Asia Plantation Capital expands Agarwood Inoculation Programme

Over the course of 2015, award-winning plantation management company, Asia Plantation Capital, has expanded its inoculation and plantation programme for Aquilaria trees into Malaysia – home to Southeast Asia’s biggest agarwood processing factory and distillery, established by the company itself.

The project, carried out by Asia Plantation Capital’s Thailand research and development team, under the guidance of its Scientific Advisory Board, commenced in March 2015, and is aimed at replicating the successful processes that produce sustainable agarwood across all the company’s plantations in Thailand and Sri Lanka.

The research and development team has achieved significant results on mature plantations in Malaysia (in Johor, and close to Kuala Lumpur) consisting of owned plantations and joint ventures. After the first inoculation of Aquilaria trees (species: Malaccensis, Senensis, Subintegra) proved successful, the second tranche was treated in November and December 2015.

It is important to note that species, climatic conditions, soil, elevation and water availability are all critical to the success of the inoculation process. All these factors work in tandem with the company’s scientifically developed and proven proprietary systems.

Known as the ‘Wood of the Gods‘, agarwood is derived from the highly endangered Aquilaria tree, which produces a dense, rich and dark resinous heartwood in a natural response to infection. Using patented technology, Asia Plantation Capital inoculates the trees to instigate that infection, thereby guaranteeing that all the trees produce the resin. The heartwood is then extracted and processed into woodchips, ground into powder, or distilled to produce the highly valued Oud oil.

It is estimated that only 7 per cent (or less) of wild Aquilaria trees produce agarwood naturally. This has resulted in the relative rarity and the attendant high cost of agarwood, as resources in the wild are depleted. This has led to the critical need to grow the Aquilaria tree and produce agarwood sustainably and ethically, with estimates also suggesting that as much as two-thirds of the market may still be from illegal sources.

“This is a significant milestone for us in Malaysia and for the company as a whole,” said Steve Watts, Asia Plantation Capital’s CEO, Asia Pacific. “Rest assured, however, we will not be stopping here. Our promise is to actively research and improve our systems, to set higher standards and establish the benchmarks that need to be met. We are already setting targets to maximise the infection in more areas of the tree, including branches and roots, as opposed to just the trunk.”

He continued, “With a steady, sustainable supply of agarwood, fewer trees will fall into the hands of illegal loggers, and that will result in a reduction in demand on black markets. As part of our commitment to holistic sustainability - we make considerable investments in the communities in and around which we operate - we will also share the technology with smaller growers and farmers across Asia. This helps them in the cultivation and end processing of agarwood, thereby providing them with income. It is very important for us, as a company, to know that everything we do impacts the environment, and society, in a positive way. Not just now, but for generations to come.”

To cater to the growing demands for agarwood, Asia Plantation Capital opened a purpose-built agarwood factory and research centre in Johor Bahru, Malaysia, early this year. It is a state of the art facility that incorporates an Oud oil distillery, a woodchip processing centre, and a fragrance stick factory. Also situated within the complex is a visitor centre, along with a wholesale factory shop stocked with the ever-growing range of agarwood products produced by the company.

This is one of a planned program of opening large scale processing facilities strategically located across Southeast Asia and the Middle East to cater to the demands and products for specific end markets such as China and the Middle East.

A pioneer in the industry, Asia Plantation Capital has been cultivating agarwood since 2009, and is known to be the market leader in terms of scientific knowledge and the techniques required to stimulate the resinous heartwood by inoculation. In nature, infected trees typically produce resin after 20 years or more.

In the setting of an Asia Plantation Capital managed plantation, however, agarwood is produced in as little as seven years. In Asia Plantation Capital’s husbandry programme, agarwood resin (Oud) is produced between years 7 and 15, and is utilised for a wide variety of end products.

Asia Plantation Capital’s research and development team consists of globally recognised experts in the Aquilaria tree species, as well as in agarwood production and techniques in Oud distillation. The team also collaborates with leading universities across Asia, ensuring that they are able to consistently produce the optimum quality and quantity of agarwood/Oud.

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