Scent of success in sandalwood farms
The Kimberley is now a key source of the timber, writes Jo Studdert
WHAT’S the most valuable timber on the planet? Indian sandalwood, and it is growing in Australia in the Ord River Irrigation Area, centred on Kununurra in the Northern Territory’s east Kimberley Region.
In fact, the territory has the largest sandalwood plantations on earth.
The prime heartwood of the tree will bring over $ 100,000 a tonne.
For 30 years now the Ord River has been dominated by sugar cane farms, but these are vanishing and it looks as though the sugar mill will close this year. Water draws the plantations. Nearly one quarter of the Ord River Irrigation Area’s 16,000ha is now under sandalwood trees, the plantations generally being held in managed investment schemes which accommodate long- term investments. The trees take 15 years to mature.
Indian Sandalwood is grown for its oil content, which is used in perfume and incense.
The Frank Wilson, chairman of Tropical Forestry Services ( TFS), one of the main sandalwood growers, says the oil is a base fixative in up to 70 per cent of the world’s fine perfumes such as Chanel No 5, Samsara, Miss Dior, Opium and Must de Cartier.
It is also a traditional base in soaps, toiletries, cosmetics and has a large Asian use in incense and joss sticks.
The oil is particularly prized in India, where native stocks of wild sandalwood are nearly exhausted, so pressure is on to find reliable, long- term supplies, says Frank Peacocke, at valuer Herron Todd White’s Darwin office.
Australia has a native version of the tree but it’s oil content is only about a quarter of its Indian relative, although it is grown commercially in Western Australia.
Terry Roth, from HTW in Darwin, says Indian sandalwood first went into the Ord about eight years ago and the big players are TFS, Integrated Tree Cropping and Plantation Tropical Timbers.
Michael Clark, marketing manager of Integrated Tree Cropping, which vies with TFS as top sandalwood grower each year, says sandalwood trees are hemi- parasitic, being unable to survive alone until they mature, so the trees are planted beside hosts onto which the sandalwood suckers until it can sustain itself.
ITC has about 2000ha of Indian sandalwood around Kununurra.
‘‘ We first planted in 2000 and have increased our holdings every year since. We will continue to expand there,’’ Clark says.
Its not surprising, then, that there is heavy demand for the land. HTW say values in the Ord are pushing beyond $ 10,000 a hectare ( including water) with most of the demand from sandalwood growers who have paid up to $ 1400/ ha to lease land when they have been unable to buy enough for their needs, although Roth says the average price tends to be about $ 1000/ ha.
TFS first planted Indian sandalwood in the Ord in 1999 and now has one of the largest plantations in the world, owning and managing more than 900ha of the Ord’s sandalwood, with access to a further 775ha for new plantings until the end of 2008, making it ‘‘ close to the biggest or secondbiggest landholder in the Ord valley’’.
One of the biggest recent Territory sales was of ‘‘ Kingston Rest’’, a 6600 ha property south of Kununurra, which TFS bought for $ 18.05 million.
The property, Roth says, has its own dam of 60,000 megalitres — about 15 per cent the size of Sydney Harbour, and had been used for grazing and growing hay.
What was particularly interesting about the purchase was that it was the first big sale for an Indian sandalwood plantation outside the Ord’s boundary: all previous sandalwood plantations have been entirely within it.
‘‘ It is the water,’’ Roth says. ‘‘ Sandalwood growers will be interested in any land up here with reliable water.’’
Sandalwood seedlings are tended at the Tropical Forestry Services at Kununurra