Hello All,

I represent a company in Lao PDR called Happy Farmers Co Ltd <www.happyfarmers.com> We are the exclusive distributor of CA Kits for Lao PDR. CA Kits are the only legitimate inducement technology for agarwood trees. The technology is patented or patent is pending in most of the main producing countries and markets for agarwood. This means that if you export agarwood to a country legally (i.e. with CITES certification) you may be infringing the patent if the agarwood was produced using a technology other than CA Kits.

Regardless of the patent protection, CA Kits are the most cost effective way to produce good quality cultivated agarwood, so you would be wasting your money and agarwood trees if you used any other inducement technology.

My main reason for writing today was to inform you of a great investment opportunity. We can offer you 100,000 standing agarwood trees for US$1 million (the plantation is in Lao PDR). They include about 50,000 trees that are ready to treat immediately with CA Kits (they were planted in 2001). Mixed in with those trees are another 50,000 younger trees of various ages that were replanted in the gaps where the original trees died. The buyer can use the land until the last of the trees are harvested.

Other good news for a potential investor is that agarwood trees treated with CA Kits can now be harvested at 10 � 12 months after first treatment. In other words the production cycle has been reduced from the original 2 years to just 1 year thanks to improvements in the potency of the CA Kit technology. (This news was received just this week after a recent visit by Prof. Robert Blanchette of the University of Minnesota - co-inventor of the CA Kit - to assess the latest research results in Vietnam).

We can negotiate later the price that we'd charge for CA Kits (one kit per tree) � but for the time being you can budget $30/tree (including all materials and application service); this price could be significantly reduced in exchange for a share of the trees at harvest time. You should add say another couple of dollars per tree for security/taking care of the trees (i.e. plantation management). Also, to improve access to the plantation, we advise improving the farm road at a cost of $50,000.

So I estimate a total investment of $1,000,000 (trees) + $1,500,000 (CA Kits) + $100,000 (management) + $50,000 (road) + $500,000 (for processing & marketing costs) = US$3,150,000 (focusing on exploiting the 50,000 mature trees only).

In return, I would estimate conservatively a gross income of 50,000 x $200 = US$10,000,000 after 12 months. (And more money could be made from the 50,000 younger trees in later years).

I reckon this is real bargain and I wish we could finance this deal ourselves but our limited cash resources are already invested in CA Kits and agarwood trees. We are making this offer to other potential buyers, so it's a case of "first come, first served".

Best regards,
Happy Farmer.
P.S. For further information you may also like to visit www.cultivatedagarwood.com www.scentedmountain.com and http://forestpathology.cfans.umn.edu/agarwoodmeeting.htm

This post has been edited by Happy Farmer: Jun 7 2008, 02:16 PM

Yes it's me! I am not sure who you are but I guess we met at the International Agarwood Conference in Bangkok in March last year?

---

Added on June 7, 2008, 8:00 amHi Amirbashah,

Any chance you can find out who is the Japanese investor? He might be interested in our offer.

Thanks.

Happy Farmer.

---

Added on June 7, 2008, 8:09 amThose trees are not so good - they are too tall and thin and they should not have multiple stems. Objective should be to maximise the yield of agarwood per CA Kit, not per hectare of land (because your most expensive input is the CA Kit not the land or tree).

---

Added on June 7, 2008, 8:19 amI wish that was true. Actually the plantation needs to be weeded, protected from fire, livestock and thieves. In the wrong place (e.g. poor draining soil) the trees can die of root rot disease (e.g. Fusarium spp) and leaf eating caterpillars can be a serious pest - they have contributed to the death of many agarwood trees in Lao PDR and Vietnam (and perhaps other countries but I don't have any information about that). However all these problems can be avoided/controlled with proper management. If you see my earlier post you will note that I referred to 50,000 out of 100,000 trees being replanted due to the original trees dying - that was simply because the previous plantation owner did not manage his plantation properly.

---

Added on June 7, 2008, 8:27 amI'd suggest 3 meters very minimum, but 3.5 meters would be better.

This post has been edited by Happy Farmer: Jun 7 2008, 08:27 AM

I am not sure why anybody would pay RM1,000 per 5-year-old-tree without any treatment when they could buy 7-year-old trees from me for less than one tenth of that price!

In the Lao PDR, farmers sell trees at any age from one year upwards but the older they are the higher the price.

Regarding inducement treatment, the only proven and patented treatment worth applying is the CA Kit. All other techniques (and there are many that can produce resin in agarwood trees) are by far inferior. It simply does not make sense to spend money to grow a tree and then treat it with an inferior technique (especially if it costs more than a CA Kit!).

Furthermore, if you want to export the agarwood legally (with CITES certification) then you will need to declare where the wood came from. Since the patent for CA Kits covers all other inducement techniques it will be easy to catch the person trading the agarwood that has been produced using another technique that infringes the CA Kit patent.

So if you want to maximize your profits from your agarwood trees and stay legal, the CA Kit is your only option. Since most of you are in Malaysia you can contact Healthy Business Sdn Bhd for more information about CA Kits (see: http://www.cultivatedagarwood.com/?page_id=6 ) for their contact numbers.

---

Added on June 7, 2008, 2:05 pmYes - too close planting and also lack of correct pruning (to maintain only one leader/main stem) when the trees are young.

---

Added on June 7, 2008, 2:15 pmI don't know if you mean US$ or RM but either way I don't believe anyone will ever get anywhere near that price for their trees. Some people are just exaggerating the prices paid for trees in order to promote their products. There are a lot of cowboys in this business so please be careful everyone.

---

Added on June 7, 2008, 2:23 pmHi Growproject,

So please tell us if you have researched the CA Kit? If you visit www.scentedmountain.com you can see good quality chips produced from CA Kits selling for nice prices. I believe only CA Kits can produce good quality chips; I agree that all the other techniques are only good for making oil.

---

Added on June 7, 2008, 2:29 pmNot sure why you want to do testing when others have already done the testing for you! If I was a Malaysian tax payer I would be complaining about my government wasting my taxes doing unnecessary research! Also all the other techniques (i.e. other than CA Kits) are illegal.

The CA Kits are not expensive if you consider the high profits that can be made from applying them to agarwood trees. Spend US$30 on a kit and get back at least $200 one year later!



This post has been edited by Happy Farmer: Jun 7 2008, 02:29 PM

Hi Sham903n,
Yes I estimate conservatively US$200 per tree. The assumptions on which this figure are based are that an agarwood tree of 10 - 14cm DBH (diameter at breast height - 137 cm from the ground) is treated with a CA Kit and yields one year later a minimum of 200 grams of good quality agarwood chips which are currently selling at not less than US$1,000/kg at wholesale price in the country of production. As you can see from www.scentedmountain.com the retail price in a consuming country can be much higher. Actually yields of up to 500 grams of good quality agarwood chips per tree (of above size) have been harvested. Besides the good quality agarwood chips, there will also be a kilogram of lower quality agarwood powder (produced when cleaning the chips) worth about US$30 - 50/kg that can be used to make incense or for oil extraction. Hence I consider the US$200/tree is a conservative figure.

I reckon that's nearly 1,250 trees per hectare. I believe around 800 - 850/hectare would be better. Anyhow, you can still produce agarwood at the higher tree density but just remember to give Healthy Business a call when your trees are big enough this will probably be at around 5-years-of-age (provided you prune them to just one main stem, otherwise a multi-stem tree will take 1 - 3 years longer for the individual stems to reach the right diameter for treatment).

---

Added on June 7, 2008, 8:30 pmThanks kwaytiau, you're welcome.

This post has been edited by Happy Farmer: Jun 7 2008, 08:30 PM

I mean that when the young agarwood tree is growing (even when it is still in the nursery) it often has a tendency to form two or more main stems, i.e. one or more of the branches tends to become more dominant than is desirable and so it starts to compete with the original main stem. If this side branch is not removed it will form a main stem leading to a mature tree with more than one main stem or trunk. Not all side branches do this, so I don't mean you should cut off all the side branches - but where one side branch starts to become equal in size to the main stem then you can either cut it off or just cut it back a little to reduce its apical dominance. Later on it is good to cut off the lower side branches so that you have a nice clear stretch of main stem in which to apply the CA Kit (because it's difficult to work on a tree when there are many side branches in the way).


You need to call the Healthy company not the Happy one! Actually I don't know what is the price of CA Kits in Malaysia, that depends on Healthy Business. US$30 is our price in Lao PDR for a number one size CA Kit (including the booster treatment and application service).

I agree that if you have a lot of trees the financial investment to treat them with CA Kits can be very high, but then so can the payback. One strategy would be to treat as many of the trees as you can afford one year, then 12 months later after you have harvested and sold the agarwood you can reinvest your income in treating the remaining trees, i.e. you don't have to treat all 1,000 trees at the same time.

We will be harvesting our first batches of trees in Laos later this year, but we expect to get the same results as achieved in Vietnam and Thailand where CA Kits have already been tested. We have already cut some trees earlier than recommended to monitor the development of resin in the tree and everything looks good. I attach a recent photo taken of one such tree. The proud owner is on the right - he owns one of the largest plantations in Laos - several hundred hectares. He is now a Happy Farmer, hence our company's name. I'm holding the saw!

Well there is always scope for improvement and that is exactly what Bob and Henry are doing (i.e. aiming to further increase the performance of the CA Kit technology). However, the CA Kit as it currently stands will work equally well for all species of agarwood and in all countries where agarwood trees grow.



This post has been edited by Happy Farmer: Jun 8 2008, 02:47 PM

Hi Kwaytiau,

Yes that is correct.

I'm sorry I don't know what is the deal in Malaysia with Healthy Business Co, but I am sure they will tell you. In Laos, we will buy the agarwood from the tree owner if we can negotiate a price that is satisfactory for seller and buyer. You might like to consider that the potential to make profit from the agarwood tree is much higher than from the CA Kit (because the value of the treated tree is many times higher than the price of a CA Kit).

You might like to drop an email to Healthy Business and ask them to participate in this thread so that everyone here can learn more about them, their prices, etc.

Thanks again for your appreciation.

HF

Yes you are right.

Having sufficient space between the trees is important so that you get short fat trunks rather than tall thin trunks.

Pruning is important so that you get single trunks not multiple trunks.

So the objective is to get trees with single short fat trunks, not multiple tall thin trunks.

I will try to get some photos to show you what I mean about the pruning.

Below are 2 photos of agarwood seedlings - one in the nursery and one already planted. In both cases you can see that one of the side branches has started to form a second main stem. Therefore some pruning should start even in the nursery to prevent this from happening.

Actually there is only one branch in each of those two pictures - the other is not a branch but is the main stem! So yes you can remove the branch but don't remove the main stem. So now you will ask me which is the branch. Well the branch is the one that emerges from a leaf axil (see http://en.wikipedia.org/wiki/Leaf if you don't know what is a leaf axil or just look at some of your own plants and you will soon see what I mean). You could remove the entire branch or just cut off its tip to keep it in check (i.e. not let it become dominant). With the latter approach you retain most of the leaves of the branch so that it can continue to photosynthesize and contribute to the growth of the seedlings. Eventually though it will either fall off or be removed by pruning to create the desirable clear bole that we talked about earlier.

But please don't make the mistake of removing all branches - only remove or trim back those which are becoming too dominant.

---

Added on June 18, 2008, 1:53 pmHi Jolly Green Giant,

You don't seem so jolly today? I hope that chip on your shoulder is an agarwood chip! (Preferably Grade A)

Your advice to investors to do their homework is excellent advice and I agree with Barden that grading (and valuation) of agarwood is complicated. I'll be learning my first lessons in this process very soon following the harvest last week of some CA Kit-treated agarwood trees here in Laos.

Regarding your comments on prices:

(a) Who said the CA Kits produce Grade B chips? In fact they produce a range of grades.
(b) I don't think you can safely assume that what is referred to as Grade A or B in one country is the same quality as Grade A or B in another country;
© I think prices should still be going up and will continue to do so for a while because the production of cultivated agarwood from CA Kits is still a tiny fraction of world production;
(d) Yes of course prices do vary according to the quantity being sold and also the level of the transaction in the marketing chain (e.g. prices go up as you proceed from village collector, district trader, provincial trader, exporter, importer, retailer, etc, according to the value added by each intermediary). I understand that mark-ups in the agarwood trade are very large, perhaps because most of the trade is illegal.

As you have suggested, in the future, prices probably will come down due to increased production from plantations using CA Kits. At the same time, as agarwood becomes more affordable for "the masses" demand will increase and new uses will be found for agarwood (e.g. agarwood soap, shampoo, toothpaste, air freshener, herbal medicines, etc) and new markets will be targeted; so this will tend to counter the decline in prices. Since CA Kits are still new in the market it will be a while before supplies of cultivated agarwood increase significantly so in the meantime it is a simple case of "the early bird catches the worm". I know for a fact that while some people like yourself are skeptical and pessimistic there are many others who have already done their homework, recognized the business opportunities and are now hard at work.

By the way, here in Laos I am not in the business of encouraging people to plant agarwood, but rather I am trying to convince the many farmers that have already planted agarwood trees that the best way to turn their "empty" trees into real money is to use CA Kits. Now that I have recently harvested some trees treated with CA Kits my job is going to become much easier!

Best regards,
HF.







This post has been edited by Happy Farmer: Jun 18 2008, 01:53 PM

Here are some pictures taken last week here in Laos following the harvest of 9 trees treated with CA Kits:

Hi Jolly Green Giant,

I would be grateful if you could be a little more civil, thank you.

Regarding agarwood grades, according to the report "HEART OF THE MATTER: AGARWOOD USE AND TRADE AND CITES IMPLEMENTATION FOR AQUILARIA MALACCENSIS" by Barden et al, 2000 (I assume this is the same Barden report that you quoted earlier; it can be downloaded here: http://www.trafficj.org/publication/00_hea...er_agarwood.pdf ):

Agarwood "is classified according to various grading systems that differ according to the product in trade and country in which trade is taking place. The grade (and hence value) of agarwood and agarwood derivatives such as oil is determined by a complex set of factors including: country of origin; fragrance strength and longevity; wood density; product purity; resin content; colour; and size of the form traded."

Of course, it is possible that since the report was written that international grades have been developed, in which case perhaps you could kindly provide us with further information or a link to the international grades for agarwood?

Also please can you provide evidence to support your claims (opinions?) that CA Kits account for 1/8 of world agarwood production and that agarwood prices are already falling?

Could you also tell us what is your interest in agarwood? Perhaps if we know this, then we may understand why you are trying so hard to discredit CA Kits?

Have a nice day!

Best regards,
HF.

Hi Jolly Green Giant,

Whoops, please be careful not to shoot yourself in your own foot. The link you provided says that "growers can earn a profit of between 100-300 million per ha of do tram (agarwood) tree per year".

"Profit" means the costs of growing, resin inducement, etc, have already been accounted for!

Best regards,
HF.

Hi Jolly Green Giant,

Thanks but there is no need to apologise. What wounds are you talking about?

No I am not avoiding the question. I already stated long ago in this thread that the CA Kits produce good quality agarwood chips worth US$1,000/kg. That is a fact and is based on reliable information from someone I trust, and not on my own personal experience. Perhaps you want me to interpret "good quality" in terms of your grading system (A, B, C, etc) but as I explained earlier what I might call A and what you might call A may be entirely different. I also told you that the CA Kit will produce a range of grades (from high to low - black wood to white wood). Actually I just received some information yesterday from Vietnam giving a breakdown of the amounts of 9 different grades in a recently harvested tree and the results are considered to be spectacular but I am not allowed to publish this information yet.

Yes we have offered to make buyback agreements with potential customers of CA Kits, but so far only one customer has entered such an agreement with us. Last week, we bought back the first trees we treated/harvested, though this was not part of any original agreement with the plantation owner.

Regarding how much we offer to buy back trees for, I have no reason to share this information with you. Obviously, we will want to offer a relatively low price to give us a good profit but not so low that the seller is not satisfied. The price will also depend on the number of trees, quality, size, location, etc. We tell the tree owner that he/she may get a better price selling to another buyer and they are free to do so if they wish. They may even negotiate a better price with us at the time of sale. Our buyback price is only intended to provide confidence for the CA Kit buyer; i.e. they can be sure that they will be able to sell the tree and make a profit.

"The price is the same for whatever they call it"??? I am sorry I don't understand what you mean. But there's no need to explain. Anyhow, I think you are now admitting that there are no international grades, right?

Whether "farm product" or "wild product", it is still a biological product and every single tree is different. The grades and results are not as consistent as you suggest (for example I already mentioned a yield range of 200 - 500 grams)

No I cannot confirm this myself. I do not know how many CA Kits have been sold, applied and treated-trees harvested but I know it is very small because the kits have not been in the market very long and it takes a year to get the agarwood from the treated trees. That is why I do not believe your suggestion that CA Kits have already caused prices to fall.

As far as I know, despite your not-very-jolly attempts, you have not discredited anything I have said.

Yes I am right and I am sorry to say you are wrong again - this time you seem to be confusing "profit" and "value". We can't know the value of the tree (i.e. it's selling price) from the information provided in the article.

No, you are mistaken, the web site did not allow me to copy and paste and I simply forgot to write "VND". I think most of the intelligent people following our discussion know that "100-300 million" meant VND not USD.

You are shooting yourself in your own foot again (confusing value and profit). I suggest you remain anonymous in order not to embarrass yourself in public.

I think I have answered this question already, but if you are not satisfied with my answers, then so be it.

Now please forgive me but I find your posts rather puerile and I do not have time to keep correcting your mistakes, so I would like to end this dialogue here. I am sure you will want to take some parting shots at me, so please go ahead and do whatever makes you happy and I will do the same.

Goodbye and best regards,
HF.