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THE MAGIC OF OUD

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For The british perfume society 2016

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THE MAGIC OF OUD

  1. 1. Andrew G. Steel Chief Executive The Treedom Group
  2. 2. 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
  3. 3. 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
  4. 4.  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
  5. 5.  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
  6. 6. 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
  7. 7. 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
  8. 8. NOTABLE OUD BASED FRAGRANCES
  9. 9.  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
  10. 10. The Oud Oil industry THE OUD OIL INDUSTRY
  11. 11.  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
  12. 12. 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.
  13. 13. 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)
  14. 14. 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
  15. 15. 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
  16. 16. 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
  17. 17. 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
  18. 18.  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…
  19. 19. Plantation Process Distillery Process OUD OIL PRODUCTION PROCESS
  20. 20. PLANTATION OPERATIONS
  21. 21. 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.
  22. 22. 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
  23. 23. ISO9001:2008
  24. 24. OUD FACTORY
  25. 25. 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
  26. 26. TRADITIONAL DISTILLING PROCESS
  27. 27. 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
  28. 28. 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
  29. 29. 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
  30. 30. OIL GRADING AND PRICING
  31. 31. GUIDELINE Grading Guideline for Clients Conclusion
  32. 32. 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)
  33. 33. Sample of test report from Treedom’s Seyufii Cambodian Oil Certificate of analysis from Gas chromatography (GC) test QUALITY CONTROL (PRODUCT CERTIFICATE & ANALYSIS)
  34. 34. Certificate of analysis from Gas Chromatography (GC) test QUALITY CONTROL (PRODUCT ANALYSIS)
  35. 35. RESULTS COMPARISON: Safii Cambodia(B8)
  36. 36. 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
  37. 37. Any questions DISCUSSION SESSION

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