The Importance of Oud

Sustainable Asset Management and Greenstone Equity Partners have teamed up with speciality plantation operator Asia Plantation Capital to bring agro-forestry and Oud bearing Aquilaria plantations as serious project opportunities to institutional investors in the Middle East North Africa (MENA) region, whilst simultaneously working to help preserve the increasingly rare Aquilaria tree in the wild.

The traditional use of Oud as an incense in the Gulf region is well known. This valuable oil is renowned for its pleasant and distinctive odour. Over generations Oud has been embodied into local culture as a sign of hospitality and generosity to family, guests and dignitaries. As a result of this demand, Oud and agarwood have become rare in the wild. Future supplies have only been safeguarded by both international legislation, with CITES protecting the rare Aquilaria species in the wild, and by the actions of specialist forestry companies such as Asia Plantation Capital (APC) who have created sustainable tree plantations and invested in modern distilling techniques to ensure future farmed Oud and Agarwood supplies.

Aquilaria trees require very specific growing conditions and when infected by particular fungi yield the precious agarwood, from which Oud is derived. In nature this occurs in fewer than five trees per hundred, but with modern forestry practices and following extensive scientific research, several methods have now been discovered to inoculate these trees and induce agarwood in virtually the whole crop. This has allowed innovative companies such as APC, who use an organic inoculation method, to develop a good number of small-scale forestry plantations across Thailand, Sri Lanka and other South East Asian countries where Aquilaria trees have been grown for a number of years and continue to be planted.

Mark Wills, Managing Director at Sustainable Asset Management (SAM), explains that “these plantations help balance the supply & demand, reducing pressure for illegal logging and the environmentally damaging cutting of wild Aquilaria in search for wild agarwood.”

The size and nature of each Aquilaria plantation is of key importance for the crop and for the local community. APC plantations are classed as agro-forestry as the land has dual uses in the early years of the Aquilaria trees’ life. By grouping plantations in regions, and growing secondary crops such as teak, bamboo, banana and other foods, these plantations create many jobs for local communities and become a centre for the processing of agarwood and Oud oil; which are labour intensive and rewarding activities for local community groups. APC has used agarwood as a social instrument to help revitalise communities in rural areas in this region.

APC is a vertically integrated business; social forestry is their passion and they recognised early on that value retention comes from selling the end product through to the market and developing new products and brands for their produce. Today APC is using agarwood and Oud as traditional products for the Gulf communities, as well as in a variety of products that appeal to Western and Eastern consumers’ alike; from fragrances used at Fragrance du Bois, through luxurious cosmetic products, to nutritional supplements, improved rice and even in traditional medicinal applications.

Of course, there remains Oud oil. APC and Sustainable Asset Management place great emotional value on the traditional uses of Oud and have been honoured by the recognition of their dedication from both Gulf based investors and now by Greenstone Equity Partners, looking to participate in what has become a partnership for social action and culture preservation.

Omar Al-Gharabally, Managing Director at Greenstone Equity Partners comments “when we recognised the quality of Sustainable Asset Management’s Oud, and heard of the dedication and forestry expertise within APC, we knew that we would welcome a commercial relationship. The careful due diligence we have conducted highlights not only the environmental and cultural positives of this project but also the financial rewards.”

Publish your content with EB Publishing

It's about who you reach. Get your news, events, jobs and thought leadership seen by those who matter to you.

Most popular

Featured Events

Publish your event
leaf background pattern

Transforming Innovation for Sustainability Join the Ecosystem →