Andrew G. SteelChief Executive

The Treedom Group

The Treedom Group has operated in plantation management with specialisation in the Oud industry for over a decade.

Founded in 2005 10 years of experience in Agarwood plantation management Plantation and factory in Trat, Thailand Certified with ISO 9001:2008 for both plantation and factory

THE TREEDOM GROUP

LIQUID GOLD

The value of Oud Oil:

Grade A – Oud Oil (retail)

US $ 50 - 75,000 Today’s gold price is US $ 1,175 per ounce.

1 kilogram equal 35.27 ounces. Gold per kilogram US $ 37,500

The resinous wood from the particular trees provide a very pleasant odour highly sought after throughout the world. As a result, the premium-grade Agarwood is extremely precious, being considered as the most expensive product originated from plant.

Agarwood price is subject to quality, purity, and origin of the wood. The premium quality wood price is high as thirty thousand US dollars per kilogram.

OUD – VERY PRECIOUS WOOD

The extremely rare piece of Agarwood is over 600 years old, and is for sale 20,000,000 USD

Agarwood has a very long history of use as a medicine, incense and as an aromatic oil.

Agarwood and its essential oil have long been associated with various religions and cultures. While it finds a mention in ancient scriptures of Japanese and Chinese dynasties it also finds mention in the Bible where it is known as Aloes or Aloeswood.

It is considered an aid for meditation in spiritual circles.

HISTORY OF OUD

OUD USAGE

Perfume and perfume component

Spa & Aromatherapy for relaxation

Incense for cultural and religious purposes

Traditional medicinal and tea for health benefits

natural detoxifier natural diuretic promotes healthy and clear skin helps lower blood sugar and

blood circulation

Various usage for both pleasure and cultural activities

The needs of the European market are mainly from global Perfume houses to create unique blend with precious Oud oil as selling point.

As many as 800 Oud based fragrances somewhere in the world Oud adds richness and complexity to a fragrance Oud works as a fixative making the fragrance last longer

Oud oil are essential oil that can be blended into Spa & Aromatherapy products as well as cosmetics for relaxation purposes.

Oud with Rose the effect is ‘honey-like’ With Jasmine – deep and even ‘animalic’ With Bergamot (and Mint) – adds freshness

and a cologne quality

THE EUROPEAN & US MARKETS

NOTABLE OUD BASED FRAGRANCES

The most valuable tree in the world The best species in producing oud oil

is ‘Aquilaria crassna’ Found in 11 countries in Asia Height 6-20 m. Oud oil is a main ingredient in many

world class fine fragrances

Medical benefits: leaves help reduce diabetes & stress, cure asthma (Chinese remedies) and allergies, seed oil can cure dermatologic problems, etc.

Agarwood sawdust (post distilled powder) can also be used to produce incense cones, bakhoor and Steam oil

Oud Denh al oud

AGARWOOD TREE

The Oud Oil industry

THE OUD OIL INDUSTRY

The Oud Oil industry is estimated at US$6-8 Billion globallySource: International Journal of Pharmaceutical and Life Sciences, ISSN 2305-0330, Volume 2, Issue 1: January 2013

50% of supply is to the Global Perfume and Fragrance Industry which is forecast to reach US$36 Billion by 2017 Source: Report Linker

Oud Oil suppliers in the main can be described as minor, a ‘cottage industry’

Industry is regulated as in only plantation based feedstock is allowed to produce Oud products

Illegal supply remains a threat to the industry

Major global perfume houses in Europe have been fined and have switched to legal suppliers as a result

INDUSTRY OVERVIEW A MATURING GLOBAL INDUSTRY

CITES

CITES is an international convention aiming at preserving the wild specimens, both animals and plants.

Aquilaria is considered as endangered species and the trade of such trees is strictly governed by CITES. Wild agarwood trading has been prohibited since 2004.

Appendix II includes species not necessarily threatened with extinction, but in which trade must be controlled in order to avoid utilization incompatible with their survival. Around 200 tree species are included in the three CITES Appendices About 85 species are included in Appendix II

It is a requirement for Agarwood originating from managed plantations to register with CITES to ensure its origin, a CITES permit is a prerequisite for the export of Oud products.

Source: www.cites.org

GLOBAL IMPORT : MIDDLE EAST THE MAJOR OUD OIL CONSUMERS

2011 2012 2013 2014 -

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

293 455 335

498 100

984

31 18

2,240

1,716

7,582

1,825

121 83 287

108 447

1,285

780

2,236

299 338 258 290

Bahrain

Malaysia

Saudi Arabia

Singapore

United Arab Emirates

Others

Kg

Year

Oud Oil Import Quantity (All Species)

GLOBAL EXPORT : GROWING DEMAND IN OUD OIL

Source: www.cites.org2011 2012 2013 2014

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

232 246 182 109

549 272 470 334

1,813

4,135

7,232

2,785

740.859999999999 668.4

99 157 157 265 67 53

563

163

Malaysia

Singapore

Thailand

United Arab Emirates

Viet Nam

Others

Oud Oil Export Quantity (All Species)Kg

Year

THAILAND OUD OIL EXPORT : MIDDLE EAST IS STILL THE BIGGEST MARKET

Source: www.cites.org

2011 2012 2013 2014 -

1,000

2,000

3,000

4,000

5,000

6,000

7,000

14 42 238

75 100

983

31 15 283 435

333 498

265

738 663 698 760

1,581

5,863

1,178

89 138 103 86

Thailand Oud Oil Export Quantity (All Species)

Singapore

Malaysia

Bahrain

United Arab Emirates

Saudi Arabia

Others

Kg

Year

The Main market is still in the Gulf region but we can see high growth in European market

64%

25%

5%6%

2012

Middle east Europe Asia North AmericaSouth America

Middle east38%

Europe35%

Asia25%

North America2%

2015

Middle east Europe AsiaNorth America South America

TREEDOM’S CLIENT BASE

 Treedom identified the client segmentation as following;

Raw material supplier for cosmetics and aromatherapy products

Fragrance House (FH) Trader (T) Retailer (R) Individual (I)

TREEDOM’S MARKET - SEGMENTATION

Fragrance House29%

Individual6%Retailer

32%

Trader33%

Customer Segmentation

Fragrance House Individual Retailer Trader

In 2011 Thailand exported 1,511 Kg

In 2013 Thailand exported 7,232 Kg. A growth of 378%! Source: CITES export data

Saudi Arabia, UAE, Bahrain, Malaysia and Singapore are the largest oud oil importers

In 2011 Saudi Arabia imported 761kgs from Thailand; in 2013 = 5,863kgs. A growth of 670%

Singapore is emerging as a small distribution ‘hub’. In 2011 imports were 13.5kgs; in 2013 = 238kgs!

Oud oil prices expected to rise due to regulation enforcement and demand growth

PURE AND BLENDED OUD OIL IS ON A STEEP DEMAND TRAJECTORY…

Plantation Process Distillery Process

OUD OIL PRODUCTION PROCESS

PLANTATION OPERATIONS

TREEDOM’S NURSERIES

Quality control is one of the essential parts for effective Agarwood plantation management. Treedom’s Nonsi and Klongkaew nurseries employ vigorous quality standards to our raw material supply from the outset.

Treedom’s plantations occupy over 850 acres in Trat and Chantaburi province in Thailand with over 250,000 units of raw material supply.

TREEDOM’S PLANTATIONS

ISO9001:2008

OUD FACTORY

Treedom is planning to increase production capacity by installing the amount of distilling pots to 360 units towards 960 kg production a year aiming to be the largest premium oud oil production factory in Southeast Asia by 2019.

EXPANSION TARGET

TRADITIONAL DISTILLING PROCESS

MODERN DISTILLATION

Gas heated stills (LPG) Distillation time 10 Days Production 80 Kg per month

Advantages:

Consistency of Quality & Quantity Economies of scale - lower cost Large Volume Supplies

INTELLECTUAL PROPERTY

Treedom’s patented inoculation formula that works as a stimulus to create black resin in the trunk for Oud Oil extract within one or two years

Since Oud Oil purity is a prerequisite to successful worldwide distribution, Treedom’s laboratory focuses on final quality control to meet international standard i.e. qualified density, viscosity, index of refraction

GRADING OF OUD OIL

The value of Agarwood and Oud Oil depends on a set of factors related to the size, resin content, odour profile, durability, color and purity.

The country of origin is an important aspect for its value in the GCC

OIL GRADING AND PRICING

GUIDELINE

Grading Guideline for Clients

Conclusion

Product specification

1. Batch number2. Date of production3. Oil properties detail

- General properties: Moisture in oilsmellcolor shade

- Physical properties:Refractive index- density of the oilRelative densitySurface tension

- Chemical properties: allergy test result4. Oil grading results

QUALITY CONTROL(PRODUCT CERTIFICATE & ANALYSIS)

Sample of test report from Treedom’s Seyufii Cambodian Oil

Certificate of analysis from Gas chromatography (GC) test

QUALITY CONTROL(PRODUCT CERTIFICATE & ANALYSIS)

Certificate of analysis from Gas Chromatography (GC) test

QUALITY CONTROL(PRODUCT ANALYSIS)

RESULTS COMPARISON: Safii Cambodia(B8)

1. Seed to Oil – touch point on the whole value chain to ensure quality

2. International standard of quality with ISO guaranteed on plantation management and distillation facilities

3. Consistent quality and supply – Batch production

4. GC-MS analysis

5. Legally traded with CITES certified

6. Work with perfumers & evaluators to develop products for the market

COMPETITIVE ADVANTAGE

Any questions

DISCUSSION SESSION