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- Business
- Singapore firm plans Oud factories in GCC
Singapore firm plans Oud factories in GCC
Asia Plantation Capital’s new agarwood (Gaharu) factory and Research Centre. According to a statement by the company on March 9, one factory is planned for Abu Dhabi and another in Jeddah in Saudi Arabia, being developed by the company over the next 18 months.
By Arno Maierbrugger/Gulf Times Correspondent /Bangkok
Asia Plantation Capital, a Singapore-headquartered group that operates agarwood plantations in Southeast Asia that deliver the precious raw material for expensive Oud perfumes highly valued in the Middle East, has said that it plans to open factories in the Gulf Co-operation Council (GCC) countries to be closer to one to its most important markets. According to a statement released by the company on March 9, one factory is planned for Abu Dhabi and another in Jeddah in Saudi Arabia, being developed by the company over the next 18 months.
The announcement was made after the opening of Asia Plantation Capital’s new, purpose-built agarwood factory and research centre in Johor, Malaysia, that incorporates an Oud oil distillery, a wood chip processing centre and a fragrance stick factory.
“This is part of an Asia-wide strategic factory and production expansion,”, said Steve Watts, CEO of Asia Plantation Capital Bhd in Kuala Lumpur, adding that “it comes with a distillation factory joint venture in China with Hua Lin Group – China’s largest manufacturer of agarwood products – as well as strategic expansion in Thailand into wood chip production and incense manufacturing and the planned factories in the Middle East.”
Asia Plantation Group is one of the largest agarwood plantation operators worldwide and runs plantations cultivating the rare wood mainly in Thailand, Malaysia, Myanmar and India. The material is exported via Singapore to the main markets Saudi Arabia, UAE, Japan and Taiwan, as well as increasingly to European luxury perfume manufacturers.
The company acts as plantation manager and advisor to various private equity funds that focus on forestry and farming, as well as on renewable energy sectors, and also manages other agro forestry projects involving teak, mahogany, sandalwood, bamboo and even rubber and maize. All products come with their own certificates, including Shariah compliance.
With around $600mn assets owned and under management – of which are 2mn trees on agarwood plantations–, the group now has plantations and agricultural projects on four continents, with operational projects at various stages also in China, Laos, Cambodia, Sri Lanka, Vietnam, North America and Europe, and a turnover forecast for this year of $100mn.
The agarwood plantation industry is growing rapidly with Singapore having emerged as Asia’s biggest agarwood import-export centre at more than $1.2bn in estimated trade per annum, more than one third of the global agarwood market which is worth around $ 3.3bn per year.
The biggest consumer markets for agarwood are in the Middle East and Northeast Asia where it has been used for over thousand years. Besides Singapore, Taipei, Hong Kong and Bangkok are major trading hubs for agarwood, while Thailand, Indonesia, Vietnam and Malaysia are major producers. The increasing scarcity of the trees makes high-quality, plantation-grown agarwood much sought-after to meet global demand.
In the Middle East, where Oud is a highly valued and priced fragrance, the largest market with 90% of trade is Saudi Arabia where around $1.63bn are spend on Oud each year.
Western perfume manufacturers have also adopted the Oud scent in the recent past as they seek to expand into emerging Middle Eastern and Asian markets. Famous brands using Oud include Calvin Klein (Obsession), Nina Ricci (Mademoiselle Ricci), Dolce & Gabbana (Velvet Desert Oud), Armani (Prive Oud Royal), Yves Saint Laurent (Splendid Wood), Versace (Oud Oriental), Dior (Fahrenheit Absolute) and others.