Two Malaysian firms plan agarwood venture in Laos

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Two Malaysian companies plan to invest US$18 million (RM79 million) for the inoculation of agarwood in Laos that is expected to generate US$200 million in three years.

Agriculture transaction company Aseagate (M) Sdn Bhd, forestry management company Richwood Capital Sdn Bhd (RWC), together with non-governmental organisation Global Outstanding Chinese 100 Organisation of Singapore (GOC100) yesterday inked a memorandum of understanding (MoU) for the project.

GOC100 inked an MoU with Aseagate that gave the latter sole rights to plantation management for over 2,000ha of land in Bolikhamsai province, Laos, while Aseagate inked an MoU with RWC to spell out their roles in the management, inoculation and supply of agarwood in the Indochinese state.

The formalisation of the two MoU will be implemented in March.

RWC CEO Kendrick Ho Qing Tyat said the parties are in the process of raising funds for the project and plan to get institutional investors from China.

“Given the platform that we have, with GOC100 backing and the Lao government’s support, there’s no reason why people won’t believe and invest with us. This is a good opportunity for them to earn money as well. This market may be new to them but it’s not new in this world,” he told a press conference after signing the MoU yesterday.

Agarwood is a dark resinous heartwood and is the most expensive wood in the world. Agarwood is pricier than gold with a retail price of between US$5,600 and US$10,000 per kilogramme. A litre of agarwood oil can be sold at US$10,000 to US$14,000. It is valued in many cultures for its distinctive fragrance, and thus is used for incense and perfume. One of the main reasons for the relative rarity and high cost of agarwood is the depletion of the wild resource.

GOC100 was awarded the exclusive concession by the Lao central government’s Ministry of Agriculture and Forestry to manage the country’s agarwood plantation. GOC100 had in August 2015 signed an exclusive agreement with the Lao Ministry of Agriculture and Forestry for concession to these trees that are planted within the Lao military base and guarded by military.

The Aseagate-RWC partnership will see the inoculation of agarwood trees aged from 15-22 years to produce resin on behalf of the government of Laos.

GOC100 Singapore secretary-general Peter Lee said the Lao venture is significant to tap into the growing demand for agarwood, especially in the Middle East and China markets.

He said the agarwood project is a safe investment, as it is more resilient to economic fluctuations as compared to stocks and bonds, with insurance purchased for its proven inoculation technique and against natural calamities.

The parties are confident of the venture as the management and technical team has accumulated over seven years of experience in forestry management and agriculture technology, having provided solutions to plantation owners in Malaysia.

Ho said it utilises technology from Singapore to artificially induce trees to produce resin.


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