DEMAND FOR AGARWOOD SOARS

VIENTIANE TIMES NEWSPAPER
Business

An Indian investor is planning to plant one million agarwood trees in Laos by 2014, along with processing factories to extract the oil for export to the Middle East and Japan.

Managing Director of the Lao Agar International Development Company, Mr Habib Mohammed Chowdhury, said on Friday that the market for agarwood products was very large in Arab countries, Taiwan , Japan , Singapore , Thailand and Brunei .

“But I intend to supply only the Middle Eastern and Japanese markets because I don’t have enough raw materials to supply others,” he said.

“I need lots of agarwood. At present supply does not come close to meeting demand. Even now I can’t achieve my targets.”

Mr Habib Mohammed said that existing agarwood plantations in Laos were not enough to supply his two factories in Vientiane and Xaysomboun district of Vientiane province, and he was having to import more from Malaysia and Indonesia.

Now he plans to expand plantations and significantly boost exports. On June 1 he will plant 100,000 trees to mark Arbor Day and then increase the number of plantations every year.

The Lao Agar International Development Company was the first multinational company in Laos and was incorporated in 1998. It is the largest company operating in the agarwood business in Southeast Asia .

Mr Habib Mohammed owns agarwood plantations in Laos and Malaysia . In Laos , he has planted 100,000 trees so far in Borikhamxay province and Xaysomboun, excluding those given to villagers for cultivation.

He began exporting oil from Laos in 2001. The sale price of agarwood ranges from 960,000 kip (US$100) to 96 million kip (US$10,000) per kg, depending on the quality after seven years of growth.

Mr Habib Mohammed’s family is engaged in the same business. “When I was young, my father imported agarwood from Malaysia , Thailand and Singapore . He always said that the agarwood in Laos was very good quality.”

He came to Laos in 1998 and decided to invest in agarwood.

“I have a deep love in my heart for Acquilaria trees. I’m afraid that if people cut down these trees without replanting, one day they will disappear from the world,” he said.

“I have a vision for Laos in 2012, with 100,000 hectares of land under agarwood cultivation. This would bring in good export income for the country and provide many employment opportunities for local people.”

Mr Habib Mohammed said the Lao government had always supported him and helped him with any problems the company encountered.

The species is native to northern India , Laos , Cambodia , Malaysia , Indonesia and Vietnam and is the world’s most expensive wood.

It is valued in many cultures for its distinctive fragrance, and used extensively in incense and perfumes. The wood is formed as a result of the tree’s immune response to fungal infection. This resinous material is produced by tropical rainforest trees and has been used for centuries as incense and in traditional medicine.

It is an extremely important component in traditional Japanese incense ceremonies, and Arab people use it as a fragrance on a daily basis. They burn it when they have a special function such as a festival or wedding, when receiving guests, and give it to each other as a gift.

By Vientiane Times

(Latest Update May 28, 2007)

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