CBI Product Factsheet: Sandalwood for cosmetics in Europe

Practical market insights into your product As a result of the popularity of sandalwood and its highly valued essential oil, many countries have depleted their natural resources of this slow growing tree. Demand remains strong and consequently prices are increasing. For producers and exporters with a long-term vision, opportunities exist to cultivate sandalwood sustainably. Secondary economic benefits from host trees and extracting vegetable oil from sandalwood seeds could provide an income to producers in Developing Countries (DCs) before the trees are ready to be harvested. There is competition from synthetic sources.
Product definition
Sandalwood, of the genus Santalum, is a genus of woody flowering trees and plants. Most species are semi-parasitic and several produce a highly aromatic wood. The most common species are Indian sandalwood (Santalum album) and Australian sandalwood (Santalum spicatum), although other species are used for their scent as well. Different sandalwood species are indigenous to India, Indonesia, Sri Lanka, Bangladesh (S. album), and Australia (S. spicatum and S. lanceolatum), as well as to several Pacific Islands such as Hawaii (S. ellipticum), Fiji and Tonga (S. yasi), Papua New Guinea (S. macgregorii), Vanuatu and New Caledonia (S. austrocaledonicum) and French Polynesia (S. insulare). The essential oil produced by sandalwood is obtained through steam distillation of the chipped heartwood. The oil is a pale yellow to yellow viscous liquid that is insoluble in water. Sandalwood oil is used in the perfumery, cosmetics, aromatherapy, pharmaceutical and food industries. Sandalwood is also used for woodcarving and as an ingredient for incense. Traditionally, sandalwood is wild-harvested, since cultivation is difficult. Because of over- and illegal harvesting, supplies of sandalwood, especially Indian sandalwood, have decreased considerably over the last 10-15 years. Consequently, efforts to cultivate sandalwood have increased; Australia now has several plantations of Indian sandalwood trees. Classification of sandalwood oil: Chemical Abstract Service (CAS) numbers: o Santalum album: 84787-70-2 o Santalum spicatum: 8024-35-9 o Santalum austrocaledonicum: 91845-48-6 Harmonised System (HS): within the EU / EFTA, sandalwood oil does not have a separate HS code. Instead it would be classified under: o 3301.29: essential oils other than citrus and mint oils

Indian sandalwood tree

Sandalwood oil

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CBI Product factsheet: Sandalwood for cosmetics in Europe

Cosing, the European Commission database with information on cosmetic substances and ingredients, lists several types of sandalwood and their derivates under their INCI names. o INCI name: Santalum album oil and wood oil, with masking and perfuming properties o INCI name: Santalum austrocaledonicum wood oil, with masking, perfuming and flavouring properties. UN number: 1993, Class 3

Product specification
Quality The quality of sandalwood oil depends on the level of santalol in the oil. Indian sandalwood is of the highest quality. Several Pacific sandalwoods are similar in quality, especially sandalwoods from Fiji (Santalum yasi) and New Caledonia and Vanuatu (Santalum austrocaledonicum). To compare:
Trade name Indian sandalwood Latin name Santalum album Santalol content -santalol: 4155% -santalol: 1624% -santalol: 3739% -santalol: 2628%

Fiji sandalwood

Santalum yasi

New Caledonian sandalwood Australian sandalwood

Santalum -santalol: 48austrocaledonicum 49% -santalol: 2022% Santalum spicatum -santalol: 1525% -santalol: 520%

Considerations for action: Work together with a local university department to determine the santalol content of your sandalwood oil. This should be included in your product documentation. Information on the chemical profile by (accredited) laboratories of the oil is important to buyers and should be part of your Product Factsheet and specifications. Check the quality standards that the International Organisation for Standardisation has set for sandalwood oil. ISO 3518:2002 was developed for Indian sandalwood oil (Santalum album. L.) and can be purchased for 40. For Australian sandalwood oil (Santalum spicatum), check ISO 22769:2009, which can be purchased for 53. These are indications of the international standard, but individual buyers may set their own standard.

In general, older sandalwood trees have more heartwood and produce higher quality oil, since santalol levels are higher. Highquality sandalwood oil comes from trees that are at least 30 years old. Sandalwood trees normally start producing heartwood at around 10-15 years. Growth of heartwood depends on soil type, rainfall and level of sun exposure. Trees that grow in shallow soil or in soil with a high level of stone inclusions, with a distinct annual dry period and exposure to full sun develop heartwood more rapidly and could be harvested after at least 15-20 years. For trees that grow in deep, fertile soil, with high and evenly distributed rainfall throughout the year and a shaded canopy, harvesting should be delayed until the trees are at least 30-40 years old. To be of optimum quality, sandalwood oil must be 100% natural (i.e., not denatured by addition of any chemicals), 100% pure (i.e., not mixed with any other essential oils with similar characteristics) and 100% integral

Before harvesting the trees, you need to test the levels of heartwood and essential oils by taking a core sample out of the trees.

Use the extraction method (temperature, pressure, time) consistent with buyers preferences and specifications. Prevent dilution, adulteration and contamination by foreign materials (e.g.

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CBI Product factsheet: Sandalwood for cosmetics in Europe

(meaning that the totality of the molecules contained in the distilled plant have been collected during the distillation process). Given its high price and low availability, there is a high risk of adulteration. Buyers are very wary about buying sandalwood oil.

synthetic sandalwood or African sandalwood) to preserve you reputation. Importers regularly analyse products for adulteration.

Labelling Facilitate the traceability of individual batches with markings and a registration system. Use the English language for labelling unless your buyer has indicated otherwise. Labels must include the following: o Product name/INCI name o Batch code o Place of origin o Name and address of exporter o Date of manufacture o Best before date o Net weight o Recommended storage conditions o Organic: Name/code of the inspection body and certification number. Ensure the buyer can access the following documentation: o Technical Data Sheet (TDS) or Specification, check this example of a frankincense oil or myrrh oil o Certificates of analysis, to support the claims of the specification, check this example of a certificate of analysis of Australian sandalwood oil o Safety Data Sheet (SDS) o GMO certificate (if requested) o Certificate of origin o Product information sheet Sandalwood essential oil is classified as a flammable liquid; include the relevant hazard symbol (as shown on the right). Also include the risk phrases with the following numbers: R10-36/38-43-65-, and the safety phrases with the following numbers: S02-24/25-36-45. EU Directive 2001/59/EC elaborates on these and other risk and safety phrases.

Hazard label

Packaging Always consult with your buyer for specific packaging requirements. Use UN approved packaging, as specified by your buyer. For more information, check the details provided by the European Federation of Essential Oils on the transport of dangerous goods. Ensure the preservation of quality of sandalwood oil by: o Using containers of a material that does not react with constituents of the oil (e.g. lacquered or lined steel, aluminium). o Cleaning and drying the containers before filling them with oil. o Filling the headspace in the container with a gas that does not react with constituents of the oil (e.g. nitrogen or carbon dioxide). Facilitate the re-use or recycling of packaging materials by, for example, using containers of recyclable material (e.g. metal). Store the containers in a dry, cool place to prevent quality deterioration. Organic oils should remain physically separated from conventional oils.

Food grade containers

Legislative requirements
Considerations for action: EU Cosmetics Regulation: The Cosmetics Familiarise yourself with EU legislation on Regulation includes, amongst others, Cosmetic ingredients and products. If you requirements (physic-chemical, microbiological & can provide all the information needed in the toxicological) for substances/ingredients to be product information file, you can offer your included in each Cosmetic Product Safety report buyer a better package. Also ask your buyer

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CBI Product factsheet: Sandalwood for cosmetics in Europe

and Product Information File. Cosmetics manufacturers and ingredient producers increasingly place the responsibility for compliance on their suppliers. Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES): CITES regulates the trade in (amongst others) wild-collected endangered plants and gives a detailed list of species of which the trade is prohibited, restricted or bound to certain rules. Globally Harmonised System for the classification, packaging and labelling of chemicals: The EU sets requirements for the packaging of chemical substances, as well as the required symbols and phrases warning users and providing safety advice that should be used on the labels. REACH may be relevant in case of essential oils. The burden of proof rests with the EU manufacturer/importer who wishes to use this exemption. CLP: The classification, labelling and packaging of substances and mixtures (EC 1271/2008) is based on international legislation the Globally Harmonised System (GHS) Product Liability Directive: This directive states that the EU importer is liable for the products put on the European market. In principle the EU importer can, however, pass on a claim to the producer/exporter depending on contracting arrangements. Packaging and packaging waste: Among other requirements, EU packaging legislation restricts the use of certain heavy metals.

for advice on legislative requirements. For more information on product safety reports, check EU Regulation 1223/2009. The sandalwood family (Santalaceae) is listed in Appendix I of CITES. This means that if you want to trade sandalwood genera or their derivatives, you have to comply with the provisions of CITES. All trade in Sandalwood and its derivatives needs to be authorised through a licensing system. Familiarise yourself with the EC Regulation 1272/2008 on the classification, packaging and labelling of chemicals. You can access such information through the European chemical Substances Information System (ESIS). Familiarise yourself with REACH regulation. The European Chemicals Agency (ECHA) offers guidance on exemptions. Familiarise yourself with UN GHS and the EC 1271/2008, which is aligned with this legislation. Be aware that EU importers can pass on a claim for defective products to exporters.

Make sure you comply with the EU legislation on packaging.

Non-legislative requirements
Good Manufacturing Practices: GMP is not obligatory for producers of cosmetics ingredients, but compliance can provide a competitive advantage on the European market. See the GMP Guide for cosmetic ingredients. Quality safety management: ISO 9001:2008 sets out the criteria for a quality management system. The standard is based on several quality management principles including a strong customer focus, the motivation and support of top management, the process approach and continuous improvement. Considerations for action: The European Federation for Cosmetic Ingredients (EFfCI) provides a guide that defines specific GMP principles for cosmetic ingredient manufacturers. Moreover, ISO Good Manufacturing Practices for Cosmetics (ISO 22716:2007) includes a chapter on how manufacturers should deal with raw materials. Making it easier for your buyer to comply will provide you with a competitive advantage.

International Fragrance Association (IFRA): IFRA Standards form the basis for the globally accepted and recognised risk management system for the safe use of fragrance ingredients

Since sandalwood oil is used as a fragrance in the cosmetic industry, check the IFRA Code of Practice on the associations risk management system.

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CBI Product factsheet: Sandalwood for cosmetics in Europe

and are part of the IFRA Code of Practice. Regulation (EC) 834/2007 on organic agriculture: Standards for organic cosmetics mentioned below require certain thresholds of organically certified organic ingredients to be used in certified cosmetics products. Organic ingredients need to comply with requirements regarding the production and labelling for organic products as established by the EU. This regulation legally only applies to food products, but standards for organic cosmetics are based on this regulation. Supplier Ethical Data Exchange (SEDEX): SEDEX offers an online database that allows members to share information on Labour Standards, Health & Safety, The Environment and Business Ethics depending on the particular industry and role in supply chain. If you choose to obtain a certificate for organic production, find out more about Organic production and labelling. French buyers prefer certificates issued by Ecocert

Cosmos and NATRUE standards: These standards, and other standards of national certification bodies, specify what cosmetic products need to comply with to be certified natural and organic. Although not directly applicable to ingredient producers, it is important to be aware of these standards in terms of permitted processes and additives. Documentation: Buyers need well -structured product and company documentation. Buyers generally require detailed specifications supported by certificates of analysis and Safety Data Sheets (SDS). Documentation should include information on fumigation. Representative samples: Your sampling method should result in lot samples that represent what you can deliver in terms of quantities, quality and lead time as specified by the buyer and in your technical data sheet. Delivery terms: Pay attention to strict compliance with delivery terms as agreed upon with your buyer.

Use SEDEX information to familiarise yourself with responsible business practices. Share your companys information on ethical and responsible practices, such as selfassessments, audits and certifications efficiently with your buyers on the online database of SEDEX. Find out more information on the standards of Cosmos and NATRUE. Prepare and publish a code of conduct that defines your social and environmental responsibility as an employer and supplier.

Website: European buyers look for credible suppliers. You can improve the perceived credibility of your company by developing your website accordingly.

For your own internal purposes, it is advisable to prepare a more detailed dossier with all the technical data from both primary and secondary research. Preparing a Safety Data Sheet (SDS) can pose technical challenges, especially for new ingredients. Consider seeking qualified advice. Check websites of European companies for examples of an SDS, e.g. The Soap Kitchen or Eramex. Buyers will appreciate a commercially oriented Product Data Sheet with photos, information on origin and bibliographic references, where available. Familiarise yourself with international delivery terms Ensure that your customers receive a copy of your terms and conditions of sale before agreeing the sales contract. See the websites of Earthoil, Azelis and Seatons for examples of terms and conditions. The Synthite website provides a good example of a website that enhances the credibility of a company. This website has a professional image with clear and relevant information on the company and its product range.

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CBI Product factsheet: Sandalwood for cosmetics in Europe

Trade and Macro-Economic Statistics

(!) No specific trade statistics are available for sandalwood oil. They are included in the trade data on essential oils, non-deterpenated, other than those of citrus fruit, mint, niaouli and ylang-ylang. (!) Please note that official production data from India is much lower than actual production data, due to the high levels of illegal harvesting and smuggling. It is estimated that about 80% of the sandalwood harvest in India is illegal. Supply levels of Australian and Indian sandalwood Traditionally, most sandalwood and sandalwood essential oil comes from India and Australia. India is reported to produce around 95% of Indian sandalwood. World market demand for the different sandalwood species and their derivatives is estimated at 4,000-7,000 tonnes per year. However, since official data on sandalwood production does not take illegal harvesting into account, actual demand and production may be much higher. Official harvest figures for Indian sandalwood in India are around 400-1,000 tonnes per year. These numbers are based on auctions of sandalwood, where supply is controlled by the government. Unofficial harvesting, where sandalwood products are smuggled to other countries, possibly adds another 3,000-4,000 tonnes per year to the total production. Indonesia used to be another major source of wild Indian sandalwood, but currently supplies are non-existent. Interest in cultivating the trees is low. Indonesia is not expected to provide significant volumes of sandalwood over the coming 20 years. Wild-harvested Pacific sandalwoods are approaching exhaustion. However, several sandalwood plantations have been established. The heartwood from these species is mainly exported to Asia. Australia produces around 2,000 tonnes of Australian sandalwood per year. Of this, around 500 tonnes are destined for essential oil production, producing around 10 tonnes of oil. Australian sandalwood is both cultivated and wild-harvested. Future production of Indian sandalwood in Australia may affect global supply. The first harvests from Australia are expected in 2013-2014. The aim is to produce 60% of the global supplies of Indian sandalwood by 2029. However, it is not expected that these supplies will saturate the market. There are some recent plantations in China; much of this production may be for domestic consumption. Since sandalwood cannot be grown in Europe, demand is met by imports. In Europe, the UK and France are estimated to be the largest importers of sandalwood and its derivatives. France is the largest importer in terms of sandalwood essential oil. Considerations for action: If you are based outside the traditional supplying countries, emphasise that you offer an alternative source to sandalwood oil in your promotional material.

Keep a close watch on the future production of sandalwood in Indonesia and other Pacific Islands. You may request such information from your buyers. These countries can become competitors if they start to cultivate sandalwood.

If you produce Indian sandalwood, monitor production levels in Australia. Check the website of the main producer of Indian sandalwood in Australia, TFS.

Focus your exports on the cosmetic industry in the UK and France. Please refer to CBI Tradewatch for natural

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CBI Product factsheet: Sandalwood for cosmetics in Europe

In Western markets, demand for sandalwood oil with its rich woody fragrance is mostly for use as an ingredient in perfume (especially mens fragrance), aromatherapy and fragrant body care products.

ingredients for cosmetics for more trade statistics.

Market trends
Natural ingredients: in Europe, there is increasing consumer interest for natural ingredients in cosmetics, and the global natural cosmetics sector is estimated to grow annually by 5-9%. However, sufficient supplies at a commercially viable price need to be guaranteed. Synthetic ingredients: the development of synthetic alternatives, which have improved performance and lowered costs, has put pressure on natural sandalwood oil. While synthetic sandalwood notes are widely used in the global fragrance industry this is predominantly in lower cost products such as soaps and household items where cheap synthetics are favoured. Higher quality products sometimes use synthetic sandalwood notes to complement natural sandalwood oil. However, natural oil is known to have fixative properties (helping a fragrance to last longer), a complex aroma profile, and therapeutic and psychological properties. Exotic ingredients: the ongoing consumer interest in speciality exotic ingredients forms an opportunity for sandalwood oil. It has exotic, mystical or luxury connotations. Ethical products: a growing interest in ethically sourced and sustainable products provides an opportunity for fair trade and organically certified sandalwood oil. Especially for sandalwood, with its dwindling supplies and high degree of illegal harvesting in India, sustainability and traceability are major issues. In addition, consumers are interested in the story behind ethical certification. In their marketing, cosmetics producers actively communicate the best stories for their ingredients to improve the connection with the consumer. Communication takes place using images, with short stories on the product, or using the producers corporate image. Considerations for action: Emphasise the potential of the use of sandalwood oil in natural cosmetics in your promotional material. Determine whether you can deliver sufficient supplies of the oil.

In your promotional material, focus on the exotic connotation that consumers have of sandalwood oil. Check your opportunities for obtaining certification for ethical sourcing. Please refer to the section on market segments for more information. In addition to certification, focus on the story behind your sandalwood oil in your promotional material. It is an advantage to help cosmetics producers communicate these stories, for example by providing pictures. If your sandalwood oil is produced sustainably, include this fact in your promotional material. Please refer to CBI Trendmapping for more market trends.

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CBI Product factsheet: Sandalwood for cosmetics in Europe

Market Channels and Segments

Market channels
Figure 1: Major market channels for sandalwood oil

Developing country

European market

Segments

Domestic processors

Cosmetic producers

European processor

Collectors and farmers Traders (importers, agents, brokers) EU ingredient distributors

Please refer to CBI Market channels and Segments for more information Export of processed oils and timber Considerations for action: Sandalwood for the use of cosmetics is Benefit from the experience and knowledge generally exported in the form of oil. The of specialised European importers and agents government in India has banned the export instead of approaching end users directly. of sandalwood in the form of timber to Especially for exporting specialised products, increase the production of the essential oil. traders are the most suitable distribution Sandalwood oil can be processed further, for channels. example by refining the oil in the country of Before setting up installations to refine origin, so cosmetics manufacturers can use it sandalwood oil, for example for decolouring, directly. The oil is not processed further until make sure that you can meet the it is prepared for use in fragrances by the end requirements of your buyer in terms of user. quality, composition, quantity and cost of the oil. Market segments
Table 1: Major cosmetic segments and applications for sandalwood oil Segment Fragrances Sub-segment Perfume Benefits of applying sandalwood oil Skin care Facial skin care, body care, moisturiser, anti-aging Shampoo, conditioner Soap, body wash, bath salts Fixative (when used in small amounts) Fragrance Skin conditioning properties Use on dry, cracked and chapped skin Fragrance Used in small amounts as a fixative Fragrance

Hair care Toiletries

Best opportunities in fragrances Considerations for action: Sandalwood oil has the highest potential for Emphasise the potential of the use use in the fragrances market. It has a specific sandalwood oil in perfumery. For perfumes, scent and is often used as a base note. In focus on the specific scent and fixative this segment, consumers tend to be more properties of sandalwood oil. willing to pay a higher price. Therefore, the high price of sandalwood oil is less of an issue. When the oil is used as a fixative in

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CBI Product factsheet: Sandalwood for cosmetics in Europe

perfumes, it is used in smaller proportions. Indian sandalwood oil and wood powder have some skin conditioning properties. It is important to note that applications in this segment are fairly insignificant due to the high price of the oil. For toiletries that have a delicate scent, small proportions of sandalwood oil can be used as fixatives. It is assumed that small amounts of the lower-priced natural or synthetic sandalwood oils are used in this segment. These sandalwood oils are also used as a fragrance in toiletries and hair care products. There is a market for fairly traded sandalwood oil. In terms of marketing, these oils do not necessarily need to be certified. Consumers and cosmetics producers are increasingly interested in the story behind ethically sourced and processed final products. Whether fair trade certification is necessary depends on your buyers preferences. Even if certification is less relevant for a marketing aspect, it can be an assurance of legal harvesting or ethical sourcing for buyers. Be aware that fair trade certification is only available for cultivated products, not for wild-harvested sandalwood. There is a market for organically certified sandalwood oil. However, this depends heavily on your prospective buyer. Please note that sandalwood oil from India cannot be certified organic, the production sites are too diverse to be certified. It is possible in other countries, however, where monitoring of the production sites is more feasible or where sandalwood is cultivated.

It is important to focus on the story behind ethical certification. In your promotional material, emphasise the social benefits to local communities of your production. If you want to obtain Fairtrade certification, check the requirements of the Fairtrade standard. Always discuss these opportunities with your buyers.

Discuss the opportunities for organically certified sandalwood oil with your buyers.

Prices High price of sandalwood oil Considerations for action: The price of sandalwood oil depends on the Monitor harvests in major production level of santalol and yield potential. countries to anticipate price developments for Sandalwood oil is rather expensive, but prices your specific sandalwood oil. You may vary per species. Indian sandalwood is valued request such information from importers. at the high end of the price range ($ 2,300 Ensure that your prices reflect the quality of 2,400 per kg), with Fiji sandalwood and New your product. Different santalol levels in the Caledonian sandalwood in the middle (around oil result in different quality and you should $ 1,200-1,500 per kg), and Australian adjust your price accordingly. sandalwood towards the lower end (over $ 1,000 per kg). The price of Indian sandalwood oil has increased almost tenfold over the last 10 years. This rise is due to both a lack in supplies and an increase of demand, both in India and across the world. Research has indicated that the essential oil yield of Indian sandalwood from Australia is much lower than the essential oil yield of wild-grown sandalwood in India. This is probably related to the growing pace of the trees. Faster growing trees produce more sapwood while slow-growing trees produce more heartwood. As a result, oil yield from fast growing trees is estimated to be lower.

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CBI Product factsheet: Sandalwood for cosmetics in Europe

The roots and lower trunk of the sandalwood tree yield up to 10% more essential oil. In these parts of the tree, the proportion of heartwood is higher than in other parts (upper trunk and branches). The host trees used in sandalwood cultivation affect the heartwood growth and consequently the yield of the essential oil. In China, fragrant rosewood (Dalbergia odorifera) has been identified as a good host, whereas pigeon pea (Cajanus cajan) is a good host that grows on the Indian subcontinent. The following price breakdown shows which costs and margins are applied to sandalwood oil before it reaches the end user.

Optimise the yield of sandalwood cultivation and distillation to lower your cost price. Use host trees that increase the growth of heartwood. For distillation, use the roots and lower trunk of the tree to increase the yield of essential oil.

Figure 2: Price breakdown for sandalwood oil, mark-ups in % Export Air cargo Import Sales

+1% Source: ProFound, 2013

+5%

+30%

Considerations for action: If agents are involved, they typically receive Agents are particularly interesting if you do a commission of a few (2-5) percent. not have a strong sales network. However, However, their actual profit margin strongly once you have established a trade depends on volumes sold and gross margin. relationship through an agent, you cannot They will normally lower their gross margin establish a direct relationship with the buyer for big volumes. anymore. The sales network of the agent is Importers add a margin of up to 25-100% to protected by law. the product depending on the activities You can add value by improving the quality of undertaken, such as testing and stocking. your production. Harvest the trees when they have matured and have a high content of santalol.

Market competitiveness
Challenges in obtaining raw material Access to sufficient raw material for the commercial production of sandalwood oil is the main entry barrier to the market. This is a long-term investment. Sandalwood is traditionally wild-harvested. Overharvesting, deforestation and spike disease have considerably decreased supplies of wild sandalwood in countries such as India and Indonesia. Several countries have put restrictions on the harvesting of sandalwood trees to protect the trees from extinction. For example, in India only the government is allowed to own and harvest sandalwood trees and a license is required to produce sandalwood oil. Recently Considerations for action: Investigate your potential to obtain the raw material for sandalwood oil, either through wild harvesting or cultivation. For wild harvesting, use sustainable practices. You can look into the possibilities of the FairWild certification scheme.

Determine under which conditions you are allowed to harvest sandalwood and produce the essential oil in your country. Be aware that there is a risk of poaching in India. Some plantations need 24/7 security to prevent this.

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CBI Product factsheet: Sandalwood for cosmetics in Europe

the country has allowed trees grown on private property to be harvested and sold to government agencies. Australia has developed legislation specifying the size at which Australian sandalwood may be harvested. Cultivation of sandalwood trees is complicated and requires long-term investments. The slow-growing trees need proper management during growth, adequate drainage, and host trees to survive. Nevertheless, the number of plantations of both Indian and Australian sandalwood is growing steadily in Australia. Other countries, including China, have also begun cultivation. Research has suggested, however, that Chinese cultivated sandalwood trees contain low levels of santalol. The first commercial harvest of Indian sandalwood from Australia is expected in 2013-2014. If this production is successful, Australia will become a considerable competitor over the coming years. On the other hand, the extensive research on sandalwood cultivation is helpful for producers in DCs as well. Sandalwood oil faces competition from cheaper synthetic sandalwood oil, which avoids the environmental issues associated with the harvesting of natural resources. It is predominately used in low-budget soaps and perfumes. As production of sandalwood oil requires limited know-how, technological barriers to enter the markets for sandalwood oil are relatively low. However, steam distillation requires significant investments. Producers of sandalwood can benefit from the host trees that are used until sandalwood trees are ready for harvesting. Some sources have identified citrus fruit trees or pigeon peas as good hosts, stating that the fruits or peas of these trees can be sold. However, it is difficult to verify this. Other trees such as fragrant rosewood or Acacia species can be sold for timber. Sandalwood seeds provide an additional financial benefit for the growers until the trees are ready for harvesting. Oil is extracted from the seeds with solvents, which requires significant investments. Australian sandalwood seed oil contains high levels of oleic acid (omega-9; emollient and emulsifying properties) and xymenynic acid. Indian sandalwood seed oil contains arachidonic acids (omega-6) and oleic acids (omega-9). Both types of seed oils have emollient and skin conditioning properties. The seed oils and their compounds have potential for use in the cosmetic industry. Trees start producing seeds when they are 45 years old. Besides providing essential oil, sandalwood

As a result of the restrictions of the Indian government and poaching, India is not a good country for new entrants in the market. New producers of sandalwood have better opportunities outside India. Stay up to date with developments in cultivation practices in countries such as China and Australia. The Australian Sandalwood Network provides information on Australian sandalwood plantations.

In your promotional material, make sure to differentiate your natural sandalwood oil from competing synthetics. For instance, focus on origin and ethical and sustainable sourcing of the product. Direct your sales at producers of high-end cosmetics. Producers of sandalwood oil can cooperate to share the investment in distillation equipment. Additionally, when you master steam distillation of one essential oil, the same machinery can be used to distil other plants for essential oils. In terms of host trees, it is important to plant a variety of trees, which benefits the growth of sandalwood. Preferably choose trees that are native to the region and produce fruits or nuts of commercial value.

Not only the heartwood of sandalwood and its essential oil are valuable; other parts of the tree can be sold as well. Cosing lists the skin conditioning properties of seed oil from Indian sandalwood, but other seed oils are not listed. Be aware that seed oils from other species will need significant investments in additional testing before they can be used in cosmetic products. Keep up to date with the research on these oils; you can also check Cosmetics Design Europe. Investigate your potential to produce sandalwood seed oil. Please note that solvent extraction is more complex than steam distillation and requires additional investments. As sandalwood seed oil is a new product, you might need to educate your

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CBI Product factsheet: Sandalwood for cosmetics in Europe

trees can be used for other products as well. Examples are timber, tannin from the bark and heartwood powder for incense.

buyers in its uses. Please refer to CBI Market Competitiveness for more information.

Useful sources
Trade fairs Visiting and especially participating in trade fairs is highly recommended as one of the most efficient methods for testing market receptivity, obtaining market information and finding prospective business partners. The most relevant trade fairs in Europe for exporters of sandalwood oil are: In-Cosmetics (http://www.in-cosmetics.com/) in Paris, France Beyond Beauty (http://www.beyondbeautyparis.com) in Paris, France SANA (http://www.sana.it/en) in Bologna, Italy Vivaness (http://www.biofach.de) in Nuremberg, Germany (for organic producers)

This survey was compiled for CBI by ProFound Advisers In Development in collaboration with Sector Expert Andrew Jones Disclaimer CBI market information tools: http://www.cbi.eu/disclaimer

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