Asia Forestry Management, an integrated plantation-management company with a focus on cultivating Aquilaria crassna, aims to become Thailand's biggest producer of oud oil this year and Southeast Asia's in five years.
Oud oil, or agarwood essential oil, is used as an ingredient of perfume and for religious purposes among Muslims. It is derived from the resinous heartwood of Aquilaria trees.
The company’s plant in Trat province will be expanded to produce 280 kilograms of oud oil per annum by the end of this year from 150kg at present. It will look for more areas to grow its trees in Cambodia, Myanmar and Malaysia to supply the factory, through either management contracts or investment by the company, Andrew Steel, chief executive officer of the Treedom Group, the parent of Asia Forestry Management, said yesterday.
The company was founded in 2006 in Thailand and is headquartered in Hong Kong.
Thailand is considered the perfect place to grow A crassna and is home to 29 agarwood plantations with about 500 rai (80 hectares) of land.
In Luxembourg, Bt100 million was raised for expansion, but in the early stage, only Bt30 million will be spent.
In Thailand, the company plans to grow its sales by 117 per cent to Bt484 million this year by opening three of its own outlets as its new business and producing its own brand Dar al Oud, which was launched last year.
Most of the oud oil produced in Thailand is exported. The company controls 7 per cent of the market and expects that figure to rise to 12-15 per cent by year-end.
Demand for oud oil is on the rise in the international market. Worldwide sales have passed US$1 billion (Bt30 billion).
The perfume market is globally valued at $33 billion in 2015 and is projected to increase to $36 billion in 2017. The Muslim population is expected to climb to 3 billion in 2020 from 2.1 billion last year.