1. A Pure Touch Of Nature and Intellect
Agarwood Oil (Oud) Production in Thailand
Business Approach and Projections
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2. What is Agarwood?
Agarwood are also known as Agarwood from
Aquilaria genus.
Agarwood is a kind of resin which forms a natural
consequence of the reaction to the attacks agarwood
tree fungus / bacteria (disease). Plants attacked by
spreading a smell of oil to protect the injured body
part (either the root, stem, branch, etc.) where the oil
will eventually become hard (resin). Resin material
that is produced consists of a sari or the diffusion of
aromatic resin known as agarwood.
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3. Why Agarwood?
Agarwood is the most expensive resinous wood
in the world;
Agarwood consumption has increased 25 times
over the last 40 years;
Global demand for agarwood exceeds supply;
We have access to trees in Thailand and to the
most advanced technology for production of
100% natural agarwood oil / oud with
extraordinary high efficiency.
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4. Use of Agarwood
Agarwood is used in various ways, including traditional
medicine, art and artifacts, artifacts essential oil. Agarwood
burned to produce a fragrant odor since time immemorial
by the Chinese, Arab, India, Japan and Korea which are
widely used in festivals, customs and religion. Starch is
extracted from agarwood oil was used as a perfume
ingredient. For example, oil "Attar", which is water-based
perfume containing agarwood oil extract. Perfumes are
widely used by Muslims and other religion.
Based on quality agarwood divided on grades of between
$1,000 to $60,000 per kg. Starch extracted oil is also sold on
the quality according to certain grades of between $100 -
$400 per tola (12 ml). Pieces of wood based on the quality
agarwood sold according to grade from $1.5 - $10 per kg.
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5. Agarwood Oil Production
Production Cycle
1. Buy 7-8 years old trees
2. Inoculate using proprietary fungal formula
3. Wait 9-10 months
4. Harvest trees – 1 week
5. Separate inoculated pieces
6. Produce powder / dust
7. Soaking
8. Distillation of oil
The whole cycle is 1 year
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6. Agarwood Oil Production
Our Concept
1. Produce oil of medium quality
Less than $10k per kg
Easier to sell
Wider market
2. Produce 40 kg oil per month
3. Sub-contract powder preparation for 1st year
To start production immediately
May be consider continue 2nd year, at least partly
4. Target all markets:
Far East
Arab world
Western world
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7. Capital Investment
Equipment Price/unit Units Cost
Distillation system $55,000 1 $55,000
Grider $2,667 0 $0
Owen $6,667 0 $0
Steenless tanks $100 300 $30,000
General equipment $13,333 1 $13,333
Pick-up car $28,333 1 $28,333
Motocycles $2,000 2 $4,000
Misc $25,000 1 $25,000
Total capital investment $155,667
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8. COGS
Ingredients Price/unit Units Total cost Time
Trees $67 160 $10,667
Inoculate $17 160 $2,667 2 weeks
Harvest and deliver $333 1 $333 40 weeks
Total $417 $13,667 52 weeks
COGS per kg oil $341.67
Produce podwer, kg 4,000
COGS per 1 kg powder $3.42
During 1st year of operation we will purchase ready powder.
For Business Plan considered cost of powder as THB 400 / USD13.3
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