Agarwood downstream industry can grow further


THE agarwood downstream industry has the potential to grow even further as many entrepreneurs have yet to take part in the sector, especially in perfume manufacturing, said Plantation Industries and Commodities Minister Datuk Dr Mohd Khairuddin Aman Razali (picture; right).

He said locally, there has been a lack of participation in the industry although South-East Asia is well known for producing agarwood essential oils that is used to produce perfumes in the Middle East.

“As of December 2019, only 217 companies and individuals have registered with the Malaysian Timber Industry Board (MTIB) as karas tree planters (for the production of agarwood), involving 2,398ha and 2.3 million trees.

“A total of 13 companies have registered with MTIB as agarwood exporters and importers, 22 companies and individuals as manufacturers, while more than 50 agarwood product businesses have been identified nationwide,” he said.

Mohd Khairuddin said this to reporters during his visit to the Oud Agarwood Enterprise’s agarwood essential oil production facility in Kampung Bukit Tok Ali, Kuala Balah, Jeli in Kelantan yesterday.

Also present was Oud Agarwood Enterprise’s deputy director Mohd Ruslan Osman (left).

Mohd Khairuddin said last year, the local agarwood industry’s exports stood at RM8.8 million — a modest amount in the billion-ringgit global market, given the fact that it is one of the popular ingredients in perfume production.

As such, the minister said he will be applying for some allocation under the 12th Malaysia Plan to assist the industry’s expansion at the plantation and downstream levels.

“The MTIB has a unit dedicated to training those who are interested in processing agarwood, and entrepreneurs can also be trained in perfume production,” he said.

Meanwhile, Mohd Ruslan Osman said his family started the business in 2012, producing agarwood essential oil for the international market.

“Five tonnes of karas wood can produce about three litres of agarwood essential oil, and the average price of 1kg of the oil is around RM20,000 to RM30,000, depending on the quality and grade,” he said, adding that last year, the company produced about 20kg of the oil.