>Usually extracted by hydro or </li></ul><ul><li>steam distillation, expression </li></ul><ul><li>or effleurage - Hunter 1996 </li></ul>
  4. 4. H&R Guide to Fragrance Ingredients
  5. 5. H&R Guide to Fragrance Ingredients
  6. 6. Other Aromatic Compounds <ul><li>Concretes & Absolutes </li></ul><ul><li>Balsams & Resins </li></ul><ul><li>Extracts & Tinctures </li></ul>
  7. 7. H&R Guide to Fragrance Ingredients
  8. 8. H&R Guide to Fragrance Ingredients
  9. 9. H&R Guide to Fragrance Ingredients
  10. 10. H&R Guide to Fragrance Ingredients
  11. 11. Potential Models of Essential Oil Production <ul><li>Co-operative or Contract growing </li></ul><ul><li>(community organisation) </li></ul><ul><li>Small Scale Plantation </li></ul><ul><li>(boutique/niche/agro tourism </li></ul><ul><li>/vertical integration – </li></ul><ul><li>manufacture consumer </li></ul><ul><li>products) </li></ul><ul><li>Large Scale Plantation </li></ul><ul><li>(competitive cost advantage </li></ul><ul><li>required to enter market) </li></ul><ul><li>Production of Essential Oil as a </li></ul><ul><li>Bi-product (focus on other </li></ul><ul><li>industry, timber, etc) </li></ul>
  12. 12. Opportunities
  13. 13. Ranking Criteria <ul><li>1. Potential Returns </li></ul><ul><li>2. Production Costs </li></ul><ul><li>3. Capital Investment </li></ul><ul><li>4. Crop Suitability </li></ul><ul><li>5. Risk </li></ul><ul><li>6. Time Frame of Opportunity </li></ul><ul><li>7. Level of Difficulty to enter Market </li></ul><ul><li>8. Personal Bias </li></ul>
  14. 14. What Not to Consider <ul><li>Lemongrass </li></ul><ul><li>Cost of production, small market </li></ul><ul><li>Citronella </li></ul><ul><li>Cost of Production, Elasticity of supply </li></ul><ul><li>Patchouli </li></ul><ul><li>Establishment costs, elasticity of supply </li></ul><ul><li>Rose Oil </li></ul><ul><li>Labour intensive, requires great organisation, </li></ul><ul><li>cost of production </li></ul><ul><li>Jasmine </li></ul><ul><li>Cost of production, high investment, </li></ul><ul><li>requires great organisation, labour intensive </li></ul>
  15. 15. 10. Geranium ( pelargonium species) Potential High Value Boutique Crop Good for Hilly Terrain
  16. 16. 9.Lengkuas (Alpinia galanga) UV Properties Flavour Ingredient Easy to cultivate Niche Oil –specialised market
  17. 17. 8.Melaleuca bracteata Source of Aromatic Ethers that can Assist in Relieving Plant Stress Cultivates Well in Malaysia Rapidly Growing Market
  18. 18. 7. Artemisia annua A source of artemisinin for treatment of malaria World Shortage Straight forward cultivation
  19. 19. 6. Pyrethrum ( Chrysanthemum cinerariifolium) Not Strictly Essential Oil Solvent Extraction Rapidly Growing Market for Pyrethrum as Organic Pesticide Excellent Crop for Highlands – Pahang, Terengganu,Kelantan, Sarawak, Sabah
  20. 20. 5. Backhousia citriodora (Lemon Myrtle) High Investment to Expand Industry in Australia Strong Demand as an Ingredient for tea Good Crop to Grow in Most Parts of Malaysia
  21. 21. 4. Persicaria odoratum ( Kesum) New Material Good Highland Crop Small Scale High Value Pests Easily Controlled Doesn’t need Registration as an Aromatic Chemical
  22. 22. 3. Eucalyptus citriodora Good Northern Crop Easy to Cultivate Oil is a bi-product Excellent & High Valued Hard Wood One year for oil 10 years for timber
  23. 23. 2.Cajuput (Gelam) Melaleuca cajuputi Local Tree Number potential Markets Can Basically Set Price Easy to Cultivate
  24. 24. 1. Tea Tree ( Melaleuca alternifolia) No Stable Production Forecast Shortage Potential Downstream Suitable All Areas Few Pest & Disease Issues Small or Large Scale Production Established Market
  25. 26. Just Out of Top 10 <ul><li>Pandan Absolute </li></ul><ul><li>(Pandanus odorus) </li></ul><ul><li>Tobacco Leaf Absolute </li></ul><ul><li>(Various sps. Nicotiana) </li></ul><ul><li>Agarwood </li></ul><ul><li>( Aquilaria sps.) </li></ul><ul><li>Star Anise Oil </li></ul><ul><li>(Illicium verum) </li></ul>
  26. 27. What Do We Do Next?
  27. 28. <ul><li>Natural Product Development Process (Aromatic) </li></ul>Biological Screening Screening For Development Potential Regulatory Screening Market Development Environmental Analysis Evaluation of Capabilites Market Analysis Technical Development Commercialis -ation Strategies Development Process Screening Process Opportunities & Threats Theoretical & Biological Screening REACH, BPD, SCP, GRAS, etc Finance, Knowledge, Land Tenure, etc Project Development in the Field Market, Customers, Options
  28. 29. Screening Process
  29. 30. Biological Screening <ul><li>Bio-prospecting </li></ul><ul><li>Literature Review </li></ul><ul><li>Consider Reintroduction of a Crop </li></ul><ul><li>Consider Introduction of New Crop </li></ul><ul><li>Identify Chemical Constituents of Essential </li></ul><ul><li>Oil </li></ul>
  30. 31. Screening For Development Potential <ul><li>Match Chemical Constituents of Essential Oil to Possible Market Uses </li></ul><ul><li>Evaluate Application Potential of Essential Oil </li></ul><ul><li>Evaluate Yields, Cost of production </li></ul><ul><li>Evaluate Time and Cost of Development </li></ul><ul><li>Value Determination (Use Criteria) </li></ul>
  31. 32. Screening <ul><li>Require Knowledge of Essential Oil Applications </li></ul><ul><li>Require knowledge of International Market </li></ul><ul><li>Require Knowledge of International Regulations </li></ul><ul><li>Need to Collaborate with Industry Parties </li></ul>
  32. 33. Screening Protocols <ul><li>Anti inflammatory </li></ul><ul><li>Anti microbial </li></ul><ul><li>Skin whitening </li></ul><ul><li>UV absorbing </li></ul><ul><li>Anti age actives </li></ul><ul><li>Flavour & fragrance application </li></ul><ul><li>Aromatherapy </li></ul>
  33. 34. Regulatory Screening <ul><li>United States </li></ul><ul><li>- GRAS ( Genarally Regarded as Safe) </li></ul><ul><li>RIFM – Collections of Monographs </li></ul><ul><li>Food and Drug Administration </li></ul><ul><li>Europe – REACH, BPD, SCP </li></ul>
  34. 35. Development Process
  35. 36. Environment Analysis <ul><li>Opportunities & Threats </li></ul>
  36. 37. Evaluation of Resources & Capabilities <ul><li>Resources </li></ul><ul><li>- Funding </li></ul><ul><li>- Time </li></ul><ul><li>- Facilities & Infrastructure </li></ul><ul><li>- Equipment </li></ul><ul><li>- Literature </li></ul><ul><li>Capabilities </li></ul><ul><li>- Available Skills </li></ul><ul><li>(Research Team) </li></ul><ul><li>- Experience </li></ul>
  37. 38. Market Analysis <ul><li>Knowledge of Industry </li></ul><ul><li>Knowledge of Potential Applications </li></ul><ul><li>Knowledge of Customers </li></ul><ul><li>Understanding of Derived Demand </li></ul><ul><li>Understanding of Trends </li></ul><ul><li>Understanding of Other Developments & Improving Technology and Knowledge </li></ul>
  38. 39. Essential Oil Technical Development <ul><li>Project Preparation and Early Work </li></ul><ul><li>- Stakeholders </li></ul><ul><li>- Team </li></ul><ul><li>- Objectives </li></ul><ul><li>- Funding </li></ul><ul><li>- Plan </li></ul>
  39. 40. Essential Oil Technical Development <ul><li>Land Selection </li></ul><ul><li>- Suitable (Soil, Rainfall, drainage, access) </li></ul><ul><li>- Climate </li></ul><ul><li>- Location </li></ul><ul><li>- Tenure </li></ul><ul><li>- Future Expansion </li></ul>
  40. 41. Essential Oil Technical Development <ul><li>Development of Propagation Material </li></ul><ul><li>- Easy to Domesticate? </li></ul><ul><li>- Seed Collection (genetic variance) </li></ul><ul><li>- Other Propagation Methods </li></ul>
  41. 42. Essential Oil Technical Development <ul><li>Planting </li></ul><ul><li>Harvesting Techniques </li></ul><ul><li>Extraction </li></ul><ul><li>Techniques </li></ul>
  42. 43. Essential Oil Technical Development <ul><li>Are Developed Techniques able to Create a </li></ul><ul><li>Viable and Economic Industry? </li></ul>
  43. 44. Marketing Strategies <ul><li>Develop in Conjunction with International Company </li></ul><ul><li>- They will have their own strategy </li></ul><ul><li>Raw Material </li></ul><ul><li>Finished Product </li></ul><ul><li>Local Market </li></ul><ul><li>International Market </li></ul>
  44. 45. Conclusion <ul><li>Multi-disciplinary Approach </li></ul><ul><li>Market Orientation </li></ul><ul><li>Focus on Research Objectives </li></ul><ul><li>Economic Basis </li></ul><ul><li>Focus on Regulatory Issues </li></ul><ul><li>Passion for the Business </li></ul><ul><li>Strategise your business (production/market) where you want to be?, what is the way you will approach the business? </li></ul><ul><li>Look for spin-offs (i.e., mulch, dried leaves, etc) </li></ul>
  45. 46. Thank You

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