Trees are big. In both the literal sense and the metaphorical one. Even today, a lot of products are derived from the green giants, more than just simple wood and paper. It goes without saying, that growing trees and managing them and then ensuring they can be utilized properly, the scope of arboriculturists, foresters and loggers, is a booming field. Companies like All Trees Perth are experiencing the demand that follows the verdant growth.
Speaking of verdant growth, the sandalwood tree is a parasitic tree whose aromatic oil has been used in perfumes, cosmetics and the like for centuries. Recently, prices have skyrocketed due to lacking production from India (the main grower of the tree, hence its many Indian aliases), combined with the increasing demand, primarily from places like China. A kilo of the parasite tree’s oil sells for around $3,000, which is a lot, especially when you realize that silver sells for approximately 1/5th of that, with averages rounding out at about the $600 range. To further exacerbate matters, prices are on a constant rise.
So imagine the joy of the TFS Corp. and KKR & Co. and their backers Santanol Group, when their 15-year investment pays off in the biggest way possible. Planted in an area of the Australian outback with just the right conditions for the parasitic trees, the sandalwood trees are maturing at the same time as the market’s condition have rendered their oil at their most expensive, and with the supply-demand ratio in its current state, the owners of the trees are in a prime position to rake in big profits.
Frank Wilson, TFS CEO, stated in an interview that the company, thanks to their trees are now a “price maker”. He adds that the company sees a lot of potential in the business, especially if future developments follow current trends. According to TFS’s predictions global demand for the tree is slated for an increase of up to 20,000 t/year in 2025, wherein China be responsible for approximately half of that.
TFS holds high hopes for this prospect, with issues from India, the somewhat unique structure of the Australian variants and consistent demands for the tree and its oil fueling their plans to increase their output by over 30-times that of current. Mr. Wilson has stated that, if all comes to pass, supply will be massive, but since costumers aren’t difficult to contact, that will be a good thing.
It would seem that going green is definitely showing that it can be very rewarding. Businesses like All Trees Perth are no doubt enjoying the demand for green products and services.