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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
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
2 COPYRIGHT 2004 - ALTAI CONSULTING, KABUL - AFGHANISTAN
Identification of opportunities for Flavor and Fragrance crops in Afghanistan Field feasibility study
Phase 2
Selection of crops Technical scheme for project implementation Implementation and Business plans
Phase 3
Phase 4
Sourcing of stakeholders
IMPLEMENTATION
GENEVA GENEVA
GIVAUDAN GIVAUDAN Rmi Pulvrail, International Buyers Naturals Rmi Pulvrail, International Buyers Naturals Francis Chabagno, New molecules development Director Francis Chabagno, New molecules development Director
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FIRMENICH FIRMENICH Jean-Pierre Rozat, Director Global Purchasing Perfumery Jean-Pierre Rozat, Director Global Purchasing Perfumery Natural Raw Material Natural Raw Material Gordon Sanders, Buyer Perfumery Natural Raw Material Gordon Sanders, Buyer Perfumery Natural Raw Material
ROBERTET ROBERTET Jean Daniel Dor, Development Director Jean Daniel Dor, Development Director Robert Sinigaglia, Production Director Robert Sinigaglia, Production Director Anne Sophie Boulet, Account Manager Anne Sophie Boulet, Account Manager IFF IFF Bernard Toulemonde, General Bernard Toulemonde, General Manager Laboratoire Monique Rmy Manager Laboratoire Monique Rmy
GRASSE GRASSE
MT ROMANCE // MT ROMANCE AUSTRALIAN SANDAL AUSTRALIAN SANDAL WOOD Co. WOOD Co. Stephane Picquart Stephane Picquart DESMARET SA DESMARET SA M. Desmaret, General M. Desmaret, General Manager Manager BIOLANDES SA BIOLANDES SA Dominique Roques, General Dominique Roques, General Manager Manager
COPYRIGHT 2004 - ALTAI CONSULTING, KABUL - AFGHANISTAN
OTHER OTHER
2
100%
20
CAGR* = 10.1%
15
40%
Fragrance
47.4 MM
50%
10
13.8
5
16.6
18.4
60%
Flavors
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
Flavor and Fragrance Market Size Of which we consider only the RM Of which we consider only the Natural RM
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
B Differentiators in the market: Is it a value (quality) or volume (low cost) driven market?
Business Attractiveness
Value Chain of 1 kg of Rose Essence (~1.3 hectare), est., in US $ Production + Processing: 3,200 $ Production: 2,100 $
400 700 800 700 4,400 400
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
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Production Plan
Rose Water
Farmers
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Site selection
Spring frost free areas south of the Hindu Kush 1,000 meters elevation Irrigation water security Low salt content The Central region (around Kabul) and Eastern regions (around Jalalabad) have been identified as suitable See details on map Central region:
Khinjan
Panjsher Salang Hisa-I-Duwum Panjsher Shinwari Jabalussaraj Chaharikar # Bagram Istalif Kalakan Mir Bacha Kot Shakar Dara Dih Sabz Paghman Guldara Alishing Kohi Safi Tagab
#
Koh Band Nijrab Mahmud Raqi Alasay Dawlat Shah Nuristan Chapa Dara Pech
#
Asadabad
Marawara
Legend
Districts Administrative D
Narang Chawkay
Sirkanay
Provinces Adminitrative D
Mihtarlam # Kuz Kunar Qarghayi Jalalabad Surkh Rod Khaki Jabbar Hisarak Sherzad Khogyani Azra Dih Bala Pachir Wa Agam Chaparhar Rodat
#
National landcover
%
Kabul Surobi Bagrami
Khas Kunar
Kama
Goshta
Lal Pur Bati Kot Shinwar Muhmand Dara Nazyan Dur Baba Achin
Muhammad Agha
Khushi
Jaji
N
Charkh
Sayid Karam
E S
0
Jani Khel Jaji Maydan
50 Miles
Eastern region: Smaller landholdings Remote locations Natural flower garden Alternative livelihood for farmers
COPYRIGHT 2004 - ALTAI CONSULTING, KABUL - AFGHANISTAN
Easier logistics, less transportation costs and time Rehabilitation (Chamali plain) Bigger landholdings potential for more efficiency and quality
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Khinjan
Site Selection: Suitable areas for Rose Damascena Mandol Panjsher cultivation in Eastern Afghanistan Salang Wama
Andarab Koh Band
Nijrab Dawlat Shah Alasay Mahmud Raqi Bagram
Waygal
Hisa-I-Awali Panjsher
Nuristan Chapa Dara Pech
#
Asadabad
Khinjan
Istalif
Guldara
Panjsher
Kohi Safi Tagab
Marawara
Legend
Alingar
Wama
Dara-I-Nur Nurgal
Sirkanay
Provinces Adminitrative D
Khas Kunar
Nuristan
Kuz Kunar
Asadabad
Goshta
hr
Bagram Chahar Asyab Musayi Istalif Kalakan Mir Bacha Kot Shakar Dara Muhammad Agha Dih Sabz Paghman
#
Pech
Lal Pur Marawara
#
Guldara
Alishing
Sherzad Khogyani Mihtarlam #
Kohi Safi
Tagab
Chaparhar Alingar
Narang
Sirkanay
Nurgal
%
Kabul
Khushi Bagrami
Azra
National landcover Fruit Trees/Vineyard and Gardens Irrigated: Intensively Cultivated (1 Crop/Year)
Surobi Jaji
Achin
Shahr ki Barak Puli Alam Chahar Asyab Musayi Khaki Jabbar Lija Mangal Hisarak Chamkani Dand Wa Patan Sayid Karam Sherzad
Kama
N W E
Goshta
Lal Pur
Bati Kot
S
harkh
Muhammad Agha
0
Khogyani
13
Rodat
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
Farmers Rose Flowers Rose Water Production Units Rose Water Afghan Rose Co. Transformation and Sales Rose Essence International Market
Processing
Sales
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Action Plan
Project Management Marketing Coordination Market Investment Research
Market Research Feasibility Study Business plans and partner recruitment
Training
Train the trainers Practical training for farmers Demonstration plots
Production Monitoring
Capacity building Develop Quality Control procedures
Distillation
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
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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
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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
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US$ 5,200
US$ 1,500
US$ 280
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20
21
Donors Involvement
Funding for agricultural infrastructure
Project Management Import and reproduction of roses Selection and contracting of farmers Grants and credit scheme for farmers Training of extension agents and farmers Extension / field work
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
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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
(such as
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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
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2004
2006
2008
2009
2010
Extension
Contracting and training of farmers Production and Quality control
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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
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