Logo of Phnom Penh Post newspaper Phnom Penh Post - Thai firm to help bolster agarwood quality

Thai firm to help bolster agarwood quality

Wild and plantation-raised agarwood from Cambodia next to a bottle of oil extract.
Wild and plantation-raised agarwood from Cambodia next to a bottle of oil extract. Bennett Murray

Thai firm to help bolster agarwood quality

A Cambodian company is teaming up with a Thai investment partner to spend $100 million improving the quality of Cambodia’s agarwood trees, according to a memorandum of understanding signed by the two companies yesterday.

Thoub Chankrassna Khmer Co (TCK), which owns agarwood plantations and an incense factory in Preah Sihanouk province, has partnered with Thai-based First Capital Group (FCG) in the hopes of improving the growth, processing and manufacturing of Cambodia’s 1 million agarwood trees.

Agarwood, a fragrant wood harvested for its aromatic, religious and medical applications, is a nontimber forest product that can fetch prices upwards of $4,000 per kilogram in Cambodia. But despite high prices, Cambodian farmers have struggled to profit from their plantations, according to TCK’s director Keo Sokunthea.

“Cambodian farmers have not had sufficient resources to process and extract agarwood oil,” she said at the announcement of the MoU yesterday. “Most importantly, they have not been able to access the regional or international market to commercialise their agarwood trees and agarwood-related products, [which] has caused discouragement to a majority of agarwood growers, forcing them to abandon their agarwood plantations.”

She added that FCG was an ideal candidate for this joint business venture, as it has been involved in agarwood business activities across the region and has access to modern technologies for producing agarwood oil and related products.

Sean Goh, CEO of FCG, said that the company planned to spend $100 million solely on improving the quality of Cambodia’s agarwood trees. If Cambodia could produce top-grade agarwood resin, the country’s 1 million trees could be a potential goldmine, he said.

“We use the best technology, and of course we have to take good care of the tree,” Goh said. “We need to invest this capital in the improvement of quality of the trees, because of course we will get a better return when we are producing top quality [agarwood] oil.”

Agarwood resin grows inside the trunks of wild Aquilaria trees. Through inoculation technology, it is possible to stimulate the growth of higher-quality agarwood resin inside the trunk of the tree, which in turn can be processed to create oil called “oud”. Oud oil can fetch between $30,000 and $100,000 per kilogram, depending on the quality of the resin and the market, according to oud oil monitoring firm Sustainable Asset Management.

According to Goh, the company plans to inoculate agarwood trees in several locations in Preah Sihanouk and monitor their progress six months after inoculation. The company also plans to establish a processing factory in Sihanoukville following that process.

MOST VIEWED

  • WHO: Covid in Cambodia goes into new phase

    The World Health Organisation (WHO) in Cambodia said that Cambodia has reached a new phase of the pandemic with “decreasing case numbers, high vaccination coverage and a more transmissible circulating variant threatening a hidden surge”. In a press release on September 6, the WHO said that

  • Purging Sihanoukville’s past with a new masterplan

    Amid illicit activities, haphazard development and abandoned projects, the coastal city of Sihanouk province needs a reset to move forward. A new masterplan might be the answer to shake off its seemingly mucky image to become the Shenzhen of the south Gun toting, shootouts, police

  • 'Pursue your goals, reach out to me': Young diplomat tapped as envoy to South Korea

    Chring Botum Rangsay was a secretary of state at the Ministry of Foreign Affairs and International Cooperation before being designated as the new Cambodian ambassador to South Korea. According to her official CV published on the foreign ministry’s website, she started her first government

  • International air visitor arrivals dip 93%

    The number of foreign tourists entering Cambodia through the Kingdom’s three international airports witnessed a sharp 92.5 per cent year-on-year decline in the first seven months of this year, according to the Ministry of Tourism. The airports handled 51,729 international tourists in the January-July period versus

  • School reopening ‘offers model for other sectors’

    World Health Organisation (WHO) representative to Cambodia Li Ailan said school reopening process should be used as a role model for reopening other sectors currently mothballed by the Covid-19 pandemic. Li strongly supports the government’s decision to reopen schools, saying it is a decision

  • Covid jab drive for 6-11 age group to begin Sept 17

    Prime Minister Hun Sen has permitted Covid-19 vaccinations for over 1.8 million children aged 6-11 across the country from September 17 in order for them to return to school after a long hiatus. Hun Sen also hinted that vaccinations for the 3-6 age group will follow in