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

  • Hun Sen: Stop Russia sanctions

    Prime Minister Hun Sen said sanctions against Russia as a result of its military offensive in Ukraine should be stopped as they have produced no tangible results, and predicted that a global food crisis would ensue in 2023 as a consequence. Speaking to an audience at

  • Chinese tourists 2.0 – Coming anytime soon?

    Regional tourism is grappling with the absence of the prolific travellers and big spenders – the Chinese tourists. Cambodia, which has welcomed over two million Chinese tourists before Covid-19, is reeling from the economic loss despite being the first to fully open last November ‘To put

  • PM reflects on shoe throwing: Free speech or act of violence?

    Prime Minister Hun Sen on May 17 questioned whether a man who threw a shoe at him while he was in the US was exercising freedom of expression or if it was an act of hostility. Hun Sen was referring to an incident last week when

  • Siem Reap’s Angkor Botanical Garden opens

    The Angkor Botanical Garden was officially opened on May 19 with free entry for both local and international visitors for the first six weeks. The garden was established on a nearly 15ha plot of land in Siem Reap. “After the first six weeks, Angkor Botanical Garden

  • Pub Street on the cards for Battambang

    The Battambang Provincial Authority has announced that it is considering establishing a Pub Street in the area around the heritage buildings in Battambang town in a bid to attract more tourists. Battambang provincial governor Sok Lou told The Post that the establishment of a Pub

  • Hun Sen: Don’t react to hostility

    Prime Minister Hun Sen urged tolerance and thanked members of the Cambodian diaspora for not reacting to the hostility on display towards him by others while he was in the US to attend the May 12-13 ASEAN-US Special Summit in Washington, DC. In an audio