Agarwood Description

Agarwood

Agarwood in a natural bi-product of the aquilaria species of tree which belongs to the Thymelaeaceae family. Aquilaria is a genus of 15 trees called lign aloes or lign-aloes trees and is native to Southeast Asia.

Finding naturally produced aloes or commonly known as agarwood is very difficult to find in the wild as the aquilaria trees that produce agarwood have been heavily destroyed by both deforestation and poaching. In the wild, it is estimated that only one in fourteen trees will ever produce agarwood and that it would take many decades to produce the dark fragrant resin. This is a very slow process that has a 7% chance of naturally occurring and even as it may occur the amount of tree infection would be extremely low unless given decades or centuries to produce. Due to these very facts, agarwood is very rare and expensive and in time gone by could only be afforded by royalty.

Aloes wood is mentioned in the Holy Bible, the Quran and is used in other religious ceremonies such as Buddhism. For more than a millennium the burning of aloes to release this wonderful oil known as “Oud” has been used as a fragrance. The oud oil is an essential oil and used in aromatherapy. It is also now used in the fragrance industry and is the main base note in almost 1,000 luxury perfumes. It is also used in Traditional Chinese Medicine and one company; Asia Plantation Capital is helping to fund its cancer fighting benefits with the Islamic University of Malaysia.

From your own research you will see a host of uses and benefits as to why this bi-product has huge value and to that end, the aquilaria species of tree is being hunted into extinction. To research the value and uses of agarwood and oud oil, please see these articles written by the SCMP, CNN, BBC and Al Jazeera about agarwood and Asia Plantation Capital.

Due to high demand and today, very little natural agarwood on the market, the value has considerably increased as wild stock is almost extinct and thus the species of aquilaria is protected by CITES. (the Convention on International Trade in Endangered Species of Wild Fauna and Flora)

Agarwood investment can be very lucrative, but you have to be very careful, as it is very difficult to find the history of any specific piece. Remember, it takes decades if not centuries for natural agarwood to grow, so the history is very difficult to trace. Be very careful of agarwood investment and ensure you do the correct due diligence of any pieces as there are international laws to protect agarwood, transportation and heavy fines and imprisonment are very possible outcomes. You should get as much documentation as to the authenticity of the agarwood, as there are many fake pieces in the market and fake companies selling them on the internet.

Many countries in Southeast Asia have encouraged locals to plant aquilaria in the hope of one day these trees may produce natural agarwood someday in the future. This though is for future generations and also has no guarantee of ever producing valuable agarwood investment. It is known as the “Money Tree” as well as the “Wood of God” and in some places in the Philippines as the “Medicine or Spiritual Tree”.

One famous city in Asia is named after this beautiful aroma “Fragrant Harbour” or more commonly referred to as Hong Kong. Today, the aquilaria tree in Hong Kong is down to less than 100 mature trees due to extensive poaching by mainland gangs after the handover in 1997 from the UK to China. Asia Plantation Capital with a local specialist Mr. Chan, Koon Wing since 2014 have planted over 5000 saplings in the New Territories to help sustain this wonderful potential lifesaving tree and have toured thousands of people and schools to learn about the history of agarwood and its local relevance.

Asia Plantation Capital started in 2009 but was privately operated as Plantation Capital in the UK since 2002 with its first aquilaria plantations in Sri Lanka and is credited with the reintroduction of the species after it became extinct to over harvesting and poaching. Today, Asia Plantation Capital work closely in Sri Lanka with local Government Departments in the development of sustainable aquilaria plantations. Asia Plantation Capital then moved into Thailand and in 2015 into Malaysia and now manage almost 200 plantations growing a variety of trees and fauna with 18 offices across the world.

Aquilaria trees grown on plantations international are helping to sustainable produce agarwood using traditional and modern infection methods to assist the trees in producing the valuable agarwood. Through modern farming techniques and using the latest in-house technologies Asia Plantation Capital have been able to inoculate 100% of the aquilaria trees and in turn, these trees are naturally producing the valuable agarwood resin which in turn can be distilled into oud oil at Asia Plantation Distilleries. These farming methods have greatly reduced the term with the earliest production for agarwood for oud production to around 7-8 years and 9-10 years for agarwood biomass. This is turn has eased the pressure on the wild stock and now the fragrance industry has other legal sustainable options.  Oud produced from Asia Plantation Capital can be found at international fragrant stores such as Fragrance du Bois and Oud Essentials and is used in a number of other leading fragrant brands, although some top named brands use synthetic oud and not the genuine oil such as Tom Ford.

An aquilaria tree may be inoculated from as early as 5-6 years and should be no less than 35cm at 1.5m in height. If inoculated for the production of oud oil, it takes an additional 24 months for the resin to form in the tree and a seven-year-old tree will produce around 35kg of agarwood of which only 60% is usable. It takes 10kg to produce one tola of oud (11.66ml), so one tree should on average produce just over two tola’s of oud. This will increase if the tree is left to grow and inoculated at a letter age at a rate of around 7.5%, as this is a natural growing entity this may be lower or higher. The remaining 40% can be used in other related products, so this is zero wastage of the tree. Asia Plantation Distilleries based in Thailand and Malaysia are at the forefront in the development of increasing in-house production and are looking to increase the usable amounts from 60% to 70% in the near future.

As you read, you can see that agarwood investment and the growing of aquilaria trees are very different, there is no such thing as an agarwood investment plantation, as agarwood is a bi-product and oud is distilled from agarwood. To an agarwood investor or art dilettante or connoisseur, plantation aquilaria is of a much lower value as it hasn’t taken decades or centuries to naturally produce and so has a relatively lower value in appreciation compared to aged wild grown agarwood. 

For other commercial uses though, plantation trees have immense value and worth, as the oud essential oils have the same medical values, it just doesn’t take as long to produce. So, an agarwood investment, is something like art or a fine wine, it gets better and more valuable with time, so be very cautious on people offering huge returns on agarwood investments as many cannot be substantiated. On the other hand, plantation produced agarwood and oud oil has huge demand in other areas such as medical, religion, fragrance and now other commercial benefits such as agarwood or oud tea, health drinks, agarwood bracelets, agarwood biomass such as the agarwood powder used for incense burning. Car manufacturers use agarwood and oud in their high-end luxury cars such as the Mercedes Benz Maybach.

All APC’s plantations international work with all local and international laws and all trees, transport and trading come with CITES certification. APC currently offer the opportunity to purchase aquilaria trees in Malaysia State, Borneo in both sapling and semi - mature trees aged a minimum of three years, these trees would be ready to harvest in five years. Clients have the options to sell their trees at any time or may wait until the trees are mature enough to produce agarwood with APC own inoculation methods to form agarwood for the purpose of oud oil or agarwood biomass production starting from maturity at a minimum of seven years or correct growth achieved. All trees come with quality assurances and a one for one replacement insurance policy in case of death, fire, flooding etc. Because of global warming and changing climate conditions. This is a major impact on the world as we know, so very important to check what protection you have if something goes wrong.

Owning trees in a plantation scenario is very safe and secure as the plantations with Asia Plantation Capital offer 24-hour protection all year round. There are no additional costs other than the purchase of the trees and Administrative charge. Asia Plantation Capital charge at the sale of the oud or agarwood a flat 25% fee for the cost of harvest, production of the end product(s) and sale of the products with agreed minimum prices as per the agreement. Oud oil at USD280 per tola and agarwood biomass at USD55kg. These are minimum rates and APC will always achieve the highest rates at the time of the sale, as this is where APC make their money at the end of the term.

Document may be downloaded here.

As a point, all clients trees are managed separately, and clients have access to the day to day running. Clients may change management companies and use 3rd parties at their discretion subject to terms of entering the land and use of pesticides etc. to maintain the highest quality. Clients request as to when trees are to be inoculated and as to what they end product will be. So, trees on the plantation will be sold and harvested for different products at different times and not as a plantation as a whole. Different clients will get different returns based on the yield and price of the oud/biomass at the time of selling.

See link for latest market retail values.

Sapling trees may not be in the ground but at point of purchase in the nursery but will be planted within 6 months of purchase. All trees haves their own unique identification numbers and clients can access their trees information remotely by QR Code.

There are many new companies now joining the established companies, so you have a choice, which is always good for competition. However, some of these companies may not be genuine in what they offer, and you should do your own due diligence. Some are ex-employees who have now gone alone, so they have the knowledge but may not have the resources to fulfil their obligations. There are numerous companies that have come and gone operating out of Singapore for example and have muddied the waters with false promises and fake plantations international and local claimed.

Always ask to see the agreements beforehand and to check that they own or lease the lands on their plantations (international) and ensure that you can visit their offices, factories, plantations (international) and retail stores if they have them. Do not purchase over the phone, instead go and see them face to face or even better ask to speak with their existing clientele for comments and testimonials. Be aware of companies using paid AdWords to get to the top of the page, especially if offering huge returns as this is very misleading.

Asia Plantation Hong Kong Limited was established in November 2011 and is the sole authorised sales agent of Asia Plantation Capital in Hong Kong, and is one of a number of sales agents selling Asia Plantation Capital's foresty products throughout Asia. Asia Plantation Capital has been repaying clients in Hong Kong since 2015 who purchased semi-mature trees. Many of our clientele are happy to speak to potential new clients and attend many of our monthly functions.