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Objectives
Develop the oil roses cluster in Afghanistan to produce rose essence for the fragrance industry worldwide 240 ha. of cultivation Excellent conditions for organic cultivation of Damascena rose
Production
Value adding processing and distillation done locally Oil roses yield US$ 3,000 per ha. (US$ 1,650 farm-gate price), a good economic alternative to poppy 500 to 1,000 farmers involved
Local Development /
Harvest: temporary employment for 3,000/5,000 workers including many women 10 to 30 local processing units will employ 50 to 150 workers opportunity for women entrepreneurship 25 qualified workers in the central distillation unit
Beneficiaries
Market research
Phase 1
Identification of opportunities for Flavor and Fragrance crops in Afghanistan Field feasibility study
Phase 2
Phase 3
Phase 4
Sourcing of stakeholders
IMPLEMENTATION
GENEVA
GIVAUDAN Rmi Pulvrail, International Buyers Naturals Francis Chabagno, New molecules development Director
-
FIRMENICH Jean-Pierre Rozat, Director Global Purchasing Perfumery Natural Raw Material Gordon Sanders, Buyer Perfumery Natural Raw Material
GRASSE
ROBERTET Jean Daniel Dor, Development Director Robert Sinigaglia, Production Director Anne Sophie Boulet, Account Manager IFF Bernard Toulemonde, General Manager Laboratoire Monique Rmy
KABUL / JALALABAD
MADERA Alain de Bures, Founder Anne Lancelot, Country Director GERMAN AGRO ACTION Dr. Julius Obermaier, Expert in rose cultivation Alexandra Rueth, Field Manager URD Francois Grunewald, Founder OTHER Zalmai Chawali, Teacher and Farmer
OTHER
MT ROMANCE / AUSTRALIAN SANDAL WOOD Co. Stephane Picquart DESMARET SA M. Desmaret, General Manager BIOLANDES SA Dominique Roques, General Manager
100%
CAGR* = 10.1%
15
40%
Fragrance
47.4 MM
50%
10
13.8
5
16.6
18.4
60%
Flavors
2000 2002 2003 (est.)
0%
The market size for Natural Raw Material for the Flavor and Fragrance Market is 900 M $
13%
Synthetic Raw Material
- Non speculative - Affordable - Allergy free
87%
Note: *Figures come from the aggregated revenues from the companies dealing in the market. Actual growth should be lower according to our estimates Source: Freedonia Inc; Givaudan; Firmenich; Robertet; Altai Consulting analysis
5 COPYRIGHT 2004 - ALTAI CONSULTING, KABUL - AFGHANISTAN
Business Attractiveness
Value Chain of 1 kg of Rose Essence (~1.3 hectare), est., in US $ Production + Processing: 3,200 $
400
Production: 2,100 $
700 400 700
800 4,400
Market size: the rose extract for fragrance market segment represents US$ 18 million (*) yearly worldwide (10,000 tons of flowers) Main producers are Bulgaria and Turkey (~90% of the market), others include Morocco, Lebanon, Iran Market Opportunities: buyers want to change suppliers production costs in Bulgaria likely to increase with entry in EU Afghan Rose quality and concept
Oil roses will grow well above 1,000 meters elevation in the central and eastern regions: water quality is good salt content is low Other fragrance crops can be cultivated there: geranium under 1,000 meters lavender at all altitudes other local specialties to be explored Farmers can intercrop with vegetables and clover for additional revenue
Phase 1
Market research
Phase 2
Phase 3
Phase 4
Sourcing of stakeholders
IMPLEMENTATION
10
Production Plan
Rose Water
Farmers
11
Site selection
Spring frost free areas south of the Hindu Kush 1,000 meters elevation Irrigation water security Low salt content
Khinjan
Koh Band Nijrab Mahmud Raqi Dawlat Shah Alasay Nuristan Chapa Dara Pech
#
Asadabad
Bagram Istalif Kalakan Mir Bacha Kot Shakar Dara Dih Sabz Guldara
Legend
Narang Chawkay
Sirkanay
Paghman
%
Surobi Kabul Bagrami Qarghayi
#
Khas Kunar Kuz Kunar Jalalabad Surkh Rod Khaki Jabbar Hisarak Chaparhar Sherzad Rodat Khogyani Azra Dih Bala Pachir Wa Agam Achin Shinwar Muhmand Dara Nazyan Dur Baba Bati Kot Lal Pur Kama Goshta
The Central region (around Kabul) and Eastern regions (around Jalalabad) have been identified as suitable See details on map Central region:
Muhammad Agha
Khushi
Jaji
N
W S
50 Miles
Easier logistics, less transportation costs and time Rehabilitation (Chamali plain) Bigger landholdings potential for more efficiency and quality
12
Khinjan
Site Selection: Suitable areas for Rose Damascena Mandol Panjsher cultivation in Eastern Afghanistan Salang
Hisa-I-Duwum Panjsher Shinwari Jabalussaraj Chaharikar #
#
Wama
Waygal
Hisa-I-Awali Panjsher
Nuristan Chapa Dara Pech
#
Asadabad
Khinjan
Guldara
Panjsher
Kohi Safi Tagab
Mandol Alishing
Alingar
Marawara
Legend
Wama
Dara-I-Nur Nurgal
Sirkanay
Hisa-I-Duwum Panjsher
Mihtarlam
#
Khas Kunar
Nuristan
Jalalabad Kama # Chapa Dara Goshta
Asadabad Pech
#
hr
Bagram Chahar Asyab Musayi Istalif Kalakan Mir Bacha Kot Shakar Dara Muhammad Agha Dih Sabz Guldara
Alishing
Sherzad
Kohi Safi
Tagab
Khogyani Mihtarlam #
Chaparhar Alingar
Narang
Sirkanay
Nurgal
Azra
National landcover Fruit Trees/Vineyard and Gardens Irrigated: Intensively Cultivated (1 Crop/Year)
Paghman
#
%
Kabul
Khushi Bagrami
Surobi Jaji
Achin
Shahr ki Barak Puli Alam Chahar Asyab Musayi Khaki Jabbar Lija Mangal Hisarak Chamkani Dand Wa Patan Sayid Karam Sherzad Muhammad Agha
Jalalabad
#
Kama
N
Goshta
Surkh Rod
W
Bati Kot
S
harkh
Rodat
13
Khogyani
PROJECT MANAGEMENT Research Steering Coordination Marketing NGOs Training Production Control FARMERS Cultivation Harvest PRIVATE BUSINESSES - Local Processing Units (10 to 30) Post-Harvest Processing Rose Water Distilling - Afghan Rose Co. Production Distribution Logistics Marketing
DONORS
Funding
14
Infrastructure
Donors Funds NGOs Training Production Control
Cultivation
Processing
Rose Water Production Units
Rose Water
Afghan Rose Co. Transformation and Sales Rose Essence International Market
Sales
15
Action Plan
Project Management Marketing Coordination Producti Post on Harvest Training Distillati Monitori Processi on ng ng
Train the trainers Practical training for farmers Demonstration plots Capacity building Develop Quality Control procedures 10 to 30 decentralized post-harvest processing units Potential for women entrepreneurship programs Main distillation units Distillation Techniques R&D
FUNDING
DONORS (Grants for R&D and Infrastructure)
DONORS
PRIVATE INVESTORS
IMPLEMENTATION
PROJECT MANAGEMENT TEAM
NGOs
PRIVATE INVESTORS
PROJECT MANAGEMENT TEAM
16
Focus on Farmers
Advantages for farmers: income security, training, access to international markets
Expected average landholding: 2 jeribs (0.4 hectare) Investment is US$ 1,050 per hectare Revenue of rose flowers is US$ 1,650 per hectare after year 3, and reaches over US$ 2,000 per hectare including intercrops Profit is around US$ 400 per year after year 5 The return rate for this investment is 17% a year on 10 years cash flow
17
Early farmers (50 of them) will need to import cuttings for an expensive US$ 1 a piece. They will nevertheless make more profit from selling many cuttings for reproduction. These early farmers will produce cuttings and sell them to new farmers for US$ 0.35 All farmers will need a credit scheme in order to make up for the investment and lack of production in year 1 These figures do not include any grants from donors. Interest free credit schemes or grants could be built in to help farmers invest in cuttings
18
US$ 5,200
US$ 1,500
US$ 280
19
20
Investment is US$ 400,000 The company shows 19% Internal Return Rate on a 10-year period, when taking into account: US$ 150,000 grants to purchase equipment Donors participation in R&D, Marketing Other flowers, roots and herbs can be distilled for the fragrance industry, adding to the profitability of the distillation and marketing company
21
Donors Involvement
Funding for agricultural infrastructure
Project Management
22
Phase 2 Development
Cultivation of potential crops (flowers and herbs) Training of personnel Distillation tests/ Research and Development Market research, involvement of key stakeholders in the market Support of other Essential Oil projects (local roses, other flowers, dried spices and wild herbs)
Production and marketing of successful Phase 1 Essential Oils Expansion of pilot farm by private investors Final selection of crops for Afghanistan Extension projects in several regions
23
Market research and selection of crops, sourcing of cuttings and seeds (potential crops are geranium,
lavender, iris, sage, mint, basil, citronella)
Hiring and Training of personnel (management, horticulture, distillation) Cultivation and harvest
Phase 1
Distillation
24
25 to 40 hectares Cultivation
7 to 10 hectares imported Damascena roses Remaining lands and intercrops: local roses, other flowers and herbs
Phase 1
Employment: 20 to 30 employees
Potential to populate 20 hectares every year with local cuttings of Damascena roses
25
2006
2008
2009
2010
Extension
Contracting and training of farmers Production and Quality control
26
Position Afghanistan on a promising market segment: flowers for the fragrance industry worldwide Provide access to international markets for 500 to 1,000 farmers in mountainous remote areas Create 100+ jobs and 3,000 to 5,000 temporary jobs Help private companies invest in processing and distillation capacity in order to add value locally Create a sizeable revenue stream for the country
27