ESSENTIAL OILS AND OLEORESINS MARKET NEWS SERVICE (MNS) QUARTERLY EDITION. MNS BULLETIN March 2011

Transcription

1 ESSENTIAL OILS AND OLEORESINS MARKET NEWS SERVICE (MNS) QUARTERLY EDITION MNS BULLETIN March 2011

2 Disclaimer This report has been prepared without formal editing, as a service to exporters and industries in developing countries by the (MNS), Division of Product and Market Development, International Trade Centre UNCTAD/WTO. No part of this report may be reproduced, stored in a retrieval system or transmitted in any form or by any means, without prior permission in writing from the International Trade Centre. The mention of specific companies or of certain commercial products and brand names does not imply that they are endorsed or recommended by ITC in preference to others of a similar nature that are not mentioned. The designations employed and the presentation of material on the map do not imply the expression of any opinion whatsoever on the part of the International Trade Centre concerning the legal status of any Country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries.

3 Essential Oils & Oleoresins, EU and US Market Report Report prepared for ITC s by: EU markets: Mr. Steve Caiger (steve.caiger@highvaluehorticulture.com) US markets: Ms. Kerry Hughes (kerry@ethnopharm.com) Issue Number 1, March 2011 The of the International Trade Centre UNCTAD/WTO (ITC) provides timely and detailed price and market information on selected primary and semi-processed products of particular interest to developing countries and economies in transition. Regular access to such information is vital to companies deciding when and where they should sell or buy products on international markets. MNS thus aims to serve as a market intelligence tool, to enable developing countries realize their full income potential through global trade expansion. MNS does not act as a broker and is exclusively an information service with the objective of improving market transparency and encouraging price and quality competition for the benefit of all market players. MNS team of product specialists draws its information from a network of correspondents in many countries worldwide, collecting up-to-date data on wholesale prices paid for specific products, supply and demand trends, and economic, climatic and legislative information that can affect the short-term market situation of particular products. MNS' information providers include major importers, exporters, manufacturers, wholesalers, and governmental organizations. We continuously encourage and welcome new sources of information. Should you be interested in becoming an information provider and contributing to MNS' efforts to improve market transparency and facilitate trade, please contact us at mns@intracen.org. For more information about the report and the, please contact mns@intracen.org or visit our website on No part of these reports may be reproduced, stored in a retrieval system, or transmitted in any form or by any means without the prior permission of the MNS/ITC Geneva. Copyright MNS/ITC All rights reserved 3

4 INDEX MARKET CONDITIONS 5 EU Markets 5 US Market 5 FUEL SUSTAINABILITY 6 Fuel costs and carbon footprint 6 SPECIAL FOCUS: 7 Flavour & Fragrance Industry Sales, with a Focus on Industry Leaders 7 Mainstream Industry Trends 11 Supplying the Top Ten 12 SUPPLIERS OF EQUIPMENT 13 Africa 13 PRICE INFORMATION 16 US Markets 16 EU Markets 19 NEWS & UPDATES 22 Cinnamon active label extends peach shelf life, maintains sensory qualities 22 Global industry looks at India as a future hub for Fragrances and Flavours 23 Study notes HPP effectiveness in reducing Listeria risk in yoghurt 24 Using wastewater to enhance mint production 25 Mentha oil remains up in futures trade 26 EVENTS CALENDAR 27

5 Market Conditions Updates EU Markets The market has not been badly disturbed by the political upheavals in North Africa, although prolonged problems in Egypt would have had a serious impact given the range of products for which it is an important origin. Provided the situation there remains basically stable in terms of the day-to-day economy functioning there should not be any major impact on product prices. Tunisia is a commercial producer of a narrow range of essential oils (neroli, rosemary) but it is not a dominant origin, so the continuing disruption there should not affect the market unduly. Libya and Syria do not have significant essential oil production, and Morocco, the other major producer in North Africa, has not been involved in the turmoil. Prices of almost all essential oils remain firm, driven by 2 basic factors: The flavours and fragrances market continues to grow, and US Market According to a Malagasy producer, there was explosion of geranium and ravintsara demand in the first quarter of the year which continues to grow. Geranium oil is being sold at 200 euro FOB now. They have also noticed the rise in demand of the vegetable oil of calophyllum inophyllum(also called forah in Madagascar). In Guatemala the harvesting season of cardamom has finished. The total production expected from Sept-2010 till August-2011 seems to be 10-15% more in comparison with last season. Prices are at high levels, which are reported to likely stay at the same levels until next season which starts in October. During recent years the weather conditions have been the most important condition regarding production volumes in Guatemala. US importers of essential oils are reporting strong demands for American peppermint oil, resulting in firm prices, which may potentially increase in the next few months. Spearmint oil is also reported to have firm pricing. Indian suppliers continue to explain the lack of Fuel costs, which represent a major part of the costs of the production of all products, are very high and likely to remain so. An additional factor is the range of crop options that farmers have these days, particularly short term fresh food crops. This has resulted in farmers being able to turn away from traditional crops when prices are poor. They are no longer tied in to production of a particular crop but have a broad range of options to choose from. The consequence of this is that many have permanently abandoned the traditional cultivation of essential oils, while others might possibly drop the crop when returns are poor and alternatives offer better returns. These changes are driving the industry towards sustainable pricing as a necessary strategy to avoid the continuing uncertainty over supply and price spikes from shortages. supplies and high prices of essential oils from India due to adverse weather conditions, inflation, and the strengthening of the Indian currency against the US dollar. Likewise, in Indonesia, shippers are reporting that even though it was still rainy (in February when this was reported), the situation has improved with both prices and with available stock, possibly due to anticipation of the end of the rainy season. The recent flooding in Australia has reportedly impacted the tea tree oil distillation this year, with estimates that the 2011 production may be 30% less than last year. Increases in the currently quoted prices (approx. US$40/kg) for tea tree oil are foreseen. In Paraguay the Petitgrain distillation season which should have begun by now, but has been delayed by about two months; therefore, production is limited and producers are now busy with other products. Oil Guaiacwood has been taken off the CITES list early this year, and therefore is being exported once again. 5

6 Fuel Sustainability Fuel costs and carbon footprint Distillation operations using fuel typically diesel or heavy fuel oil have seen major price rises over the last few years, and the signs are that prices are going to remain high, and that further upheavals in the Middle East area have the potential to send them higher still. Even without any consideration of political disturbances, it is clear that global demand has risen, and is continuing to rise, and this is likely to keep prices where they are, or to push them higher still. Fuel costs are a major in distillation costs, and enterprises have to find ways to reduce usage, and/or to change to lower priced fuels. New boilers and burners can offer significant efficiency savings over old equipment, but important and cost effective benefits can be obtained by optimising insulation to minimise heat loss, putting in heat recovery systems to make use of waste heat, using simple solar collectors to pre-heat water etc. As well as trying to minimise fuel usage, enterprises need to consider their carbon footprint, and start to work on strategies to at least minimise it, and then to start off-setting it. This is starting to become an important factor in the market, and will become increasingly so. It is much better to be a leader in offering carbon neutral product, than to be driven to do it at the end and not have the time to identify and plan for the best way to achieve it. Fuel used is likely to be the major source of carbon usage, although if crops are grown under intensive systems, with irrigation and high fertilizer inputs, crop production itself may have a significant carbon footprint, which will also need to be considered. Minimising fuel used in distillation will reduce the carbon footprint of the enterprise. After that, the strategy changes to off-setting either through the purchase of carbon credits, or the generation of credits (such as through registered tree planting schemes). The costs of this are not great, but the beneficial impact both to the environment and the business - can be. As an indication, for each 10,000 litres of diesel used in a boiler, around 27 tonnes of CO2 equivalent (tco2e) is released so that 27 credits are required to offset it. Prices of credits vary depending on whether they come from voluntary schemes or formal CDM credit schemes, but at around US$10/credit, the total offset cost would be US$270 for each 10,000 litres used. Alternatively, tree planting schemes could be started, to generate credits. Schemes have to run for a certain time typically 15 years, but it can be shorter so that they may not be suitable for fuel wood schemes. In the voluntary sector RED credits (for avoided deforestation) can be generated, and boundary tree planting schemes (around landholdings) are also accepted. Once the carbon credit system is understood and frequently there are locally based organisations that have made it their business to understand the system, in East Africa for example the Uganda Carbon Bureau is a very good first point of contact an appraisal of the business can identify a range of ways through which carbon usage can be minimised and credits generated to move towards offsetting the carbon footprint. Enterprises that run wood fired distillation operations either an open fire or wood fired steam boilers also have to consider fuel usage, as the same principles apply as for enterprises using diesel. Wood is becoming scarce, prices are rising, and burning wood is generating a carbon footprint. Uganda Carbon Bureau Plot 47 Lubowa Estate PO Box Kampala. Uganda Tel/fax: +256 (414) Contact: Bill Farmer, Chairman billfarmer@ugandacarbon.org

7 Special Focus Flavour & Fragrance Industry Sales, with a Focus on Industry Leaders The flavour and fragrance Industry is dominated by a few large corporations that control the majority of the market share while the more numerous small Flavour and fragrance companies continue to lose market share. Last year was no different in this trend, as 2010 saw some of the largest year-to-year gains, with an estimated total market growth of approximately 10% in US$ 1. The small flavour and fragrance companies, on the other hand, were reported to lose market share on the order of about 4.5% in US$. Who are the Top 10 Industry Leaders? 1. Givaudan SA Corporate Headquarters: 5, Chemin de la Parfumerie Vernier, Switzerland Givaudan is the top Flavour & fragrance company in the world. They claim their success has to do with their innovation, and they have a focus on building partnerships with clients. They list their mid-term objectives based on assumed market grown of 2-3% as being a % organic sales growth, the best in class EBITDA, 14-16% free cash flow of sales by 2015, and above 60% free cash flow return. The key pillars of their five-year strategy are reported to be developing markets, research and development, health and wellness, sustainable sourcing of raw materials, and targeted customers and segments. As reported by Leffingwell & Associates: In 2010, Givaudan Group sales totalled CHF 4,239 million, an increase of 8.9% in local currencies and 7.1% in Swiss francs compared to the previous year. Sales of the Fragrance Division were CHF 1,988 million, an increase of 10.5% in local currencies and 9.0% in Swiss francs. Sales of the Flavour Division were CHF 1 Leffingwell & Associates 2,251 million, an increase of 7.5% in local currencies and 5.4% in Swiss francs compared to the previous year. 2. Firmenich SA Corporate Headquarters: Rue de la Bergère 7 P.O. Box 148 Meyrin 2 CH-1217 Switzerland Firmenich is the largest privately owned flavour and fragrance company in the world. It was founded in 1895 and early on became known for signature fragrance chemicals, such as Dianthine and Iralia, which are still present on the market today. Their strongest growth markets today are geographically in emerging market, with a new affiliate in Dubai opened this year to serve the Gulf region, a new state-of-the art perfume and Flavour development center in Brazil to service Latin America, and a new Perfume ingredients plan in India to support their global business. As reported by Leffingwell & Associates: For the financial year ended June 30, 2010, Firmenich posted record sales of CHF 2873 million, an increase of 12.1% in local currencies and 8.7% in Swiss Francs, regaining its position as growth leader in the fragrance and Flavour industry. This performance was driven by double-digit growth in Perfumery and Flavour segments, with a particularly strong rebound in Fine Fragrance during the second half of the year. The perfume and Flavour ingredients business followed the trend, recording a healthy high single-digit growth performance. Leffingwell estimates that Firmenich increased market share by about 1.7% in the period. 3. IFF Corporate Headquarters: 521 West 57th Street New York, NY USA 7

8 IFF s vision is to create unique scent & taste experiences people love. They say they do this through their commitment to customers, people and innovation. Since 1833 they have been in the Flavour and fragrance business, originally started by a miller and a druggist with a focus on the production of essential oils, especially sandalwood oil and clove. In 2011, IFF has announced plans to invest over $100 million in Greater Asia over the next few years to be allocated to two new state-ofthe-art manufacturing facilities located in Guangzhou, China and Singapore. IFF s 2010 net sales were $2.6 billion and had operations in 33 countries. 4. Symrise Corporate Headquarters: Muehlenfeldstraße Holzminden, Germany In the medium term Symrise is striving to become one of the three leading manufacturer in the Flavour and fragrance industry. In order to do this they plan to grow globally with defined customers, growing in the emerging markets of Asia, South America, the Middle East and Africa. They plan to strategically strengthen themselves through acquisitions. As reported by Leffingwell & Associates: Symrise increased sales in 2010 by 15.4 % to million (+11% in local currency) and exceeded its target to achieve sales growth of at least 8 %. Scent & Care sales increased 17.9% to million while Flavour & Nutrition sales increased 12.9% to million. 5. Takasago Corporate Headquarters: Nissey Aroma Square 17F , Kamata Ohta-Ku, Japan Founded in Japan in 1920, Takasago has developed Flavours and fragrances for over 80 years, and has a focus on the Asian region. Takasago maintains operations in 24 countries and through this network strive to deliver individual market solutions. Takasago also has pursued pharmaceutical intermediaries, functional materials and other fine chemicals, with asymmetric synthesis being used as a key technology. As reported by Leffingwell & Associates: Sales for the half fiscal year ending September 30, 2010 were 60,547 million, up 2.9% from the prior year while net income increased 85.1% to 3,325 million. 6. Mane SA Corporate Headquarters: 620 Route de Grasse Le Bar Sur Loup, France Founded in 1871, Mane began as a company supplying and producing fragrant materials from regional flowers and plants. It grew internationally between 1916 and 1958, and then in 1959 diversified into the Flavourings for the food industry. Mane reportedly consolidates their activities with the promotion of human resources, the quality assurance of their products, and with their environmental protection management system. As reported by Leffingwell & Associates: Mane achieved a consolidated turnover of million Euros in 2010, up 26.7% from million Euros in 2009 (personal communication, Leffingwell & Associates). 7. Sensient Flavours Corporate Headquarters: 777 East Wisconsin Avenue Milwaukee, WI USA Sensient Technologies is not only one of the largest Flavour and fragrance companies in the world, but they also supply colours that are used in a diversity of products, from food and beverages, pharmaceuticals, cosmetics, home and personal care products, specialty printing and imaging products, as well as computer imaging and industrial colours. As reported by Leffingwell & Associates: The Flavours & Fragrances Group reported full year 2010 sales of $809.1 million, an increase of 4.7% vs Operating income for the same period declined 2.0%. For the 4th Qtr, F&F sales

9 were $206.1 million, up 5.2% while operating income declined 0.5%. As these figures include dehydrated products such as dehydrated vegetables that are about 28% of sales, we estimate that the sales of conventional Flavours & fragrances in 2010 were about $582.6 million. 8. T. Hasegawa Corporate Headquarters: , Nihonbashi Hon-cho, Chuo-ku, Tokyo Since 1903, T. Hasegawa has focused on quality and service. Today they are second in the Japanese market, and eighth in the global market. Operations are focused in the US, Japan, Singapore and China. As reported by Leffingwell & Associates: For the full year ending September 30, 2010 consolidated net sales were 45,167 million, up 4.4%. For the same period, net income increased 58.5% to 2,840 million. 9. Robertet SA Corporate Headquarters: 37, Avenue Sidi Brahim BP Grasse Cedex, France Robertet describes itself as being above all a natural aromatic products company. Their natural raw materials are produced in one of their four factories, located in France, Turkey, South Africa or Belgium. Robertet is a family business that is quoted on the Paris stock exchange since 1984, and it prides itself on family traditions that live on in the company s rigorous management style that enable it to grow globally. As reported by Leffingwell & Associates: Robertet has reported sales for 2010 of million Euros, an increase of 18.7% over Fragrance sales increased 15.7% to million Euros. Flavour sales increased 17.3% to million Euros and Ingredient sales increased 26.1% to 85.8 million Euros. 10. Frutarom Corporate Headquarters: 25 Hashaish Street P.O.B Haifa Israel Frutarom was established in 1933, and is now a rapidly growing Flavour and fine ingredients company. Beyond Flavours and fragrances, Frutarom develops, produces and markets functional food extracts, and natural pharmaceutical/nutraceutical extracts. As reported by Leffingwell & Associates: Frutarom's revenues in FY 2010 totalled US$ million, an 8% increase in comparison to revenues of US$ million in 2009 in local currency terms. The strengthening of the US dollar against European currencies offset 1.9% of the increase in Frutarom's sales. In terms of US dollars, the sales increased by 6.1% compared to

10 Table Flavour & Fragrance Industry Leaders (estimated sales volume in millions (preliminary estimates as of March 26, 2011) Company Est Est Est Est Est Country Currency =US $ Market Share Country Currency =US $ Market Share Country Currency =US $ Market Share Country Currency =US $ Market Share Country Currency =US $ Market Share Givaudan 2,909 CHF $2, % 4,132 CHF $3, % 4,087 CHF $3, % 3,959 CHF $ % 4,239 CHF $ % Firmenich 2,500 CHF $2, % 2,847 CHF $2, % 2,641 CHF $ % 2,873 CHF $ % ~3,100 CHF ~$3318.9* 15.1% IFF $2,095.4 $2, % $2,276.6 $2, % $2,389 $2, % $ $ % $ $ % Symrise 1,230.0 $1, % 1,274.5 $1, % 1,319.9 $ % $ % ~$2106.6* 9.6% Takasago 113,876 $ % 124,231 $1, % 123,973 $ % 114,347 $ % ~ 117,777 ~$1452.1* ~6.6% Mane SA 288 $ % $ % $ % $ % $ % Sensient Flavours $535.4** $535.4** 3.0% ~$572** ~$572** 2.9% ~$591** ~$591** 2.9% ~$548.7** ~$548.7** 2.7% ~$82.6** ~$582.6** ~2.6% T. Hasegawa 47,000 $ % 50,066 $ % 45,421 $ % 43,244 $ % 45,167 $ % Robertet SA $ % $ % $ % $ % $ % Frutarom $287.2 $ % $368.3 $ % $473.3 $ % $425.2 $ % $451.1 $ % Top Ten Totals.. $11, %.. $13, %... $ % ~$ % ~$ % All Others.. $6, %.. $ %... $ % ~$ % ~$ % Total Market.. $18, $19, $20,300.. $20,000 ~$22,000 Note - Top 10 Total figures includes Quest International for Year 2006 and excludes sales of Frutarom for the same period, as 2007 was Frutarom's 1st year in the Top 10. *Note - As of March 26, 2011, the following sales figures are estimates based on partial year sales figures where available: Takasago (based on 6 month sales); Figures for Firmenich are the author's estimate based on historical performance. Until final figures are available for these companies, the top ten totals are only "estimated".

11 Mainstream Industry Trends According to John Leffingwell, a Flavour chemist who started Leffingwell & Associates to act as an information source to the Flavour and fragrance industries, as well as to supply the industry with software, mainstream industry trends don t change too much the top ten Flavour houses mainly sell the same materials, and the top essential oils remain the same. John Leffingwell said, Although the top Flavours are mainly the same, there has been a large trend toward natural Flavours in all markets. For example, when I first started in this industry in the 1970 s, about 70% of the favors were from synthetic supplies. Today, over 70% of the Flavours come from natural sources, such as essential oils, and this trend continues to increase. There have also have been fairly recent changes in processes that are significant in the Flavour and fragrance industry. The high throughput screening that has been popular within the pharmaceutical industry is now found in the Flavour and fragrance industry. High Throughput Screening is a method for discovering new compounds and substances with desired activities and characteristics. In reference to the more well known pharmaceutical high throughput screening, for example, if a company was interested in a compound for lowering blood sugar, they would first find an in vitro assay that selected for blood sugar lowering compounds. Then the company would take entire libraries of known compounds and pass them through this screen. Those compounds that showed a positive result in the assay would then be taken to the next phase of research and selection. This method allows for the screening and potential unexpected results of compounds that researchers may not normally think of to bring into the research and development process. The way this process is applied in Flavour research, on the other hand, is that desired taste receptors are cloned by researchers, and then libraries of compounds are screened. Leffingwell gave the example that in Givaudan s strategy report, they reported a program for screening for new cooling compounds that they completed using high throughput methods. They ended up screening 28,000 materials against receptors which they were able to effectively reduce to 350 materials that were tasted. 25 compounds, were then selected for indepth application tests. Two final cooling agents stood out and have been commercialized. Another area identified by Leffingwell & Associates as being a top trend in the industry is bitter blockers. Recently, for example, in the US GRAS (Generally Recognized as Safe) notification list there have been several bitter blockers showing up on the list, showing company interest in development of these type of compounds for food use. Bitter blockers are mostly used for masking the bitter off-notes of certain sweeteners (both artificial and natural). Cooling agents also remain a top trend among the mainstream Flavour industry. For example, as menthol in large quantities becomes bitter in Flavour, when mixed with other cooling compounds, the menthol mixture becomes cooler without forming the bitter off-flavours. For this reason there has been an effort by major Flavour houses to find other cool Flavours. Symrise and Takasago currently have the largest synthetic menthol manufacturing plants, and BASF has just announced it has developed a new process for producing synthetic menthol. On the other hand, whereas Brazil used to be one of the largest natural menthol producers in the world, currently India and China are the largest sources. Brazil now buys mint oils from these sources and processes them to crystallize and purify the menthol, which they offer at a value-added price. 11

12 Supplying the Top Ten When it comes to supplying the larger Flavour and fragrance houses, Leffingwell & Associates emphasize that producers should meet certain GMP and quality specification standards, which can be found from the major essential industry associations. Also important is to see which substances are allowed in each market that is being targeted. For example, in the Flavour-Base 2010, the regulatory status of Flavour materials is given per market area. Although, the differences between countries & markets regarding what is allowed are growing smaller, there are still some significant differences in what is allowed and not allowed. The other very important aspect that was identified for supplying today s market is ensuring a sustainable supply. As this was not an emphasis for many years as the Flavour and fragrance industry developed, we now are experiencing shortage problems from overharvesting and demand that outpaces the sustainability of supply. This is evident with Indian Sandalwood oil, Santalum album, which is now listed as a vulnerable species by the International Union for Conservation of Nature, as it is one of the world s most illegally logged plants. In 2007, Givaudan partnered with Mount Romance (now part of TFS Corporation), a producer of pure Australian sandalwood oil from Santalum spicatum. This partnership creates a sustainable supply of a specific grade of sandalwood oil that is harvested by people from the Aboriginal communities in the southern part of Western Australia. In addition, TFS has also planted over 3,700 hectares of Indian Sandalwood in Western Australia and, when the trees reach maturity, they have plans to produce a sustainable supply sandalwood products for the market. They claim it will be the largest sustainable supply of Indian Sandalwood in the world. Currently, as it is one of the world s most valuable hardwoods, it is selling for over A$100,000 per ton of heartwood (Tamil Nadu Forestry Department).

13 Suppliers of Equipment Africa The distillation and extraction industry in Africa is relatively small and localised outside of the North African centers of Egypt and Morocco, and Southern Africa (South Africa, Swaziland). New entrants to the industry can find it hard to identify suppliers of equipment (stills, condensers, extractor vessels etc) in stainless steel, steam boilers, and other necessary materials (drums, jugs, filter papers etc). The development of the industry in Africa would benefit greatly if there was greater sharing of information on the location of suppliers. New entrants would find it easier to identify necessary suppliers, and the concentration of orders on particular suppliers would encourage the development of skills and expertise this is particularly necessary in the areas of fabrication of stainless steel vessels and condensers. Some contacts of companies involved in the manufacture of distillation/extraction equipment or the capability to do so (primarily the capability to work with stainless steel) or supply of materials based in East Africa are given below. The Newsletter would welcome information from Readers on other suppliers of relevant equipment and materials from all regions of Africa, so that the listing can be expanded. Please send any information to The contacts are provided as a service only. NO RECOMMENDATION IS IMPLIED. 1. MANUFACTURE OF STAINLESS STEEL DISTILLATION EQUIPMENT: KENYA ASL Heavy Fabrication Division Ramco Industrial Park Mombassa Road PO Box Nairobi. Kenya Tel: /820296/ Fax: / murali@asl.ramco-group.com Attn: Mr Ve Balamurali, General Manager Warren Enterprises Ltd PO Box 8251 Nairobi. Kenya Tel: /3/4 Fax: Attn: Mr S Ramaswamy, Managing Director Morris Steel & Company Mogadishu Road PO Box Nairobi. Kenya Tel: Attn: General Manager UGANDA Specialised Welding Services (previously Kasise Kleinsmedie Uganda Ltd) Jinja Road, Plot 96 PO Box Nakawa Vocational Training Center Kampala Uganda Tel: +256 (776) /405070/ (772) (Samantha Moray) sam.moray@sws.co.ug Attn: Samantha Moray, General Manager MADAGASCAR Societe Aris Trading Lot VB 81X Ambatoroka 101-Antananarivo. Madagascar Tel: Fax: aristrading@freenet.mg Attn: Mr James Davidson ATICOM Lot IT 91A Itaosy 102 Antananarivo Atsimondrano. Madagascar 13

14 Tel: Attn: Josoa Andriamorasata SOUTH AFRICA EDESA PO Box 123 Riebeek Kasteel 7306 Western Cape. South Africa Tel: +27 (82) Attn: Werner Bester Manufacture of distillation equipment and sales of used equipment. BENCO PLANT & ENGINEERING (PTY) Ltd 159 Van Eeden Crescent, Rosslyn, Karin Park P O Box 59. Pretoria, Gauteng. South Africa Tel: +27 (12) Fax: +27 (12) Attn: Sloam Durbach Manufacturer of distillation equipment and steam boilers POWERSAVE PO Box 699 Hilton South Africa Tel (cell): Fax: Attn: Greg Rowe gregrowe@telcomsa.net Manufacture of steam distillation plants Henry S Komar & Associates CC 2 Hebel Road, Roodepoort, Gauteng, South Africa Postal address: PO Box 994, Honeydew 2040, South Africa Tel: Fax: Attn: Stan Kumar, CEO info@komar.co.za; sales@komar.co.za Manufacture of stainless steel distillation and processing equipment. Also sales of secondhand equipment. 2. SUPPLIERS OF STEAM BOILERS MADAGASCAR ARTICOM Lot IT 91A Itaosy 102 Antananarivo Atsimondrano. Madagascar Tel: morasatajosoa@yahoo.fr Attn: Josoa Andriamorasata ARTICOM make a simple, low pressure, wood fired steam boiler. KENYA Boiler Consortium Africa (BCA) Ltd PO Box Nairobi. Kenya Tel: / / Tel: / / Fax: Barry Corlines info@boilersafrica.com BCA design, manufacture and commission boilers, included wood fired steam boilers, and are agents for Riello in East Africa. SOUTH AFRICA Combustion Technology South Africa PO Box Tokai, 7966 Cape Town, South Africa Tel: Fax: Combustion Technology are the exclusive Southern African distributors of Riello burners and Garioni Naval Boilers. BENCO PLANT & ENGINEERING (PTY) Ltd 159 Van Eeden Crescent, Rosslyn, Karin Park P O Box 59. Pretoria, Gauteng. South Africa Tel: +27 (12) Fax: +27 (12) Attn: Sloam Durbach Manufacturer of distillation equipment and steam boilers CAPE BOILER 16 Natal Street, Parden Island, Cape Town, South Africa Tel: Fax: Attn: Mr Nic Kellerman INDIA Firetech Boilers Pvt Ltd FIRETECH HOUSE, No.211, 2nd Cross, 38th Main, B.T.M Layout, 2nd Stage, Bangalore India Tel: ; Fax: firetech@vsnl.net

15 Manufacture of wood fired steam boilers. Indian manufacturer, but has supplied boilers to Africa. 3. SUPPLIERS OF MATERIALS AND EQUIPMENT (a) Forklift trucks/pallet trucks Forktruck Solutions 16 Kiewiet Close, Okavango Park, Brackenfel 7560, Cape Town. South Africa Postal address: PO Box 3221, Durbanville South Africa Tel: and ; Cell: Fax: Attn: Dirk van der Westhuizen Sales and rental of new and used forklift trucks. Also pallet jacks/stackers and range of other warehouse equipment. (b) Hoists and lifting equipment Blue Cranes, Crane House, 10 Mansell Road, Killarney Gardens, Minerton, Cape Town, South Africa Postal address: PO Box 702, Melkbosstrand South Africa Tel: /9 Fax: Attn: Mr Kobus Steyn Greif Nigeria Ltd Apapa, Nigeria Phone +234 (01) Fax +234 (01) Attn: Olukunle Obadina, Greif South Africa Ltd Vanderbijlpark, South Africa Phone +27 (0) Fax +27 (0) Attn: Carl Williams Website: Greif Mozambique Maputo. Mozambique Phone Fax Greif Egypt Cairo, Egypt Phone Fax Attn: Ayman Korra Greif Algeria Arzew, Algeria Phone / Fax Mohamed.Gherbi@Greif.com Attn: Mohamed Gherbi Manufactures full range of hoists, beam girder cranes and lifting equipment. Sole supplier of Liftket electric chain hoists and wire rope hoist units. Repairs and spare parts supply service. Supply of associated slings, chains, blocks etc. (c) Essential oil drums: Greif supply a range of steel and coated drums, and are present in 45 countries around the world. Greif Kenya Ltd Box Unga Street Shimanzi Mombasa. Kenya Tel: Fax: pascal.wanyonyi@greif.co.ke Attn: Pascal Wanyonyi 15

16 Price Information Price indications collected from the markets within the US are given for a range of essential oils, below. Prices are FOB from country of origin, and quoted in US Dollars, unless otherwise indicated, and if there are volume indications they are quoted in US Markets parentheses. These price quotes were taken mostly from medium-small sized importers, or small producers. As this news service develops, a broader sampling for pricing will be conducted, as well as for a larger number of products. Essential oils Spice oils Spice Variety Prices /kg Black Pepper India $ 126 CFR (400 kg) Cardamom Guatemala $ 425 CFR AIR (50 Kg) Cardamom Guatemala $ 525 Cinnamon Bark Madagascar $ 175 (10-19 kg) Cinnamon Bark Madagascar $ 165 (20-29 kg) Cinnamon Bark Madagascar $ 155 (30-39 kg) Cinnamon Bark Madagascar $ 150 (40-49 kg) Cinnamon Bark Madagascar $ 140 (50 kg and more) Cinnamon Bark Madagascar $ 280 (25 liter min) Cinnamon Bark 75% Sri Lanka $ 275 (200 Kg) Cinnamon Leaf Sri Lanka $ 21 (10 Drums) Clove bud Madagascar $ 71 (25 liter min) Clove bud Indonesia $ 33 CIF (5 Tons) Garlic China $ 68 (CIF; 1 Ton) Ginger China $ 66 CIF (1 Ton) Ginger, fresh Madagascar $ 286 (25 liter min.) Nutmeg (10% myristicin) Indonesia $ 76 CFR (1 Ton) Star Anise China $ 23 CIF (1 FCL) Herb oils Spice Variety Prices per kg Wild Chamomile Morocco $ 750 CFR (100 Kg) Basil Egypt $ 70 CFR AIR (200 Kg) Citronella China $ 20 CIF (1 FCL) Cumin Egypt $ 150 CIF (1 Ton) Cumin seed India $ 70 (200 Kg) Marjoram Egypt $ 110 CIF (1 Ton) Peppermint 50% China $ 18 CIF (40 Drums) Wintergreen, natural China $ 23 CFR (600 Kg)

17 Citrus Oils Spice Variety Prices per kg Grapefruit, white (white.37% nootkatone) America $ 28 (6 Tons; EX STORE CA) Lemon America $ 32 (1 FCL; EX STORE PA) Petitgrain Paraguay $ 34 CFR (1-2 Tons) Lime, Tahiti C.P. Brazil $ 38 (12 Drums) Perfumery Oils Spice Variety Prices /kg Ajowan India $ 26 CFR (1 Ton) Cypress Morocco $ 43 CFR (500 kg) Davana 45% Davanone India $ 302 CFR AIR (200 kg) Eucalyptus 80% China $ 14 CIF (1 FCL) Eucalyptus 99.5% China $ 19 CIF (1 FCL) Geranium Egypt $ CFR Geranium China $ 275 CIF (500 kg) Geranium Madagascar $ 188 (25 liter min) Geranium Madagascar $ 160 (10-19 kg) Geranium Madagascar $ 156 (20-29 kg) Geranium Madagascar $ 150 (30-39 kg) Geranium Madagascar $ 145 (40-49 kg) Geranium Madagascar $ 142 (50 kg and more) Helichryse (Helichrysum Madagascar $ 82 (10-19 kg) gymnocephalum) Helichryse (Helichrysum Madagascar $ 77 (20-29 kg) gymnocephalum) Helichryse (Helichrysum Madagascar $ 72 (30-39 kg) gymnocephalum) Iary (Psiadia altissima) Madagascar $ 72 (10-19 kg) Iary (Psiadia altissima) Madagascar $ 67 (20-29 kg) Iary (Psiadia altissima) Madagascar $ 62 (30-39 kg) Litsea cubeba (67.5%) China $ 22 CIF (1 FCL) Lemongrass India $ CFT (3-4 tons) Mastic Morocco $ 450 CFR (100 kg) Neroli Tunisia $ 800 CFR (10 kg) Niaouli Madagascar $ 36 (less than 10 kg) Niaouli Madagascar $ 30 (10-19 kg) Niaouli Madagascar $ 26 (20-29 kg) Niaouli Madagascar $ 26 (30-39 kg) Niaouli Madagascar $ 26 (40-49 kg) Niaouli Madagascar $ 21 (50-99 kg) Niaouli Madagascar $ 18 (100kg and more) Nagarmotha India $ 191 CFR AIR (50 kg) Palmarosa India $ 68 CFR (2 Drums) Ravensara aromatica Madagascar $ 85 (10-19 kg) Ravensara aromatica Madagascar $ 77 (20-29 kg) Ravensara aromatica Madagascar $ 73 (30-39 kg) Ravensara aromatica Madagascar $ 70 (40-49 kg) Ravensara aromatica Madagascar $ 65 (50-99 kg) Ravensara aromatica Madagascar $ 60 (100kg and more) Ravintsara (Cinnamomum Madagascar $ 145 (10-19 kg) camphora) Ravintsara (Cinnamomum Madagascar $ 140 (20-29 kg) 17

18 camphora) Ravintsara (Cinnamomum Madagascar $ 136 (30-39 kg) camphora) Ravintsara (Cinnamomum Madagascar $ 133 (40-49 kg) camphora) Ravintsara (Cinnamomum Madagascar $ 130 (50 kg and more) camphora) Rose Bulgarian $ 4,800 CIF (10 kg) Rue Morocco $ 140 CFR (200 Kg) Sandalwood India $ 2,125 FOB NJ (50 kg) Saro (Cinnamosma fragrans) Madagascar $ 98 (10-19 kg) Saro (Cinnamosma fragrans) Madagascar $ 91 (20-29 kg) Saro (Cinnamosma fragrans) Madagascar $ 88 (30-39 kg) Saro (Cinnamosma fragrans) Madagascar $ 85 (40-49 kg) Saro (Cinnamosma fragrans) Madagascar $ 81 (50-99 kg) Saro (Cinnamosma fragrans) Madagascar $ 81 (100kg and more) Ylang grade 1 Madagascar $ 150 (10-19 kg) Ylang grade 1 Madagascar $ 142 (20-29 kg) Ylang grade 1 Madagascar $ 138 (30-39 kg) Ylang grade 1 Madagascar $ 134 (40-49 kg) Ylang grade 1 Madagascar $ 127 (50 kg and more) Ylang grade 2 Madagascar $ 106 (10-19 kg) Ylang grade 2 Madagascar $ 124 (20-29 kg) Ylang grade 2 Madagascar $ 117 (30-39 kg) Ylang grade 2 Madagascar $ 113 (40-49 kg) Ylang grade 2 Madagascar $ 107 (50-99 kg) Ylang grade 2 Madagascar $ 101 (100kg and more) Ylang grade 3 Madagascar $ 103 (10-19 kg) Ylang grade 3 Madagascar $ 96 (20-29 kg) Ylang grade 3 Madagascar $ 91 (30-39 kg) Ylang grade 3 Madagascar $ 87 (40-49 kg) Ylang grade 3 Madagascar $ 85 (50-99 kg) Ylang grade 3 Madagascar $ 83 (100kg and more) Ylang complete Madagascar $ 133 (10-19 kg) Ylang complete Madagascar $ 117 (20-29 kg) Ylang complete Madagascar $ 117 (30-39 kg) Ylang complete Madagascar $ 113 (40-49 kg) Ylang complete Madagascar $ 110 (50-99 kg) Ylang complete Madagascar $ 105 (100kg and more)

19 Price Information PLEASE REMEMBER THAT THESE ARE ONLY PRICE INDICATIONS.Price indications collected from the markets within the EU are given for a range of essential oils, below. The oils are grouped for convenience only into EU Markets Spice Oils, Seed Oils, Citrus Oils, Herb Oils and Perfumery Oils. Prices are wholesale for quantities of 25kg or more unless otherwise stated. Prices were collected over weeks 48 to 52. Spice Oils Product Origin/Grade Prices per KG Clove bud Indonesian 20-25/kg, 1-5 ton lots Indian 35-44/kg Madagascan 60-65/kg 1kg lots Clove stem Indonesian 8-10/kg, 2-5 ton lots India 25-30/kg Clove leaf Indonesian 17/kg, 2-5 ton lots Indonesian n/a container cif Madagascar 17/kg spot India 15-20/kg 1 kg lots Cinnamon bark Sri Lankan 60/65% /kg Cinnamon leaf Sri Lankan 45-50/kg 1kg lots India 18-20/kg; 30-40/kg 1 kg lots Cassia bark China 20-25/kg Black pepper Sri Lankan /kg 1 kg lots Indian /kg Nutmeg Indonesian 60-65/kg spot Indonesian /kg 1 kg lots Sri Lanka 100/kg Ginger Chinese 40-50/kg ton lots Indian /kg Sri Lankan /kg Pimento leaf Jamaican 70-90/kg ton lots Pimento berry Jamaican /kg 1 kg lots Cardamom Guatemala /kg spot Spice Seed Oils Product Origin/Grade Prices per KG Aniseed China 17-20/kg; 60/kg 1 kg lots Egypt 90/kg 1 kg lots Star Anise India 36/kg Coriander seed Russian 55-65/kg; kg lots Cumin seed Iran & Egypt /kg Egypt 110/kg, 1kg lots 19

20 Citrus Oils Product Origin/Grade Prices per KG Orange (sweet) Brazilian pera 6-7/kg Brazil/Portugal/Spain 15-17/kg, 1 kg lots Italy 9/kg 1 kg lots Orange (bitter) Italian 50-60/kg Bergamot oil Ivory Coast/Italy /kg Lemon Argentine, Spain 22-25/kg Italian 40-50/kg, 1 kg lots Lime (distilled) Mexican 20-25/kg Mexico/Peru 40-50/kg 1 kg lots Mandarin (red) Italy 60-70/kg 1 kg lots Grapefruit Israel 40-50/kg Herb Oils Product Origin/Grade Prices per KG Basil India 60-70/kg 1kg lots France /kg 1 kg lots Italy 40-50/kg 1 kg lots Lavender Bulgaria/France 50-70/kg French (high altitude) /kg, 1 kg lots Lavendin French Grosso 35-45/kg 1kg lots Spike Lavender Spain 40-50/kg 1 kg lots Mints Indian piperita 20/kg China piperita 22/kg 1 kg lots China piperita 13-14/kg container Indian dementholised 7/kg peppermint oil USA Peppermint 35-55/kg 1kg lots Chinese Spearmint 60% 18-22/kg Chinese Spearmint 80% 24-25/kg Indian Spearmint, 58-60% L /kg carvone Menthol Chinese 15-18/kg Indian, bold crystals 16-17/kg Chamomile (German) Egypt /kg Morocco (wild) /kg 1kg lots Chamomile (Roman) Hungary 900-1,100/kg 1kg lots Somalia/France /kg Sage Spain /kg 1 kg lots Rosemary Portugal/Spain/Tunisia kg lots Marjoram Egypt /kg 1 kg lots Thyme Spain 60-70/kg 1 kg lots Perfumery Oils Product Origin/Grade Prices per KG Eucalyptus globulus & other China 12/kg container lots high cineole types Australian 15/kg China 20-30/kg 1kg lots Eucalyptus citriadora Brazilian 7-9/kg China 20-26/kg 1kg lots

21 Litsea cubeba China 14-18/kg China 40-48/kg 1kg lots Ylang ylang Comores: Extra S /kg Comores: Troisième /kg Ylang (cananga) Indonesia 60-65/kg Patchouli Indonesia 50-60/kg; kg lots Geranium China 210/kg China, Egypt /kg 1 kg lots Egypt 230/kg drum Rose Geranium Madagascar /kg 1kg lots Sandalwood Fiji/E. Indies 1,100-1,500/kg Australian /kg Sandalwood african /kg Cedarwood USA 35-40/kg 1kg lots; 8/kg container Frankincense Somalia/France /kg, 1kg lots Citronella Chinese 14/kg; 22/kg 1 kg lots Indonesian 14/kg Sri Lanka (Ceylon type) 25-30/kg 1 kg lots; 18-22/kg spot Lemongrass Indian 12-14/kg; 30-40/kg 1kg lots Guatemala 20-25/kg; 5 kg lots China/India/Guatemala 25-40/kg 1 kg lots Palmarosa Indian 50-60/kg 1 kg lots Vetiver Indonesian /kg China 60-70/kg Indonesia/China /kg 1 kg lots Tea Tree Australia 35/kg; 55-70/kg 1kg lots Fennel Italy/Hungary 55-65/kg 1 kg lots Juniperberry Croatia /kg 1 kg lots Myrrh Somalia/Ethiopia 300/kg 1 kg lots 21

22 News & Updates Cinnamon active label extends peach shelf life, maintains sensory qualities A new active packaging system containing essential oils has been found to significantly extend the shelf life and preserve the quality of one variety of peach, according to research. The system, consisting of a label infused with cinnamon essential oils, was attached to plastic packaging and used to lengthen the shelf life of late maturing Calanda peaches, said Spanish scientists. The tag was placed inside a macro-perforated PET tray, which included 20 macroperforations. Shelf life and quality The study by Christina Nerin concluded that use of the cinnamon active packaging slashed the amount of fruit spoiled after being stored for almost two weeks. After 12 days of storage at room temperature, the percentage of infected fruit in the active label packaging was 13 per cent versus 86 per cent in the nonactive packaging, said the group from the University of Zaragoza. The fruit normally has a shelf life of 3-5 days at room temperature. The paper, published in the journal Postharvest Biology and Technology said use of the packaging cut weight loss in the fruit and helped it maintain firmness. The technology also reduced the production of enzymes leading to oxidation in the fruit over the course of the storage period. The scientists said they reached this conclusion after examining the influence of the active packaging on the in vivo activity of lipoxygenase (LOX), polyphenol oxidase (PPO), peroxidase (POD), superoxide dismutase (SOD), catalase (CAT), and of malondialdehyde (MDA) content as an indicator of lipid oxidation. It added that in carrying out sensory analysis, most positive descriptors were not significantly different from the optimum quality level (day 0) for peaches stored in the active package after 12 days at room temperature. The researchers said it has been more usual to incorporate the active packaging agent directly into the plastic polymers - while use of active labels is less common. Labels are very versatile and also easily adapted to an industrial scale and can be added just before packaging the food, thereby maximizing their functionality, said Nerin. Conclusions She concluded that the self-adhesive active label developed by the team placed inside the packaging offered an efficient option for extending shelf life of the fruit at room temperature. Nerin added: This type of active packaging is more efficient than the use of an active macro-perforated tray of PET, probably due to the higher concentration of active compounds released by the packaging. The system also demonstrated an improvement in physico-chemical properties such as weight loss and firmness. The cinnamon essential oil also inhibited the activity of lipoxygenase. The use of the active packaging somehow influences the activity of some selected enzymes, said the research. The global sensory qualities of the fruit were also enhanced so that after 12 days of storage at room temperature they were similar to that at the optimum quality level. The panel of 11 assessors detected no cinnamon or off-flavours. Source: Active label-based packaging to extend the shelf-life of Calanda peach fruit: Changes in fruit quality and enzymatic activity by Pablo Montero-Pradoa, Angel Rodriguez-Lafuente and Cristina Nerin; published in Postharcest Biology and Technology ; doi: /j.postharvbio

23 Global industry looks at India as a future hub for Fragrances and Flavours Fragrances and Flavours Association of India (FAFAI) is the national apex body of the players in the Fragrances & Flavours segment. The body was formed in 1949 by a few traders from the segment, with the key objective to promote the sector. Today, with 800 members, the body, apart from manufacturers and dealers from the Fragrances & Flavours industry, includes those that are from Aroma Chemicals, Natural Essential Oils as well as allied fields. The association regularly conducts biennial seminars across India, on various topics that are relevant to the Fragrances & Flavours and allied industries. The 20th FAFAI seminar was held in Bangalore between January 28 and 30, The theme of the event was India The Future of F&F Industry. According to Frost & Sullivan India, globally, the Fragrances & Flavours segment is estimated to be $17.8 billion industry of which the top five players account for 40 per cent of the market. The five largest companies in the industry are Givaudan, International Flavours & Fragrances (IFF), Firmenich, Symrise and Quest International. Japanese firm, Takasago, the sixth largest player, has revenues close to that of Quest International. The Indian Fragrances and Flavours industry has been growing rapidly following liberalisation. The global economic slowdown did not have any impact on the industry; instead, it clocked a growth rate of per cent. With globalisation, there have been improvements in technology, competition and brand images. The global industry is looking at India as a future hub for fragrances and flavours, stated Rohit Seth, Joint Secretary, FAFAI, in an interaction over . Excerpts: How would you describe the current food fragrances and flavours industry scene in India? The market for the food fragrances and flavours related products is showing strong growth. The Indian strength lies in the fact that the products are available at competitive prices. What are India s capabilities in this space? Which are the important flavours and fragrances that are distinct to India? India's capability in this space pertains to sandal, jasmine and herbal-related fragrances. For flavours, it is about spicebased products since India dominates in production of spices. What is the total size of this sector and its growth rate? The total size of the industry including menthol, sandalwood oil and other essential oils is around Rs. 9,000 crore and the estimated growth rate is approximately 12 per cent. The key applications of flavours in the food processing sector include confectionaries, dairy, bakery and snacks among others. Globally what is India s stand in the food fragrances and flavours space? India is a market, which the world is eyeing, so we expect that India is going to place itself at a very commanding position in near future. Would the country become a hub for contract manufacture of food fragrances and flavours? India has a good potential to become a hub for manufacturing, especially, for raw materials used by the industry. What according to you are the visible trends in this industry? Strong growth is visible for the industry in coming years, going by India s inherent strength in the space of spices and development of fragrances. Conventionally, flavours and fragrances are mainly customised in raw materials, which lead to higher pricing of endproducts. The industry is also extremely fragmented and is expected to consolidate in the coming years. 23