One of the world’s largest producers of Indian sandalwood is diversifying into farming native aromatic plants in the Ord Irrigation Scheme, hoping to cash in on the increasing demand for essential oils around the world.

Santanol hopes to establish up to 100 hectares of new crops and build a small distillery next year in Kununurra, approximately 3000 kilometres north of Perth.

Unlike the 15 years, it takes to harvest sandalwood trees, these crops will be ready to plant, pick and put through the still before October 2022.

“We’re looking at primarily native Australian oils that we can produce and grow up in up in the Ord,” managing director David Brocklehurst said.

“The advantage of annual crops is cash flow, but more importantly for us, it’s a diversification into a range of oils for our clients.

“Australia has some wonderful native flowers that very little work has been done with, and we see that as an opportunity.”

Early trials look promising

Although Mr Brocklehurst remained tight-lipped on the exact plant species they are farming, he said trials were already underway to test their suitability to the climate, and early results had been promising.

“We’ve had one up here now for four months, and the balance will go in just before the end of the wet season next year,” he said.

“We haven’t done any work on using any of them as flavours at this point, although we do know one could well be suitable for that.

“But certainly, the target markets are aromatherapy and the fine fragrance market.”

Indigenous worker sitting in forklift inside shed
Santanol hopes a new essential oils distillery will create more employment opportunities in Kununurra.(ABC Kimberley: Courtney Fowler)

Aromatherapy and wellness sectors growing

Mr Brocklehurst said the perfume industry had recovered in recent months after taking a hit during the coronavirus pandemic.

But he is most excited about the significant opportunities for growth in the aromatherapy and cosmetics sectors, particularly in Asia.

Over the past four years, Santanol has been selling its Santalum album oil to fine fragrance markets in China, Europe, North America, the Middle East and India.

Often described as “liquid gold”, nearly half of all perfumes contain sandalwood oil, which has been fetching as much as $300,000 a tonne on the global market in recent years.

Although the new range of Australian essential oils is unlikely to be as lucrative, native plants grown in southern farming areas like Brown Boronia can fetch as much as $15,000 per kilogram.

Fine fragrance and aromatherapy
Santanol’s new range of native Australian essential oils will be sold to the fine fragrance and aromatherapy markets.(ABC News: Gregor Salmon)

Sandalwood still core business

Santanol, which was bought by global forestry giant Mercer International in 2018, owns more than 2,000 hectares of land across the Ord.

This year, the company expects to produce up to 10,000 kg of Indian sandalwood oil after completing a record harvest in 2020.

Although this year’s harvest was disrupted by shipping delays which left the forestry team without vital equipment, the company has still managed to put 50 per cent more wood through its Kununurra processing shed this season.

From there, the processed chips are trucked to the company’s facility in Perth, where the sandalwood oil will be distilled and refined over the next 12 months.

A closeup of the end a log of sandalwood
An Indian sandalwood tree which has been cut, exposing the valuable heartwood inside.(ABC Kimberley: Courtney Fowler)

The Indian sandalwood industry in Kununurra has weathered some turbulent times after Santanol’s major competitor, Quintis, fell into administration and recapitalised as a private company in 2018. 

Santanol went through some organisational changes of its own, following its acquisition by the NASDAQ-listed Mercer, with outgoing Paris-based chief executive Remi Clero stepping down early last year.

But both companies have got back on track, significantly expanding harvest operations over the last two years, which is creating new employment opportunities in the region.

Turning a new chapter

Mr Brocklehurst said he believed there was a bright future ahead for the industry in northern Australia.

“The issues that both companies have had over the last five years are well documented…[but] we both feel there’s a long-term future in the industry; otherwise, we wouldn’t be here,” he said.

“I think Australia still offers that unique growing opportunity that other countries don’t with Indian sandalwood; and that’s the security and integrity around the product.

“The annuals, in some cases they’re harvested twice or three times a year depending on the product, will produce a secondary range of essential oils which we can sell alongside our sandalwood.”

Two middle-aged white men standing in tree plantation
Santanol operations manager Cameron Wood and managing director David Brocklehurst at one of the plantations on the outskirts of Kununurra.(ABC Kimberley: Courtney Fowler)

Creating a sustainable future

Kununurra operations manager Cameron Wood said his role had been created this month to focus on improving the sustainability and soil health of forestry operations.

Santanol has reduced its pesticide use by more than 40 per cent since starting its chemical reduction program, and trials have started on a biochar product made from leftover biomass material from host trees. 

But Mr Wood, who has a background in cropping and livestock farming in southern NSW, said there was more work to be done to shrink their carbon footprint.

A flock of goats grazing in a sandalwood plantation on a sunny day
Santanol has been grazing goats in their Kununurra plantations to cut back on pesticide and herbicide use.(ABC Kimberley: Courtney Fowler)

“There’s this large amount of carbon that’s tied up in host trees, that’s not being used as effectively as we would like after the sandalwood has been removed,” he said.

“And we may get to a stage where we can test that and become accredited. Then we can start actually trading carbon credits.”

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