You also want an ePaper? Increase the reach of your titles
YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.
<strong>IFEAT</strong> INTERNATIONAL CONFERENCE <strong>2007</strong>Developments in the Global AromaChemicals and Essential Oils IndustriesTHE CONFERENCE PROCEEDINGSInterContinental <strong>Budapest</strong> HotelSunday 23 – Thursday 27 September, <strong>2007</strong>
Editor: Dr. Peter GreenhalghPublished by:International Federation of Essential Oils and Aroma Trades (<strong>IFEAT</strong>)GAFTA House, 6 Chapel Place, Rivington Street, London EC2A 3SH, United KingdomE-mail: secretariat@ifeat.org.ukTel: +44-207–729-5904Fax: +44-207-814-8383Website: www.ifeat.org
CONTENTSPagePrefaceiiiGlobal Developments in the Aroma Chemicals IndustryStatus and development of China’s aroma chemicals manufacturing industry 1Cathy Chen Doing Xia (Hangzhou Aroma Chemicals, P.R. China)India’s aroma chemical industry: A vision for the future 12Parag Satoskar (Arofine Chemical Industries, India)Current status and prospects of sulfur-containing flavor compounds in China 24Sun Baoguo, Tian Hongyu, Zheng Fuping, Xie Jianchun, Liu Yuping(Beijing Technology and Business University, P.R. China)Structure-odour relationship of macrocyclic musks andharmony with the environmentHideaki Takaoka (Soda Aromatic Company, Japan) 36REACH Legislation and ImplementationREACH preparation from an EU-based company perspective 45Joseph S. Tomusange (Treatt, UK)REACH: A global perspective from the fragrance industry 55T.J. (Hans) van Bergen (IFRA, Belgium)Developments in the Essential Oils Industries of Central andEastern Europe and the BalkansThe <strong>IFEAT</strong> Medal Lecture: Essential oil production in Hungary 68Professor Jen! Bernáth (Corvinus University of <strong>Budapest</strong>, Hungary)Albania’s medicinal and aromatic plant industry 80Elvira Bazina (Enterprise Development and Export Market Services, Albania)and Xhevit Hysenaj (Essences Producers and Cultivators Association, Albania)Recent developments in the Bulgarian essential oils industry 87Juliana K. Ognyanova (Bulatters, Bulgaria) andAngel N. Konakchiev, (Bulgarian Academy of Sciences, Bulgaria)The essential oils industry in Moldova 103Nathalie Green (Framaroma, France)Production of aroma chemicals and essential oils in the Slovak Republic 113Peter van der Schaft (LiAxx Biotech, Slovakia)and Pavel Farka" (Monoprix, Slovakia)i
The essential oils industry in the former Yugoslavia 120Ana Rangus (Arxfarm, Slovenia)Developments in the Essential Oils Industry ElsewhereThe Cuban citrus industry 135Reut Berezovsky (Waknine & Berezovsky, Israel)Developments in Indonesia’s essential oils and the establishment of theIndonesian Essential Oil Council 146Wien Permahdi Gunawan (Indonesian Essential Oil Council, Indonesia)Other PresentationsAroma marketing: new applications of essential oils and syntheticaromatic substances 152Monika Kaleta (Pollena Aroma Flavours & Fragrances, Poland)Why Perfume Products? 157Tony Curtis (Plymouth Business School, United Kingdom)<strong>IFEAT</strong> BusinessReport on the <strong>2007</strong> British Society of Flavourists training courseat the University of Reading 168The University of Plymouth Perfumery Course 171<strong>IFEAT</strong> Egypt Study Tour 2006Ian Mclean (S&D Botanicals, South Africa) 174ii
PREFACEThis book of <strong>Procee</strong>dings contains the formal presentations given at <strong>IFEAT</strong>’s International Conferenceon Developments in the Global Aroma Chemicals and Essential Oils Industries held in <strong>Budapest</strong>,Hungary from Sunday 23 to Thursday 27 September <strong>2007</strong>This was the 30 th Anniversary of the founding of <strong>IFEAT</strong> and we were delighted to welcome 594delegates and 86 accompanying persons representing 51 countries. One and half days of the lectureprogramme were devoted to Global Developments in the Aroma Chemicals Industry. Of majorimportance was the full afternoon session devoted to REACH and Legislation. REACH is having aprofound affect on many of those in our industry on the way business is being conducted both in theEU and elsewhere. On the final day, lectures and discussions addressed developments in the EssentialOils Industries of Central and Eastern Europe and the Balkans, followed by a view of developmentselsewhere including Cuba and Indonesia. It was gratifying to see that presentations and discussionswere very well attendedThe success of the Conference arose from the efforts of many people. I want to thank all that havecontinued to support the <strong>IFEAT</strong> Conferences with their attendance, advertisements and sponsorship ofcoffee breaks, lunches and music. I want to extend special thanks to the speakers that give of their timeto organise and give presentations, often travelling long distances. They are deeply appreciated. Also,we wish to express our appreciation to our industry colleagues in Hungary, Csaba and Judit Fodor fortheir assistance in planning this successful conference. In addition, thanks are owed for their work onthe logistics to Mrs. Sarah Greenwood, Mrs. Pamela Kirby Johnson and Mrs. Louise Kapor of the<strong>IFEAT</strong> Secretariat, Dr. Peter Greenhalgh, our Programme Coordinator, and to the staff of Motivationand the InterContinental Hotel, <strong>Budapest</strong>.Michael G. BoudjoukChairman,<strong>IFEAT</strong> <strong>Budapest</strong> Conference Organising CommitteeThe <strong>IFEAT</strong> <strong>Budapest</strong> ConferenceOrganising Committee:Chairman: Michael G. BoudjoukMembers:W BrudH FakhryC FodorM GillK NealeK PoehlmannConsultants: P Greenhalgh, R Nealiii
GLOBAL DEVELOPMENTS IN THE AROMACHEMICALS INDUSTRY1
STATUS AND DEVELOPMENT OF CHINA’S AROMA CHEMICALSMANUFACTURING INDUSTRYCathy Chen Doing Xia,Hangzhou Aroma Chemical Company, 311600, Jade Hill, Yangxi, Jiande City, Hangzhou,Zhejiang Province, People’s Republic of Chinacathy@hangzhouaroma.comBRIEF HISTORY OF AROMA CHEMICALS MANUFACTURING INDUSTRYChina’s aroma chemicals manufacturing industry started in the 1950s. The production facilities weresmall scale and mainly located in the areas of Shanghai, Tianjing, Guangzhou, Hangzhou, Fuzhou andGuilin.From the mid-1960s to the mid-1970s, the “Cultural Revolution” throughout the whole country, meantthere was almost no development of aroma chemicals manufacturing during this long period.Along with the implementation of China’s Economic Reform and Opening-up Policy in the 1980s, thearoma chemicals industry resumed its development. The industry entered its first fast developmentperiod.In the 1990s, with the deepening of Economic Reform measures and the setting up of Socialist MarketEconomic System Reform targets, the Chinese economy was transformed from a centralised to amarket economy. As with other industries, the aroma chemicals industry was also restructured anddifferent enterprise ownership structures emerged at this time.• Most of the state-owned and collective enterprises were reorganized into Shareholding orPrivate Enterprises.• Many overseas companies were attracted to invest in China by policies favourable to foreigninvestment companies on taxes and land etc, as well as by the vast market potential andextremely low labour costs etc. They formed Joint Ventures (JV) with local enterprises orestablished wholly foreign-owned enterprises. For example, almost all the top ten F&Fcompanies established their fragrance or flavor branches in China. But only a few companiesinvested in aroma chemicals manufacturing in China. Two of these were IFF - InternationalFlavor and Fragrance Co. Ltd., who made a JV in Hangzhou, and Firmenich, who formed a JVin Kunming.• A large group of private, active and energetic aroma chemical producers kept appearingduring this period. They infused fresh and dynamic blood into the aroma chemicals industry inChina.Under the New Economic System, the 1990s saw the second extremely rapid growth in aromachemicals manufacturing in China.In the 21st century, based on the past 20 years’ fast development, locally-owned manufacturers haveaccumulated rich experiences in technology development, QA, QC and production management andmarketing. The industry progressed into its third fast development period. A group of Chinese-owned,mostly private, blue chip enterprises emerged.2
China’s aroma chemicals manufacturing industryFig.1 illustratesthe three fastdevelopmentperiods of theindustry.LOCATION OF AROMA CHEMICALSMANUFACTURING FACILITIESChina’s aroma chemicals manufacturing facilitiesare mainly located in the east and south of China.The detailed provinces are Shanghai, Tianjing,Jiangshu, Zhejiang, Fujiang, Shandong, Yunnan,Guangdong and Jiangxi (Fig.2).AROMA CHEMICALS PRODUCT RANGEThere are over 700 kinds of aroma chemicalproducts, being produced now in China. The mainrange is shown in Table 1.BenzenoidDerivativesTerpene DerivativesHeterocyclicCompoundsLactonesMusksTable 1 The Main Range of Aroma Chemicals in ChinaPhenylethyl alcohol, Benzaldehyde, Cinnamal, !-Amyl Cinnamal, Vanillin, EthylVanillin, Piperonal, p-Anisaldehyde, Methyl Phenyl ketone, Raspberry ketone,Eugenol, Methyl salicylate, Benzyl acetate, Cinnamates, Coumarin, Anethol,Diphenyl etherCitronellol, Geraniol, Terpineol, Menthol, Citronellal, Citral, Hydroxycitronellal,Lyral, Myrac aldehyde, Iso E super, Ionone, Menthone, Dihydro myrcenol,Linalool, Borneol, Cedrol, methyl cedryl ketone, Synthetic Sandalwood derivativesMaltol, Ethyl maltol, Furanone, Pyrazine, Thiazole, Pyrrole, Pyridine, sulfides"-nonyl lactone, "-Decalactone, "-undecalactone, #-Decalactone, #- dodecalactoneGalaxolide, Musk T, Celestolide, Musk ketone, Musk xylolFig. 2 Manufacturing locationsAt present, the biggest aroma chemical product by value produced in China is vanillin with an outputof around 10,000 tonnes in 2006. Other products having over 10,000 tonnes output are methyl3
salicylate, and phenylethyl alcohol. The main aroma chemicals exceeding 1,000 tonnes of output aregalaxolide, terpineol, linalool, coumarin, methyl cedryl ketone, heliotropine, benzyl acetate, benzylbenzoate, benzyl salicylates, maltol, ethyl maltol, musk-T, carvone, furanone series, dihydromyrcenoland synthetic sandenol.ESTIMATED OUTPUT OF THE F&F INDUSTRY AND EXPORTS OF SOME MAINAROMA CHEMICALS IN 2006The estimated total output of China’s flavor and fragrance industry in 2006 was about 255,000 tonnes,with a sales volume of approximately USD 2.6 billion and export values of around USD 0.8 billion.40% of the total output belongs to aroma chemicals. About 80% of aroma chemicals are for export,and 20% for domestic market use. Export tonnages of some aroma chemicals in 2006 are shown inTable 2.Table 2 Exported Tonnages of Some Aroma Chemicals in 2006Product Name Exported Tonnage Product Name Exported TonnageVanillin 8,000 Ethyl Vanillin 600Coumarin 1,500 Heliotropine 900Methyl Cedryl Ketone 1,500 Musk Ketone 200Musk ketone 200 Musk xylene 800Musk ambrette 200 Galaxolide 2,000Linalool 2,000 Carvone 1,300Dihydromyrcenol 3,000 Phenylethyl alcohol 12,000AROMA CHEMICAL MANUFACTURERSThere are about 800 manufacturers in the fragrance and flavor industry. 100 of them belong to foreignrelatedinvestment enterprises. About 300 to 400 of the 800 are aroma chemical producers. About40,000 people are involved in this industry.A majority of the manufactures have small production capacities. Their annual output is less than USD5 million and some, even much less. There are only about 30 enterprises with output volume higherthan USD 14 million (including F&F compounding). In China, in contrast to other countries, a F&Fenterprise usually only makes aroma chemicals or fragrance and flavor compounds, but does notmanufacture all of them.Table 3 Some Large Scale Local Aroma Chemical Manufacturers and their Core ProductsC.P. CapacityManufacture NameCore Products(tonnes)Zhejiang Jiaxing ZhongHua Chemical Co., Ltd Vanillin 8,000Tian Jin Freeworld Industry Co., Ltd.Galaxolide2,500Phenylethyl alcohol 8,000Zhejiang NHU Company LTD Linalool 5,000Wuxi Huamao Chemical Co., Ltd. Phenylethyl alcohol 4,000Wandong Jinrui Chemical Co., Ltd.MaltolEthyl maltol8002,200Yibin Jianzhong Perfume Co., Ltd Heliotropine 6004
China’s aroma chemicals manufacturing industrySome Fast Developing Manufacturers and Their Core Products:Wanxiang InternationalCore product: carvoneIn 2006, the output of carvone: 1,500tonnesXiamenDoingcom Chemical Co., LtdCore product: dihdromyrcenolIn 2006, the output of terpenederivatives: 6,000 tonnesHangzhou Aroma Chemical CompanyMain products: MCK and alpha campholenic aldehyde derivativesIn 2006, the output was 1,500 tonnesJiangyin Baihui Fragrance Co. Ltd.Core product: courmarinIn 2006, the output was 1,500 tonnesDalian Jinju Perfume Co., Ltd.Main products: furanone seriesIn 2006, the output was 100 tonnesTengzhou Ruiyuan Flavor Co, Ltd.Main products: heterocyclic compoundsIn 2006, the output was 70 tonnes5
RICH RAW MATERIALS RESOURCES FOR AROMA CHEMICALS MANUFACTURINGChina has rich natural resources ofessential oils and basic raw materialsfrom petrochemicals and coal tarchemicals for aroma chemicalsproduction. The existing aromachemicals derived from these materialsare as follows:Essential Oils DerivativesCurrently, we are making the derivativesfrom turpentine oil, cedarwood oil,firwood oil, litsea cubeba oil andsassafras oil. Their trees are mainlylocated in the southwest of China, to thesouth of the Yangtze River (Fig.9).Fig.9 Essential oils locations for aroma chemicalsTurpentine Oil DerivativesWorkers cutting for resin.In 2006, the output of turpentine oil was over 120,500 tonnes, ofwhich 18,000 tonnes were exported. The output of rosin was800,000 tonnes and 367,000 tonnes were exported. Turpentineoil comes from distillation of resin, which is obtained fromcutting the bark of the tree. The oil quality is good.Resin flowing into plasticcollector.Harvesting pine treeKnife for cutting pine tree for resin6
China’s aroma chemicals manufacturing industryTurpentine oil derivatives currently produced in China are terpineol, geraniol, linalool, nerol,myrcenol, dihydro myrcenol, camphor, sandela, santaliaol, osyrol, lyral, myrac aldehyde, iso E super,norone and isolongifolanone.G"5-#B"%CD!0H"5-EDI0J-5-KDF0--5-%EDA0"LM*0%DI041"=D2,M1);KDA05-#6*-#%EDA05-#B"C?DA05-#B"A05-#6*-#F0--5-G"5-#B"!0H"5-I0J-5-I041"A0"LM*02,M1);!"#$%&'()*+*),"*-'*.'/0)+1-,"-1'2"3'24,5"-16'.)*7'8"..1)1-,'()*9"-:1;'?&&',*--1;'"-',*,53@Cedarwood Oil and Firwood Oil DerivativesIn 2006, the output of cedarwood oil wasabout 1,800 tonnes and firwood oil was 3,000tonnes. Their exported quantity is around1,600 tonnes. These two types of oils containsome similar components. The oil is distilledfrom their tree roots.Cedarwood oil derivatives currently made inChina are cedrol, cedralone, methyl cedrylketone, cedryl actate and cedryl methyl etheretc.Cedarwood tree forestFirwood tree forestCedarwood and firwood tree rootsto be distilled for oils7Oils
Litsea Cubeba Oil DerivativesIn 2006, the output was about 1,000 tonnes of which about 485 tonnes was exported.Derivatives currently made in China are citral, ionone and geranyl nitrile.Sassafras Oil DerivativesIn 2006, output was about 500 tonnes, and 2,000 tonnes were imported.The derivatives currently made are piperonal, helional and piperonyl nitrile.Agricultural By-Products’ Derivatives• Based on the material, enanthal, obtained by pyrolysising castor oil, the synthesized productsare !-amyl cinnamal and "-dodecalactone.• By using furfural, obtained by hydrolysising agricultural by-products, the synthesizedproducts are maltol and ethyl maltolPetrochemicals’ DerivativesBased on isobutene, isoamylene, isoprene and !-methyl styrene as raw materials, linalool, phenylethylalcohol and galaxolide were successfully synthesized.Coal Tar Products’ DerivativesBased on benzene, toluene, xylene, phenol, guaiacol as raw materials, benzaldehyde, phenylacetaldehyde, celestolide, musk xylene, musk ketone, musk ambrette, lilial, cyclamen aldehyde,vanillin and sandela derivatives were successfully synthesized.ADVANTAGES IN AROMA CHEMICALS MANUFACTURINGChina has rich raw material resources for aroma chemicals manufacturing as mentioned earlier.The country has comprehensive supplementary chemical industries. These provide a forcefulguarantee of materials’ availabilities in aroma chemicals production.Almost all the aroma chemicals production equipment can be designed and made in China.GCs are commonly used in enterprises, and some also have HPLC and GC-MS instruments for qualitycontrol. Enterprises invest in different ways of ensuring Odour Evaluators’ professional training. Theysend them either to Universities or to global F&F companies for odour evaluation training. These, thenensure that product qualities meet International QA and QC standards.Automatic computer control systems, such as DCS, are beingused in production process control by more and moreenterprises (Fig.11).China has an efficient transportation network. Expresshighways cover most parts of the country and reach veryremote places. From North to South, there are 6 large seaportsfor import and export. Almost all the provincial capitalcities have international airports or national airports or both.Meanwhile, logistic services are highly efficient. Small orlarge volumes of goods can be delivered to their destinationsthroughout China within hours or by the following day.Fig.11 DCS used in production8
China’s aroma chemicals manufacturing industryIt has become easy for enterprises to find highly educated research people for new process technologydevelopment. Project co-operation on technology developments between enterprises and universitiesand research institutions have become more popular and effective.Attracted by the rapid economic development and numerous opportunities, a large group of talentedpeople, highly educated overseas, has come back to China. Some of them have joined the industry,too. They have brought with them new concepts of technology and enterprise management.Thanks to almost 30 years’ of economic reform and growth, individuals and many enterprises haveaccumulated large sums of surplus money and eagerly look for profitable projects for investment. As aresult, production capacity expansion and new manufacturing set-ups have become easier if projectsprove to be good and profitable.CHALLENGES ENCOUNTEREDBecause of the great overseas pressure on the Chinese Government to reduce the huge trade surplus,the Government has taken a numbers of measures, such as:• The export tax rebate for most low-value added products has been cut. Some products’ taxrebates are now 5%, some are 0% and some are even imposed with export tariff.• The government allowed the exchange rate of RMB against USD to appreciate. The RMBvalue against USD has increased by 9 % since July 2005 and it still keeps increasing.These actions have decreased product’ margins greatly. The low value-added products now have nomargins and are losing their competitiveness.Tougher and tougher rules and regulations on environmental protection and safety issues are beingissued by the Central Government. The days are gone forever when the enterprises in China couldobtain business by sacrificing the environment and safety for lower costs and competitive prices.Many chemical enterprises have forced or are facing re-location problems. For example, chemicalenterprises around Tai-lake area are facing re-location issues. Furthermore, if the waste water of anenterprise cannot meet Government’s required standards of discharge or the enterprise has safetyproblems, it will be closed down. For example, in Hangzhou all the chemical manufactures whoseoutput is less than USD 650,000 are to be shut down.In Zhejiang Province, the threeenvironmental protection and safetyfacilities shown in the photos taken at theHangzhou Aroma Chemical Company arerequired to be set up in all chemical plants(Figs. 11,12 and 13).These willbe requiredall overChina inthe nearfuture.Fig.11 A large pit and aset of emergency conduitswith valves for collectionof fire fighting water inincidents.An On-line on-lineVideovideoInspectorFig. 12 An on-linevideo inspectionsystem set up in theeffluent watertreatment plant(controlled bygovernment)Fig. 13 An on-lineautomatic sampletaking and analysissystem for waste waterdischarging (controlledby the localgovernment)9
Many materials derived from petrochemicals and essential oils etc. for aroma chemicals haveincreased significantly in price in recent years. For example, the price of acetic anhydride hasincreased from USD 0.8/kg in 2003 to USD 1.6/kg in 2006. This year, its price reached USD 2.3/kg.The price of the essential oil, cedarwood, has increased from USD 3/kg in 2003 to USD 6/kg in <strong>2007</strong>.These have increased the cost of finished products tremendously.Enterprises are facing barriers in aspects of both technology and the export trade. For example, mostChinese enterprises are facing major difficulties regarding REACH pre-registration because they haveno professional personnel to handle it at this moment. Labor costs are increasing rapidly now. As anexample, in our Province, Zhejiang Province, the average salary in 2006 had increased by 78%compared with the year of 2000.AROMA CHEMICALS MANUFACTURING DEVELOPMENT TRENDSProductsChina’s Central Government had removed or cut the export tax rebate of essential oils to 5%, whilethe majority of their downstream products still have higher tax rebate on export, and the higher valueadded products, the higher percentage tax rebate on export. The ending or cutting of the export taxrebate on essential oils not only increase the availability for domestic processors but also increaseoverseas processors’ raw materials’ costs. So essential oils’ downstream products made in China willbe more competitive in the near future, such as turpentine oil, which is the starting material for a largefamily of products.Because of the increased costs arising from tighter environmental protection and energy savingpolicies, high pollution products and, high energy consuming products from China will no longer be ascompetitive as before on the world market.Along with the upgrading of the national economy and technologies, efforts are being focused onmaking a wider range of downstream products with higher value-added and using more difficultprocesses. Furthermore, the Central Government has issued a series of favourable policies on taxesetc. aimed to stimulate enterprises to manufacture such products, including those that are new toChina. In the near future, we believe that a much wider range of Chinese products, will become morefrequently available on the global market.EnterprisesLarge-scale advantages will become more obvious. Product capacity will be transferred to largerenterprises. Malign competition will be reduced. Some companies will seek acquisitions for betterresource combinations to compete both globally and domestically. Large volumes of products will befound to be produced by large-scale pharmaceutical and normal chemical enterprises.Enterprises that are making over-supplied products, but have no know-how technology for loweringcosts, will gradually lose their market shares or become toll-manufactures or probably merge withtheir former competitors.Small enterprises will face even greater difficulties in surviving due to the challenges being faced.10
China’s aroma chemicals manufacturing industryThe enterprises that are equipped with the human resources, finance and new technology developmentabilities will grow bigger and stronger. They will continue to influence the trend of the aromachemical manufacturing industry in the direction of a more professional and globalised industry.With the hard working nature of the Chinese people and the great achievements, particularly madeduring the past 30 years, China’s aroma chemicals manufacturing industry will progress towards ahigher technological level and play a more important role in the future world market.ReferencesIn preparing this presentation, some of the information was provided by the China Association of theFragrance, Flavor and Cosmetic Industries and by the magazine Flavor, Fragrance and Cosmeticspublished by the Shanghai Research Institute of Fragrance and Flavor Industry. Information on themanufacturers and the associated illustrations were provided by the manufactures themselves.Cathy Chen Dong Xia graduated from Hangzhou Normal University in 1987. Sheentered the aroma chemical industry in 1994 when she joined International Flavorsand Fragrances (Hangzhou) Co., Ltd. She left IFF Hangzhou in 1999 and became akey founder of Hangzhou Aroma Chemical Company, where she is the DeputyGeneral Manager in charge of sales. She is also a Standing Member of the Council ofChina Association of Flavor Fragrance and Cosmetic Industry.11
INDIA’S AROMA CHEMICAL INDUSTRY: A VISION FOR THE FUTUREParag SatoskarArofine Chemical IndustriesMumbai, Indiaparag.satoskar@gmail.cominfo@arofine.comIndia has become the flavour of thewhole world. “India poised”, “Indiashining” seems to becoming the globalmantra.I recently landed at Cannes airport toattend the World Perfumery Congressand was greeted in the arrival hall of theairport by a huge cutout showing the TajMahal and some kuchipudi dancers. Onenquiring about the cutout I was told thatthe recently concluded Cannes Festivalhad decided to celebrate sixty years ofIndian Independence and the cutout wasthe part of the celebration.The million dollar question ineverybody’s mind is what suddenly happened to this land of bullock carts and snake charmers andwhy is the whole world taking stock and talking about India. I would like to share a few interestingstatistics about India and its vibrant economy, which according to me and a lot of pundits across theglobe, makes India a very interesting destination for the future.Be it the Wal-Mart’s of the world, or the Boeings and the airbuses of the world or the Body Shops ofthe world, everybody is keen to enter India and have a slice of the Indian cake.Let us now move our focus to thetopic of today’s presentation.In my company, we have beenhaving a lot of foreign buyers in thepast few years. One question whichis always asked to me is “Parag,what is the position of the Indianaroma chemical industry in theglobal F&F space and where do yousee it moving in the future”.I am sure a lot of people in theaudience who have never been toIndia have the same question andare keen to find an answer.12
India’s aroma chemical industryIn my presentation I have made an attempt to find an answer to this question. I have tried to answerthis question by first analysing the Indian aroma chemical industry using a decision making tool andbased on the analysis tried to build a vision for the future.I am aware that some of those present in this august gathering could be from allied industries such asessential oils, fragrances or flavours. But I am sure that the deliberations that I make during mypresentation will be of significant relevance to you in your business.Aroma chemicals of synthetic and natural origin are primarily used as feedstock only for the fragranceand flavour industry (F&F) and therefore any study of the aroma chemical industry would beincomplete without a status report of the F&F industry. The next slide below provides data on theglobal F&F industry.The estimated global demand for F&F in 2008 is roughly around US $18.5 billion and aromachemicals demand is around US $3.0 billion. The industry is growing at around 3% per annum and isexpected to grow even faster in the future. The drivers of growth are going to be the high growtheconomies of Asia and Latin America.I would like to share a very interesting statistics that I read on a billboard in Mumbai. It said that 7 outof the top 10 fastest growing economies of the world are from Asia and hence it is no surprise that thegrowth in the fragrance and flavour space in the near future will be governed by Asia.A break up of the industry based on themarket share shows that 70% of themarket share is held by the top 10fragrance and flavour companies.Anticipating the future, these companiesalready have very strong bases in theAsian markets and other developingeconomies of Latin America and arepoised to take a major chunk of businessoriginating from these fast developingeconomies.After obtaining a picture of the global fragrance and flavour industry, I will now zero in on the IndianF&F industry. The Indian F&F industry is estimated to be worth around US $325-350 million and hasbeen growing at a healthy rate of more than 8% per annum. It is extremely difficult to obtain accurateand authenticated data on the aroma chemical industry as most of the companies are privately owned.Flavours comprise some 45% of the market and fragrances comprise 55% of the market. Theestimated size of the Indian aroma chemical industry is around US $250-275 million. This alsoincludes aroma chemicals worth around US $40-45 million that are imported in India. Even in India,more than 70% market share is with the big international F&F houses and the rest accounting for 30%.13
This is a very interesting slide. The datain this slide has been taken from anindustry study published in early 2006.The survey was conducted by therenowned consulting firm Frost andSullivanThe pie chart gives a segment-wisedistribution of fragrance and flavourssales in India for the year 2004.Most of the product segments such aswash products, detergents, shampoo infragrance and toothpaste, savory, andbeverages in flavours are currentlyshowing a double digit year-on-yeargrowth and any company interested inentering the Indian F&F space shouldfocus on making products for thesesegments.This slide gives you the value chain ofthe Indian fragrance and flavourindustry. The reason for incorporatingthis slide in my presentation is toshow the way the Indian F&F industryworks. This will enable the non-aromachemical manufacturers to positionthemselves in the Indian market anddevelop their strategies.A closer look at the raw materials sideof the data flow diagram shows theway in which aroma chemicals aresold in India.14
India’s aroma chemical industryThese aroma chemicals manufacturers sell their produce either directly to the F&F houses or throughagents. The imported chemicals are also supplied to the Indian perfumery companies and Indianoperations of the global F&F companies through either importers or dealers or direct imports.Mr. Narayan Murthy is the visionary chief mentor of Infosys, which is one of the largest softwarecompanies in India. He makes a very apt statement, namely “In god we believe, everything else has tobe substantiated with data”. The next few slides provide data about the activities and the size of Indianaroma chemical industry.The slides provide a list of aroma chemicals that are manufactured in bulk in India. These are productswhere Indian companies enjoy a competitive advantage due to reasons including availability offeedstock, process expertise, local consumption and other factors.The first slide provides a list of bulkcommodity chemicals manufacturedfrom synthetic raw materials.Indian aroma chemical manufacturershave successfully achieved global costleadership in certain bulk commodityaroma chemicals including otbcha,ptbcha, styrallyl acetate.Other products of interest which arebeing manufactured in India aredihydromyrcenol, ionones, benzylsalicylate, coumarin, products chemicallyequivalent to iso-E super, tonalide,bacdanol, galaxolide, para-cresol and itsderivatives, benzyl acetate, etc.Global competitiveness has not onlybeen achieved in bulk commodity aromachemicals but also in specialty aromachemicals and Indian companies are alsomanufacturing and exporting specialtiessuch as alpha damascone, sandalspecialities, ambrettolide, undecylenicaldehyde etc. The main driver for thesespecialities is comparable quality andtremendous savings in cost for theinternational buyers.15
This slide contains the list of aromachemicals that are manufactured fromraw materials of natural origin.India has vast reserves of certain keynatural feedstocks.The numero uno product in this categoryis menthol, which comes from the mintfamily. India is now one of the leadinggrowers of mentha crops and one of theleading menthol suppliers. However,menthol as a product is a subject in itselfand hence I am not going to discuss thisproduct in any detail in my presentationtoday. However, Indian exports of thisproduct are hugeAnother critical feedstock is castor oil from which one can obtain chemicals such as heptaldehyde andundecylenic acid. These feedstocks are then used to manufacture important aroma chemicals such asaldehyde C11 (undecylenic) and isomerised versions of this aldehyde and alpha amyl cinnamicaldehyde. India again is a leading supplier of aldehyde C11 and its isomers which are high valuespeciality aroma chemicals.Another important feedstock of natural origin is alueritic acid, which is the raw material for theimportant macrocyclic musk “ambrettolide”. India is the only source of alueritic acid in the world andevery global manufacturer of ambrettolide has to source alueritic acid from India. Backwardintegration has been happening in this area and large manufacturing capacities for ambrettolide, whichis a macrocyclic musk, are being put up in India and hence India is now becoming a major player inambrettolide.India also is a major source of turpentine oil and a lot of very interesting sandal wood chemicals arebeing synthesized from alpha pinene derived from Indian turpentine oil.In the next part of my presentation I willtry to answer the question that I asked inslide 3 of my presentationI have tried to create a strategic positionfor the Indian aroma chemical industry inthe global F&F space by using thedecision making tool of SWOT analysis.This time tested and widely used toollooks at the strengths, weaknesses,opportunities and threats that the Indianaroma chemical industry faces and basedon the findings of the swot analysis, Ihave attempted to suggest a way forwardfor the industry16
India’s aroma chemical industryStrengthsAccessibility to the Indian marketThe greatest strength of the Indian aromachemical industry is the availability of alarge domestic market, India having theworld’s second largest population.A large population might be considered asa liability while measuring certaineconomic parameters, but for the IndianF&F industry and indirectly for the Indianaroma chemical industry, it is a big boon.Given the fact that per capita income andconsumption of all goods in Indian households was at a low and is rising rapidly; the potential for theIndian F&F industry is huge and is waiting to be harnessed.Thanks to globalization and consolidation of the Indian retail industry, the Indian consumer is exposedto the best products from all over the world and hence he is looking for sophistication and finesse inthe products that he uses. Private labels are going to be the main drivers of growth for the Indian F&Findustry.Perfumers therefore have to make fragrances of international quality at very competitive cost becausean Indian consumer is extremely price conscious. This requires a wide range of specialities aromachemicals at very competitive prices and this has acted as an incentive for the aroma chemicalmanufacturers to go ahead and manufacture these speciality chemicals.This has resulted in development of not only commodity chemicals like DHM, PTBCHA, OTBCHAbut also specialities like damascones, speciality sandalwood aroma chemicals, macrocyclic musks etc.India has traditionally been anintellectual powerhouse supplying itsproducts to leading organizations such asNASA and Microsoft etc.India has one of the largest and the finesteducation systems in the world with 217universities, 13 institutes of specializededucation, 85 research institutes and arapidly expanding list of more than14,000 colleges that churn out engineers,technologists and other professionals inlarge numbers.17
India has already become a global leader in software development and services and the backbonebehind this achievement is this education infrastructure.Global F&F companies have already started using this infrastructure for their benefit. One of the topglobal F&F companies is already collaborating with one of the top research institutes of chemicaltechnology in India. The objective of this collaboration is to explore the possibilities of using India asa base for carrying out research for aroma chemicals of the future and also filling local product patentsin India.Changing perceptions about the “Made in India” labelUntil a few years ago the “Made inIndia” label was associated with poorquality, inconsistent supplies and poorcommunication.I remember an example when one of myfriends who is a pharmaceutical bulkdrug manufacturer had defaulted on hisshipment date to a big customer inSwitzerland. He received a fax from hiscustomer which included 13 of the mostwidely used excuses given by Indianmanufacturers for sending delayedshipments and he was told to just tickmark one of them and send it back! Thiswas a few years back, however things arecompletely different today.Most of the Indian aroma chemical manufacturers have quality certifications such as ISO 9001-2000that ensures the presence and implementation of a quality management system in the organization.This ensures better quality, better service which ultimately leads to better customer experience.Some manufacturers are also implementing ISO 14001 which is an environment management system.Many of the Indian aroma chemical manufacturers now have their own regional stock points acrossthe globe which are used for providing prompt shipments to their customers. The “Made in India”label today therefore stands for excellent quality, excellent packaging and excellent price.Thus we are moving from customer satisfaction to customer delight.WeaknessesLet us now look at some of the weaknesses of the Indian aroma chemical industry and we need to findout ways to convert these weaknesses into strengths.18
India’s aroma chemical industryLack of perfumery infrastructure:This factor, I believe, is the biggestweakness of the Indian aroma chemicalindustry that needs to be overcome so asto ensure the future growth of ourindustry.We are all in the business of smell. Wedo not sell specifications. We sell smell.Although we have lot of trained chemistsin the aroma chemical industry, we lackthe presence of trained technicalperfumers who can evaluate a chemicalolfactively rather than looking at thespecs sheet. The problem is furthercompounded by the lack of educational institutions that offer training in olfaction and smelling.Although there are technical perfumers available in the west, the current size of operations of theIndian manufacturers does not justify an expensive investment in a technical perfumer. For theindustry to grow in the future, this weakness needs to be overcome. One way of overcoming thisweakness is for all you perfumers and buyers to work closely with us (Indian aroma chemicalmanufacturers). Indian aroma chemical manufacturers can then form alliances with the perfumeryschools in Europe on a product-to-product basis and use the perfumery expertise of these schools.India is called the outsourcing hub of the services industry. However this is one service that Indiancompanies will have to outsource to the experts in Europe. A similar trend can be seen in theautomobile industry where Indian car manufacturers are increasingly using the sophisticated designlaboratories in Italy and Germany to design their cars.Fragmented setupExcept for a few players, who haveinvested in constructing world classmanufacturing facilities, most of thearoma chemical industry in India isclustered and fragmented.Most of the aroma chemical plants areold, multi-product and mid-sized plantdesigned with the intention of catering tothe needs of the Indian market. Theglobal buyer is today looking for focus.He gets confused on seeing a plant whichmanufactures 100 products in one plant.This has to change.This can change only if the international F&F community start talking to Indian manufacturers andexploring the possibilities of doing business together in a win-win situation. Once the Indian19
manufacturers have the confidence that the products manufactured by them could be sold by theirpartners’ world-wide, global capacities will automatically come up and fragmentation of the industrywill be greatly reduced.OpportunitiesLet us now look at the opportunities thatcan be grasped by the Indian aromachemical industry to expand in the futureThe need to shift manufacturing out ofthe west.The origin of almost all aroma chemicalscould be traced to the west. However, thewest is no longer the preferreddestination for manufacturing chemicalsdue to the prohibitively expensive cost ofmanufacturing and challenges posed bylot of regulatory restrictions.It is due to these constraints that there has been a gradual but definite shift of manufacturing activityfrom the west to cost effective manufacturing giants in China, India, Mexico etc.F&F giants like IFF and Givaudan have pledged huge investments in setting up aroma chemicalsplants in China. India has still not got its share but the recent manufacturing agreements signedbetween global F&F companies and a few Indian aroma chemical manufacturers are a testimony oftimes to come.“Make or Buy”The fragrance and flavour companies aremanufacturing less by themselves andalso buying less and less from each other.“Make or buy” seems to be the mantrafor every global buyer.20
India’s aroma chemical industryThere are many factors that have been responsible for this phenomenon• Awakening of sleeping giants like BASF and DSM• Emergence of a stand alone aroma chemical industries in China, India and Israel• Huge cost pressures and margin expectations from shareholders and the phenomenal savingsthat can be accrued by outsourcing a capital intensive activity like manufacturing.This phenomenon has lead to many fragrance companies buying bulk commodities and specialitiesrather than making them in-house. This process of outsourcing has just begun and the Indian aromachemical industry can benefit a lot from this trend.ThreatsLet us now look at the threats that theIndian industry needs to counter tocontinue their growth.Regulation is the most talked about butleast acted upon word in the Indianaroma chemical industry. This lethargy toact on the most important driver ofgrowth for the industry is due to therelative insulation that the Indianfragrance industry provides to the Indianaroma chemical industry.If you make a search for “fragranceingredient” in Google, at least 5 out ofthe 10 links talk about regulation in someform or other. In order to ensure the sustainability of the industry, the players need to make themselvesaware of the plethora of regulation regulating the industry and comply with all these regulations.The industry should take help from industry regulators such as IFRA and RIFM to keep ourselvesabreast of the regulatory environment prevailing in the western world and be flexible to change as perthe need of the hour.Work also needs to be done to ensurethat the processes developed for newaroma chemicals are moreenvironmentally friendly.Another threat facing India iscompetition from other low costmanufacturing countries. These includeChina, Korea, Mexico, Brazil and somecountries from the Eastern bloc.I have already mentioned that Indiancompanies lost round one of the fight21
when global F&F companies set up huge aroma chemical manufacturing sites in China. However,there will be many more opportunities coming up in the future and Indian companies will win if theyhave the right blend of product, technology, infrastructure and resources.ConclusionsI have now completed my SWOTanalysis and presented a number ofinteresting points based on this analysis.I have prepared a list of critical successfactors for the Indian aroma chemicalindustry:1. India has the potential to become theglobal manufacturing hub for a widerange of aroma chemicals (both bulkcommodity and speciality aromachemicals).2. The focus will have to be global, andrequire the forming of strategic allianceswith F&F companies, involving taking help from these global giants in product selection and once theproduct is manufactured, use their perfumery expertise to stabilise and standardise the product.3. Invest in R&D and new process development with a clearly defined objective of finding cleaner andefficient processes for manufacturing aroma chemicals.4. Start manufacturing products where India has a competitive advantage of certain key raw materialsor process knowledge or any specific advantage over the incumbent manufacturer.5. Awareness and compliance with the global regulatory framework is essential and will be the keydriver for future growth.6. India needs to retain its position as a cost effective manufacturing base.Everybody in the audience knows aboutthe Windows operating system. Windowsis an extremely popular operating systemthat is used by 90% of computers andBill Gates has made his billions sellingWindows.Windows is excellent because it has avery user friendly front end (the screensand the interface) and it also has a robust,stable back-end (the source code).22
India’s aroma chemical industryIt is due to this fantastic combination that Windows offers customer delight to my six-year-olddaughter and my 72-year-old father. In the fragrance and flavour space, you have the market, which isthe front end, and we have the process, plants, products and people, which is the back end.Have faith in India and let us start working together to provide customer delight to the global F&FindustryThank you….Mr. Parag Satoskar graduated in 1996 from Bombay University Department ofChemical Technology, specialising in pharmaceutical sciences. In 1997 he joinedArofine Chemical Industries, a leading Indian manufacturer of aroma chemicals.As a key member of “Team Arofine” his roles included international marketingand global sourcing of key raw materials for the group. Twice he has been electedto FAFAI’s (Fragrance and Flavor Association of India) managing committee –the umbrella organisation representing India’s fragrance and flavor industry. Asan active member of FAFAI’s aroma chemicals sub-committee he has helpedorganise workshops and study trips for Indian aroma chemical manufacturers. Also, over the pasttwo years, he has been editor of FAFAI Journal. He has visited most parts of the world either sellinghis company’s aroma chemicals or as a member of delegations representing the Indian fragrance andflavor industry.23
CURRENT STATUS AND PROSPECTS OF SULFUR-CONTAINING FLAVORCOMPOUNDS IN CHINAINTRODUCTIONSun Baoguo, Tian Hongyu, Zheng Fuping, Xie Jianchun, Liu YupingSchool of Chemical and Environmental Engineering,Beijing Technology and Business University, Beijing 100037sunbg@btbu.edu.cnIt is well known that sulfur-containing flavor compounds have become a very important class offlavors. The number of sulfur-containing compounds among 2,429 GRAS substances announced byFEMA <strong>2007</strong> has reached 309 and accounts for 12.8%, while there were only 14 sulfur-containingcompounds in FEMA GRAS list of 1965 (accounting for 1.2% of the total number of 1,124 at thattime) (Figure 1). The number of sulfur-containing flavor compounds has increased quickly in the 21 stcentury and 106 new sulfur-containing chemicals have been added to the FEMA GRAS list from 2001to <strong>2007</strong>. The ratio of sulfur-containing chemicals in GRAS 20, 21, 22 and 23 is 31.7% [1] , 31.1% [2] ,17.8% [3] and 22.7% [4] respectively (Figure 2).Figure 1 Number of sulfur-containing flavors having FEMA No.The main reasons for the fast development of sulfur-containing flavor compounds include:• The improvement of analytical technology. Sulfur-containing chemicals occur in food in tracelevel and more and more sulfur-containing chemicals have been found with the application ofGC-MS and GC-O analysis of food aroma. It has been proved that they make an importantcontribution to food characteristic odor;• The fast development of the food industry, such as instant food, meat products, fast frozenfoods, seasonings, etc. Sulfur-containing chemicals are important ingredients for savoryflavorings which are in great demand in the food industry;• The improvements in research, development and industrialization of sulfur-containing flavors.24
Sulfur-containing flavor compounds in ChinaFigure 2 The ratio of sulfur-containing flavors in GRAS listMAIN CHARACTERISTICS OF SULFUR-CONTAINING FLAVORSCompared with many synthetic flavors, such as alcohols, aldehydes, ketones, esters and acetals, sulfurcontainingflavors show some distinct characteristics. The main characteristics are as follows:• Pure sulfur-containing flavors often have an unacceptable stinking odor, while their highdiluted solutions present an attractive aroma reminiscent of food, especially in cooked dishes,such as meat aroma, roasted meat aroma, sea food aroma, coffee aroma, chive aroma, garlicaroma, leek aroma, cabbage aroma, and some tropical fruit aroma. The odor characteristics ofsulfur-containing flavors decide their application, which is usually limited to food flavorings,especially savory flavorings and tropical fruit flavorings. There are few reports about theapplication of sulfur chemicals in fragrance formulations, one exception is dibutyl sulfide,which can be used in some flower and fruit fragrances due to its green odor of violet leaves,flower odor, onion odor, garlic odor, hot radish and vegetable odor.• Sulfur-containing flavors have low thresholds and high intensity of aroma. Generally, they area class of flavors having the lowest thresholds and strongest aroma intensity in all flavors. Forexample, the threshold of 2-furfurylthiol in water (5.0!10 -3 µg/kg) is only one 7,000,000th ofthat of maltol (3.5!10 4 µg/kg). The other features of sulfur-containing flavors correlatedclosely with their low thresholds and high intensity including low use levels, small batchproduction and high prices.The production scales and use levels of sulfur-containing flavors are much smaller than those of othersynthetic flavors, such as aldehydes, ketones, acetals and esters. Many sulfur-containing flavors areproduced and sold at kilogram level. Most sulfur-containing flavors were produced in glasswarereactors at a laboratory scale at the initial stage. The high prices of sulfur-containing flavors are causedmainly by their small batch production. The prices of sulfur-containing flavors vary from several tensof dollars per kg to several thousands of dollars per kg; some even exceed ten thousand dollars per kg.An advantage of the quick development of the sulfur-containing flavor industry in China is the supplyof sulfur-containing products of high quality and low prices. The development of the sulfur-containingflavor industry has a common feature with the world’s IT industry in that the quality of products hasimproved while prices have decreased.25
A SIMPLE OVERVIEW OF THE DEVELOPMENT OF THE SULFUR-CONTAININGFLAVOR INDUSTRY IN CHINASulfur-containing flavor industry in China did not begin until 1980. Although several sulfurcontainingchemicals with FEMA numbers were produced on a large scale before 1980, such as 4-methyl-5-(!-hydroxyethyl)-thiazole (FEMA No. 3204) and dimethyl disulfide (FEMA No. 3536), theywere produced and sold as medical intermediates or chemical products.A series of sulfur-containing flavors, including furfurylthiol, 3-methylthio propanal, methyl 3-methylthio propionate, ethyl 3-methylthio propionate, 3-mercapto-2-butanol and thiazoles weredeveloped in the 1980s and produced in some small state-owned enterprises in Beijing, Shandong, andJiangsu. Some private enterprises started to produce thiols, such as 2-methyl-3-furanthiol and 2,3-butane dithiol, sulfides, such as difurfuryl sulfide and methyl furfuryl sulfide, disulfides, such asmethyl 2-methyl-3-furyl disulfide and bis (2-methyl-3-furyl) disulfides, thiocarboxylates, such furfurylthioformate and methyl thiofuroate in the 1990s. The original state-owned enterprises gradually weretransformed into private enterprises. The sulfur-containing flavor industry in China had completed thetransformation from a centralized to a market economy by the end of the 20 th century and entered intoa market economy. An integrated system consisting of research and development, production and saleswas formed. Dozens of leading companies in China replaced the original small state-ownedenterprises, some of which have the rights of self-managed import and export.The varieties of sulfur-containing flavors produced in China have reached 330, including almost alltypes of sulfur-containing chemicals, and there are new varieties being put into production almostevery month. China has become a major producer of sulfur-containing flavors. The research,development, production, salesand technical service of sulfurcontainingflavors are graduallyintegrating into the globalmarket.Distribution of main sulfur-containing flavors factories inChinaMost sulfur-containing flavorenterprises in China are locatedin Hebei, Shandong, Jiangsu, andZhejiang, with Tengzhou City inShandong Province being themost important production basein China, and possibly the world.Three well-known productioncompanies are Ruiyuan FlavorCo., Ltd.; Wutong AromaChemicals Co., Ltd.; and JitianAroma Chemicals Co., Ltd.. Ofthe three companies, RuiyuanFlavor Co., Ltd. ranks first andowns the world’s largest production unit of 2-methyl-3-furanthiol with an annual capacity exceeding10,000 kg. The Ruiyuan Company’s workshop for the production of 2-methyl-3-furanthiol is shownbelow.26
Sulfur-containing flavor compounds in China!The Ruiyuan Company’s workshop for the production of sulfur-containing flavorsMAJOR VARIETIES OF SULFUR-CONTAINING FLAVORS PRODUCED IN CHINAThe varieties of sulfur-containing flavors produced in China have reached 330. There are usuallyseveral functional groups in a molecule and it is difficult to classify these sulfur-containing flavorsaccording to a relative simple method. In this paper these compounds are classified based on thecommon group or structural unit with the consideration of molecular structure, aroma characteristicsand product series, and not based on strict chemical definition. This classification seems to be moresimple and straightforward from the perspective of production and sales.!Thiols and ThiophenolsThe thiols with only onemercapto group in themolecule produced inChina include mainlymethanthiol,propane thiol,iso-propane thiol,allyl mercaptan,1-butane thiol,2-butane thiol,isobutane thiol,2-methyl-1-butane thiol,3-methyl-2-butane thiol,2-pentane thiol,cyclopentane thiol,hexane thiol,octane thiol,t-nonyl thiol,benzyl thiol,!-phenyl ethane thiol,thiogeraniol,1-p-menthenyl-8-thiol,2-mercapto pyridine,2-pyridyl methanthiol,2-mercapto pyrazine,2-methyl-3(5/6)-mercaptopyrazine,2-mercaptomethyl pyrazine,pyrazinyl ethanethiol,etc.The other thiols containing onemercapto group and othergroups concurrently in themolecule produced in Chinainclude mainly3-mercapto-2-propanol,3-mercapto-2-butanol,3-mercapto-2-butanone,4-mercapto-2-butanone,3-mercapto-2-pentanol,3-mercapto-2-methyl pentanol,4-mercapto-4-methyl pentanol,3-mercapto-2-methyl pentanal,3-mercapto-2-propanone,4-methyl-4-mercapto-2-propanone,3-mercapto hexanol,3-mercapto-2,5-hexane dione,2-mercapto acetophenone,ethyl 3-mercapto propionate,1,3-dimethyl-3-mercapto butylacetate,3-mercapto-1-hexyl acetate,etc.The thiols containing twomercapto groups in themolecule produced inChina include mainly1,2-ethane dithiol,1,2-propane dithiol,1,3-propane dithiol,1,2-butane dithiol,1,4-butane dithiol,2,3-butane dithiol,1,6-hexane dithiol, 1,8-octane dithiol,1,9-nonane dithiol,etc.The thiolphenols producedin China include mainly2-methyl thiophenol,2,6-dimethyl thiophenol,2-ethyl thiophenol,2(or4)-ethyl thiophenol,etc.27
SulfidesThe sulfides produced in China include mainlydimethyl sulfide,methyl ethyl sulfide,methyl propyl sulfide,methyl i-propyl sulfide,methyl allyl sulfide,methyl butyl sulfide,methyl octyl sulfide,methyl lauryl sulfide,methyl phenyl sulfide,methyl benzyl sulfide,diethyl sulfide,ethyl propyl sulfide,dipropyl sulfide,diisopropyl sulfide,diallyl sulfide,allyl propyl sulfide,dibutyl sulfide,dihexyl sulfide,diheptyl sulfide,n-dodecyl sulfide,dibenzyl sulfide,thiocineole,2-methyl-5-methylthio furan,2-methylthioethyl-1,3-dioxolane,4-methyl-2-methylthioethyl-1,3-dioxolane,4,5-dimethyl-2-methylthioethyl-1,3-dioxolane,bis(2-pyridyl) sulfide,2-methylthio pyridine,2-methylthio pyrazine,2-methylthio-3-methyl pyrazine,2-methylthio-(3/5)-methyl pyrazine,2-methylthio-3(5/6)-methyl pyrazine,2-methylthio-3-ethyl pyrazine,2-methylthio-(3/5)-ethyl pyrazine,etc.!The other sulfides containing alkylthio group and othergroups concurrently in the molecule produced in Chinainclude mainly2-methylthio ethanol,2-methylthio acetaldehyde,1-methylthio acetone,3-methylthio propanol,3-methylthiopropyl acetate,3-methylthiopropyl acetylpropionate,2-methylthio acetaldehyde dimethyl acetal,3-methylthio propanal,3-methylthio propionic acid,methyl 3-methylthio propionate,ethyl 3-methylthio propionate,1-methylthio-2-butanone,2-methylthio-3-butanone,ethyl 2-methylthio acetate,ethyl 2-methylthio butanoate,ethyl 2-methylthio isobutanoate,3-methylthio butanol,3-methylthio butanal,4-methylthio-2-butanone,3-ethylthio butanoic acid,ethyl 4-propylthio-3-oxo butanoate,2-isopropyl-5-methylthio-2-pentenal,4-methyl-4-methylthio-2-pentanone,3-methylthio-1-hexanol,3-methylthiohexyl acetate,3-methylthio hexanal,methylthio methyl butanoate,2-methylthio phenol,2-(methylthiomethyl)-2-butenal,iso-pentanal bis(3-methylthiopropyl) acetal,2-(methylthiomethyl)-3-phenyl propenal,3-methylthiopropenyl diethyl amine,3-methylthio propyl dibutylamine,N-(3-methylthiopropenyl) piperidine,6,7-dihydro-5H-2-methyl-7-methylthio cyclopent[d]pyrimidine,2-hydroxyethyl ethyl sulfide,!-mercaptoethyl ethyl sulfide,"-methyl-!-hydroxypropyl "’-methyl-!’-mercaptopropylsulfide,etc.DisulfidesThe disulfides produced in China include mainlydimethyl disulfide,methyl ethyl disulfide,methyl propyl disulfide,methyl allyl disulfide,methyl phenyl disulfide,methyl benzyl disulfide,methyl 5-methyl furfuryl disulfide,diethyl disulfide,ethyl propyl disulfide,ethyl allyl disulfide,dipropyl disulfide,diisopropyl disulfide,diallyl disulfide,propyl allyl disulfide,dibutyl disulfide,diisobutyl disulfide,diisopentyl disulfide,bis(1-hydroxy-3-hexyl) disulfide,biscyclohexyl disulfide,didecyl disulfide,dibenzyl disulfide,diphenyl disulfide,2-pyridinyl disulfide,etc28
Sulfur-containing flavor compounds in ChinaTrisulfides and Tetrasulfides!!The trisulfides produced in China include mainlydimethyl trisulfide,methyl propyl trisulfide,methyl allyl trisulfide,diethyl trisulfide,dipropyl trisulfide,diisopropyl trisulfide,diallyl trisulfide,allyl propyl trisulfide,etc.!!!!ThiocarboxylatesThe tetrasulfides produced in China include onlydimethyl tetrasulfide,diethyl tetrasulfide.!The thiocarboxylates produced in China include mainlyfurfuryl thioformate,methyl thioacetate,ethyl thioacetate,propyl thioacetate,allyl thioacetate,3-acetylthio-2,5-hexanedione,benzyl thioacetate,phenylethyl thioacetate,2-methylphenylthio acetate,2-methylphenylthio butanoate,furfuryl thioacetate,methyl thiopropanoate,ethyl thiopropanoate,allyl thiopropanoate,benzyl thiopropanoate,furfuryl thiopropanoate,methyl thiobutanoate,ethyl thiobutanoate,furfuryl thiobutanoate,methyl thioisobutanoate,methyl thioisopentanoate,2-butyl thioisopentanoate,methyl thiofuroate,ethyl thiofuroate,pyrazinyl ethylthio acetate,etc!!!ThioacetalsThe thioacetals produced in China include mainlyformaldehyde dimethyl thioacetal,propanal dimethyl thioacetal,benzaldehyde dimethyl thioacetal,2,4-heptadiene aldehyde dimethyl thioacetal,2,4-nonadiene aldehyde dimethyl thioacetal,2,4-decadiene aldehyde dimethyl thioacetal,vanillin dimethyl thioacetal,3-methylthio propanal dipropyl thioacetal,3-methyl butanal dipropyl thioacetal,benzaldehyde dipropyl thioacetal,furfural dipropyl thioacetal,pentanal bis(2-hydroxyethyl) thioacetal,etc.!29
Thiazoles and ThiazolinesThe thiazoles produced in China include mainlythiazole,2-methyl thiazole,4-methyl thiazole,4-methyl-5-ethenyl thiazole,2,4-dimethyl thiazole,2,5-dimethyl thiazole,4,5-dimethyl thiazole,2-ethoxy thiazole,2,4,5-trimethyl thiazole,2-methoxy thiazole,2-mercapto thiazole,2-methylthio thiazole,2-acetyl thiazole,4-methyl-5-acetyl thiazole,2,4-dimethyl-5-acetyl thiazole,4-methyl-5-thiazolyl methanol,4-methyl-5-thiazolyl formaldehyde,4-methyl-5-hydroxyethyl thiazole,4-methyl-5-hydroxyethyl thiazolyl acetate,4-methyl-5-hydroxyethyl thiazolyl propionate,4-methyl-5-hydroxyethyl thiazolyl butanoate,The thiazolines produced in China include mainly2-methyl thiazoline,4,5-dimethyl-2-ethyl-3-thiazoline,4,5-dimethyl-2-isobutyl-3-thiazoline,4,5-dimethyl-2-(2-methylbutyl)-3-thiazoline,4,5-dimethyl-2-(methylthioethyl)-3-thiazoline,4-methyl-5-hydroxyethyl thiazolyl hexanoate,4-methyl-5-hydroxyethyl thiazolyl decanoate,2-ethyl thiazole,2-ethyl-4-methyl thiazole,2-ethyl-4,5-dimethyl thiazole,4,5-diethyl-2-propyl thiazole,2-ethenyl thiazole,2-ethenyl-4-methyl thiazole,2-ethenyl-4,5-dimethyl thiazole,2-ethylthio thiazole,2-propyl thiazole,2-isopropyl-4-methyl thiazole,2-isopropyl-4,5-dimethyl thiazole,2-propionyl thiazole,2-isobutyl thiazole,2-isobutyl-4-methyl thiazole,2-benzothiazole,methyl 4-methyl-5-thiazolyl formate,ethyl 4-methyl-5-thiazolyl formate,etc. !4-methyl-5-ethyl-2-(methylthioethyl)-3-thiazoline,4,5-trimethyl-2-(2-mercaptoethyl)-3-thiazoline,2-acetyl-2-thiazoline,etc!!3-Furyl sulfides3-Furyl sulfides and their derivatives are very important sulfur-containing flavors, and most of themhave meaty aroma. They are key ingredients in various meaty flavoring formulations.The 3-furyl sulfides produced in China include mainly2-methyl-3-furyl sulfides and 2,5-dimethyl-3-furyl sulfides,such as2-methyl-3-furanthiol,2-methyl-4,5-dihydrofuran-3-thiol,2-methyl-3-tetrahydrofuranthiol,2,5-dimethyl-3-furanthiol,2-methyl-3-methylthiofuran,2-methyl-3-methylthio tetrahydrofuran,2,5-dimethyl-3-methylthio furan,2-methyl-3-propylthio furan,2-methyl-3-isopentylthio furan,2-methyl-3-furyl 2-methyl-4,5-dihydro-3-furyl sulfide,2-methyl-3-furyl 2-methyl-3-tetrahydrofuryl sulfide,2-methyl-3-furyl thioacetate,2-methyl-4,5-dihydro-3-furyl thioacetate,2-methyl-3-tetrahydrofuryl thioacetate,2,5-dimethyl-3-furyl thioacetate,2,5-dimethyl-3-furanylthiofuroate,2-methylthiomethyl-3-(5-methyl-2-furyl)propenal,4-methyl-4-(2-methyl-3-furylthio)-2-pentanone,4-methyl-4-(2-methyl-3-furylthio)-2-pentanol,bis(2-methyl-3-furyl) disulfide,methyl 2-methyl-3-furyl disulfide,methyl 2,5-dimethyl-3-furyl disulfide,methyl 2-methyl-3-tetrahydrofuryl disulfide,ethyl 2-methyl-3-furyl disulfide,propyl 2-methyl-3-furyl disulfide,bis(2-methyl-3-furyl) trisulfide,bis(2-methyl-3-furyl) tetrasulfide,etc30
Sulfur-containing flavor compounds in ChinaFurfurylthiol and its Sulfides and DisulfidesFurfurylthiol contributes greatly to the aroma of coffee and sesame and its derivatives are veryimportant flavors too.This class of flavors produced in China include mainlyfurfurylthiol,difurfuryl sulfide,methyl furfuryl sulfide,isopropyl furfuryl sulfide,methyl 3-furfurylthio propionate,ethyl 3-furfurylthio propionate,4-methyl-4-furfurylthio-2-pentanone,difurfuryl disulfide,!ThiophenesThe thiophenes produced in China include mainly2-thiophene thiol,bis(2-thiophenyl) disulfide,2-acetyl thiophene,2,5-dimethyl-3-acetyl thiophene,2-methyl thiophene,2-pentyl thiophene,methyl furfuryl disulfide,furfurylthio acetone,2-furfurylthio thiazole,2-furfurylthio pyridine,2-furfurylthio pyrazine,2-furfurylthio-3(5/6)-methyl pyrazine,2-furfurylthio-(3/5)-methyl pyrazine,etctetrahydrothiophen-3-one,2-methyl tetrahydrothiophene-3-one,4-methyl tetrathiophene-3-one,5,7-dihydro-2-methylthieno(3,4-d)pyrimidine,etcHeterocycles Containing Two or More Sulfur AtomsHeterocycles containing twosulfur atoms produced inChina include mainly4,5-dimethyl-2-methylthioethyl-1,3-dithiolane,4,5-dimethyl-2-furyl-1,3-dithiolane,1,4-dithiane,2,5-dihydroxy-1,4-dithiane,2,5-dimethyl-2,5-dihydroxy-1,4-dithiane,2,5-dimethyl-2,5-peroxy-1,4-dithiane, 1,8-dihydroxy-2,9-dithiacyclotetradecane,etc.Heterocycles containingthree sulfur atoms producedin China include mainly2-diethyl-1,3,4-trithiolane,2,5-diisobutyl-1,3,4-trithiolane,3,5-bis(2-methyl-3-tetrafuranyl) spiro-1,2,4-trithiolane,2-methyl-1,3,4-trithiane,2,2,4,4,6,6-hexamethyl-1,3,5-trithiane,etc.!!Miscellaneous Sulfur-Containing FlavorsThere is only oneheterocycle containing fivesulfur atoms produced inChina1,2,3,5,6-pentathiepane with atrade name “lenthionine”.!Heterocycles containingsulfur and oxygen atomconcurrently produced inChina include mainly4,5-dimethyl-2-ethyl-1,3-oxathiolane,2-isobutyl-1,3-oxathiolane,2-ethylmethylthio-1,3-oxathiolane,2-methyl-2-(1-mercapto-1-ethyl)-1,3-oxathiolane,2-methyl-4-propyl-1,3-oxathiane,2-(2-mercaptopropyl)-6-hydroxy-1,3-oxathiane,2-(2-mercaptopropyl)-4-methyl-6-hydroxy-1,3-oxathiane,etcMiscellaneous sulfur-containing flavors produced in China includedimethyl sulfoxide,N-(2-mercaptoethyl) tetrahydrothiazole,thiolactic acid,2,4,5-trithiane,ethyl thiolactate,1,3,5-dithiazine,isopropyl isothiocyanate,2,4,6-trimethyl-5,6-dihydro-4H-1,3,5-dithiazine,allyl isothiocyanate,4,6-dimethyl-2-isobutyl dihydro-4H-1,3,5-dithiazine,3-methylthio propyl isothiocyanate,2,4,6-triisobutyl-5,6-dihydro-4H-1,3,5-dithiazine,phenylethyl isothiocyanate,etc31
MAJOR RESEARCH WORK ON SULFUR-CONTAINING FLAVORS IN CHINAThe systematic research on sulfur-containing flavors in China started at the beginning of the 1980s andthe Scientific and Technological Department of the Chinese Government gave continuous financialsupport of about $10,000 every year for the last 20 years of the 20 th century. It led to some goodresults although the amount of funding was not very much. The establishment of the productionplatform of the main sulfur-containing flavor varieties benefited from the projects supported by theChinese Government. Because the industry started from almost zero, the sulfur-containing flavorsdeveloped at that time in China were those being used in other countries, patents for which hadexpired. The process technology routes for more than 300 flavors mentioned above were developedduring this time, many of which showed a certain creativity.The research work on new sulfur-containing flavors in China in the 21 st century mainly focuses onoxothio mixed acetals [5-7] , 1-alkylthio-2-butanethiols, 1-alkylthio-2-butanols and their derivatives [8-9] !-alkylthio-2-butanones [10] , 3-thiophenyl sulfides [11] and 1,3-dithiolanes. Several hundred newsulfur-containing chemicals were synthesized and the odor characteristics of some of them wereevaluated. Some oxothio mixed acetals present attractive odor characteristics [14-17] . The application ofthese chemicals still has a long way to go due to the lack of toxicological evaluation data.!The research on the relationship of molecular structure and meaty aroma of sulfur-containingchemicals in China has made some progress. A characteristic structural unit of meaty aromas as shownin Figure 3 was proposed. The research results indicated that organic compounds with such a structuralunit usually have a basic meat flavor [14] . This presumption can be used to direct the development ofnew meaty aromas, and avoid aimlessness in screening aromas. It is helpful in promoting research anddevelopment of meaty flavors.!SOSSSOXSSSSOSSFigure 3 Six types of characteristic structural unit of meaty aromasPROBLEMS FACED BY SULFUR-CONTAINING FLAVOR INDUSTRY IN CHINAThe sulfur-containing flavor industry in China is facing many problems, which affect the developmentof the whole industry, although they are not main stream problems. These problems are as follows:!Scale and Number of Enterprises!The scale of production of sulfur-containing flavor enterprises in China vary greatly. There are only 3enterprises with annual sales exceeding US $10 million: dozens of enterprises with annual salesexceeding US $1 million: several tens of enterprises with annual sales failing to reach US $1 million,32
Sulfur-containing flavor compounds in Chinaand annual sales of small scale factories are below US $100,000 dollars. The leading enterprisesinvested a lot on waste disposal and have solved the problem of environmental pollution. But somesmall-scale factories did not have equipment for environmental protection and directly discardedwaste, which brought severe environmental pollution, especially to the air. There are many complaintsfrom neighbors around these factories, which makes the whole sulfur-containing flavor industry facegreat pressure from the mass media.Quality and Standard of ProductsThe leading enterprises in China often have advanced production technology and equipment, goodanalytical apparatus and complete product standard systems, so they supply products of high quality,which meet the requirements of the international flavor companies. Conversely, due to the lack ofanalytical apparatus and technical personnel the standard and quality of products from small factories,especially small workshops, fluctuate greatly and cannot meet international standards.!Duplication of Products and Vicious Market CompetitionEntry into the sulfur-containing flavor industry seems to be very easy for some investors due to smallbatch production of many sulfur-containing flavors. Many small-scale factories were created byformer employees of leading companies, who obtained the process technology in abnormal ways.They produce the same products as the original enterprises and cause vicious market competition. Thisdecreases profits and affects investment in new product development.!OUTLOOK FOR SULFUR-CONTAINING FLAVOR INDUSTRY IN CHINAThe sulfur-containing flavor industry in China has established a relatively integrated platform ofresearch, development and production although it still faces many problems and challenges. Thisenables the leading sulfur-containing flavor enterprises develop new products in a short time.There are three main features in the future development of the sulfur chemical industry in China,namely:• the volume of products will increase with the increased varieties of products; the scale effectof production brought by the increased volume of products and advanced technology willoffset the high cost caused by the rising price of raw materials,• prices of products will reduce while product qualities improve further; the price change ofdifurfuryl disulfide (RMB/kg) was shown in Figure 4.• cleaner production will be paid more attention and the environmental problems created by thesulfur chemical industry will be alleviated while the scale of production expandscontinuously. !33
!Figure 4 The price changeof difurfuryl disulfide(RMB/kg)There are major opportunities for the development of product varieties and production volumes ofsulfur-containing flavors with the development of the food and flavor industry. The variety, theproduction scale and sales of sulfur-containing flavor compounds produced in China will keepincreasing at a relatively high speed in next several years. The leading enterprises will develop furtherand occupy a dominating position in the production of those varieties in great demand. Most smallscalefactories will gradually quit the market due to strict enforcement of production licenses and sternpunishment for environmental pollution, which will favor the establishment of a better market andpromote the healthy development of the sulfur-containing flavor industry in China.!References1. R.L. Smith, J. Doull, V.J. Feron, et al. GRAS flavoring substances 20. Food technology. 2001,55(12): 34-552. R.L. Smith, S.M. Cohen, J. Doull, et al. GRAS flavoring substances 21. Food technology. 2003,57(5): 46-593. R.L. Smith, S.M. Cohen, J. Doull, et al. GRAS flavoring substances 22. Food technology. 2005,59(8): 24-624. W.J. Waddell, Cohen, V.J. Feron, et al. GRAS flavoring substances 23.http://www.femaflavor.org/GRAS23-REVISED-ALL-Tablesl.pdf5. Baoguo Sun, Xiang Fu, Fuping Zheng, et al. Facile Preparation of Monothioacetals from Acetalsin the Absence of Catalyst. Fourth Tokyo Conference on Advanced Catalytic Science andTechnology. July 14-19, 2002. Tokyo, Japan6. Baoguo Sun, Xiang Fu, Yuping Liu, Fuping Zheng, Hongyu Tian. The preparation of 1-alkyl-1-alkoxy-1-alkylthio methanes, CN patent, ZL00107636.1 (in Chinese)7. Xiang Fu, Baoguo Sun, Fuping Zheng, Yuping Liu. Syntheses of 1-methyl-1-ethoxy-1-alkylthiomethanes. Huaxuetongbao, 2001, (2): 12-115 (in Chinese)8. Hongyu Tian, Baoguo Sun, Mingquan Huang, et al. Syntheses and odor characteristics of 1-alkylthio-2-butanethiols, 1-alkylthio-2-butanols and their derivatives. Perfumer & Flavorist,2006,31(1):32-349. Mingquan Huang, Baoguo Sun, Hongyu Tian, Yuping Liu. Syntheses and Aroma Evaluation of1-alkylthio-2-butane thiols. Jingxihuagong, <strong>2007</strong>, 24(1):67-68. (in Chinese)10. Mingquan Huang, Hongyu Tian, Baoguo Sun. Syntheses of !-alkylthio-2-butanones.Jingxihuagong, 2005, 22(2):127-129. (in Chinese)34
Sulfur-containing flavor compounds in China11. Jinbo Huang, Ainong Yu, Baoguo Sun et al. Syntheses of alkyl 3-thiopenyl sulfides.Yingyonghuaxue, <strong>2007</strong>, 24(1): 105-107. (in Chinese)12. Haijun Li, Fuping Zheng, Baoguo Sun et al. Syntheses of 3 kinds of 2-methyl-2-alkyl-1,3-dithiolanes. Jingxihuagong, 2005, 22(3): 195-197. (in Chinese)13. Haijun Li, Fuping Zheng, Baoguo Sun et al. Syntheses of 1,3-dithiolanes catalyzed byphosphotungstic acid. Zhongguo Shipin Xuebao, 2006, 6(1): 63-66. (in Chinese)14. Baoguo Sun, Hongyu Tian, Fuping Zheng, et al. Characteristic structural unit of sulfur-containingcompounds with a basic meat flavor. Perfumer & Flavorist, 2005,30(1):36-4515. Yingqing Yang, Fuping Zheng, Baoguo Sun, et al. Synthesis of three 2-alkyl(aryl)-1,3-oxathiolane compounds. Chemical Journal on Internet. 2001,3(11)16. Baoguo Sun, Caifen Miao, Yingqing Yang, et al. Aroma characteristics of 1,3-oxathiolanes. Theproceedings of The 2nd international conference on functional molecules. Dalian 2003.DalianUniversity of Technology Press.2003.377-37917. Baoguo Sun, Fuping Zheng, Yuping Liu et al. Syntheses of 15 kinds of flavors--1,3-oxathiolanes.Huaxuetongbao, 2002, 65(9): 614-619.Prof Baoguo Sun obtained his Ph.D from Tsinghua University in China and teachesand researches at the School of Chemistry and Environmental Engineering, BeijingTechnology and Business University, Beijing. He teaches the chemistry andtechnology of flavour and fragrances and researches in the areas of flavour synthesisand thermal reaction. He has won three major national prizes for his research workand published several books and articles.35
STRUCTURE-ODOUR RELATIONSHIPS OF MACROCYCLIC MUSKSAND HARMONY WITH THE ENVIRONMENTHideaki TakaokaSoda Aromatic Co. Ltd.Fundamental Research Department, 1573-4 Funakata, Noda,Chiba 270-0233, Japanhideaki_takaoka@soda.toray.co.jpMusks comprise one of the most important groups of materials in the aroma chemical industry, and therelationship between their chemical structures and their odour has been a very important subject ofinvestigation. Also, the development of environmentally friendly materials has become a primary andurgent theme for research as consumers have become more environmentally concerned with a stricterviewpoint towards chemical substances.This presentation covers the correlation of the structures and the odour of macrocyclic musks, andincludes a history of the development of musks, the environmental issues and the future, plus our lateststudies on these topics.THE HISTORY OF MUSKUsage“Musk” is a natural fragrance obtained from malemusk deer. The musk deer is an herbivorousruminant animal that enjoys tree buds and lives inhigh-mountain areas of Central Asia - Tibet,Mongolia and south Siberia. In the mating season,the male emits a special smell - musk - to attract thefemale, in which the main component is themacrocycliccompound(R)-(-)-muscone.Musk has been widely used not only as a fragrance but also for medicinal purposes from ancient times.Its medical use in China was recorded in a document dating from about 100-200 BC. In Japan, muskwas stored from 756 AD in the emperor’s treasure warehouse “ShoSo-In” in Nara prefecture. In 1189,musk was a gift from an Arabian king to the Holy Roman Emperor.36
Macrocyclic musksAs a result of indiscriminatehunting in the last century, thewild population of musk deer hasdecreased to about 1,000.Consequently, the WashingtonConvention prohibited trading innatural musk in 1973 and todaythe musks that are currently inuse are all synthetics.THE DEVELOPMENT OF SYNTHETIC MUSKSIn 1891, Bauer discovered by chance that trinitro t-butyltoluene had a musk odour and, thereafter,many synthetic musks have been developed: polycyclic musks, new macrocyclic musks, and, mostrecently, alicyclic musks.The nitromusks possess an excellent note and have been used for the longest period as the mainingredient in musk fragranceformulations. The polycyclic muskswere found superior in odour and,because of their reasonable price, alsocontributed to increased use of muskin perfumery. Many natural muskcompounds have macrocyclicstructures and, recently, some newmacrocyclic musks with excellentfragrance notes have been developed.Today, the study of a new group, thealicyclic musks is a very active areaof research.STRUCTURE–ODOUR RELATIONSHIPSDyson (1) reported the relationship between ringsize and the odour of macrocycle ketones in 1929and the effect of the functional group of macrocycliccompounds was investigated by Carothers (2) andLzica (3) in the 1930s.Theimer (4) and Klouwen (5) researched theintensity of the musk odour of theoxahexadecanolide series containing an ether groupin 1963. Klouwen found that most isomers wereweak in odour, but that 11-oxa compound has thesame intensity and quality as pentadecanolide.37
HARMONY AND THE ENVIRONMENTNow, let us consider the topic of harmony with the environment, starting with the current state ofmusk materials.Natural musk materials were used as fragrances until their prohibition for animal conservation reasonsin 1973 under the Washington Convention.The use of nitromusks in the 20thcentury was limited by problems thatincluded toxicity andbioaccumulation. In the case ofpolycyclic musks, their use inadvanced countries is being limiteddue to poor decomposition andaccumulative damage, etc. Especiallyshocking was the report thatpolycyclic musks were detected inmother's milk. As a result, usage hastended to decrease although dataconcerning the toxicity are notconfirmed despite various researchinvestigations (6).Therefore, because of the investigation ofharmony with the environment, we examinedtypical synthetic musks for theirbiodegradability. And the results are shownhere. The biodegradability of 60% or more isdefined as an easily decomposing compound,shown as the light blue parts in this table. Whenwe classify the musks in this table by theirstructure, we can see clearly the superiority ofthe macrocyclic musk. Therefore, it may be saidthat the macrocyclic musks are eco-friendly forthis reason with low environmentalaccumulation.Because these problems are not reportedin the macrocyclic and alicyclic musks,these two groups are becoming more andmore important due to their harmony withthe environment.38
Macrocyclic musksRECENT RESEARCH WITH METHYLATED MACROCYCLIC LACTONESI shall discuss now our latest study, which has been based on the following concepts:• To target macrocyclic lactones that are “natural similar type” compounds, from which superiorbiodegradability can be expected, and eco- friendly materials.• To use commercially available !, "-dibasic acid as a starting material.• To examine the inter-relationship between the positions of the methyl functional groups forthe macrocyclic lactones and their musk odour.Our third concept arose from literature reports on methylated macrocyclic lactones. In 1994, Kraftdiscovered the creation of a musk-type odour within methylated 13-tridecanolide when a methyl groupwas inserted at the 12 position (7). This was the first example of the significance of the methyl groupin macrocyclic lactones. Subsequently, it was reported that methylated macrocyclic lactones, such as14-methyl-16-hexadecanolide (8) and 14-methyl-14-teradecanolide (9), had excellent musky odours.A detailed report was made by the Takasago Perfumery Co. on the interrelation between the odour andstructure of the optical isomers of methylated lactones in 2004 (10). This concluded that the R-formhas a rich musk odour with powdery notes whereas the S-form has a weak musk odour.39
In our study, we selected eight methylated macrocyclic compounds and four unmethylated compoundsand muscone for sample objects of comparison.Our results, comparing the fragrance activity for each compound by our internal expert panels, areshown in the preceding table. Each compound was evaluated for characteristics such as “musky”,“animal”, “powdery,” and “fragrance intensity”, which are essential to natural and high-quality muskyodours. The size of the circle in the table stands for the strength of each character. On the basis ofthese results, we considered the relationship between the chemical structures and the odours. First of40
Macrocyclic musksall, we found out that the sense of musk is emphasized when the methyl functional group isintroduced. Moreover, the powdery character is stressed if the methyl functional group is introducedinto the macrocyclic lactone. This is a very interesting result, because in general macrocyclic lactoneslack powdery character.This figure shows the change of themusk odour with the introduction ofthe methyl group. We compared themusky odour and its intensity bychanging the sizes of the ring of thelactones with the methyl functionalgroup at (!-2) position. When themethyl functional group is notintroduced, the intensity of the odourgets stronger as the carbon numberbecomes smaller but the muskcharacter gets weaker. However,when we introduced the methylfunctional group, we found thattetradecanolide specifically has boththe intensity of odour and the muskcharacter at the maximum value.Next, we considered the relationshipbetween the positions of the methylfunctional group and their odourcharacters. We examined thecharacter as locating the methylfunctional group of 14-tetradecanolide from the ! to the (!-3) position. We found that the methylfunctional group in the (!-2) positionsingularly had the maximum valuesfor muskiness, powderiness, and theintensity of odour.The biodegradability of methylatedlactones also was examined. 12-Methyl-14-tetradecanolide wasdecomposed up to 83%, thusconfirming that it is an easilydecomposing compound. In addition,the Ames Test (determining if achemical is a mutagen) also showednegative results.41
In summary, our research results for methylated macrocyclic lactones are:• The powdery character is strengthened by introducing the methyl group into the macrocycliclactone.• The powdery character and the intensity are strengthened specifically with the methylfunctional group at the (!-2) position.• 12-Methyl-14-tetradecanolide was found by these results as a novel macrocyclic musk withhighly desirable properties. This macrocyclic musk displays an excellent powdery note, muskyodour, and fragrance intensity.• This compound is biodegradable, and negative in the Ames Test.THE FUTURE OF MUSKSLet us now consider the potential for the future development of macrocyclic musks.This matrix lists macrocyclic lactone compounds with 13-16 carbon rings, possessing a methyl groupor a double bond, both or none of them. There are 801 compounds when we count all thesecombinations, but:• only 129 compounds, about one-sixth, have been officially investigated; and• only 5 compounds are available in the market.There are still many macrocyclic lactones that we have not investigated yet. As we have found throughour studies, the characteristic of musk odour can be changed dramatically by slightly changing thestructure. This makes us presume that a huge potential is still left in the macrocyclic lactones.42
Macrocyclic musksVarious macrocyclic lactones willbe developed in future but it maytake some time. A macrocycliclactone with the best fragrancecharacteristic will be selectedeventually. In addition, some of thenew macrocyclic lactones will bedeveloped and appear on themarket. They will have a superiorfragrance and will be produced at areasonable cost and price. Of coursewe hope that 12-methyl-14-tetradecanolide is included.Someday, macrocyclic musks withthe production capacity of several thousands tons will be on the market. Dr. Sonnenberg predicts in thenear future, by 2010, the production of macrocyclic musks will be at the same level as polycyclicmusks and would grow into an industry with approximately 6,500 tons, valued at over !100million(11). Because these macrocyclic musks may be superior in biodegradability, their market share willincrease, and the day will come when macrocyclic musks occupy a sizeable share of the market withalicyclic musks.In all events, I continue to hope for the development of new macrocyclic musks that stimulate thefascination of the world’s perfumers, appeals to the wealthy consumer and, of course, are eco-friendlymaterials. At the end, all these studies are dedicated to poor musk deer!References1 Dyson, G. M. Perfum. Essent. Oil Res. 1927, 75.2 (a) Hill, J. W.; Carothers, W. H. J. Am. Chem. Soc. 1933, 55, 5039.(b) Spanagel, E. W.; Carothers, W. H. J. Am. Chem. Soc. 1935, 57, 929.3 Ruzicka, L.; Stoll, M. Helv. Chim. Acta 1934, 17, 1308.4 Davies, J. T.; Theimer, E. T. J. Agric Food Chem. 1967, 15, 6.5 Klouwen, M. H.; Kok, J. G. J.; Ruys, A. H. J. Soc. Cosmet. Shem. 1963, 14, 19.[1]-[5] Rossiter, K. J. Chem. Rev. 1996, 96, 3201.6 Shirakawa, T. Aroma Science Series 21; Nakajima, T., eds; Fragrance Journal Ltd.: Tokyo,Japan, 2004, Vol. 8, pp. 1-22.7 (a) Kraft, P.; Tochtermann, W. Liebigs Ann. Chem. 1994, 1161.(b) Kraft, P.; Tochtermann, W. Liebigs Ann. Chem. 1995, 1409.8 EP19960308107; Quest Int. (Netherlands)9 EP 0862911A2; Haarmann & Reimer Gmbh (Germany)10 (a) JP 2000 053675; Takasago Perfumery Co. Ltd. (Japan),(b) <strong>IFEAT</strong> 200411 Sonnenberg, S. Fafai Journal October-December, 2005, 33.Hideaki Takaoka graduated from the Department of Agriculture of YanaguchiUniversity in Yamaguchi, Japan. Since 1990 he has worked at Soda Aromatic Co.Ltd., Tokyo on the synthesis of aroma chemicals.43
REACHLegislation and Implementation44
REACH PREPARATION FROM AN EU-BASED COMPANY’S PERSPECTIVEJoseph S. TomusangeTreatt PLCNorthern Way, Bury St. Edmunds.Suffolk, UKJoseph.Tomusange@treatt.comreach@rctreatt.comWHAT IS REACH?REACH is the new chemical regulation for Europe, standing for the Registration, Evaluation, andAuthorisation (and Restriction) of Chemicals. It will apply to all those that manufacture/importchemical substances into the EU in quantities of !1 tonne per legal entity. It is based on what isknown as the precautionary principle:‘Manufacturers, importers and downstream users will not produce, use or place on the marketitems that adversely affect Human Health or the Environment’TITLE I, Chapter 1, Article 1.3, REGULATION (EC) No 1907/2006The regulation was brought into being due to the current lack of test data on the risks thatchemicals pose to humans and the environment. The aim is to generate data on the effects ofchemical substances so that they may be used safely. This should not only make the Europeanchemicals industry more innovative and competitive but also should force the substitution of themost toxic chemicals for safer alternatives.The change in law has brought about a change in protocol, with the ‘burden of proof’ being placedon industry rather than the authorities to demonstrate the safety of chemicals placed on the market.It has taken many years to develop the regulation and a great deal of lobbying by industry wascarried out prior to the second reading in December 2006. After the parliamentary discussion, theregulation was accepted, formally becoming law on June 1st <strong>2007</strong>. Chemical companies arefrantically preparing, as compliance is imperative to ensure business continuity.Scope of ReachThe scope of REACH is extremely complex and the substances used in the flavour and fragranceingredients industry that will be covered by the regulation include:• Fragrance ingredientso aroma chemicals e.g. ethylene brassylateo essential oils and natural extracts (NCS/UVCB) e.g. patchouli oil• Flavours in cosmetics (oral care) e.g. mint oils• Flavours in tobacco• Isolated intermediates 11 A substance that is used on the site of its production will have to be registered but information requirementwill be limited to that which the manufacturer holds or can obtain through data-sharing provisions of TitleIII.45
And exclude:• Substances that are deemed to be generally safe e.g. water & corn oil(see Annex IV & V)• Preparations (mixtures of substances/blends)• Flavour and food ingredients & additives (Article 2(5)(b))• Pharmaceutical ingredients (Article 2(5)(a))• Waste (directly) (Article 2(2))• Non-isolated intermediates 2Essential oils and natural extracts will be included if they are used as fragrance ingredients orflavours in cosmetics. It should be noted that the substances that are excluded are only exempt fromcertain titles of REACH e.g. Titles II (Registration), VI (Evaluation) and VII (Authorisation). Fromthe substances listed above, it is clear that it will be impossible for a company that supplies theflavour and fragrance industry to avoid the REACH regulation.REACH DeadlinesThankfully with REACH, companies are not required to submit their data at one registrationdeadline. There are various phases or deadlines which allow companies to submit data in astaggered manner. The first phase of REACH is pre-registration which may prompt some to thinkthe regulation should be renamed PREACH is Pre-Registration! This phase is in place to facilitatethe sharing of data to avoid duplication during registration. It will also allow participants to agreeupon classification and labelling of their substances. Those that participate in pre-registration willbe able to follow the registration deadlines set out in the regulation for phase-in substances. Thosethat participate shall:• Provide other participants with existing studies• Respond to information requests from others• Collectively identify the need for future studies and arrange for them to be carried outPotential registrants who manufacture/import outside of the timetable will not be able to rely on thedeadlines set out. Companies will have a six-month window to submit data from June 1 st untilDecember 1st 2008.The next phase of REACH is Registration, where Manufacturers and Importers (M/I) submitinformation on substances in dossiers to the European Chemicals Agency (ECHA or the Agency) inHelsinki, Finland. Registration is based on two parameters, quantity and toxicity. The timeframefor the process is a decade from pre-registration to the final phases of registration with thestaggered deadlines listed below.2 A substance which, except for sampling, is not removed from the equipment where it is manufactured andused up is excluded from REACH.46
REACH from an EU company perspectiveQuantity & ToxicityDeadline>1000t/y30th November 2010>100t/y N 3 : R50/53 41t/y CMR 5 Categories 1& 2& SVHC 61000-100t/y 31st May 2013100-1t/y 31st May 2018The rationale behind these deadlines is to assess the most frequently used and the most toxicsubstances in the first phase. This phase is followed by the Evaluation of substances and dossiersby the Agency; which will ensure the reliability of the data submitted. This is followed by theAuthorisation of chemicals for specified use. Finally, substances may be restricted if they aredeemed to pose significant risks to humans and/or the environment.TREATT’S APPROACH TO REACHThe first step that Treatt took was to appoint a company contact for REACH-related matters, aREACH Coordinator. Treatt like most in our industry can be defined as an SME 7 and so it wouldbe too difficult to form an in-house regulatory team/taskforce to deal with REACH like some largercompanies. However, Treatt was able to nominate an individual to become “an expert” in theregulation. The role of the REACH Coordinator at Treatt is to become an in-house expert on theregulation, providing support to the technical, sales and purchasing teams on REACH relatedmatters as well as assisting Senior Management in formulating a company action plan. After theinstallation of the REACH Coordinator, a dedicated set of contact details and email address wereset up to ensure that all REACH related issues from customers and suppliers could be directed tothe Coordinator. When these measures were in place, it was important to begin reading andunderstanding the regulation in order to remain informed of developments as they occur.Implications for our CatalogueAfter gaining a good understanding of the scope of REACH, it was important to assess theimplications for our portfolio which can be separated into three groups:1. Essential oils and extracts2. Aroma chemicals3. Blends (or preparations as they are known in REACH)Essential oils and extracts are referred to as NCS 8 or UVCBs 9 under REACH. This is an area of thebusiness in which Treatt have a great heritage and in which we have continued to be very strong; soit was important for us to understand how these substances would be treated. Given the nature ofthese substances, many are imported into the EU in quantities greater than a tonne per year. Thescientific definition of these substances was always going to be a challenge due to their3 Dangerous to the environment4 Very toxic to aquatic organisms5 Carcinogenic, Mutagenic, Reprotoxic6 Substances of Very High Concern i.e. PBT and vPvB7 Small and Medium-sized Enterpriseshttp://ec.europa.eu/enterprise/enterprise_policy/sme_definition/index_en.htm8 Natural Complex Substances9 Substances of Unknown or Variable composition, complex reaction products or Biological materials47
composition and natural variability. In many cases, these natural substances have been used forhundreds, if not thousands of years and because of this are generally considered to be inherentlysafe. As a consequence, the necessary test data in many cases have never been generated.Therefore, like Treatt there are many companies who possess physico-chemical data but lack thetesting facilities to produce the required human and environmental exposure data. In this instance,we have sought support from our trade associations with EFFA 10 and EFEO 11 being particularlyhelpful in providing guidance and formulating a plan for the Registration of NCS. They haveseparated the substances into two categories. Those that can be categorised to 90% or more by theirconstituents and those that cannot, with the former being Type 1 NCS and the latter are Type 2NCS. This methodology will rely on the use of QSAR 12 (which uses equations and computationalmodels to determine the effects of chemicals), Grouping and Read-Across (which allows similarsubstances to be ‘grouped’ and assessed under a category from a reference substance) to fill datagaps and reduce the need for testing. We are awaiting further information from the authorities onwhether this methodology can be used. So as our trade associations continue to fight for theappropriate treatment of these substances, we must continue to monitor the situation and follow anyguidance that becomes available.Aroma chemicals can be considered to be ‘Well Defined Substances 13 ’ due to the ease in which wecan define their composition by upper and lower concentration limits of their components. Afterthe initial assessment it became obvious that Treatt is predominantly an importer and a distributorof these substances and that much of the required data are available or will become availablethrough data sharing. Hence, it is important that we assess our volumes and supply lines todetermine which substances we will be required to register as an importer and those that we willnot.Preparations (or blended products) do not need to be registered under REACH. However, it isrequired that a company registers the substances in these preparations that are present in quantitiesgreater than 1 tonne/year. They must account for the hazards related to the substances used in apreparation in MSDS 14 in accordance with the current legislation. As a consequence of REACH, itis important to be aware of the fact that reformulation may be necessary as some substances maybecome unavailable due to suppliers having difficulty with compliance.Implications for our Supply ChainAfter assessing the group’s portfolio, it is important to assess the supply chain as a whole. UnderREACH, Treatt can be treated in two ways, as a Manufacturer/Importer (M/I) or as a Distributor.From a manufacturer/importer’s standpoint, we must register substances. From this perspectivepre-registration is the key phase, as being a participant we will benefit from the extendedregistration deadlines. For pre-registration, data must be submitted to the Agency but theinformation requirements are less than those for registration and are generally as follows:10 European Flavour & Fragrance Association11 European Federation of Essential Oils12 Quantitative Structure-Activity Relationship13 Well Defined Substances – Substances with a defined qualitative and quantitative composition that can besufficiently identified based on the identification parameters of REACH Annex IV item 2. Ref. RIP 3.1014 Material Safety Data Sheet48
REACH from an EU company perspective• Substance identity (EC no., CAS no. & name, IUPAC, synonyms)• Identity of potential registrant (name, address & name of contact person)• Expected registration deadline/tonnage band• Registration statusAfter pre-registration, SIEF 15 will be formed to facilitate the sharing of data. In our capacity as amanufacturer/importer we must gather data on any substances that we must register and therelevant data on our customers’ usages. This can assist us in two ways; we can discount allquantities used in applications that are excluded from specific Titles of REACH. While for thosesubstances that we must register it will help when developing the recommended risk managementmeasures (RMM) for our customers to employ. For all substances that we purchase from within theEU 16 we are considered a distributor, so we will need to ensure that we pass information on ourcustomer usage upstream to our suppliers.Implications for our SuppliersAs an importer, our suppliers can be located both inside and outside the EU. Those within the EUwill be assessed differently to those outside the EU who have no registration obligations. Although,suppliers outside of the EU cannot register for REACH directly, they can opt to nominate an OnlyRepresentative who must be located within the EU. This is a feature of REACH that Treatt havebeen considering as an importer who will have to register imported substances, as it may be usefulto carry out the registration duties in collaboration with our suppliers. We will need to furtherassess the feasibility of this as it may be worthwhile becoming an Only Representative. If our non-EU suppliers decide to appoint an Only Representative, then we will be considered a distributorand will need to again pass usage information up the supply chain.Implications for our CustomersIt is important that you understand your customers’ needs. Questions are currently being asked byall members of our supply chains but the majority of them are from customers requiringreassurances on continued supply. Some examples of those that we have responded to are listedbelow:• Can you please confirm that all of the materials that we have purchased from you over thelast 12 months are to be pre-registered?• Is the material a substance or a preparation?• What is the volume your company trades of each of these materials?• Are there any impurities present in the products? If yes, please list them.It is useful to have someone within an organisation to answer such questions like a REACHCoordinator, reassuring customers that they are planning for the regulation.15 Substance Information Exchange Forum16 NB: Switzerland outside EEA49
FURTHER IMPLICATIONSThere are three areas that should be considered in addition to those aforementioned that will befundamentally important at every stage of REACH. First, communication is extremely important asdescribed below;‘REACH is a Communication, Coordination and Cooperation challenge at 3 levels: Intracompany,Inter-company, Multi-stakeholder level’(REACH Implementation Projects Overview, Jack de Bruijn, EC DG JRC25/09/06)REACH preparation within a company will rely on good communication between the sales,purchasing and regulatory departments. It will involve IT in training, data collation and migration;and will also involve the finance department in ensuring that sufficient funds are in place, fortesting, compensation of existing data holders and the process of registration. A great deal ofnegotiation will take place on whether substances can be considered to be the same to whichlaboratory to use to perform environmental fate tests on substances. So it will be important thatcompanies to nurture existing relationships with customers and suppliers and whenever possibleforge new ones. There will be instances when large multinationals will be able to assistance SMEslike Treatt but we must be mindful of the fact that the opposite may also apply. Consequently, goodrelationships with alias as well as competitors will be important.Second, confidentiality will be a key issue with so much dialogue between different members ofsupply chains. When considering the submission of data confidentiality will be maintained by theAgency. It is noted in REACH that any information that undermines commercial interests will notbe passed on but information relating to safety will effectively never be confidential (Article 118(2)). The implications of this are considerable and it would be useful to formulate a plan on how toprotect trade secrets during discussions with supply chain members.Third, the costs of complying with the regulation will be large but the authorities are being mindfulof the numbers of SMEs that will be affected and will be making concessions. Despite this, costswill be incurred and funds will need to be allocated for the various activities associated withREACH compliance; whether this is attendance at SIEF meetings or the production of new testdata for the compilation dossiers. There are cost implications at every stage of REACH that mustbe considered carefully. Invariably, some of these costs may have to be passed along the supplychain and it will be important to keep abreast of any developments on product margins that arebusiness critical.Actions to DateFrom the second reading of the regulation to date, we felt that it important to keep members of oursupply chain informed of our plans for REACH compliance through letters. The first werestatements to our customers and suppliers informing them that we have been monitoring thesituation and that we are intent on meeting compliance. These letters were composed anddistributed shortly after the regulation passed its second reading in December 2006. Two furtherletters have been produced for customers and suppliers; the first being a response to concerns aboutour plans for compliance with the regulation; while the latter asks suppliers for their plans formeeting REACH compliance.50
REACH from an EU company perspectiveTreatt for many years has had strong ties with trade associations (BEOA 17 , BFA 18 and BEMA 19 ).Through these bodies we were able to quickly gain a good understanding of the regulation as itdeveloped. Through these organisations we are members of European trade associations, EFEOand EFFA and as their guidance has been invaluable. EFFA were alert to the implications ofregulation being involved in projects i.e. SPORT 20 Project. They have recently launched a numberof other REACH initiatives such as the EFFA Survey. As a result, of being part of this survey wehave been invited to join pre-consortia on Aroma Chemicals. In relation to NCS, in the early stagesof REACH we were proactive in informing our local MEPs of our plight and lobbying on behalf ofour industry for several amendments (namely 352, 353 and 966). More recently, we have beensupplying data on NCS to EFEO. This is with a view to submitting representative qualities to theauthorities in an effort to support our industry’s case for the special treatment of NCS. Regretfully,Treatt are one of only a handful of companies who can see the benefit in this type of data sharing.IUCLID 5 is the software portal/platform that will be used to upload the registration dossier forREACH. Although there is no obligation to use the software, dossiers must be submitted to theAgency in the same format as the software, so as the package is free it will be the easiest method touse. It became available prior to REACH becoming law in June <strong>2007</strong> and shortly after this wedownloaded the software. Given the complexity of IUCLID (which containing several thousandfields), we are assessing the feasibility of training key members of regulatory staff. This is with aview to uploading of the substances in our catalogue.We have also begun dialogue with customers and suppliers and have been in discussions with ourtrade associations, a service provider (REACH Ready) and our competent authority (which in theUK is the HSE 21 ). REACH is extremely complex and whenever we have been in doubt about anydetails of the regulation we have sought guidance.Current and Ongoing AimsMaintaining good lines of communication is fundamental in ensuring that a company meetsREACH compliance. Treatt will continue to maintain dialogue with all those involved in REACH(including our customers, suppliers, trade associations, REACH Ready, the HSE and any otherinterested parties) wishing to ensure the survival and growth of the European chemical industry. Asthe pre-registration period draws near, it is important that we continue to assess our data andprepare the required information for submission to the ECHA. This will include highlightingsubstances that may be included in the first registration phase.(Pre-) SIEF and (pre-) consortia formation (See Fig.1) will involve information exchange, theplanning and implementation of testing to fill any data gaps with group members.17 British Essential Oil Association18 British Fragrance Association19 British Essence Manufacturers' Association20 Strategic Partnership On REACH Testing between the EC, Member States and Industry21 Heath & Safety Executive51
Pre- SIEFPre-RegistrationStart :1 st June‘ 08Finish : 1 st December’08SIEFPre-ConsortiaConsortiaRegistrationPhase 1 – >1000 t/y & OthersPhase 2 - >100 t/yPhase 3 - >1t.yEstablishSamenessSubmitInformationvia REACHITDataExchangeDataAnalysisCompensationfor Testing &pre -existingData• Identity Codes e .g.EINECS , CAS• Specification(particularly forUVCBs)• Data-sharing onexisting tests data• Classification andLabelling• Discussions with otherSIEF• Assessment of Read -Across and othermethodsRegistration DossierFigure 1During the information exchange meetings there will be negotiations on compensation for test datathat is currently available. There will also be the formulation of test plans that must be vetted by theauthorities before they can be undertaken. It will be important at this stage to ensure the ‘sameness’of the substances that are pre-registered.From the studies previously undertaken on the practical application of the regulation (e.g. SPORTand PRODUCE 22 ), it was found that it would be unworkable without detailed guidance documents.These documents known as REACH Implementation Projects (RIPs) have been developed withstakeholder groups to help companies as well as the authorities in the member states to understandthis complex regulation. Although they are not legally binding given the complexity of theregulation, they are recommended reading. The development of these documents has taken time,some have been published but many are still unavailable. We will continue to monitordevelopments in these RIPs, checking the ECB 23 website for any further publications. Asaforementioned, product equivalence is very important and particularly with respect to naturals. Anexample of the current methodology can be found in RIP 3.10 - Guidance on checking substanceID, which contains an example on Lavandin Grosso.The preparation for Registration will include gaining further understanding of IUCLID so that weare able to upload the information that has been collated. We are currently assessing how we willmanage the massive data entry process.22 Piloting REACH on Downstream Use and Communication in Europe (similar to SPORT but involvingboth include manufacturers/importers and downstream users.23 European Chemicals Bureau52
REACH from an EU company perspectiveSUMMARYREACH will have a massive impact on the European chemical industry and it is imperative to startpreparation early. In the midst of the hours of data analysis and heated negotiations that areinherent in REACH it will be important to remember the reasoning behind the regulation. It is forour safety and the preservation of the environment around us; so with this and business continuityin mind it is important that every effort is made to comply with the regulation. We shouldcontinually remind ourselves of the maxim ‘No Data, No Market,’ which means just that. You willnot be able to do business unless you comply, so start now! Assess your inventory, find out yoursuppliers plans and assess your customers’ uses.ReferencesFinal text of REACH Regulationhttp://eur-lex.europa.eu/JOHtml.do?uri=OJ:L:2006:396:SOM:EN:HTMLEuropean Chemicals Agency (ECHA)http://ec.europa.eu/echa/home_en.htmlDG Enterprisehttp://ec.europa.eu/enterprise/reach/index_en.htmDG Environmenthttp://ec.europa.eu/environment/chemicals/reach/reach_intro.htmEuropean Chemicals Bureau (ECB)http://ecb.jrc.it/REACH/Frequently Asked Questionshttp://ec.europa.eu/echa/doc/faq_industry_en.pdfEFFA & REACHhttp://www.effa.be/Flavours/Tree/EFFA%20&%20REACH.htmHSE – Health & Safety Executivehttp://www.hse.gov.uk/reach/index.htmREACH Compliancehttp://reach-compliance.eu/english/index.htmlREACH Ready – CIA REACH Servicehttp://www.reachready.co.uk/Reach Centrum – CEFIC REACH Servicehttp://www.reachcentrum.eu/ReFaC – REACH Facilitation Companyhttp://www.refac.eu/53
Out of REACH? A Workshop on the New Chemical Regulation, 26 October 2006http://www.fdf.org.uk/events_workshop_061026.aspxWorkshop held on 25 September 2006 on REACH Implementation Projects 3 – Development ofguidance for Industryhttp://ec.europa.eu/enterprise/reach/prep_guidance_en.htmREACH – A Summary Guide, DEFRAhttp://www.hse.gov.uk/chemicals/defrasummary.pdfWorkshop "The 'R' in REACH - who has to fulfil what and when?", Pre-Registration andRegistration of Substances - Practical Steps, 21 June <strong>2007</strong>http://www.baua.de/en/Chemicals-Act-biocide-procedure/Helpdesk/Workshop05.html__nnn=trueJoseph Tomusange has a degree in chemical engineering with environmentalmanagement from the University of Birmingham, UK and joined RC Treatt inAugust 2006 as a graduate trainee. He has since been working on severalprojects within the business including REACH. Currently, he is the company’smain contact for all matters regarding REACH, assisting sales and purchasingwith enquiries relating to the legislation. He has been working closely with seniormanagement on company strategy in meeting compliance. He is well placed togive an idea of the enormity of the task and an idea on the questions that weshould be asking our suppliers, our customers and ourselves.54
REACH: A GLOBAL PERSPECTIVE FROM THE FRAGRANCE INDUSTRYDr. T.J. (Hans) van Bergen 1International Fragrance Association (IFRA)Avenue des Arts 6, 1210, Brussels, BelgiumThe new EU-REACH Regulation applies tofragrance ingredients as used in consumer products.Therefore, the fragrance industry faces a majoreffort to register its substances and ensure that themany substances in its portfolio can continue to beused in a REACH compliant manner. TheEuropean and international associations of thefragrance industry have taken the initiative for ajoint REACH programme to facilitate theimplementation of REACH in fragrance companiesand the fragrance substances supply chain. Thecontent of this REACH programme is the subjectof this presentation and is placed against thebackground of the ongoing product safetyprogramme through IFRA and its Code of Practice. Because REACH adopted a very generaldefinition of “substance”, also natural complex substances (NCS) such as essential oils, absolutes,concretes, extracts, resins, etc. are subject to REACH registration unless exempted for very specificreasons.In 1973 the fragrance industry founded its global association the IFRA, whose current membershipcovers about 90 % of the world fragrance market. It is an association of national and regionalassociations.1 Contact details: Para-Celsus Concept, Boterbloem 14, 3984 CT Odijk, The Netherlandsinfo@para-celsus.eu55
IFRA’s mission focuses primarily on the safe useof fragrances by consumers via self-regulation. TheIFRA Code of Practice is globally recognised andapplied by producers and downstream users offragrances to accomplish this safety objective in themarket place.The Code is available on line (www.ifraorg.org). Currently, it covers standards for 151 ingredients,which prohibit or limit the use of the ingredient or set certain purity standards.The quality and scientific basis for these standardsis assured via a structure in which the ResearchInstitute of Fragrance Materials (RIFM) plays avital role. Its independent scientific panel oftoxicological, dermatological and environmentalexperts from academia and well-known institutesaround the world reviews and approves theproposed standards and initiates testing as needed.The input from the fragrance industry comes viathe Scientific Committee of IFRA, which iscomposed of product safety specialists from thelarge fragrance houses.This global product safety programme of the fragrance industry is well recognised and will continue asdescribed. The industry will benefit from these experiences to meet REACH demands. However,IFRA has some areas of concern for REACH such as:• the compatibility with the industry's selfregulationprogramme• its burdensome and bureaucratic nature• its high cost• the risk of loss of certain ingredients• the consequences of reformulating existingproducts• unnecessary restrictions for the perfumer’screativityIt will be an enormous task to fulfill the registrationof a large number of substances, which include many NCSs.56
REACH: A global perspectiveThe REACH RegulationThe Regulation is a “masterpiece” in itself ofwhich the content is a subject for specialists. Theacronym stands for “Registration, Evaluation,Authorization and restriction of Chemicals”.Registration of substances by industry is the firstpart of the REACH programme, which is followedby the evaluation of the registration dossiers by theEuropean Chemicals Agency (ECHA). If soindicated by the properties of the substances andthe nature of the use, risks for humans andenvironment will be controlled by a system ofauthorisations (permits) for companies to continuethat use. They will face an incentive to find saferalternatives and have to submit a substitution plan. The various Titles of REACH are listed to the left.REACH registration applies to so-called PHASE-IN substances. They are now produced or imported,placed on the EU-market and appear on EINECS (European Inventory of Existing ChemicalSubstances) or are manufactured by industry during the past 15 years as “isolated intermediates”. Theduty to register holds for legal entities of companies and their substances if the volume exceeds 1tonne per year (t/y).Because of the huge task for industry as well as for the authorities, the phasing in of REACHregistration of an estimated 30 000 substances is foreseen over a period of 11 years ending in 2018.The period for evaluation of the dossiers by ECHA and member states is expected to take until 2022.REACH registration of a substance by a company is not the end, but more the beginning of a processthat will continue into thefuture, because dossierswill have to be updated ifnew information onproperties is obtained or ifthe volume for which asubstance is registeredincreases and exceeds avolume band of its originalregistration. The phase-inscheme for registration isdivided into three phasesas presented here.The actual registration ofphase-in substances ispreceded by a system ofpre-registration. Theperiod for pre-registration57
is relatively short: 6 months, starting on June 1 stand ending December 1 st of 2008. Only companieswho pre-registered their substances can make useof the phase-in scheme for registration. Those wholet this opportunity pass and fail to pre-register,will not be allowed to continue to produce orimport their substances after December 1 st of 2008,unless the volume threshold stays below 1 t/y or thesubstance is registered straight away. Companiescan base their choices for pre-registration on theiranticipated business as it might develop during thephase-in period.New substances shall be registered according to REACH requirements as of June 1, 2008.The essentials for a REACH compliant registration dossier of a substance by a company are givenbelow. Besides the identity of the registrant it includes hazard information regarding physicochemical,toxicological and environmentalproperties, the identified uses and exposurescenarios for these uses and an assessment of therisks with measures to control those risks toacceptable levels.These aspects will have to be covered in theChemical Safety Report (CSR) of the dossier. Thesubstance properties and the safety controls for theidentified uses must be communicated todownstream users via the safety data sheet, whichis extended with an additional section for thispurpose.REACH addresses the wholechain of suppliers and users ofsubstances, which from cradleto grave of a substance caninvolve several steps. Forfragrance substances, includingthe NCSs, this starts with thechemical synthesis or isolationfrom the botanical source, thenproceeds to the use infragrance compounding andsubsequent application of thefragrance compound in theformulation of a consumer orindustrial product such ascleaners, cosmetics, air58
REACH: A global perspectivefresheners or other household or personal products. Articles such as fragranced candles are alsoincluded. It means that the downstream user and the consumer depend on the producer or importer ofthe substance as used in their products. If the producer or importer fails to register the substance fore.g. the use as a fragrance, their products cannot be applied in compliance with REACH unless thedownstream user notifies this with a comparable dossier to ECHA. They will not like to be botheredwith this task.There are some exceptions to these basic REACH rules:1. if the substance is below the threshold of 1 t/y per producer or importer2. if the downstream use is outside the scope of REACH, e.g. foods, animal feed andpharmaceuticalsA further simplification is provided in REACH, namelyfor substances which do not classify as hazardous. Iftheir use is within the scope of REACH, but theirproperties are such that they do not classify ashazardous a CSR is not needed in the registrationdossier. Cosmetic use and food packaging have also aspecific position, because their safety is well regulatedby existing vertical EU directives. Therefore, the CSRof substances applied in these end products do not haveto address the consumer safety aspects. However,environmental and worker safety have to be assessedalso for these applications as they are not covered bythese existing EU’s vertical legislations.EFFA REACH Road Map to Implement REACHEFFA developed a REACH programme for its membersand the fragrance supply chain, which is laid down in aROAD MAP with Time Table. The objective is:“to help accomplish a REACH compliant situation forthe fragrance industry, its suppliers and downstreamusers within the periods allowed for (pre-) registrationor any time sooner where feasible”.59
EFFA’s programme facilitates this objective, but companies remain responsible for the actualregistration.The main principles of the programme are that it:1. assures to meet the global fragranceindustry interests, i.e. via IFRA and otherregional associations2. is aligned with the REACH objectives ofcustomer organisations3. draws on industry expertise present inRIFM and companiesAs stakeholders in the fragrance supply chainEFFA’s REACH programme recognises the role ofEFEO, <strong>IFEAT</strong> and their members and others in thechemical industry as the source of fragrancesubstances and downstream users, which in the EUconcerns primarily the membership of COLIPAand AISE. Other main players in the REACHscheme are the EU agency, (ECHA) and the 27 EUmember states. Consumers and NGO’s willcritically follow how REACH will be implementedand adhered to and evaluate if all these efforts leadto safer products for them and the environment.For the execution of the REACH ROAD MapEFFA has set up an organization with a SteeringCommittee, chaired by its fragrance President, aREACH Task Force and several sub-TFs who owncertain parts of the programme. For thecoordination EFFA has expanded its staff with aprofessional REACH Manager, who is veryknowledgeable on REACH.60
REACH: A global perspectiveThe ROAD MAP has 14 sections, which addressthe various subjects that must be covered tocompile REACH compliant registration dossiers bycompanies. For the necessary activities of each ofthese subjects a timeline has been adopted to meetREACH deadlines.A communication programme to report progressand recommendations is an essential part of theprogramme. The membership is informed via aquarterly REACH Phase-in Bulletin and byREACH Information Newsletters, which coverspecific REACH topics. These documents areposted on www.effa.be and are freely available.Main accomplishments so far include those listedto the left, such as an inventory of the portfolio ofthe substances to be registered, which includesNCSs. Where possible the programme will providecommon generic tools for consortia to assessexposure, which will stimulate that a consistentapproach is practiced throughout the fragranceindustry.Companies will work in consortia for groups ofsubstances, which have structural similarities andtherefore are similar in their properties andbehaviour. REACH offers the feature for readacross. Grouping of substances is the key tooptimise the use of this approach. In this mannerfurther testing can be kept to a minimum. Byjoining forces in these Group Consortia industry’sexpertise is also pooled as much as possible.RIFM’s specialists and customer company expertscan and will contribute as well. The latter in thecapacity as associated members.61
Already EFFA has invited companies and themembership to a kick-off meeting of the firstconsortia for 7 chemical groups, which havesubstances in the first tier for registration(December 2010). These invitations triggered abroad response. At the start these groups ofcompanies are given a memorandum ofunderstanding for the pre-consortium phase and amodel agreement to form their actual consortium tocomplete the joint data set for the lead substancesdossiers. During the pre-consortium phase theyagree on a basic structure for tasks, responsibilitiesand cost sharing.The portfolio of fragrance substances coversaccording to the EFFA surveys for production andimport about 815 substances that exceed thevolume of 1 t/y per legal entity. It includes about150 NCSs. The substances have been groupedbased on structural similarities. These groups arecomposed of substances irrespective of theirREACH registration volume band. By doing so lowvolume substances will benefit from data existingfor their higher volume relatives and vice versa.The table below illustrates the effect of thisapproach. The fragrance industry has about 26substances for registration in the first tier(December 2010), which represent 18 chemicalgroups. These groups include in total some 190substances in the portfolio. A common, combinedevaluation of their data will lead to an effectiveREACH registration programme.62
REACH: A global perspectiveAs a result companies can be ready to register lower volume items much earlier during the phase-inperiod than the deadline allows. Therefore, it is expected that we will see registration for high and lowvolume items overlapping during the phase-in period.The first 7 chemical groups for which EFFA willstart consortia are presented to the left. They coverabout 70 individual substances, of which the highvolume substance of the group is listed.NCSs for Fragrances and REACHNCSs are very important ingredients for fragrances.They are in the scope for registration, because mostof them cannot benefit from the exemptions underAnnex IV and V due to the presence ofconstituents, which classify them as hazardous.Therefore and because of their specific natureEFFA has given special attention to them as aunique group of REACH substances for which atailored protocol for registration should bedeveloped. EFFA’s NCS Sub-TF has developedsuch a protocol with contributions from EFEO andCOLIPA experts.The aim of the protocol is to “present a scheme forthe REACH registration of the UVCBs ofbiological origin as used in fragrances” but canalso be applied for uses of NCSs other than infragrances.63
The protocol divides NCSs in two Types:• Type 1 “Well defined NCSs”, those whichare analytically characterised to a total of90 % or more• Type 2 “Incompletely defined NCSs”,those that are analytically characterised forless than 90 %.In the protocol the substances present in NCSs aredivided in “major” “(> 1 %) and “minor” (0.1 to1.0 %) constituents.For the safety evaluation of NCSs their data cancome from several sources:1. the NCS as such if obtained from a typicaland representative sample2. the main constituents by applying readacross,because many such constituents arealso substances used as such in fragrancesneeding data for their registration3. substances structurally related to the mainconstituents and by applying read-across.The read-across principle for the main constituentsis a very good option for the Type 1 NCSs. For theType 2 NCSs it can partly apply. The unidentifiedpart of the Type 2 NCS will have to be evaluated inother ways, e.g. by testing the NCS as such or viaanother reasoned and scientifically justifiedmethodology.The EFFA REACH programmeforesees the formation of consortiafor NCSs containing similar mainconstituents, e.g. a citrusconsortium, one for pine oils, onefor clove and one for mint, etc.These NCS consortia should liaisewith the EFFA consortia of thecorresponding fragrancesubstances, with whom they cannegotiate to obtain the relevantdata on the main constituents fortheir NCSs.64
REACH: A global perspectiveIn the case of Type 2 NCSs thefirst step may be to obtain moreanalytical data with the objectiveof moving the case to a Type 1situation that can avoid the need tofind funding for further testing.The timing is right to initiate now the first NCSconsortia for citrus, pine, cedarwood, caraway andnutmeg oils, which are likely in the first tier forregistration. Companies having to register theseNCSs are among the EFEO and EFFAmembership. Therefore, it is logical that bothassociations join forces and coordinate theirREACH programmes to support producers andimporters of these NCSs in the best possiblemanner.65
Dr. Hans van Bergen served for 20 years until 2005 in a Director position onProduct Safety & Chemical Regulations for fragrances, flavours and aromachemicals with IFF in Europe. Previously he worked for the Dutch Ministry for theEnvironment and for Dow Chemical in the area of ecology and occupationalhygiene. By education and training he holds a Ph.D. in organic chemistry fromGroningen University, did a post-doctorate at the Ohio State University (USA) andis registered as EUROTOX toxicologist. In 2006 he started his consultancy Para-Celsus Concept with expert services on Product Safety and the EU’s REACH Regulation for theproduction, import and use of substances. Recently he has been instrumental in developing theREACH program for EFFA, the European Flavour & Fragrance Association and is also involved withthe approach to the REACH registration of natural complex substances (NCSs)66
Developments in the Essential Oils Industries of Centraland Eastern Europe and the Balkans67
The <strong>IFEAT</strong> Medal Lecture <strong>2007</strong>ESSENTIAL OIL PRODUCTION IN HUNGARY: SURVIVAL OF TECHNIQUESUNDER DIFFERENT POLITICAL AND ECONOMIC CONDITIONSProfessor Jen! BernáthCorvinus University of <strong>Budapest</strong>Department of Medicinal and Aromatic Plants,1118 <strong>Budapest</strong>, Villányi str. 29/43. Hungaryjeno.bernath@uni-corvinus.huTHE PROCESS OF AFFILIATION OF HUNGARY AND OTHER EAST EUROPEANCOUNTRIES TO THE EUROPEAN UNIONCo-operation between European countries started in 1950, when the European Coal and SteelCommunity began to unite European countries economically and politically in order to secure lastingpeace. The 1950s were dominated by a cold war between east and west. The unification process wasaccelerated at that time by the Hungarian Revolution. In 1956 Soviet tanks put down the protests inHungary against the Communist regime. This event gave impetus to the unification process and in1957, the Treaty of Rome created the European Economic Community (EEC) or ‘Common Market’.In the second phase of the unification process, between 1960 and 1969 – which can be characterizedby intensive economic growth – Hungary hardly played any role in European evolution. At that time,the economy of Hungary suffered from many contradictions of the socialist system and the intellectuallife of the people was darkened by the iron curtain.Between 1970 and 1979 Denmark, Ireland and the United Kingdom joined the European Union,raising the number of member states to nine. The European Parliament increased its influence in EUaffairs and in 1979 all citizens could elect, for the first time their members directly. During this period,Hungary started to play a leading role in building up closer economic relations with individualcountries of the EU. Some other members of the Soviet Block watched it with great fear. However,they could not interfere and this action contributed to the further decomposition of the socialist system.The period 1980-1989 can be characterized by the rapid development of the EU, as well as by the fallof the Berlin Wall. In 1981, Greece became the 10 th member of the EU and Spain and Portugalfollowed five years later. In Hungary and in some other socialist countries the “peaceful” revolutionwent on.With the collapse of communism between 1990 and 1999 across central Europe, Europeans becamecloser neighbours. In 1993 the Single Market was completed with the ‘four freedoms’ of movement ofgoods, services, people and money. In 1995 the EU gained three more new members, Austria, Finlandand Sweden. In this period the privatization process accelerated in Hungary, in which many German,French, Austrian, British, Italian firms and representatives of many other EU countries were involved.The first years of 21 st century can be characterized by the further EU expansion. 10 new countries,including Hungary, joined the EU in 2004. Romania and Bulgaria became members in <strong>2007</strong>. By this68
<strong>IFEAT</strong> Medal Lecture: Hungary’s essential oils industryaction new possibilities were offered to Hungary after the economic and intellectual blackout of thesocialist era.Hungary’s Importance in the Unification processHungary played an initiating role in the European unification processes. The Hungarian Revolution in1956 proved that the Soviet system was rather dangerous and that the European co-operation processmust be accelerated. Since then Hungary has always been at the forefront of political and economicnegotiations and initiatives relating to co-operation between western and eastern parts of Europe. Itwas highly regarded by U.K. Prime Minister Margaret Thatcher at the time of her visit in Hungary in1988, saying:“None of us will forget that Hungary was right at the forefront of change in Eastern Europe. The firstto undertake economic reforms. The first to allow freedom of travel to the West. The first to tear downits border fences.”U.K. Prime Minister Margaret ThatcherHUNGARY AS A FULL MEMBER OF EUHungary, which is a full member of the EU, is located in the heart of Europe, surrounded by Austria,Slovakia, Ukraine, Romania, Serbia, Croatia and Slovenia (Fig.1). The population is 10 millionpeople, of which 20% live in the capital, <strong>Budapest</strong>. Since World War I a large number of Hungarians(more than 4 million people!) have been living in surrounding countries. This has resulted in thedevelopment of special, ethnic-based trading links with neighbouring countries, which are used also inthe essential oils sector.Figure 1 Unified Europe (<strong>2007</strong>)69
In 2004 Hungary’s GDP per capita was around 14,000 US$ (~60% of the EU average), and the growthrate is around 2-4%. EU membership has given additional stability to our economy.Before 1990 Hungary was considered an agricultural country, with wheat and corn as the main crops.However, in the past decade a large amount of foreign investment arrived in the country andcontributed to the success of industrial development. Hungary has attracted the largest foreigninvestment per capita in the region in the last 15 years. At the beginning this was due mostly to therelatively cheap and skilled manpower, as well as the advanced banking system, and a stable economicand political environment. In the last few years this trend changed, probably due to increasing labourcosts, as some large multinational companies moved their operations to cheaper developing countries,usually outside the region. On the other hand, new investments of higher value added products havearrived; though we lost some big deals to Slovakia recently, mostly in the automobile industry.RECENT CHANGES IN THE ESSENTIAL OIL SECTORS OF EUROPEAN COUNTRIESLIBERATED FROM SOCIALIST RULEThe changes in exports and imports of essential oils, perfume and flavour materials in Europeancountries liberated from socialist rule are shown in Fig. 2. According to total export data for the firstfive years of the 21st century, the export activity of these countries doubled. In spite of the enormousincrease of national production the actual demand of former socialist countries for essential oils,perfume and flavour materials are satisfied mainly from import sources.In particular the export values of Slovenia, Poland, Hungary and Bulgaria are considerable (Table 1).The export activities of these countries accelerated through the intensification of local production aswell as by the opening up of the large European market. It is an interesting fact, that the export valuesof these four countries exceed the output of the Russian Federation and the Ukraine, which aretraditional essential oil producing countries. However, the import values are, in all cases about 8-9times higher compared to export ones. It does mean that the former socialist countries, withoutexemption, require large amounts of foreign resources. The largest importers are EU members namelyPoland, Czech Republic, Hungary and Romania. Interestingly the import activity of the RussianFederation is similar to Poland and only about twice as high as Hungary.Figure 2: Changes in the Total Export and Import Values of Essential Oils, Perfume and FlavourMaterials of European Countries Liberated from Socialist RuleValue in US '00090000080000070000060000050000040000030000020000010000002001 2002 2003 2004 2005Import valueExport value70
<strong>IFEAT</strong> Medal Lecture: Hungary’s essential oils industryTable 1 Export and Import Data of Essential Oils, Perfume and Flavour Materials by EasternEuropean Countries 2001 to 2005Country 2001Value US$’0002002Value US$’0002003Value US$’0002004Value US$’0002005Value US$’000ExportSlovenia 15,104 18,501 26,665 31,230 35,771Poland 7,668 7,833 11,543 16,435 24,013Hungary 4,986 6,601 8,188 11,747 10,622Bulgaria 4,490 7,843 9,329 14,667 16,472Czech Rep. 2,758 3,416 5,327 2,706 3,860Croatia 1,881 1,468 1,665 2,076 2,104Lithuania 1,249 1,244 2,645 1,547 2,900Romania 1,121 9,296 1,526 1,820 2,093Latvia 941 778 1,022 1,265 1,415Slovakia 298 590 879 385 434Estonia 108 197 1,314 349 291ImportPoland 101,657 132,709 163,139 224,354 212,054Czech Rep. 68,556 85,931 91,853 93,572 98,656Hungary 42,807 53,455 66,236 70,579 57,826Romania 34,444 42,608 60,872 81,618 86,436Bulgaria 29,640 27,178 31,062 31,833 29,487Croatia 22,840 22,325 29,701 32,411 33,105Slovakia 16,203 17,606 20,377 20,905 13,812Slovenia 11,490 13,053 14,534 14,200 15,879Lithuania 6,039 7,263 10,685 8,844 8,710Estonia 5,642 6,788 10,879 7,307 6,103Latvia 3,635 3,900 4,576 5,634 5,130START, SURVIVAL AND DEVELOPMENT OF THE HUNGARIAN ESSENTIAL OILSSECTOR - CO-OPERATION BETWEEN PRACTICE AND SCIENCEBeginnings - Before World War IIMedicinal and aromatic plants, especially for domestic consumption were produced on Hungarianterritories for many centuries. However, until the end of 19 th century the cultivation of medicinal andaromatic plants was carried out on a "garden" scale, on a limited area. The intensification ofproduction only started in the first years of the 20 th century, when the processing of the raw plantincluding oil distillation began as well. At the beginning the raw material (camomile, juniper etc.) wasgathered from the wild by hand collection (Fig. 3). That was a time when Hungarian camomile,because of the large exports to Germany (which was the trading centre for European herbal products atthe time) was given the nickname “German camomile”.71
Figure 3: At the Beginning of the Development of theHungarian Medicinal and Aromatic Plant Sector theRaw Material (Camomile) was Gathered from the Wildby Hand CollectionThe shortage of medicines, teas and spices during the First World War drew much more attention tothe production and utilization of medicinal and aromatic plants. As a result the first research station inthe world specialising in medicinal and aromatic plants was established in Hungary in 1915. The mainactivity of the station was orientated to the control of medicinal plant production coming mainly fromwild and from limited cultivation. Today the Institute continues to exist in Budakalász. It is aninteresting fact that in 1988 Prime Minister Margaret Thatcher paid a visit to the Institute motivated byher chemical interests.The story of the Hungarian essential oils industry began in 1923, when the famous Schimmel & Co.AG of Miltitz, Germany established a subsidiary in <strong>Budapest</strong>, offering a full range of aromaticproducts: liqueur and rum essences, essential oils, flower oils, perfume compounds, aroma chemicals.The company had a very strong position in supplying local users.In the early 1920s Dr. Jules Bittera (a good friend of E. Guenther, the famous author of the 6-volumestudy on essential oils) introduced several new selected crops from abroad, such as lavender (fromFrance), peppermint Mitcham (from England), caraway (from Holland), etc. He worked very hard oncontinuous crop selection to increase yields and qualities. As a result, production levels grow year byyear. All products were exported and praised (as you can read in Guenther’s books) for their very highquality. Figure 4 shows the production figures for the main crops in 1941. However, at that time wildgrowing plants were used for processing as well (juniper berry oil and oak moss extract).9000800070006000500040003000200010000Peppermint Dillweed LavenderFigure 4:Main Cropsin 1941(tonnes)The Period of Communist Rule 1945-1990After World War II the Russians came and stayed in the country for 45 years. Both their arrival andtheir departure provided a shock to our industry – even if the latter was a little lighter. In 194572
<strong>IFEAT</strong> Medal Lecture: Hungary’s essential oils industrySchimmel and the distilleries of Dr. Bittera were nationalised (becoming state owned, as with allprivate companies in the country). Everything was centralised: fragrance, flavour, essential oilmanufacturing, and aroma chemical production. The only trading company entitled to export essentialoils was Medimpex.However, from the early 1960s the political leaders recognised the economic importance of essentialoils, fragrances and flavours in obtaining hard currency. The state started to subsidise essential oilproduction for export, as western markets demanded them. As a result, many cooperatives throughoutthe country were encouraged to grow aromatic herbs and build distilleries.Between 1967 and 1990 the cooperatives were in their glory. The cultivated area for medicinal andaromatic plants increased to 37,000 - 42,000 ha. The total drug mass reached the 35,000-40,000tonnes yearly, from which 25,000-30,000 tonnes came from cultivation. In 1967, 7 distillers wereoperated by the government enterprise KHV (<strong>Budapest</strong>, Kapuvár, Papkeszi, Paks, Miske, Mohács,Balatonfenyves), another 7 operated by cooperatives (Páty, Újfehértó, Enying, Öreglak,Daránypuszta, Székkutas, Tihany).The large-scale production was based on intensive research activity. This was the time when manynew cultivars were created, methods for large-scale application of pesticides were worked out and boththe production and post harvest processing had been mechanised. These large-scale cultivationtechnology methods were outstanding and admired worldwide. However, in the course of theircreation the economic and labour saving aspects were not considered much. The most important thingwas to fulfil the quantity quota contained in the national plan.The main crops cultivated in the co-operatives during the communist era were caraway, blue androman chamomile, fennel, lavender and angelica.There were many political and economic contradictions under communist rule, which manifestedthemselves in abrupt changes in oil production (Fig.5). There was a fall in essential oils productionbetween 1945 and 1954. Production was practically zero by 1954 at only 1.9 tonnes. From 1954 until1967 (only 13 years) the area under cultivation grew from 250 ha to 2,000 ha – an 8-fold increase!Production grew from 1.9 tonnes to 41.1 tonnes - a more than 20-fold increase! In 1977 the systemchanged slightly with one of the cooperatives (Szilasmenti) taking over the majority of the business.The distillation units of several cooperatives were delivered to Kerepes, creating a huge concentratedcapacity there. However, the change was smooth; production in the late 1970s decreased slightly andoil production stabilised around 30-35 tonnes.Major export markets during communist era were heavily European (mostly French and German)oriented. More than 70% of total exports went to these two countries.Transition Period 1990-94The Hungarian people had the first free election in 1990. Everyone was happy, the Russians left, andthe Hungarian people felt freedom and unlimited possibilities. However, the situation was not that rosyfor the economy. Our new conservative government tried to find solutions, but unfortunately, theiractions have not always been the best ones for the essential oils industry. All subsidies were cutimmediately causing losses at the cooperatives. Land privatisation was initiated for political reasons.The cooperatives had the equipment and machines for successful cultivation of essential oil crops butwere left without land. Finally the cooperatives growing aromatic herbs disintegrated, the distillationunits were sold, and generally everything was chaotic for the 4 years between 1994-97. This is73
demonstrated by the export figures for oil (Fig.6). The peak was 1990, and then there was a deep falluntil 1993 (the year of privatisation of Szilasmenti) followed by a quick recovery. By 1997 exportshad returned to 1990 levels.Figure 5: Effect of Political and Economic Contradictions Under Communist Rule -Manifestedin Abrupt Changes in Oil ProductionProsperity of co-operativesEssential oilproduction(tonnes)4540353025201510501941 1954 1967 1980Figure 6: Hungarian Essential Oil Export Data 1984 - 1997.2500Oil export in USD20001500100050001984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997Years of Market Economy 1994-<strong>2007</strong>An interesting characteristic of the Hungarian essential oils industry is that a few companies havedominated it. In the communist era it was Kompozícó, KHV and Szilasmenti, and today it is Silvestris& Szilas, as a result of the continuous economic transformation between 1994 and <strong>2007</strong>. Currentlymore than 80 % of total Hungarian exports are coming again from one company. This is quitefascinating as Hungary apparently is following the good old Soviet system in the market economy,74
<strong>IFEAT</strong> Medal Lecture: Hungary’s essential oils industrytoo: one industry - one dominant company! The majority of the remaining 20% is mostly re-exportsfrom the new states of the former Soviet Union and is based on the traditional links between theformer Eastern Bloc countries.The concentration of the distillery system is even higher than in the old regime: 95% of the capacity isoperated by Silvestris (Fig.7). By far the largest distillery is Kerepes (122 m 3 total capacity) followedby Nyiracsad (18 m 3 ), another Silvestris operation. There are only two other small distilleries, run bylocal farmers: Szekkutas (5 m 3 ) and Öreglak (2 m 3 ). If we compare the distilleries from 1967 and2002, it is obvious, that the number of production sites decreased by 70%, while capacity decreasedonly by 20%.The export share of oils changed in this period a great deal, too. In contrast to the 1970s, data for 2000show the USA with the largest share (26%), followed by France (17%) and Germany (11%).Figure 7: Changes in the Number of Hungarian Distilleries Between 1941 and 2006.1941 19411 Deáki Deáki2 Dömsöd Dömsöd3 Kalocsa Kalocsa4 Tihany Tihany5 Zalavár Zalavár20061 Kerepes2 Nyiracsád3 Öreglak4 Székkutas51415133116431029827311241421967 196711 Balatonfenyves22 <strong>Budapest</strong> <strong>Budapest</strong>33 Daránypuszta Daránypuszta44 Enying Enying55 Kapuvár Kapuvár66 Mohács Mohács77 Miske Miske88 Paks Paks99 Papkeszi Papkeszi10 10 Páty Páty11 11 Öreglak Öreglak12 12 Székkutas Székkutas13 13 Tihany Tihany14 14 Újfehértó ÚjfehértóNEW CHALLENGES FOR INCREASED PRODUCTIVITY AND IMPROVED ECONOMIESOF THE SECTORNew challenges for increasing the productivity of the essential oils sector are as follows:• To improve the biological background of the production systems - selection of new cultivarsof high quality and productivity,• To stabilise crop yield and to obtain higher quality raw material to conform to EUrequirements,• To modernise distillation and isolation systems, introduction of new methods.New Selection ProjectsHungarian scientists achieved outstanding results in the selection of higher yielding essential oilsspecies. This line of research was generated by the increasing demand for stable and higher qualityraw materials for distillation. At present, 31 cultivars are registered by the Hungarian authorities,detailed in Fig. 8.75
To improve the plant material used for oil production is one of the most important items of scientificactivity. A higher oil level increases the economics of the production procedure, while oil qualityimprovements result in better specific products, which can be sold on the world market at a higherprice. In Hungary rather active selection work is going on to improve about 10-15 species includingoregano, yarrow and camomile.Figure 8: The Actual Spectrum of Cultivars: 19 species – 31 cultivarsCommonnameCarawayCorianderName of cultivar Year Essential oilcontentHollandi 1959 5 - 6 %Maud1990 4 - 6.5%SZK11987 2 - 3.5%Csillag1978 1.3 - 1.5%Lucs1978 1 - 1.2%Main constituents of the oil50-60 % carvacrol50-60 % carvacrol, 42% limonene50-60 % carvacrol80 – 82% lin alool65 – 70% lin aloolDill Budakalászi 1959 0.8 - 1.6% 25 – 35% d-carvoneAngelica Budakalászi 1959 r.:0.5 - 1.0%l.:0.23 - 0.4%Tarragon Zöldzamat 1976 1.8 - 2.6% 40% methyl-chavicolFennelBudakalászi 1959 4.0 - 6.0%Fönicia1998 3.0-5.0%Soroksári 1990 6.0 - 7.0%Foenipharm 2003* 5.0 - 7.0%alpha and betha-pinene, phellandrene,mircene, limonene60% anetole, 20% fencone60% anethole, 20% fenchone65% anethole, 15% fenchone65% anethole, 15% fenchoneHyssop Kékvirágú 1959 0.5 - 1.0% 50% phinochamp heneLavender Budakalászi 80 1974 0.6 - 0.8% 50 – 55% linal yl-acetateLovage Budakalászi 1959 r.:0.5 - 1.0%l.:0.1 - 0.3%phtalids, eugenol, carvacrol,sesquiterpenesCamomile BudakalásziSoroksári 40197019700.7 - 1.0%0.7 – 1.4%18% azulene16 – 20% azuleneBalm Ildiko 1998 0.3 – 0.5% citral, citronellal, geraniolPeppermint MexianMitcham199719591.5 – 6.0%1.5 – 6.0%40 – 60% menthol40 – 60% mentholBasilAlykoEugéniaKeskenylevel1998199819590.5%1.6%1.5%18 – 27% geraniole4.0 – 6.0% eugenol50 – 55% methyl-chavicoleMarjoram FranciaMagyar195920000.7 – 1.0%1.0 – 1.6%terpene-4-ol, gamma-terpineneterpene-4-ol, gamma-terpineneAnise Budakalászi 1978 3.5 – 4.0% 80 – 90% anetholeRosemary Harmat 1990 1.8 – 2.0% 15 – 35% 1.8-cineole, camphorClaryAkaliSclareola195919970.1%0.3 – 0.35%45 – 87% linal yl-acetate, 15% sclareole60 – 80% linal yl-acetate, 18% sclareoleSavory Budakalászi 1959 1.3% 30 – 40% carvacrol, 25% cimoleW. savory Bokroska 1999 1.8% 60 – 70% carvacrol, 10% cimoleIn the case of oregano about 40 plant population of gene bank origin were tested for high oil content inopen field random experiments. As a result of selection 5 lines were separated with about 5-7 % oilyield levels and more than 80% carvone content.To create a yarrow cultivar of high productivity, with about 50-70% azulene content 300 naturalHungarian populations were sampled and analysed by us. The morphological and chemicalcharacteristics of the populations were measured in open field experiments. The best lines wereselected and were given to the middle-scale cultivation test.76
<strong>IFEAT</strong> Medal Lecture: Hungary’s essential oils industryBoth the dried flower and the oil of chamomile are traditional Hungarian products, known asworldwide as ‘hungaricum’. We have one diploid (‘Soroksári 40’) and one tetraploid (‘Budakalászi-BK’) cultivar in the practice. These cultivars are well known by foreign research groups and are usedby them in breeding work. With the objective of broadening the cultivar spectrum of the species, thechemical diversity of Hungarian wild growing populations was tested. Plant individuals of about 150wild population collected from the Great Plain of Hungary were planted into an open field randomexperiment. After the morpo-phenological and chemical analysis three different chemotypes wereseparated: a) chamazulene, b) bisabolol-oxid I and c) alpha-bisabolol types.Modernization of Cultivation Systems to Conform to EU Requirements (GAP) to Obtain HigherQuality Raw Materials and Cost Saving at the Same TimeModernization of cultivation systems is necessary both economic reasons and to meet EU regulationaspects. Yarrow is a good example of the introduction of a new species into the culture. The plant wascollected from traditional indigenous places. However, the wild growing populations show extremelylarge chemical diversity. By cultivation both the yield and the quality of the raw material can beimproved.Hungarian scientists initiated the introduction of chamomile into the culture in the 1960s. However,the collection of wild growing chamomile was rather common in Hungary and exists even nowadays,the requirement for stable and high quality raw material enforced its introduction. Hungariantechnology was reproduced afterwards in many other countries including Slovakia, Serbia andArgentina. The technology is rather effective and makes possible large-scale production. The actualcultivation is organized according to the principles of Good Agricultural Practice (GAP).Cultivation of fennel, caraway and hyssop is undertaken in Hungary on about 2,000-2,500 hectares,based on principles of GAP (Fig 9). Cultivation of lovage, savory and roman camomile is undertakenon about 500 hectares, also based on GAP principles (Fig.10).Figure 9: Large-Scale Cultivation of FennelOrganized According to the Principles of GoodAgricultural Practice (GAP) in Szarvasgede atNorth Region of Hungary (<strong>2007</strong>)77
Figure 10: Large-Scale Cultivation ofCamomile Organized According to thePrinciples of Good Agricultural Practice(GAP) in Szarvasgede at North Region ofHungary (<strong>2007</strong>)Modernization of the Processing System, Introduction of New Methods (SFE)The demand for high quality oils and specific products is increasing all over the world. It must bebased on the development of analytical tools, as well as the introduction of new extractiontechnologies. Hungarian scientists are working on the development and application of SFE(Supercritical Fluid Extraction) technologies for making a new spectrum of products.The decrease and large fluctuations of essential oil prices are major challenges for the producers. Thespecial Hungarian problem is that our local currency (forint) has strengthened by more than 50% in thelast few years. This creates quite a challenge as more than 90% of Hungarian essential oils productionis exported. We have to compensate with increased productivity and cost reduction, etc. which is notan easy job. Science should assist the industry by developing efficient technologies and loweringlabour costs. Higher levels of automation should be introduced in both agriculture and distillationsites.Further Challenges for Industry and ScienceScience should be the partner of essential oil producers in developing up-to-date organic productionsystems, which are growing rapidly in our country. Using these environmental saving methods specialoils can be produced which can achieve a higher world market price.In Hungary we have a local problem: some “clever” clerk in the Environmental Ministry put a phraseinto our law on hazardous products a few years ago: “all waste material from aromatic herbprocessing has to be considered as hazardous material unless otherwise proven” - by some veryexpensive tests. Now all exhausted camomile, dill, caraway, etc., which previously were consideredvaluable by-products (as natural fertilisers), are a target for our local agencies. Science should helpindustry in finding economic forms of utilisation for these “dangerous” wastes.It is not an easy task to persuade farmers to grow an unknown aromatic herb with unknowntechnology. They always compare the profitability of different crops. Unless they see a large potentialmargin, they stay with their well-known crops: wheat, corn, etc. Also those who are already growingaromatic herbs quit rather quickly when the crop fails. They do not plan for the long term. If we wantstability we have to put some control on raw material supplies.78
<strong>IFEAT</strong> Medal Lecture: Hungary’s essential oils industryJen! Bernáth graduated from the University of Agriculture, Gödöll! in 1966. From1967to 1992 he was employed by the Research Institute for Medicinal Plants(Budakalász, Hungary), initially as a research worker and in 1979 was promoted toscientific director in 1979. In 1989 he became honorary professor of University ofSzeged and in 1992 the full professor of University of Horticulture and FoodIndustry, Department of Medicinal and Aromatic Plants (<strong>Budapest</strong>). In 1985 on thebasis of his scientific activity he was awarded a Doctorate by the HungarianAcademy of Sciences.He has published 73 books and book-chapters, 278 scientific articles and delivered about 150lectures. Between 1974 and 2003 he was editor of the international journal of Herba Hungarica andActa Horticulturae and the editor of Newsletter of Medicinal and Aromatic Plants (supported by FAOand ISHS). He was invited to be the member of editorial board of Journal of Spices, Herbs andMedicinal Plants (USA). He has contributed to the creation of 17 new plant cultivars, two of themregistered in Germany. Between 1974 and 2003 he took positions in presidency of medicinal plantworking groups of FIP, became the member of the presidency of International Council of Medicinaland Aromatic Plants and Medicinal Plant Section of ISHS.79
ALBANIA’S MEDICINAL AND AROMATIC PLANT INDUSTRY:READY TO MEET INTERNATIONAL DEMANDElvira BazinaU.S. Agency for International Development funded Enterprise Development and Export MarketServices (EDEM) project, Rr. “Ismail Qemali” Pall.Fratari, Tirana, Albaniaelvira_bazina@dai.comandTHE COUNTRYXhevit HysenajEssences Producers and Cultivators Association (EPCA)Rr. “A.S. Kruja”, Nr. 38, Tirana, Albaniaxherdo@yahoo.comAlbania is situated in the southeast region of Europe, on the Balkan Peninsula, along the Adriatic andthe Ionian Seas. The country’s population is 3,135,000. Its largest city is the capital, Tirana.The climate is mild and temperate, with cool, cloudy, wet winters - and hot, clear, dry summers. Theinterior is cooler and wetter than the coast. The terrain is mostly mountainous and hilly with smallplains along the coast. Thirty-eight percent of the land is forest and woodlands, 21% is arable land,15% is permanent pastures, and the remainder is planted to permanent crops.80
Albania’s medicinal and aromatic plant industryOVERVIEW OF THE ALBANIAN HERB AND SPICE INDUSTRYAlbania has been endowed by nature with a vast and unique diversity of medicinal and aromatic plants(MAPs), 98% of which are grown in - and collected from - the wild. This industry supports about50,000 rural families all over the country, and historically the collection of MAPs has been a primarysource of income for thousands of rural families living in remote areas of Albania.In 1960, Albania started production of value-added essential oils on a relatively small scale. However,traditionally, MAPs are exported in a dried bulk form, with no or little value added.The overall herb and spice industry underwent significant changes after the collapse of the communistregime in 1990, resulting in deregulation of state-controlled commerce and a weakening of the quotacontrolledharvesting structure.There was a decline in both the value and volume of herb and spice exports after 1990 due to thetransition to a free market economy. However, businesses adjusted to the new market structure andsignificant increases in exports (values and volumes) have occurred since 2000. According to theAlbanian Customs Office, there was an increase of 8% in export values in 2005 as compared to 2004 -and about 4% in 2006 as compared to 2005 (the lower percentage increase is a reflection of theexchange rate and not the overall growth of export volumes).The industry is now re-structured and the value chain is shown below:Today Albanian herbs and spices areexported in several forms includingdried, essential oils (in bulk drums andconsumer-sized bottles), fresh herbs andaromatic sachets. Domestically, theproducts are sold as packaged products(teas and spices).Packaged teasEssential oil in drumfor bulk export813
PRODUCTION OF ESSENTIAL OILSCurrently annual production of essential oils is estimated to be between 35 and 40 tonnes. Steamdistillation remains the major extraction method.The major essential oils produced are sage (representing 50% of the total export volume), juniper(black and red), myrtle, oregano, thyme, lavender, pine, fir and savory oil.Albanian red juniperAlbanian black juniperThe following map depicts where herbs are collected and where essential oils are produced.Production and collection takes place throughout the country; extraction occurs in the areasrepresented by the red spots.Uniquely High Quality Chemical CompositionAlbanian essential oils are very rich in key natural compounds such as thujone, pinene, camphor,borneol, cineole, flavonoids, terpenes and acids. These essential oils are extracted from plants thatgrow in the wild, are organically certified, have high yields and are rich in key natural compounds.82
Albania’s medicinal and aromatic plant industryThe following tables illustrate the chemical composition patterns of three major essential oilsproduced in Albania: sage, juniper and oregano.Albanian Essential OilsSAGE Oil Chemical CompositionPatternJUNIPER Oil Chemical CompositionPatternNo Compound Content (%) No Compound Content (%)1 ! – thujone 20-42 1 ! – pinene 17 – 382 ß – thujone 3 – 8 2 ß – pinene 2.5 – 143 Camphor 14.08 3 Myrcene 19 – 274 ß – caryophyllene 6.33 4 Sabinen 1.7 – 55 1.8 – cineole 4.90 5 Limonene 2 - 3.76 Camphene 3.86 6 Linalool 1.5 - 1.77 ! – pinene 2,51 7 ß – caryophellene 1 – 28 ß – pinene 1.48 8 Citronelal 1.449 ! – humulene 2.02 9 Myrtenal 1.810 Borneol 1.36 10 Cadinen 1.811 Myrcene 1.15 11 Terpinyl acetate 0.2 -1.812 Borneyl acetate 1.09 12 Bornyl acetate 0.4 - 1.513 Sabinene hydrate 0.90 13 ! – humulene 0.3 - 1.514 Terpinen - 4- ol 0.37 14 p –cymen 0.6 – 215 ! – thujene 0.37 15 Germacren - D 0.1 – 2.3416 ! – terpinene 0.32 16 ! – thujene 0.35 – 1.4217 Limonene 0.3418 P – cymene 0.20The sage oil composition pattern shows thatthe Albanian oil is highly rich in thujone andcamphor.OREGANO Oil Chemical CompositionPatternNo Compound Content (%)1 Thymol 2.4 – 282 Carvacrol 40 – 713 P- cymene 4.8 – 114 " - terpinene 3.3 – 7.25 Limonene 0.1 – 1.76 Myrcene 0.16 – 1.457 ! – pinene 0.6 – 1.78 ß – pinene 0.4 – 4.29 Camphene 0.32 – 2.710 ß – bisabolene 1 – 2.111 Terpinen -4- ol 0.3 – 1.8512 ß – caryophillene 0.1 – 1.213 ! – terpineol 0.2 -1.914 Linalool 0.16 – 0.8515 ! – terpinene 0.14 – 0.9316 ß – ocymene 0.2 – 0.7117 ! – felladrene 0.04 – 0.6Albanian oregano oil is rich in carvacrol and thymol- very important and sought-after compounds fororegano in world markets.Juniper harvested in Albania is uniquely highin !-pinene and myrcene.835
ALBANIAN TRADE ASSOCIATION – ADDING VALUE, CONSTANTLY UPGRADING,AND ENSURING SUSTAINABILITY OF THE INDUSTRYThe leading Albanian essential oils producers have established a trade association called the EssencesProducers and Cultivators Association (EPCA). The association’s members (approximately 110)represent oil producers, cultivators, collectors and exporters.Members of EPCA produce and supply value added products, such as organically certified products,for the EU and US markets. Organic products are increasing from year to year. There were only 3organic products in 2006, and there are 8 in <strong>2007</strong>. Price premiums received range from 5-10% andover 40 Albanian products are organically certified (fresh, dried and essential oils).EPCA members focus on business development and technology updates, investing in technologyimprovements and mini-laboratories in order to enhance quality control capacity and diversification ofthe range of products supplied.EPCA members are extremely sensitive towards the sustainable harvesting of natural herb and spiceresources. One important method is encouraging thecultivation of organic raw materials. Some cultivationhas already started on a small scale, and this year’sextreme droughts and fires make it even more imperativefor the industry to identify alternatives that will helpAlbanian exporters fulfill the contracts with internationalbuyers.EPCA collaborates with Albanian producers to promotethe application of environmentally friendly harvestingpractices and the conservation of biodiversity.Cultivation of medicinal andaromatic plantsTo further the relationships between the Albanian suppliersand international buyers, the industry is expanding itsinternational contacts through regular participation in tradefairs and membership of international associations formedicinal and aromatic plants (e.g. AMAPSEEC, <strong>IFEAT</strong> andIFOAM) and EPCA members have been part of regional andinternational activities helping them enhance knowledge onthe recent trends and developments of the industry worldwide.Wild harvesting of myrtleIn <strong>2007</strong>, for the first time, Albania exhibited at the Biofachorganic trade fair in Nuremberg, Germany.Albanian businesses atBioFach / GERMANY84
Albania’s medicinal and aromatic plant industrySupport from the U.S. Agency for International Development (USAID)EPCA is supported by the USAID-funded Enterprise Development and Export Market Servicesproject (EDEM). The project aims to increase the industry’s competitiveness capacity by focusing ontechnology, production and marketing; promotion of the industry at various levels; and associationcapacity building in particular.CONCLUSIONSAlbania has become a reliable supplier of pure natural essential oils.With improvements in the business climate and infrastructure in Albania, relationships between localsuppliers and exporters - and between Albanian exporters and international buyers are rapidlyprogressing.The Albanian industry today is in the position to supply about 30 different kinds of high qualitynatural essential oils, increase export volumes from the current 40 tonnes to 100 tonnes of productiona year, offer value added products such as organic oils, and implement GMP standards and qualityassurance systems. Currently, the major export markets are the European Union, with 75%; and theUnited States, with 25%.Cultivated sage (in the foreground) and hillsides with wild herbs (in the background)857
Ms. Elvira Bazina received a B.Sc. degree from the Agricultural Faculty of theUniversity of Tirana in 1994 and a M.Sc. degree in Biotechnology from theMediterranean Agronomic Institute of Chania, Crete, Greece in 2000. Ms. Bazinahas worked for over 15 years as a contractor to the US Agency for InternationalDevelopment in Albania. For the last decade she has focused on providingtechnical assistance to the Albanian herb and spice industry.Mr. Xhevit Hysenaj received his B.Sc. degree in Economics from the University ofTirana in 1986. He entered the herb and spice industry in 1993, when he foundedthe Xherdo Company in Tirana, Albania. He has developed this company tobecome Albania’s leading producer and exporter of essential oils. Mr. Hysenaj isthe Chairman of the Essences Producers and Cultivators Association of Albania,and a member of several international organizations including <strong>IFEAT</strong>, IFOAMand AMAPSEEC.86
RECENT DEVELOPMENTS IN THE BULGARIAN ESSENTIAL OILS INDUSTRYJuliana K. OgnyanovaBulattars Ltd, 23A Shipchenski prohod, 1111 Sofia, Bulgariabulattar@techno-link.comAngel N. KonakchievInstitute of Organic Chemistry with Centre of Phytochemistry, Bulgarian Academy of Sciences1113 Sofia, Bulgariaangel@orgchm.bas.comBulgaria has been long established and world recognised as a major producer and global supplier ofhigh quality natural essential oils, and in first place for the valuable and famous Bulgarian rose oil, aswell as a source of other essential oils such as lavender, dill, pine, clary sage, basil, zdravetz, milfoil(yarrow) oil and many others. Besides its historically long positive tradition, Bulgaria’s essential oilsindustry has gone through much turmoil, during different periods of its development. One of thegreatest challenges was the transition from a central planned economy towards a market oriented one.Finally the transition period is over for Bulgaria. We have put in a lot of effort to overcome theobstacles on the road toward integration with the big European family and finally on January 1 st <strong>2007</strong>my country, together with Rumania became a regular member of the EU.In this presentation, to the best of my knowledge, I will follow the changes of the last 5 years,outlining present conditions and providing some information on the main essential oils produced inBulgaria. Also reviewed will be the present structure of producing and exporting companies and sometrends in the essential oils industry.GENERAL BACKGROUND ON BULGARIABulgaria is situated in south-east Europe in the centre of the Balkan Peninsula. Probably most of youhave some knowledge about Bulgaria being the main supplier of the famous Bulgarian rose otto/oil,but only a few will be aware that Bulgaria’s essential oils industry offered more than 50 differentessential oils, concretes, absolutes, natural flower waters etc. The list presently contains about 30products. Nevertheless the climatic conditions, the land, the experience, the well-trained and highlyeducated professionals are still present.Bulgarian nature has been very generous concerning the main geographic and climatic factors, whichdetermine the excellent development of essential oil bearing and medicinal plants. Although small interritory, besides being very picturesque and rich in historical and cultural monuments, the countryoffers quite different micro-climatic areas, suitable for cultivation of different agricultural plants. Theclimate varies from moderate continental in the northern part to the Mediterranean/subtropical insouthwest and southeast parts of the country. As a result of the favourable climatic conditions andother natural factors, Bulgaria has been for more than 350 years and still is, a classical land of rose oilproduction and the home of the beautiful Valley of the Roses, where most of the rose and lavendergardens, as well as processing factories are located. In later years other essential oil plants includinglavender, peppermint etc. found their home in different parts of Bulgaria and became a significantsource of earnings in many rural areas, where other agricultural crops were not suitable for cultivation.87
The objectives of this paper are to:- describe the development of Bulgarian essential oils industry in the past five years;- underline the recent changes in the industry after more than fifteen years orientation towards amarket economy and private entrepreneurial activities plus the initial impact of EUmembership on the industry;- outline trends in production and exports of essential oils and natural products and possiblefuture developments.The main areas for the cultivation of essential oil bearing plants remain the same, but withconsiderable enlargement of the cultivated lands and the inclusion of some new regions. The areas areas follows:- Rose Valley – includes the area between the Balkan Mountain and Sredna Gora Mountain,starting west of the town of Klissoura through the Karlovo area, and the Kazanluk Valley tothe town of Tvarditza on the east;- South slopes of Sredna Gora Mountain from the village of Starosel, Krasnovo on the west tothe vicinity of towns of Chirpan and Nova Zagora on the east;- Western Sredna Gora Mountain area around the towns of Strelcha and Panaguirishte;- Northern slopes of Rodopi Mountain near the towns Bratzigovo and Peshtera;- South west part of Bulgaria around town of Razlog (Pirin Mountain);- North-eastern part of Bulgaria around Shumen, Veliki Preslav as far as the Black Sea area tothe east;- North-Western Bulgaria on the slopes of Balkan Mountain.Map of Bulgaria with essential oils producing areasSTRUCTURE OF THE ESSENTIAL OILS INDUSTRYDuring the transition period the Bulgarian essential oils industry was 100% privatised. There is alsoprivate ownership of the lands of the agricultural producers of flower material. Some of them are88
Bulgaria’s essential oils industryorganised as private owners in agricultural cooperatives. Presently in the commercial register ofBulgaria there are more than 50 companies registered according to Bulgarian commercial law involvedin essential oils production, cultivation of plants, processing factories, aromatherapy studios andshops, and trade in essential oils etc. (Table 1). More than 90% are medium and small size enterprises.Some 25 to 30 of the registered companies are actively working. Larger companies number 10-12, butthey produce and export more than 60% of the total production of essential oils in Bulgaria.A large number of companies from the essential oils and cosmetic industry in Bulgaria are members ofthe Bulgarian National Association of Essential Oils, Perfumery and Cosmetics (BNAEOPC). Fromthe essential oils sector some 25 companies are members of BNAEOPC. An Associate Member is theUnion of Rose Flowers Producers. BNAEOPC is a member of COLIPA and this year is applying formembership in EFFEO.In the last 5 years the entrepreneurial activities of companies have been oriented more towardmodernisation and enlargement of the existing production capacities according to the EU requirementsof good manufacturing practice and good agricultural practice. The BNAEOPC using the capacity ofBulgarian and foreign experts along with the organization of SES from the European programmes,regularly organises educational and training courses on the subject. The BNAEOPC together with theBulgarian Ministries of Health, Agriculture and Economics have put a lot of effort into harmonisingBulgarian and European legislation in the field of essential oils production and plant cultivation. Alsothere has been considerable investment in building new more modern facilities for processing essentialoils and medicinal plants using EU SAPARD programme financing.In addition, there is a process of merging some of the smaller companies or selling assets to the largerpharmaceutical or cosmetic companies. Some of the bigger companies participate on the financialmarkets in Bulgaria. Their assets are traded on the Bulgarian Stock and Finance Exchange.Table 1: Structure of essential oil producing and exporting companiesPeriod Late 1980s 2002 2005-2006Number of companies 7 56 50Number of distilleries 21 30 36Number of exporters 1 22 20-22Presently the essential oil industry employs several thousands of people full-time and this numbergrows dramatically in the months of May to September each crop year to reach more than 40,000people directly or indirectly involved in production and crop collection. More than 7,000 families inthe mountainous and semi-mountainous areas, most of them coming from minority population groups,earn their income from essential oil plant cultivation. On the other hand, there has been a constantshortage of labour in the last 5 years during harvesting, due to recent population migration. Also, thecost of labour has increased substantially in the last 3 years. This, together with the general increase inenergy costs; the higher price of flower material and unfavourable climatic factors in the last few yearsshows clearly in the impact on price increases for essential oilsCultivation AreaThe most remarkable positive development is the growth of new cultivation fields for both rose andlavender plants in the last 5 years (Table 2). This growth is particularly substantial for roses where thegardens have reached nearly 3,100 ha in total, exceeding the 2,500 ha existing before 1990. Of the89
3,100 ha about 1,200 ha are old plantations and 1,900 ha new ones from 2 to 5-6 years old. Lavenderplantations total some 3,500 ha, close to the level existing before 1990 (4,200 ha).Table 2: Area under cultivation (ha)Late 1980s 2001 2006-<strong>2007</strong>Rose 2,500 1,200 3,100Lavender 4,200 2,500 3,500Others 3,000 1,000 1,400Total 9,700 4,700 8,000The rapid growth of rose and lavender plantations shows the impact of the EU pre-unificationprogrammes like SAPARD, PHARE and other European agricultural structural programmes, as wellas the willingness of Bulgarian producers and farmers to respond adequately to the increased marketdemand for both rose and lavender oils. We consider that the implementation at the end of <strong>2007</strong> of theEuropean programmes for agricultural subsidy will have another positive impact on the cultivation ofessential oils-bearing plant development.Figure 1. Rose plantations 2006Plovdiv area (1200 ha)Stara Zagora area (1440 ha)Bresovo;350 haO thers;130 haKarlovo;470 haO thers;550 haKaznluk; 890 haKalojanovo; 250 haPazardjik area (460 ha)O thers;50 haStrelcha;410 haUnder existing circumstances most medium and even smaller manufacturers of essential oils createdtheir own essential oils plantations as reliable sources of raw material, thus investing substantialfinancial resources of their own.90
Bulgaria’s essential oils industryThe problem of adequate agricultural machinery still exists, especially for smaller size farmers.Considering present weather changes, it is imperative to introduce modern systems of irrigation for theplantations (drip-irrigation systems etc.). Also alternative sources of energy should be considered.PRODUCTION OF ESSENTIAL OILSThe total volume of production of essential oils in 2006 was 270 tonnes compared with 299 tonnes theprevious year (Fig. 2). More than 97% of production is exported and only 3% used in local industry.Production value was more than 11 million Euro (!) in 2006. The total production value of theessential oils in the past 5 years has tended to increase gradually starting from about 7.4 million Euro(!) in 2001 and reaching 11.1 million Euro (!) in 2006, representing about a 50% increase.Figure 2. Essential oils production (tonnes)350300250200150100500299233 2302701271362001 2002 2003 2004 2005 2006The figures also include flower waters (between 160 and 200 tonnes)The fluctuations in rose oil production tend to be smaller than the other essential oils, except for thepresent year. Due to unfavourable climatic conditions our estimates suggest a 30 to 40% decline in thevolume of rose oil output. With the new gardens coming to maturity and hopefully better weatherconditions next crop year we expect to overcome the present shortage of the material. Unfortunately,this crop year has been poor for the lavender crop as for the total agricultural crop, and the totalvolume will not exceed 40 tonnes.PRODUCTION OF INDIVIDUAL OILSRose OilInformation about rose cultivation in our lands is found in Pliny the Elder’s works (24-29 AD). In hisNatural History he wrote that in the Thracian provinces of the Roman Empire the ancient Thracianscultivated 20 varieties of roses. One of those was called Thracian rose. This statement of Pliny theElder is confirmed by mural paintings with images of roses discovered in a Thracian tomb from 4thcentury AD by the town of Hissarya, as well as in the paintings of the famous Kazanluk Thraciantomb 4 th - 3 rd century BC.The beauty and enchanting fragrance of the rose has attracted man’s heart ever since antiquity. Homerwrote about it as early as 8 th century BC, Sappho, the poetess (6 th century BC) called it “ the queen of91
flowers”. The rose has been dedicated to Aurora as a symbol of youth, to Venus as a symbol of loveand beauty. The ancient people from Assyria, Babylon, China, Egypt, India and Persia made use of itswonder-making properties for obtaining essential oils – attars, waters, wine, tea and medicines.Ancient Rome registered a climax in the use of rose in various rituals, feasts and customs. In manyways the rose became a constant companion of the entire history of mankind. Poets glorified it withverse, for Emperors and common people it was the symbol of youth and love, for others it was thebasic raw material for the obtaining of sweet scented oils. For everyone, however, it remains theQueen of Flowers.In the medieval 12 th and 13 th centuries the oil-bearing rose was brought to Europe from the Near andMiddle East at the time of the Crusades, most probably from the environs of Damascus, Syria. TheDamascus oil bearing rose from the Valley of the Shiraz River in Persia reached the sub-Balkanvalleys of Bulgaria also through Syria and Edirne area (presently in European Turkey). This process ofpenetration in inner Bulgaria continued in the first ages of Ottoman Empire. There are two documentspreserved from those years. The first one is the ordinance from Sultan Murad III (1574-1595) late 16 thcentury to the Chief Gardener of Edirne in which he gave orders that roses from Edirne gardens shouldbe sent to the old Sultan palace in the Ottoman capital Istanbul. The second document is the evidencein the travel notes of the traveller Hadji Khalifa in which he pointed out that in 1650 rose water was ingreat demand on the busy market of Edirne. Having in mind that the Kazanluk Region and the presentValley of the Roses were part of Edirne Vilayet it is clear that the roses for rose water were cultivatedin the interior of the Bulgarian provinces. The French counsel at the Ottoman capital in 1840 alsowrote: rose oil and rose water are produced in the environs of Edirne mostly in Kazanluk, StaraZagora, Karlovo and Kalofer.The Rosa damascena Mill. plant was brought to Bulgaria in the early 17 th century from the area ofDamascus in Syria. It was planted in a special geographical region, the valley between the BalkanMountain and Sredna Gora Mountain near the town of Kazanlik in the Central Bulgaria, later knownas the Valley of the Roses. It is a unique region, where nature and the climatic conditions are mostsuitable for the cultivation of roses and a wide range of essential oil yielding plants.Rosa damascena garden and flower92
Bulgaria’s essential oils industryThe main geographic and climatic factors that determine the excellent development of the Kazanlukoil-bearing rose in the Rose Valley are the following:- the mild winter with average annual temperature 10.6 o C, when the flower buds are formed inFebruary;- the high humidity in May and June - the rose picking season;- the light sandy cinnamon forest soils that do not retain water.It is important to know that during the period of blooming the Kazanluk oil-bearing rose is verysensitive to the air humidity (the best is 50 to 60% air humidity). The low air humidity considerablydecreases the content of essential oil in the flowers, and at high air temperature causes the perishing ofthe buds before blooming.The nature of rose oil production is such that the proximity of processing facilities to the raw materialsource is one of the crucial factors for cost-effective production.Bulgarian rose distillers introduced a number of innovations in the technology of rose production,which were unknown before. The most important was the ratio of rose flowers and water 1:4, thesecond was direct cooling by means of a cooling vessel (a cask or a trough) and the third, doubledistillation as a result of which the yield of attar increased.The first Bulgarian attar of roses appeared on European markets as early as the end of 17th century tomeet the needs of the developing perfumery industry. Doncho Papasov from Kazanluk founded thefirst Bulgarian Rose-Trading Company for production and export of rose oil in 1820. Kuncho Chipkovfounded the second rose-trading company in 1840 and in 1863/1864 Petko Orozov and ChristoChristov the next. They organized rose oil production and exports to Paris, Vienna, London, Odessa,and Moscow etc. At the end of the 19 th century (1876-1892) and early 20 th century (1900-1907)Bulgarian merchants and producers participated in numerous international exhibitions in Philippopolis(Plovdiv), Paris, Amsterdam, Milano, London, Philadelphia, Saint Louis etc., and were awarded aseries of prizes and medals for Bulgarian rose oil starting as early as 1873 in Vienna.The rose distillation itself is a simple process called “water distillation”. The flowers soaked in waterare distilled in containers of 3 to 10 m 3 . The distillate separates continuously in a Florentine flask intowater and oil. The water containing emulsified oil and dissolved more polar components yields by asecond distillation, i.e. the “cohobation process”. The two oils mixed together form the final productknown as rose oil.The blending of the oils is the final and very important act for preparation of standard lots of Bulgarianrose oil. The batches from different distilleries and micro-geographical regions, varying lightly inaroma nuances and composition, need skilful blending for preparing grades of rose oil, which theinternational market knows as Bulgarian rose oil. The blending of rose oil is also based on theavailability of a number of different oil batches from previous crop years, although in small quantities,specially stored for combinations. This combination allows the preparation of several basiccommercial types of Bulgarian rose oil for the traditional market or for specific demands of customers.Blending is a really qualified piece of work resembling the creativity of the perfumer. It needs aspecific background, long training and much experience. The process is achieved through the effortsof many well-trained specialists in chemistry, olfactive analysis and evaluation. Their precise workresults in the high quality, stable and maximum replication of the standard lots from the previousyear’s product known as Bulgarian rose oil.I must mention that recently some Bulgarian producers have preferred to sell their own oils producedin their individual distilleries. We consider that this practice has additional risks for the end user93
ecause of the differences in character of the oils in different crop years and the lack of acceptablereplication of the lots.Rose distilleryRecent requirements of EU legislation and high international safety standards for products call for theuse of modern methods for control and analysis of the different production batches, proving theauthenticity of Bulgarian rose oil. Long years of experience and tradition lead to the establishment ofthe following characteristics of Bulgarian rose oil:Table 3: Characteristic components of Bulgarian rose oilCompoundRose oil fromdistilleryBDS ISO9842:2006Typical commercialbatchesmin max min max min maxEthanol - 3.0 - 2.0 - 3.0Linalool 1.0 3.0 1.5 2.5!-Phenylethyl alcohol - 3.0 - 3.5 1.5 3.0Citronellol 24.0 33.0 20.0 34.0 27.0 30.0Nerol 5.0 12.0 5.0 12.0 7.5 9.0Geraniol 13.0 23.0 15.0 22.0 15.0 20.0Geranyl acetate - 1.5 - 1.5Eugenol - 2.5 - 2.0Methyl eugenol - 2.0 - 1.5(E,E)-Farnesol 1.4 - 1.6 -n-Heptadecane (C 17 ) 1.0 2.5 1.0 2.5 1.0 2.0n-Nonadecane (C 19 ) 8.0 15.0 8.0 15.0 8.0 13.0Nonadecene (C 19 ) 2.0 5.0 2.5 4.0n-Heneicosane (C 21 ) 3.0 5.5 3.0 5.5 3.0 4.5n-Tricosane (C 23 ) 0.5 1.5 0.5 1.094
Figure 4. Production of Lavender oil (tonnes)8070605040302010075706254364032252000 2001 2002 2003 2004 2005 2006 <strong>2007</strong>In recent years, due to the increased needs of industry, some new varieties were introduced aimed atincreasing quality and oil yields and prolonging the period of harvesting and flower processing. Themost popular Bulgarian lavender varieties such as Hemus and Droujba were complemented by theselection of new varieties including Sevtopolis, Jubilejna, Raja and Hebar.Lavender fields96
Other Essential OilsThe rest of the essential oils and natural aromatics produced in Bulgaria include: dill weed and dillseed oil (Anethum graveolens L.), fennel oil (Foeniculum vulgare Mill. Var. dulce Mill.) clary sage oil(Salvia sclarea L.), sage oil (Salvia officinalis L.), pine oils (Pinus sylvestris L., Pinus nigra Arn.,Abbies alba Mill.), Juniper oil (Juniperus communis L.), Peppermint oil (Mentha piperita L.), Yarrowoil (Achillea millefolium L.), zdravetz oil (Geranium marorrhizum L.), chamomile oil (Matricariachamomilla L.), annual wormwood oil (Artemisia annua L.), coriander oil (Coriandrum sativum L.),basil oil (Ocimum basilicum L.), melissa oil (Melissa officinalis ssp. officinalis L.), tansy oil(Tanacetum vulgare L.), hyssop oil (Hyssopus officinalis L.), thyme oil (Thymus vulgaris L.) as wellas rose concrete and absolute, lavender concrete and absolute, clary sage concrete, natural flowerwaters, plant extracts etc.Figure 5. Other essential oils, concretes, absolutes and flower waters (tonnes)Production of rose concrete Bulgaria varies from 1,000 kg to 2,500 kg in good years.Flower water production in the recent years also increased. The volume of rose water production, forexample, is about 160-200 tonnes and is used for cosmetic, pharmaceutical and alimentation purposes.THE MARKET OUTLET FOR BULGARIAN ESSENTIAL OILSThe total essential oils export value is presently about !11.1 million, mostly exported to EU countriesaccounting for 36-49%, USA 16-18%, Japan 7-8% and the Far East, Switzerland and Middle Eastcountries etc. 31-48%.Table 6: Export Per Cent in Euro (!) of different essential oils.Years Rose oil Lavender oil Others2001 55.43 17.06 27.512002 59.17 21.23 19.602003 45.66 28.17 26.172004 65.79 12.63 21.582005 64.52 18.80 16.682006 58.90 18.93 22.1798
Bulgaria’s essential oils industryFigure 6. Total exports of essential oils (tonnes)Rose oil forms less than 1% in quantity of the total volume of the exported essential oils in the year2006, but 58.9% of the value; lavender oil forms 27.5% in quantity and 18-20% of the value; otheressential oils form 72% in quantity and 22.0% of the value (Table 6 and Fig.7).Figure 7. Structure of essential oils export (%) 2006In Euro (!)In kgLavenderoil; 18,8Others; 22Rose oil;58,8Others; 72Rose oil;1Lavenderoil; 27,5Over the past 5 years, price levels have been relatively stable with a small upward tendency. Theestimated increase in the rose oil price this year will be between 12 to 15%. This is due to the badcrop, the considerable price increase of rose flowers, high energy prices, increasing labour costs andthe practical termination of stock from previous crop years. The price of lavender oil for the last 5years has shown a slight downward tendency, but this year, for the same reasons, prices will go up bymore than 25% or even 30% compared to last year.99
Table 7: Export of essential oils by zonesEssential oilsYears European Union USA Japan Others% in ! % in kg % in ! % in kg % in ! % in kg % in ! % in kg2002 49.26 44.05 18.62 9.82 4.22 22.68 27.90 23.452003 45.25 49.99 15.75 10.01 4.75 18.22 34.25 21.782004 47.85 54.35 16.64 8.24 5.04 14.39 30.47 23.022005 49.50 44.64 15.78 9.36 9.60 26.53 25.12 19.472006 36.25 34.20 15.46 12.18 11.31 29.80 36.98 23.82Rose oilYears European Union USA Japan Others% in ! % in kg % in ! % in kg % in ! % in kg % in ! % in kg2002 39.78 39.06 23.46 22.57 4.35 3.82 32.41 34.552003 62.11 59.88 17.0 16.37 6.19 6.98 14.70 16.772004 59.50 49.26 19.69 18.87 5.41 5.18 15.40 26.692005 52.91 44.64 15.73 14.18 9.82 9.28 21.54 31.902006 36.18 36.23 15.46 17.92 11.31 14.93 37.05 30.92Lavender oilYears European Union USA Others% in ! % in kg % in ! % in kg % in ! % in kg2002 69.44 66.16 16.05 14.06 14.51 19.782003 59.88 60.25 26.38 27.05 13.74 12.702004 54.05 50.40 21.65 26.83 24.30 22.772005 72.99 67.73 18.55 19.07 8.46 13.202006 46.29 44.64 11.93 8.37 41.78 46.99THE DOMESTIC MARKETThe domestic market in Bulgaria is relatively small at present due to the changes in productionstructure and the volume of cosmetic and perfumery production in Bulgaria, but there is a growingtendency. Part of the essential oils traded within the country between Bulgarian companies is intendedalso for further export. Usually smaller essential oils producing companies seek the assistance of thelarger and better established ones on the international market for the sales of their products.THE INTERNATIONAL PRESENCEThe presence of international companies in Bulgaria is smaller in number than in volume. Most of theinternational partners buying Bulgarian essential oils prefer to depend on the experience, skill andprofessional ability of the local manufacturers. Thus the structure of the essential oils industry in thecountry remains predominantly Bulgarian. Two manufacturing and trading companies mark theinternational presence, namely Biolandes Bulgaria and Trakia Berje. The other internationalcompanies operate through their representative trade offices and by direct contacts with the local100
Bulgaria’s essential oils industrymanufacturers and traders. The reason for the lack of multinational companies involvement in theBulgarian essential oils industry was probably the unstable Balkans situation over some 10 years,although Bulgaria demonstrated a balanced position and a relatively stable political status during thisperiod. The current stability in the Balkan region might attract future interest from internationalinvestors.Table 8: Leading Bulgarian companies by estimated sales’ volume in 2005Company Location Estimated sales volumein 000 !1 Bulgarska Rosa AD* Karlovo 2,9622 Lavenda Ltd Burgas 1,4393 Intermed 1 Sofia 1,2874 Bulgarska Rosa Plovdiv AD Plovdiv 1,2685 Bulattars Production Co. Ltd Sofia 1,1366 Enio Bonchev Production Ltd Sofia 9537 Biolandes – Bulgaria Ltd Plovdiv 8628 Rosabul Ltd Plovdiv 6279 Damascena – St. Stojanov Pavel Banja 44310 Ikarov Ltd Plovdiv 406Others 1,824* Bulgarska Rosa Karlovo AD and Bulgarska Rosa Plovdiv AD sales also include cosmetic sales.The impact of general trends in aroma chemicals usage and numerous strict legislation requirementsfor the production and application of natural essential oils, including the recent developments foramendment of European Cosmetic Directive and REACH requirements, will have a strong influenceon natural essential oils production in Bulgaria.CONCLUSIONSBulgaria has the necessary favourable natural conditions, a long tradition in production, highlyeducated professionals and the goodwill to preserve and further develop the essential oils industry.The industry is export oriented and Bulgarian companies are making continuous efforts to introducethe best European practice into essential oils production by the adoption of EU Directives onmanufacturing, agricultural practice, quality control, safety and market performance in the sector.However we cannot avoid the fact that recent climatic changes in this part of Europe, probably due tothe global warming process, will have negative effects on the production of natural products includingessential oils and related derivatives.Our future aim is to preserve and develop those treasures with which Mother Nature bestowed us inthe field of essential oils yielding plants.101
References1. Actander S. Perfume and Flavor Materials of Natural Origins, 1994, Allured PublishingCorporation, Carol Stream, IL, USA.2. Irinchev I., Ognenski G., Delev P., Rose cultivation and processing in the Kazanlak valley, Sofia1994.3. Ognyanov I., Nenov N., Bulgarian Attar of Roses production, <strong>Procee</strong>dings of the <strong>IFEAT</strong>International Conference, 1990, Antalya, Turkey.4. Bulgarian national statistics bulletin, 2002-2006.5. BNAEOPC Information bulletin, Plovdiv, Bulgaria, 2005-6.6. SFB Capital markets bulletin, Sofia, Bulgaria, 2002-20067. Kitov G., Zarev K., Dimitrova E. The Valley of Roses and Thracian rulers, 2001The speaker, Juliana Ognyanova, Technological Engineer, has been involved in theindustry for over 30 years. She graduated as an engineer from the Plovdiv Institutefor Food and Flavour Technology and then commenced her career in the state-ownedPharmachim Company, where she gained a broad experience in production andtrade with essential oils and related materials. Later, she studied English andbusiness administration in the USA. After the political and economic upheavals of theearly 1990s, she and three partners established the Bulattars Ltd company, which hasdeveloped as one of Bulgaria’s principal producers and exporters of essential oils. Inaddition to being a Director of Bulattars Ltd., she is a Vice-Chairman of theBulgarian National Association for Essential Oils, Perfumery and Cosmetics.The co-author, Angel Konakchiev, is a chemical engineer, who graduated from the Sofia Institute forChemistry and Technology. His professional career has been totally connected with the Institute ofOrganic Chemistry at the Bulgarian Academy of Sciences, where he developed expertise on thechemistry and quality control of essential oils.102
THE ESSENTIAL OILS INDUSTRY IN MOLDOVANathalie GreenFRAMAROMA, 79 Avenue la bruyère,94 400 Vitry-Sur-Seine, Francemarketing@framaroma.comSince the fall of the Soviet Union in 1991, each of the 15 former Soviet Republics has been strugglingto find their own identity, and to decide whether to join the promising European Union to the West, orto remain under the power of the imposing Russian Big Brother to the East.Moldova concentrates all the contraction, both cultural and geopolitical, of this particular situation. Asa landlocked country between Romania, now part of the European Union, and the Ukraine, the secondbiggest former USSR republic, Moldova still experiences a particularly strong influence from Russiahence its unresolved situation with Transnistria.This paper aims at giving an overview of the recent developments in the essential oils industry inMoldova and to place this country within its particular economic and political context in order to drawa possible evolution for the future.… But actually, where is Moldova?Location of MoldovaMOLDOVA: SOME BACKGROUNDThe Republic of Moldova is situated in the southeast ofEurope, between Romania and Ukraine. This country is aboutthe size of Belgium (33,800 km 2 ), but hosts the same amountof people as Croatia (about 4 million). Moldova is mostlycomposed of Moldovans (70%), Ukrainians (11%) andRussians (9%). Located at the crossroads of Latin and Slaviccultures, it uses a Latin alphabet, and 98% of the population isOrthodox Christians. Due to its strategic location on a routebetween Asia and Europe, Moldova has suffered from severalinvasions and experienced a very destabilising history. But wewill focus here on the most recent changes.!103
Formerly part of the USSR, Moldova took its independence in 1991 and now enjoys a parliamentarydemocracy with a President as its head of state, Vladimir Voronin. The Communist Party of theRepublic of Moldova (CPRM) has been in power since 2001 (was re-elected in 2005), but generally,public institutions have been unstable, weak and fragmented in implementing new policies, withcontinuous problems of corruption. The national currency is the Lei with exchange rate EUR 1=MDL16.24, USD 1=MDL 11.69.!The country stretches some 350 km from north to south, and 150 km from west to east. Moldova isdivided into 32 districts. The capital city is Chisinau. The largest part of the country lies between tworivers the Dienstr and the Prut, but they cannot be used for navigation, except for a small access to theRiver Danube since a territorial exchange with Ukraine in 2002. This country is basically landlocked,even though it is so close to the Black Sea.In spite of its small territory, Moldova shows highly diversified and contrasting physico-geographicalfeatures. The relief is represented by alternating hills and deep river valleys, as well as depressedplains in slow descent towards the South. On average Moldova is 150 m above sea level while thecentral part has the highest elevation point at an altitude of 430 m.The climate of Moldova is moderate continental, with mild winters, hot summers. The averagetemperature in July is about 25°C to 28°C, and that of January is about –4°C to –7°C. The temperaturereaches an absolute maximum of 41°C and an absolute minimum of –36°C. Despite Moldova lying ina low humidity zone, resulting in frequent drought, it has proved over the years to have a favourableclimate for the production of aromatic plants. Indeed, Moldova is covered on 75 % of its territory bysome rich black soil called “chernozem” which is considered as one of the most fertile in the world. Itrepresents the largest asset of this country. 65% of the land is cultivated mainly with wheat, corn,sugar, beetroot, and grapes for wine production, tobacco, fruits and vegetables.!Rich black soil : chernozemEVOLUTION OF THE ESSENTIAL OILS INDUSTRYThe cultivation of aromatic and medicinal plants benefited in the 1970’s and 1980’s from aconsiderable development in Moldova. As planned by the Soviet Union, this small country had about15 different sites for the transformation of aromatic plants that were cultivated over 20 to 25associated kolkhozes. This industry covered between 50,000 to 70,000 ha of land solely dedicated tothe production of aromatic and medicinal plants.104
Moldova’s essential oils industryTherefore, just before its independence, Moldavia was producing on annual average 160–200 tonnesof essential oils: lavender 75-80 tonnes, clary sage 30–35 tonnes, dill 25-30 tonnes, mint 25–35tonnes, fennel 16-20 tonnes and rose 5 tonnes as well as other plants in much minor quantities, such ashyssop and iris. Most production was exported to Moscow which was in turn was mostly distributedon the internal market, or sold overseas under the name of “Russian essential oils”.Currently, production has dropped to 3,000 ha of land cultivated for this type of crop, and only 5 unitsare in use. Three units are directed by foreign ownership (Austrian, French and English) and accountfor the bulk of production. Today, the main product is clary sage, mostly for concrete. Lavender,which used to be so important, has dropped dramatically as the fields were abandoned, while someothers such as the rose fields were completely uprooted (possibly a 1,000 ha or more). Dill and fennelare back but other plants, which were not cultivated before are being introduced with success andalready gaining some relative importance e.g. coriander or sage officinalis. Tests are currentlyunderway with mint, oregano, cumin and thyme and a small production of rose for concrete extractionhas been restarted. There is no aroma chemicals industry in Moldova.Table 1: Evolution of the Essential Oils IndustrySoviet EraCultivation 50,000 to 70,000 ha in 20 to 25specialised collective farms(kholkoze)Transformation 15 distillation sites, including 2units with extraction facilitiesCurrent Situation3,000 ha5 distillation and extraction sitesSalesMain productionThrough Moscow for internalSoviet market, and also exportedunder « Russian essential oils »(20 to 30%).- Lavender: 75-80 tonnes,- Clary sage: 30 – 35 tonnes,- Dill: 25 -30 tonnes,- Mint: 25 – 35 tonnes,- Fennel: 16-20 tonnes- Rose: 5 tonnes- Other such as Hyssop and IrisDirectly to international buyers orbrokers (mainly European).- Clary sage: 2 ton (EO), 60 tonnes(concrete)- Dill: 6 tonnes- Fennel: 5 tonnes- Coriander: 5 tonnes- Lavender: 5 tonnes- Sage officinalis: 2 tonnes- Other such as Mint, Hyssop,Oregano, Cumin, Thyme and RoseTable 1 presents some average quantities/year for the past 3 years but the harvest in <strong>2007</strong> wasexceptionally low due to major drought, very high temperatures and no rain. Overall, the harvests havebeen 30% to 85% below normal for all plants. As for the clary sage, the loss is between 25% to 60%105
and for some plants, such as coriander and dill, the loss has been close to 100% since the plant did notgrow high enough to reach the level of the combined harvester’s cutting bar.Clary sage (salvia sclarea)An example of extractionClary sage is the main aromatic plant produced in Moldova and most generally in Eastern Europe(Ukraine and Russia). It takes 2 years to grow to be at harvesting stage. Nowadays, very little of theessential oil is produced because of Chinese competition. The crop is harvested in July and is mostlyused in perfumery and also a little in the food industry. Some 90% of the production is being extractedwith a solvent to make clary sage concrete and sold to sclareol producers. The extraction method is incontinuous columns, or in mobile containers which is unique in Europe. There is over 50% content ofsclareol in concrete. Small quantities are sold for amber, musky woody notes to perfumers, but most isfor the production of ambroxan, a chemical derivative of sclareol.Lavender (lavendula angustifolia)An example of distillationLavender used to be the major production, but currently output is about 5 tonnes!and many fields havebeen abandoned. Harvesting is undertaken towards the end of June. Production is mainly of the clonaltype. Lavender is used predominantly in perfumery, but its very good antiseptic properties leads tosome medical applications. During the Soviet Union, there were two types of distillation: continuous106
Moldova’s essential oils industrysteam distillation in vertical columns as well as in mobile containers. Since the former was inefficientand used too much energy, it was destroyed and now only the mobile containers are in use. In this unit20 containers were able to function in parallel. The size of each plant is very important (see thecooling tower at the back).!Coriander has been newly introduced but is of growingimportance with production currently about 5 tonnes.Traditionally, coriander production was very big in theUkraine and Russia where it was the number one product inthese countries at the time of the Soviet Union. The crop isharvested in August and it has the characteristic ofmicrocarpum type of seeds. It is used widely in perfumery,pharmaceuticals and food industries.Coriander (coriandrum sativum)Fennel is of growing importance, with output of about 5tonnes. The crop is harvested in September and it is thebitter type with a high anethole content (60%). It is knownas a flavouring for liqueur and other non-alcoholicbeverages.Fennel (foeniculum vulgare)Traditionally productionwas important but now is about 6 tonnes mostly from herb and notseed. The market is in decline, especially in the USA. The crop isharvested in August and characteristically has a carvone contentbetween 32% and 42%. It is used for flavouring in the food industry.Dill (anethum graveolens)Hyssop is a new product with a high value and constant growth.The harvesting period is in July and it is used in perfumerycompounds.Hyssop (hyssopus officinalis)107
The Evolution of Aromatic Plantations 2005 – <strong>2007</strong>Fig 1Fig 2As discussed previously the cultivated area for aromatic plants is substantially lower than in the Sovietperiod. However, as Figures 1 and 2 illustrate there has been a steady growth for most plants between2005 and <strong>2007</strong>. Figure 2 also shows the Soviet-type of combines used for harvesting.!The relative share of clary sage is declining slightly with the growth of other productions, such ascoriander and dill. New products with higher added value are currently being tested including rose,hyssop and oregano. !THE CURRENT ECONOMIC SITUATIONThe Republic of Moldova used to be the main supplier of wine, fruit and vegetables to the former 15Soviet Republics. Following the break-up of the Soviet Union in 1991 it became one of the poorestcountry in Europe. This was due mainly to the loss of traditional markets, the energy dependence onRussian gas and the secession of the Republic of Transnistria.108
Moldova’s essential oils industryMoldova’s transition recession ended in 2000 when the economy finally began to experience sustainedeconomic growth. Between 2001 and 2006, the Moldovan economy grew on average by 8% perannum. Nevertheless, about 40% of population is still below the absolute poverty line, and in 2006 theGDP was still inferior to that of Bangladesh. Current average income is about 150 USD per month.The underground economy is estimated at around 40% of GDP, leading to strong inflation (between10% to 15%) as well as a major commercial deficit, financed by money transferred from Moldovanswho have gone overseas to work.Indeed, Moldova experienced a massive exodus during the 10 harsh years of recession, and some 25%of its population is currently working abroad, primarily in Western Europe and Russia. This is theofficial data. Apart from the obvious brain drain, little statistical information is available on the extentabout human trafficking and young women being enrolled in prostitution networks. Moldova is one ofthe largest net emigration countries in the world. The economic recovery has been actually drivenprimarily by expanding household consumption fuelled by the inflow of worker’s remittances.However agriculture still represents the largest real sector of the Moldovan economy, accounting for19% of GDP (30% if agro-processing is included), and generating the majority of Moldova’s exportsaccounting for nearly 60%. It employs more than 50% of the workforce so its development is essentialto the country’s growth, sustainability and poverty reduction. Other sectors in development are thetextile and ITT (information technologies & telecommunications i.e. fixed and mobile phone, cableTV services and the internet). But growth is still constrained by 80% of industries being concentratedin Transnistria territory, and the rise of energy costs from Russia.Production AreasThe map illustrates the different areas of cultivation: in yellow mostly cereals, sugar beet andsunflower for animal feed, in green mostly animal breeding, in purple special cultivation such asaromatic plants as well as grapes, fruits, vegetables and tobacco. !Moldova carried out its farmrestructuring later than most othertransition economies, not startinguntil 1998, which prolonged thecontraction of the sector. Butreform has been now successfullycompleted, resulting in a highlyequitable distribution ofagricultural land and a new class oflanded independent farmers. As ofJanuary 2003, two-thirds ofagricultural land had been formallyclassified in private ownership.However, private ownership doesnot mean individual use of land.The current corporate farms areoften run in a similar fashion to the former collectives, but are about one-third the size (on averageabout 650 ha). They are typically managed by “leaders” from the former collectives who encouraged109
land share recipients to lease out their shares. Thanks to this reform and other economic developments,the agricultural sector grew gradually from 2000 to 2002, before the drought of 2003 set it back again.As far as industry is concerned (cement, metallurgy and main electricity supplier plants), the Sovietplanners had concentrated 80% in Transnistria territory, which also hosts the XIV th Russian army.Shortly after Moldovan independence, this region announced its independence, which has not beenrecognised or approved by any international body. Despite naming Tiraspol as its capital and IgorSmirnov as its president, this region has mainly a reputation for its crime networks (drugs, arms andmoney laundry), and its potential for destabilizing the rest of the country. Moldova used to have alsosome secessionist problems with another semi-autonomous region called Gagaouzie (where a Turkishminority lives), but an agreement has been reached and there is no problem now.New resources of brown charcoal, petroleum, and metals have been discovered recently in the south ofthe country and are currently being evaluated for industrial use. Also, some important resources forconstruction material such as limestone, gypsum and sand remain largely unexploited.2000 - 2006: Growth and StabilityDuring the period 2000-2006Government policies wasoriented towards the assuranceof macroeconomic stability,the development of the realsector of the economy,promotion of structuralreforms and intensification ofexternal commerce. This hasresulted in a positive GDPgrowth and the loweringinflation rates.!THE GEO-POLITICAL SITUATIONMoldova is strategically positioned at the crossroadbetween Western and Eastern Europe. The map showshow the Russian gas pipeline runs through the south ofthe country by Tiraspol, the main city of Transnistria,to reach the south of Europe. Indeed this particularsituation draws the attention of various interests inEurope, the USA and Russia. Moldova has officiallybeen a neutral country since its independence, and anearly member of the NATO Partnership for Peace. Thecountry is part of many international organisationssuch as the United Nations, World Trade Organisation,CIS, etc. Moldova aspires to join the European Unionand is implementing its first 3-year Action Plan withinthe framework of the European Neighbouring Policy(ENP).110
Moldova’s essential oils industryIn December 2006, the European Commission announced that it was going to double its helps toMoldova by providing some 200 million Euros between <strong>2007</strong> and 2010 to support the process ofreforms. Approximately 300 millions Euros was spent during the last 15 years under specificprogrammes, such as TACIS. Apart from European countries, the USA and Japan announced that theywere going to take part as major contributors. The plan is mainly focused on improving security, inorder to avoid a tension zone at the door of Europe, such as regional conflicts, unresolved or latent.Obviously the conflict with Transnistria is in everybody’s sights. Russia has kept armed troops there,despite having signed international obligations to withdraw. By helping financially, the internationalcommunity wants to ensure the respect of human rights, to support legislative reforms and to developa better climate for investments.FOREIGN DIRECT INVESTMENTThe contribution of investment to growth hasbeen modest by local standards, representingonly 18% of GDP. Public investment has beenparticularly low (less than 2% of GDP). Foreigndirect investment translates into around USD200 per head in Moldova, compared with aroundUSD 1,000 in Poland, and USD 2,000 in Hungary.In theory, the communist administration isopen to Western investment. However, aseries of conflicts between the Moldovanauthorities and foreign investors have sentopposite signals. For example, the law oninvestment was amended to allow for equaltreatment of local and foreign investors. Italso provides guarantees againstexpropriation and ensures unlimited profitrepatriation. However, the large number ofprocedures for obtaining licenses, permitsand certificates often discourages mostentrepreneurs from even starting. Inaddition, there are the problems of theunstable and opaque tax system, and problems with excessive inspections of enterprise. On mostmajor scales of corruption, Moldova continues to rank at or near the top for the region, generallyahead of countries such as Russia and Ukraine. In addition, there is a considerable lack of medium and111
long-term credit since loans provided by commercial banks are largely short-term credits. Thisproblem of lack of access to credit is a frequent complaint in the agricultural sector.Foreign investments in Moldova are essentially concentrated in the energy sector (natural gas andwater supply), processing industry, trade, transport, hotels and real estate. Even Russian investors,who are most familiar with Moldova and relatively cash-rich after several years of high oil prices,have only begun to invest, mostly in wine and machinery sector. Many European countries as well asthe USA rank amongst the top 10 foreign investors. The investors are mainly important multinationals.In the essential oils industry, about 10 to 20% of investment is from local sources against 80% fromforeign investment.CHALLENGES AND FUTURE OPPORTUNITIES FACED BY THE SECTORShall we run away from Moldova, or is it actually the best time to invest? There is real potential andknow-how for the cultivation and transformation of aromatic plants but this is currently underutilised.While labour costs are rising the country is still very competitive. However, local entrepreneurs faceconsiderable difficulties in developing the sector because of the very limited availability to capital forfinancing projects, and the lack of market organisation and access. Foreign investment can play amajor role in overcoming these constraints. In addition, continued state reforms can create a betterbusiness environment as well as facilitating the movement towards becoming more in line withEuropean systems and standards.The information and data contained in this presentation are mostly part of our company’s experiencein the field since negligible official data are available or accessible, and even if available is notobjective. I would like to thank the whole team who helped me collect the information in thispresentation.!While it is very difficult to work in these countries it feels very satisfying and exciting to contribute tothe rebuilding of the East. It is particularly important to help strengthen these countries to enable themto grow steadily and to resist corruption. Moreover, it is important to ensure they utilise correctly boththe soil, which is their best asset, and the tradition of high quality production. This can be achievedthrough organic agriculture to prevent spoiling the soil, and fair trade practices, to ensure that thepopulation obtains the benefit of their hard work. As we saw, there used to be a huge production ofaromatic plants and related essential oils during the time of the Soviet Union. There is no reason whyit should not bloom again as the political and economic environment stabilises, and as the worldmarket requires better controlled quality products, and clearer traceability from Eastern Europe.Originally from France, Nathalie Green finished her master’s degree in marketingand international business at the University of NSW, Australia, in 1994. She usedher marketing skills to contribute to the development of several businesses invarious countries, including Singapore, the Netherlands, Australia and France. In1999 she joined the sales force of her father’s company Beten International, whichhad started to produce aromatic raw materials in Moldova and Ukraine under thebrand name Framaroma. From 2004 until 2006, she worked for Orgasynth inParis, marketing the group’s activities in raw materials, flavours and fragrances.In early <strong>2007</strong>, she returned to work for Beten International in order to continue the development ofEastern European production and sales of aromatic plants under organic and fair trade certificationby ECOCERT.112
PRODUCTION OF AROMA CHEMICALS AND ESSENTIAL OILSIN THE SLOVAK REPUBLICPeter van der SchaftLiAxx Biotech s.r.o.Mileticova 23, Bratislava, Slovak Republicpeter.v.d.schaft@axxence.comPavel Farka!Monoprix s.r.o.Dubravska cesta 9, Bratislava, Slovak Republicmonoprix@nextra.sk)\The history of production of natural aroma chemicals, flavouring substances and essential oils isrelatively short in Slovakia. In spite of this, during the past decade it has become a reliable source ofthese products and with considerable potential for further growth. This paper provides a briefoverview of the current assortment and extent of production capacities of natural aroma substancesand essential oils in Slovakia.COUNTRY BACKGROUNDPopulation and GeographyMap of Europe showing Slovakia’s locationSlovakia (official name: Slovak Republic) is a landlocked country in Central Europe with a populationof 5.4 million and an area of about 49,000 square kilometres.113
The Slovak Republic borders the Czech Republic and Austria to the west, Poland to the north, Ukraineto the east and Hungary to the south. The Slovak landscape is noted primarily for its mountainousnature, with the Carpathian Mountains extending across most of the northern half of the country. TheSlovak climate lies between the maritime and continental climatic zones, with relatively warmsummers and cold, cloudy and humid winters.The largest city is its capital, Bratislava with about 425,000 inhabitants.Map of Slovakia and of surrounding countriesPolitics and EconomySlovakia is a parliamentary democratic republic with a multi-party system. Slovakia is a member stateof the European Union since May 1, 2004 and should join the Schengen zone in Dec. 31, <strong>2007</strong>.Slovakia is also a member of NATO, WTO, OECD, OSCE and other international organizations.After 1990 Slovakia has pursued a difficult transition from a centrally planned economy to a modernmarket economy. Major privatizations are nearly complete, the banking sector is almost completely inforeign hands and foreign investment increased considerably in recent years. As a result, in <strong>2007</strong>Slovakia reached the highest economic growth among OECD members, namely 9.8%. Inflation isabout 3%, unemployment 11.1%. The average monthly salary is around 800 USD. Slovakia plans toadopt the Euro currency on January 1, 2009 and has already entered the ERM II for this purpose. Asa result of good economic indicators the Slovak currency has strengthened against the Euro by 12%and around 20% towards the US dollar during the past year.THE EMERGING FLAVOURS, FRAGRANCES AND AROMA CHEMICALS SECTORIn the past, the main chemical industry in the former Czechoslovakia was concentrated in Bohemia inthe northern part of the country that had historically been one of the centres of the European chemical114
Slovakia’s aroma chemicals and essential oils industriesindustry. The chemical company Spolchemie in Usti nad Labem recently celebrated 160 years ofexistence.In the communist past, R&D was highly directed by COMECON (Council for Mutual EconomicAssistance) and Slovakia became one of the centres for biochemistry and biotechnology; R&D in theCzech part was more focussed on industrial chemistry to support these economically importantindustries.Several important fermentation plants were located in the Slovak part during this period withpenicillin, tetracycline and amino acids in Biotika, Slovenska Lupca and citric acid in Leopoldov.Consequently R&D in Slovakia was much more focussed towards biochemistry/biotechnology andthis is reflected in the make up of important centres of education such as the Slovak TechnicalUniversity and the Slovak Academy of Science.In contrast to North Bohemia, the Slovak part of the country was relatively unpolluted and thegeography supported many microclimates for the growing of medicinal herbs and botanicals.Significant R&D resources in the Agricultural Research Institute in Piestany were devoted to newhigher yielding genotypes. The state pharmaceutical company Slovakafarma produced a wide range ofgalenicals and pharmaceutical actives derived from agriculture, morphine and codeine for example.In the communist era, flavours and fragrances were not considered as important, in fact in some partsof the region you were considered lucky to have sufficient food so flavour was certainly not an issue.The same can be said about the fragrance business; cosmetics and toiletries were not high up on theagenda, flavours and fragrances were mostly imported from the West.After the change of the political system in 1989 and following the transformation of the centrallycontrolled economy to a market economy much of the large-scale chemistry was taken over byneighbouring countries and today little remains in Slovak hands. Along with this came foreign knowhowand in these areas research has been reduced.Galenical and essential oil production on a commercial basis has almost ceased to exist. However, it isnow starting to develop again and has a strong potential for growth.The new economy however, has created new producers of chemical specialities with products thatmore reflect the economic realities of a small land-locked country with few natural resources. Thesenew producers are concentrating on what could be termed “intellectual chemistry” which is reflectedin the production of high value added but small scale specialities, including natural aroma substances,based on the connection between existing scientific-research capacities, availability of freebiotechnological facilities and domestic as well as foreign capital.NATURAL AROMA CHEMICALSMonoprix s.r.o.Monoprix s.r.o. was the first natural aroma chemical company and founded in 1993. The company'sscope of business has been defined as the research and development of production technologies andthe manufacturing of selected natural aroma chemicals, flavouring substances and concentrates forfoods based on herbs and plants species. All products are manufactured exclusively by physicalseparation and concentration techniques which comply with "Code of Practise for the FlavourIndustry", I.O.F.I., Geneva, 1993, EC Council Directive 88/388/EEC and FDA-CFR 172.510.115
Monoprix processing plantThe authenticity (natural origin) of the products is documented by isotopic analyses - activity ofradiocarbon 14C and 13C/12C and D/H isotopic ratios. Moreover, all the products are manufactured inconformity with special religious requirements, which is attested by the Kosher certificate. Theutilised original technologies result from long-term successful cooperation between the company andthe universities, research institutes and selected local and foreign experts.For production of the flavouring and aromatic substances we use only high-grade herb and plant rawmaterials and the whole technological process is under permanent control utilising modern analyticaltechniques such as GC, GC/MS, HPLC, etc.Analytical control equipment116
Slovakia’s aroma chemicals and essential oils industriesOf course the complete specifications and guarantee of the characteristics are provided for eachsupplied consignment. Concurrently, the high-grade natural products are offered for very favourable,competitive prices.Product listProductProduction capacity(kg/year)Trans-2-Hexenal, Natural, Kosher, 96 %, 97% and 98% (GC) 1,000Trans-2-Hexenol, Natural, Kosher, 80 %, 94% (GC) 30-40Trans-2-Hexenyl acetate, Natural, Kosher, 93 % (GC) 201-octen-3-ol, Natural, Kosher, 98 % (GC) 25Pyrazine complex (mixture of alkylpyrazines, C3-C5), Natural, 250 totalKosher2,5-/2,6-dimethyl pyrazine, Natural, Kosher, min. 70 or 90% GC)2,3,5- Trimethyl pyrazine, Natural, Kosher, min. 60% (GC)2-ethyl-3,5- and 2-ethyl-3,6-dimethyl pyrazine, Natural, Kosher,min. 80% (GC)LiAxx Biotech s.r.o.LiAxx Biotech s.r.o. is a joint venture established in 2006 between Axxence Aromatic GmbH(Emmerich, Germany) and LIKO Bratislava a.s. (Bratislava, Slovakia). It is a young company thatconducts research and development on natural flavour ingredients and produces natural flavourchemicals using leased production facilities in Slovakia. This company will start construction of abiotechnology facility in 2008 in Malzenice near Trnava, Slovakia. This new building will have R&Dlaboratories and fermentation and downstream processing pilot and production facilities.Axxence Aromatic is a manufacturer and distributor of natural flavour chemicals with existingproduction in Grasse, France. LIKO is the former State Research Institute for the food andfermentation industry and has research, development and pilot plant facilities in Bratislava. LIKO’sbackground in food and fermentation technologies allied with the proven market strength of Axxencewill combine to form a company which is able to provide the world’s flavour and fragrance industrywith natural compounds derived from biotechnology and agriculture.Product listProductFEMA GRAS numberNatural Hexanal 2557Natural Benzaldehyde 2127Natural Citronellol 2309Natural Citronellyl Acetate 2311Natural !-Decalactone 2361Natural !-Dodecalactone 2401Natural Indole 2593Natural Raspberry Ketone 2588Natural Styralyl Alcohol (chiral) 2685Natural Styrallyl Acetate 2684Natural "-Undecalactone 3091117
The companies R&D pipeline contains various natural flavour molecules to be commercialized soon,for instance natural vanillin.Future of Natural Flavour ChemicalsThe Slovak producers of natural flavour chemicals are experiencing and take advantage of anincreasing demand for natural ingredients by the flavour industry. This can be explained by generalconsumer trends such as the request for authenticity, convenience and health.Currently the council directive of the European Communities (88/388/EEC) on flavours is beingreviewed and updated and will become effective for the flavour industry around 2010. The generaltendency of the regulation with regard to natural flavour substances is that only physical methods,fermentation and bio-catalysis are allowed for their production and there is much less room left for“soft” chemistry. The Slovak manufacturers will benefit from this change in EU legislation, becausethey have chosen the fermentation/bio-catalysis approach for the production of natural flavourchemicals.ESSENTIAL OILSAt present Calendula, a.s. is the only distillery in Slovakia producing essential oils on a commercialbasis. The oils are manufactured from plant material grown in the ecologically friendly environment ofthe country. The company was founded in 1998 by privatisation of a former state-owned cooperative.As well as essential oils, they produce extracts from different medical plants for cosmetic andpharmaceutical purposes. Their essential oils production capacity is as follows:Product Production capacity (kg/year)Caraway 500Fennel 1000Chamomile 20-30Juniper 200Peppermint 150Pine 200-250SMOKE FLAVOURINGAromarco, s.r.o. is a small private company which is using 15 years experience to produce smokeflavouring by condensation of smoke obtained by controlled combustion of beech sawdust. The rawwood tar obtained is purified to remove the toxic/carcinogenic components and then concentrated. Thedark brown liquid obtained has an intense, delicious smoke flavour and is suitable for the flavouring ofdifferent meats, cereal products, fishes, savouries and other foods. The product has successfullypassed the toxicological tests organised by the European Food Safety Authority in Parma, Italy andhas been included in the list of approved products for sale in the countries of the European community.The production capacity of concentrated smoke flavouring is up to 4,000 kg/year.118
Slovakia’s aroma chemicals and essential oils industriesDr. Peter van der Schaft graduated from the University of Utrecht in theNetherlands in 1986. He worked for more than 20 years as a biochemist inflavour R&D at various companies, including IFF and Givaudan. Hismain interest is flavour research, especially using biotechnology as a toolto develop processes for natural flavour ingredient production. Since June1, <strong>2007</strong> he has been responsible for science and technology with regard tonatural flavour ingredients at Axxence Aromatics, Emmerich, Germanyand LiAxx Biotech s.r.o. Bratislava, Slovakia.Pavel Farka! - graduated from Comenius University, Bratislava in 1979.From 1983 to 2003 he was a research scientist at the Food ResearchInstitute in Bratislava where he specialised in the analysis of aromacompounds in foods, flavour chemistry and technology. In 2003 he joinedMonoprix, s.r.o., Bratislava as a technical director responsible for R & Dand quality control of production of natural aroma chemicals.119
THE ESSENTIAL OILS INDUSTRY IN THE FORMER YUGOSLAVIAAna RangusArxfarm d.o.o.,Turopolje 7, 8310 !entjernej, Slovenijaarxfarm@siol.netThe Balkan Peninsula, whose central west area was part of the former Yugoslavia, is characterised byan abundance of different plant species due to the influence of alpine, Mediterranean and continentalclimates.According to Turrill, the Balkan Peninsula hasexceptionally rich flora, and geographically andhistorically it is a link between the plant life ofEurope and Asia. The area stretching fromTrieste and up to Crete and Sulina, covers480,911 km 2 , with approximately 6,500 plantsspecies and 1,750 endemics.The main plant families with aromatic plants:Asteraceae (913 species), Apiaceae (334Species), Lamiaceae (371 species), Pinaceae (21species), Iridaceae (61 species), Rutaceae (21species), Geraniaceae (44 species), Rosaceae(188 species), Violaceae (58 species),Valerianaceae (37 species), Aristolochiaceae (12species), Verbenaceae (5 species), Tamariaceae(8 species), Myrtaceae (1 species), Lauraceae (1species) and Araceae (12 species).The Balkan PeninsulaAmong them, as source of endemic species are determined the following species: Thymus, Teucrium,Origanum, Satureja, Salvia, Stachys, Achillea, Anthemis, Artemisia, Seseli, Peucedanum, Veronicaand Viola.Following a brief outline of the new countries that make up the former Yugoslavia and an overview ofessential oils in the region, the paper discusses the essential oils industries in each of these sixcountries. Finally notes are provided on various essential oils that are currently produced in the region.WHAT IS THE FORMER YUGOSLAVIA?The country no longer exists, it was established after the First World War and lasted for almost 70years. Today, the term is used for a broader determination of the region. The former Yugoslavia isnow divided into six new countries, namely Bosnia and Herzegovina, Croatia, Macedonia,Montenegro, Serbia and Slovenia established in the period from 1990-1999 during the war in theregion.Economically there are several differences between the new countries and some economic data areshown in Tables 1 and 2. Slovenia is the most developed part of the former Yugoslavia, followed by120
Former Yugoslavia’s essential oils industryCroatia. Meanwhile Serbia, Bosnia and Herzegovina, Montenegro and Macedonia are atapproximately the same stage of economic development. The industrial development was uniquelyarranged at the time of Tito's Yugoslavia, following the Second World War. Slovenia was the leadingregion, with the most developed industry.Table 1 Former Yugoslavia - GDP per capita (Euro)Country/Year 2002 2003 2004 2005Bosnia and1556 1642 1950 2095HerzegovinaCroatia 5507 5906 6397 6972Macedonia 1981 2025 2128 2277Montenegro 2107 2311 2465 2638Serbia 2016 2181 2664 2730Slovenia 11,866 12,461 13,103 13,896Source: Southeast Europe Investment Guide <strong>2007</strong>, www.seeforum.orgTable 2 – GDP growth in Former Yugoslavia countriesCountry Population (m) Annual GDP growth (%)2006 2006 <strong>2007</strong>* 2008*Bosnia and 3.8 5.9* 5.7 6HerzegovinaCroatia 4.4 4.8 4.2 4.3Macedonia 2 3.1 3.9 4.4Montenegro 0.6 6.5 6 6Serbia 7.4 5.7 5.5 5.9Slovenia 2 5.2 4.6 4.9Note, *ForecastSource: ISIS Chemical Business, 9 - 15 July <strong>2007</strong>, Bela Fincziczki, <strong>Budapest</strong>Vienna Institute for International Studies, Unicredit Group New Europe Research NetworkAN OVERVIEW OF THE ESSENTIAL OIL INDUSTRY IN YUGOSLAVIA AFTER THESECOND WORLD WARThe first written evidence of essential oils in the region is around 1777 and is connected to lavenderand rosemary production on the island of Hvar in Croatia. Mass production started after peronosporadisease in the vineyards after the First World War. After that many farmers replaced their vineyardswith lavender plantations. In the best years, Croatian lavender production totalled 60-80 tonnes peryear. Only a small part, up to 5%, was used for local industry needs.Lavender (Croatian), sage (Dalmatian) and juniper berry oil were the main essential oils produced inthe Socialist Federal Republic of Yugoslavia (SFRJ). Some export data are shown in Table 3. Theaverage value of essential oils export was around 100 tonnes /year with the dominant productslavender oil (accounting for an estimated 73%), sage officinalis (estimated 14%), laurel leaf oil (5%),121
juniper berry oil (8%). A very small quantity (estimated around 5%) of essential oils produced in SFRJwas used for the local, internal market.Table 3 Export and Import of Essential Oils in Yugoslavia (SFRJ)* 1976-1986300250200150100EXPORT/tIMPORT/t5001976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986* Socialist Federal Republic of YugoslaviaTHE STATE OF THE ESSENTIAL OILS INDUSTRY IN THE FORMER YUGOSLAVIAToday, essential oils production in the former Yugoslav region is undertaken by many small producers/farmers. The approximate number of distilleries in the region is around 55 and the average volume ofproduction from each distillery ranges between 100 kg to 1,000 kg. A few distilleries produce morethan 1,000 kg/year. Ownership of the distilleries is mainly private. Below are illustrations showingdifferent technical levels of distillery equipment.Field distillationHome made distillation122
Former Yugoslavia’s essential oils industryThe older type of distillationThe recent type of distilleries123
BOSNIA AND HERZEGOVINABosnia Herzegovina is in the central part of the formerYugoslavia with 3.8 million inhabitants, an annual GDP percapita of 2,095 EUR in 2005, and forecast GDP annual growth of5.9% in 2006. The cultivation of aromatic plants does not exist inimportant quantities and production of essential oils is mainlyfrom material collected from the wild. Due to internationalsupport from SEED, SIPPO and GTZ after the Bosnian War theproduction of organic essential oils began in Herzegovina. Theseincluded helichrysum oil, juniper berry oil, sage off. oil andwinter savory oil etc. The essential oils from the Bosnia andHerzegovina are marketed only as organic quality. The firstIFOAM Conference on Organic Wild Production was held inTesi!, Bosnia and Herzegovina in 2006. In the mountainous partsof former Yugoslav region (the whole region except Slavoniadistrict in Croatia and Vojvodina district in Serbia), there are conditions for organic production.Farmers in these parts did not and do not use pesticides, herbicides or similar agents for plantprotection.CROATIACroatia has 4.4 m. inhabitants, GDP per capita was 6,972 EUR in2005, with GDP annual growth of 4.8% in 2006. It is aninternationally well-known part of the former Yugoslavia regionwith regard to its earlier involvement in the essential oilsbusiness. A few companies that existed in the time of SFRJ (e.g.Dalmacijabilje, Chromos) were the main exporters of essentialoils from the whole of SFRJ. Essential oils are produced inCroatia from cultivated plants or from wild grown plants. Today,the Croatian government supports the plantation of lavender oil"Budrovka" and other medicinal and aromatic plants by statesubventions of 2000 EUR/ha. Lavender "Budrovka" plantationcovers around 40 ha and lavender on the island of Hvar coversaround 50 ha (according to the information of the AgriculturalAssociation of Hvar).The total cultivation area of aromatic and medicinal plants in Croatia is between 3,000-4,000 ha. Datafrom the Croatian Bureau of Statistics suggests 4,040 ha and 3,214 ha. in 2005 and 2006 respectively.The majority of the area is under Chamomillae and used as dried flowers for the food industry andpharmaceuticals.124
Former Yugoslavia’s essential oils industryMACEDONIAMacedonia with 2 mn inhabitants, GDP per capita 2,277 EUR in2005, GDP annual growth 3.1 in 2006 is the southern mostcountry of former Yugoslavia, bordering Greece. Essential oilproduction is focused on juniper berry oil. Cultivation of aromaticand medicinal plants is at an early stage. There are some attemptsto cultivate lavender oil near the Greek-Bulgarian border thathave not developed successfully.MONTENEGROMontenegro has only 600,000 inhabitants, a GDP per capita of2,638 EUR in 2005 and GDP annual growth of 6.5% in 2006. Theessential oils produced in Montenegro are only from naturallyoccurring plants. There is a prohibition regarding the collectionof Pinus pumilionis oil from the wild. For the past 70 years thiswas produced at Sinjajevina Mountain in quantities of 3-4tonnes/year. In early 2000, Montenegro introduced the GermanDM as the national currency and later the EUR, which led to arise in prices throughout the country.A second important influence on the economy in this smallcountry has been the impact of large Russian investments inMontenegro's real estate. A consequence has been higher labourcosts. Furthermore, this is the reason for the higher price ofhelichrysum oil this year. In the past, the price given to the herbcollectors was around 0.3 EUR/kg, but this season the price rose toaround 0.8 EUR/kg or even 1 EUR/kg.SERBIASerbia is located in the central part of the Balkan Peninsula withsome 7.4 million inhabitants, GDP per capita of 2,730 EUR in2005 and GDP annual growth of 5.7% in 2006.After World War II, through the initiative of Prof. Tucakov, aplantation of aromatic herbs was started in the Banat region:peppermint, dill, parsley, melissa and tarragon. Along with thecultivation the first distillation equipment was made in Banat in1959. It was privately owned as were another 8 distilleries built inthe same village during the next 10 years. Private ownership inSFRJ allowed farmers up to 10 ha of lands. Small manufacturersalso existed in SFRJ. Today, production of essential oils in Serbiais represented by almost 20 small distilleries.125
The most important oil produced in Serbia is juniper berry oil. Other essential oils, produced fromwild growing plants include yarrow oil and St John's wort oil. The collection of natural plant rawmaterial is limited by law and managed by The National Institute for Protection of Nature.The area with aromatic and medicinal plants is estimated at approximately 7,000 ha. and comprisingsome 53 species and 99 cultivars. The most abundant is peppermint (500-1,500 ha), chamomile (600 -1,000 ha) and melissa (50-200ha). Further spicy plants include paprika (1,200-3,600 ha), parsley (200-300 ha), coriander (100-400 ha), caraway (100-300 ha) and mustard (100-350 ha). A number of oilsare produced from cultivated plants including angelica root oil, chamomile oil, hyssop oil, melissa off.oil, lovage herb and root oil, parsley leaf oil and yarrow oil. Further development is expected in thedirection of cultivated plants as raw material for distillation.SLOVENIASlovenia with 2 mn. inhabitants, GDP per capita 13,896 EUR in2005, GDP annual growth 5.2% in 2006 is the northern most partof former Yugoslavia. Law limits the collection of natural plantraw material and therefore the distillation from wild plants is notpossible anymore. One exception is Templini oil. The averagecultivation area under aromatic and medicinal plants in Sloveniais around 20 ha and is not enough for any serious production. Theproduction of essential oils from forest waste (Abies alba, Piceasp) after sawing is theoretically possible but it seems that there isno actual market demand at the current production price. Themain product is juniper berry oil, produced from raw materialfrom other ex Yugoslavian countries.ESSENTIAL OILS PRODUCED TODAY IN THE FORMER YUGOSLAVIA REGIONIt is estimated that the total quantity of essential oils, produced in the new countries of the formerYugoslavia is between 20-25 tonnes per year. In the last decade of SFRJ (i.e. Yugoslavia up to 1991),the production of essential oils was estimated at around 100 tonnes per year. Thus, the region is nolonger an important producer of any major essential oil and the industry is an unimportant part of theglobal essential oils business. Table 4 and Figure 1 provide an overview of production by both countryand type of essential oil.Both the organization and people involved in today's essential oil business in the former Yugoslaviaare small scale, economically weak, face an insecure market and face buyers' demands for lower andlower prices. Some larger companies, which operated in the past in the SFRJ have changed,disappeared or withdrawn from the business. Only Chromos (today Ireks Aroma) continue with thebusiness, but this is a very small part of their total business with only a few % of their revenuesderived from essential oils.The future production of essential oils from material collected from the wild has limited opportunityfor development. Cultivation of aromatic and medicinal plants could become an important part ofagriculture in some parts of former Yugoslavia given the traditions and natural conditions. It is limitedby heritage of the socialist era.126
Former Yugoslavia’s essential oils industryDuring the time of the SFRJ the farmer could have a maximum of 10 ha of land and this is still thesituation. The average size of land for a household is around 2 ha. Fields are small, averaging 0.5 ha oreven smaller and this is unsuitable for mass production. As the agricultural sector goes throughreconstruction and change, we hope that this will create better opportunities.A second development path is the production of organic essential oils as is happening inHerzegovina. The threat that follows the "wrong , irregular " collection of wild grown plants is thedevastation or disappearance of some habitats. This has partially happened with helichrysum. Two orthree years ago two harvests per year of helichrysum were possible, the first in June and the second inautumn due to long and warm summer. The plants no longer have enough time for renewal and thehabitat is becoming poorer, with fewer plants per square metre.Table 4 – Overview of Essential Oils Production in Former Yugoslav Region (KG.)ProductCountry1. Abies Alba needle oil,Fir oilBosnia &HerzegovinaCroatia Macedonia Montenegro Serbia SloveniaTotalquantityproduced inthe region50 30 20 1002. Angelica root oil 30 303. Chamomillae 20 20 404. Fennel oil 100 100 2005. Helichrysum oil 300 700 400 1,4006. Hyssop oil 100 1007. Juniper berry oil 1500 500 1,500 500 3,000 3,000 10,0008. Lavender oil 5,000 5,0009. Lavender oil(Budrovka)600 60010. Laurel leaf oil 500 300 1,000 1,80011. Melissa off oil 10 1012. Parsley leaf oil 700 70013. Parsley seed oil 100 10014. Pinus nigra/sylvestris 200 20015. Pinus pumilionis 50 5016. Rosemary oil 100 10017. Sage off oil 2000 500 2,50018. St John’s Wort oil 10 1019. Templini oil 200 20020. Winter Savory oil 200 200 40021. Vitex agnus castus oil 150 15022. Yarrow oil 50 50127
12000Slovenia10000Serbia8000Montenegro6000Macedonia4000Croatia2000Bosnia and Hercegovina01 3 5 7 9 11 13 15 17 19 21Country/ProductAngelica Root OilIs a rather new product with volumes of around 20kg /year with a tendency to grow. Angelica root oilis a relatively new product starting after 2000 year and produced only from cultivated plants. Thevolume of production is a maximum of 20 kg per year.Blue Chamomile OilThis is produced in limited quantities of approximately 20 kg /year. The quality from Serbia andCroatia is very similar, rich in chamazulene and a low content of bisabolol. Price is competitive, butdemand is not regular. Chamomile oil is produced in rather small amounts despite the large area ofchamomile cultivation in Croatia and Serbia. The genotype, cultivated in Croatia and also in thenorthern part of Serbia is “chamazulene” type and essential oil contains around 5% chamazulene. Thebisabolol content is very low.Fennel OilAs with chamomile oil production is in very small quantities. The reason for the low production of theessential oil is that despite the cultivation of fennel seed (i.e. the plant Foeniculum vulgare ssp.vulgare) the farmer receives a better price for seed than for the essential oil. There are substantial areaswith fennel, but due to better price for seeds farmers have stopped producing the oil.128
Former Yugoslavia’s essential oils industryHelichrysum OilIn the Balkans there are two species of Helichrysum Helichrysumitalicum and Helichrysum arenarium. The two species differmorphologically by the flower's colour and habitat. OnlyHelichrysum italicum is used for essential oil production andproduction is located in Croatia, Bosnia and Herzegovina andMontenegro.It is the most wanted product this year and the price is above the1,000 EUR/kg for product collected from the wild and even morefor the organic product. Only organic helichrysum oil is producedin Herzegovina, which generally has lower levels of neryl acetate,averaging 3-5 % compared to Croatian coastal and even higherisland qualities. This is caused by the more continental habitat ofHelichrysum italicum in Herzegovina.Helichrysum italicum(Roth.) GideonThe average volume of organic helichrysum inHerzegovina is around 200kg /year.Collection of Helichrysum rawmaterial before distillation -Herzegovina 2001The raw material for helichrysum oil is collected alongthe coastal Adriatic region up to Scadar Lake near theAlbanian border. The quality of the raw material is thebest on the islands, providing oil with higher nerylacetate, which is closer to the Corsican variety ofHelichrysum italicum than other products originating inthe Balkans.The product is endangered because of high productioncosts and the endangered habitat due to unregulatedpicking. Future demand could be met by cultivation,which would also make the product more stable on themarket.Habitat of Helichrysum italicum inCoastal region of Croatia- summer2001129
Hyssop OilHyssop oil is produced from Hyssopus officinalis ssp. officinalis and production varies, since thedemand is irregular. The main constituents are pinocaphone/isopinocamphone. Production is locatedin the northern parts of Croatia and Serbia. The average quantity produced is around 100kg per year.Juniper Berry OilThis is a difficult product. It seems that demand for “Balkan quality” has decreased in the last decadedue to other sources with more favourable prices on the market. The main source for good rawmaterial (which is a precondition for good quality oil) is the southern part of Serbia including Kosovo,the northern part of Montenegro, some parts of Bosnia and finally Macedonia. Every third year gives a“ good harvest”. Law limits collection from the wild; in Serbia in <strong>2007</strong> it was permitted to collect2.000 tonnes of juniper berry. Some further steps for processing, including rectification, have not beenapplied in commercial production due to scattered production and the absence of bigger companies todevelop it.Laurel Leaf OilThis oil is sourced from young branches and leaves. The habitat of Laurus nobilis is in three countries:mainly the southeast part of Croatia, the northern coastal part of Montenegro and a very smallproportion from Herzegovina. In Bosnia and Herzegovina organic laurel leaf oil is produced inquantities of approximately 300 kg per year. Generally, laurel leaf oil is produced in much smallerquantities than in the past (estimated 1,500 – 2,000 kg per year). Due to higher labour costs inMontenegro and Croatia, the product has an uncertain future.Lavender Oil/ Lavendin Oil “Budrovka”This oil is still produced on the island of Hvar, but to a much lesser extent than in the past. Due to thedevelopment of tourism, labour costs have increased and Croatian lavender is not competitive on theinternational market (with the price of 35-50 EUR/kg). The volume of production is 3-5 tonnes andmainly sold on the local market. The future perspective for the Croatian lavender oil is limited by thehigh producer price. The hope is that “Budrovka” will return back the lost position of Croatianlavender among other lavender /lavender qualities on the market.Due to the Croatian government programme to encourage the production of the native species ofLavender oil “Budrovka”, new plantations have arisen in continental Croatia with the support of theCroatian government.Lavender fields - Island Hvar Croatia <strong>2007</strong>130
Former Yugoslavia’s essential oils industryThe plantation area is around 40 ha with a tendency towards enlargement. The advantage of Budrovkavariety is the low camphor content and high linalyl acetate in respect to Croatian Lavender.Mellisa Off. OilMelissa off oil is another product with only a very small volume of production, around 10 kg per year.It is well known among producers (farmers) but faces an irregular market demand. The demand issmall with no substantial change on the market.Production of nursery plantsin Serbia (1998)Melissa field Serbia <strong>2007</strong>Parsley Leaf OilParsley leaf oil is produced on a regular basis. The demand varies from year to year and averagesaround 500 kg. Parsley leaf oil has a long tradition in northern part of Serbia. It is produced from thesecond year of vegetation from the whole green herb of cultivated parsley. The volume of productionvaries from year to year, and in the 2006 season was around 600-700 kg.Parsley Seed OilParsley seed oil is produced in small volumes.Rosemary OilRosemary oil is produced on the island of Hvar, but in very small quantities for the local market andtourism promotion. The price of the product is not competitive on the market.131
Sage Off. OilThe sage story follows the disintegration of Yugoslavia (SFRJ) and SSSR (“deliberation of Albania”).In the time of the SFRJ there was a government enterprise “Sage export”, which exported the sageleaves to the USA according to ASTA specification. The collection of raw material from the wild(sage herb) was dominated by Croatia (from the Adriatic coastal region), Herzegovina andMontenegro (close to Helichrysum habitat). Few factories processed the herbs (drying, cutting,cleaning) and prepared the sage leaves for the USA market. From the waste, essential oil wasproduced.Following the collapse of SFRJ in the early 1990s, Albanian companies undertook the business.Government enterprises with their rigid structures failed to adapt during the transition period. Thesituation was made more difficult by the war in the region and further economic sanctions, whichadditionally destroyed the economies in Serbia and Montenegro.In the past, sage was one of the main Yugoslavia export businesses, but this has almost died today.For cultivation, the native hybrid Primorska has been developed and some initial plantations have beenestablished. Sage (Salvia officinalis) is the main aromatic plant wild grown in Herzegovina andproduction is widespread. The quality of essential oil is characterised by its high thujone content,which is in excess of 40%. Due to cheaper products from Albania and cultivation in Central Europe,the region has lost its importance as a supplier of sage, both dried leaves and essential oil. The averageannual volume of organic Sage off. oil output is around 2,000 kg. Sage off. oil was produced in thepast in important quantities. Today, production has almost stopped due to more competitive Albanianproduction.Winter Savory OilAccording to Prof. Pali!, there are generally two distinct chemotypes of Yugoslavia's wild Saturejamontana subsp. montana; the first is characterised by the high content of phenolic compounds(thymol-carvacrol) and the second by terpene alcohols (linalool-terpineols). Organoleptically it is notpossible to recognize the chemotypes and this makes production even harder. Thymol and carvacrolchemotypes are grown in Croatia, Bosnia and Herzegovina and Montenegro.Winter savory oil is a minor product produced fromplants growing in the wild and only from thymolcarvacrolchemotypes.Organic winter savory oil is produced in very smallquantities of approximately 50 kg per year.The chemotypes encountered in Montenegro iseither carvacrol or thymol type.Satureja montana habitat in Montenegro1997132
Former Yugoslavia’s essential oils industryYarrow OilYarrow oil is produced from both plants grown in the wild, which have low chamazulene content ofaround 1%, and from cultivated plants with higher chamazulene content. The demand for bothproducts is small and irregular. Yarrow white oil is occasionally produced in Macedonia. The qualityis similar to Bulgarian yarrow white oil (without chamazulene). Quantities vary from year to year upto a maximum of 50 kg.Other Essential OilsThe following essential oils are produced in small quantities or even as test products with the ability toenlarge production volumes. These include ramson oil (allium ursinum oil), horseradish oil and myrtleoil. St. John’s wort oil is produced in limited quantities of approximately 10 kg/year from the wildplant Hypericum perforatum and used for aromatherapy purposes. Templini oil is produced from theraw material Abies alba, collected in Slovenian forests with an average quantity of 100kg/year. Vitexagnus castus-flower oil is produced in June in Herzegovina from flowering branches of Vitex agnuscastus. The product is used in limited quantities in aromatherapy. The volume of annual organicproduction is around 50 kgCONCLUSIONSFuture development perspectives will include:• organic essential oil production from wild and cultivated plants• enlargement of the cultivation area of aromatic plants and the introduction of newspecies in the whole region.Ana Rangus graduated in Pharmacy at Belgrade University and receivedher Master's degree at Ljubljana University, in the field of Pharmacy andNatural raw materials. She is responsible for sales and quality in the familyessential oils business (Arxfarm and Pharmanais).133
Developments inEssential Oils Industries Elsewhere134
THE CUBAN CITRUS INDUSTRYReut BerezovskyWaknine & Berezovsky Co. Ltd.,36 Magal Street, 56528 Savyon, Israelr.berezovsky@wb-il.comYou may wonder why a woman from Israel is talking in Hungary about the citrus industry in Cuba.The answer is because our company has a long-term joint venture with two citrus factories in Cubathat represent 80% of the total citrus industry in Cuba.In this presentation I will initially provide some background information on the political and economicsituation in Cuba and then discuss the citrus industry. Aspects covered include a short historicalreview of the sector, the citrus factories, quality control, the processing seasons, characteristics of themajor citrus crops, grapefruit and orange; the citrus oils, the impact of natural disasters, the citrusrevolution that has taken place in Cuba and finally prospects for the sector.WHAT IS CUBA FOR YOU?Cuba is one of the most intriguing countries in the world.I do not know how many of you have been to Cuba, but itis definitely worth a visit, not only because of whatColumbus said in his first visit to Cuba, that “this is thelandscape which a man’s eye has never seen before”, butbecause Cuba has so many unique things to offer – andyes it is an island with beautiful beaches!People may say that Cuba is the last communist country,but many will say that the Cubans are Fidelists ratherthan communists. Cuba has been communism or moreaccurately – Fidelism – since 1959. Fidel is no longer in power and there has been a good transition toFidel’s brother Raul who is now President and everything looks stable. However, one would need tobe a prophet in order to predict what will eventually happen.One cannot talk about Cuba without mentioning the tobacco for their cigars and praising their famousrum. In this country, the Salsa dance is not learnt - it is innate! It seems that babies learn to dancebefore they learn to walk! Walking along the streets of Cuba is sometimes like watching a movie ofthe 1950’s. You feel as if time has stopped. As if it was just a week ago that the Americans left theisland and their cars behind. This is a country where the past intermingles with the present. Where(very old) vintage cars from the early fifties, are still running next to new models. In Cuba peoplequeue for ice, because not everyone has a fridge at home. However, one does not see homeless peopleon the streets.When you ask consumers and purchasing managers about Cuba, they will probably tell you that Cubais:• the largest supplier of premium quality sweet orange• the second largest supplier of premium quality grapefruitAs the Google Earth map shows, Cuba lies between North and South America, close to the Gulf ofMexico. Alongside Cuba you can see the Dominican Republic and below Cuba you can see Jamaica,135
Yucatan – Mexico-Cancun. Also part of Cuba is Guantanamo Bay, which everyone has now heardabout. Florida is very close to Cuba and approximately half of Havana’s population has families inFlorida. The embargo imposed on Cuba by their US neighbour undoubtedly creates a huge problemfor the local population, but this does not change the fact that the Cubans are an extremely pleasant,warm, and joyful people.Cuba is a large island, approximately 900 km in length with approximately 11 million inhabitants, outof which about 20% live in Havana, the capital. The proportion of land to population leaves plenty ofspace for agriculture! Besides agriculture, Cuba obtains income from other sources. One of these istourism; 15 years ago, less than 0.5 million tourists visited Cuba annually; nowdays, the numberexceeds 2.0 million, bringing in an income of more than US$2 billion to the country. Tourism isCuba’s largest source of income.Surprisingly, the second source of income comes from donations given directly to the Cubans by theirfamilies in Florida, which also amounts to more than US$ 2 billion. Another important source ofincome is remittances from Cubans living abroad especially the USA and more recently donations thathave been received from President Chavez of Venezuela.HISTORICAL BACKGROUND TO THE CITRUS INDUSTRY1490 – Cuba’s citrus activity began when Christopher Columbus, on his second voyage to theCaribbean in 1493, brought some citrus seeds to Haiti, from where they were passed on to Cuba.1894 – For 400 years the Cubans took no advantage from these citrus seeds and their fertile soil. Asalways, only a crisis brings the opportunity, which came with the big freeze in Florida.136
Cuba’s citrus industryThe big freeze took place over two consecutive years and literally killed 90% of the Floridian citrusindustry. In the crisis, farmers looked for alternatives and they did not have to look very far – Cubawas there! So they moved to Cuba and planted citrus there in order to sell to the USA. However thistrial failed due to high duties.1959 – The Communist Revolution saw Fidel Castro coming to power but he was isolated from therest of the world. Following the revolution the immediate contact was with the USSR that neededcitrus and actually both partners found synergy – it provided a big push to the development of thecitrus industry.1991 - After the fall of the Berlin Wall, President Fidel Castro had the choice of either following thepath chosen by the Soviet Union, (which created a huge gap between the rich and the poor), or togradually open up the country to the West. One of the ways of doing this was to establish jointventures with foreign companies who were ready to invest, to bring in know-how and to open newmarkets for Cuba, other than Eastern European market. A key turning point was when Cuba took thedecision to collaborate with western companies, in order to upgrade its economy, for which we cannow see the results.2000 – The IFU Symposium in Cuba, with some 400 participants from all around the world! It provedthat Cuba was indeed on the world’s citrus map and concluded the Citrus Revolution! Since thencustomers have been knocking on our doors to ask for Cuban citrus products!Cuban Soil.As the slide illustrates some plantation land is very rocky.One way to overcome this obstacle and to plant citruswas by drilling a hole in the rock and inserting a stick ofdynamite! This is a real story! At the end of the day, whatdoes a plant need? Physical support, water and chemicals– and it works!The Citrus FactoriesThe Ministry of Agriculture heads all Cuban citrusactivity and this includes the plantations, the fruit and thecitrus plants. The oils are by-products of citrus processingand as such, they are sold through the same channels.Jaguey Grande and La Isla products are sold by ourcompany, while Ciego and Contramastra by a Cubanmarketing company and the Pinar Del Rio plant is a jointventure between the Cuban and another Europeancompany.137
Quality ControlAll factories were significantly upgraded4 factories are ISO 9002 certified4 factories are SGF membersThe processing seasonsGrapefruit: September - FebruaryOrange: December - JuneCharacteristicsVery wide range of Ratio:Grapefruit: 6 - 11Orange: 10 - 40Non-bitter productsSpecial flavorGRAPEFRUIT – TORONJA138
Cuba’s citrus industryCuba produces approximately 300,000 tons of grapefruit of which 90% are directed to the industry toproduce approximately 120,000 tons of juice (or 20,000 tons of concentrate and 200 tons of oils (whiteand pink). These data are based on an average of a non-hurricane and non-post hurricane year. Cuba isdifferent from other countries in the fact that 90% of fruitgoes to the industry whereas elsewhere only the secondbest fruit goes to the industry. This guarantees a betterquality of fruit for squeezing.Share of processed grapefruit output: globally Cuba issecond in processed grapefruit output behind the USAand followed by Israel, South Africa and Argentina. Thisis under the same assumptions of an average year withouthurricanes.As regards exports, since the USA uses most of thegrapefruit in the local market, Cuba has become thelargest exporter of processed grapefruit.QUALITY AND PRODUCTSThere are three grapefruit varieties grown in Cuba, white(Marsh seedless variety) accounting for approx. 70% ofproduction, pink (Ruby Red) accounting for approx. 25% and red (Star Rio and Rio Red varieties) accountingfor approx. 5%.From these grapefruit Cuba produces a wide range of grapefruit products that includeFGJC (frozen grapefruit juice concentrate) 58Bx ratio 6-12low pulp FGJCfrozen and aseptic NFC (not from concentrate) - juicefrozen and aseptic cellcold pressed oil – white and pinkdistilled oiloil phasewater phased-limonene139
Cuba grapefruit have a wide range of ratios as shown inthe diagram that illustrates the ratio between Brix andacidity. As the season moves forward the fruit becomessweeter.Thus to summarise, Cuba is the second largest grapefruitprocessor, it produces approximately 300,000 tons offruit; there is a lack of bitterness in the fruit and there is awide Brix/acidity ratio ranging between 6-12.ORANGE – NARANJASome basic statistics on the Cuban orange industry:• Cuba is the fifth largest orange processingcountry after Brazil, USA, Spain and Italy but• It is first in sweet (high ratio) orange processing!It produces approximately 350,000 tons of fruit of which90% is directed to the industry. Again this is differentfrom other countries and guarantees a better quality offruit for squeezing. It can produce approximately 140,000tons of juice or approximately 30,000 tons of concentrateand approximately 1,000 tons of oils.140
Cuba’s citrus industryQuality and TrendsConsumers are moving to a sweeter (higher ratio) juice.1950-1970 Israel and Spain controlled the market anddictated the taste with an acidic juice (ratio 11-12).1970-1990 - then Brazil made a strong entrance with highratio product, the consumer tasted the sweeter juice andapparently liked it (ratio 14-16).1990-2005 – Cuba, Mexico and the USA made a strongpenetration of the European market and the ratio went upto 18.More recently we are experiencing a very strong demandfor higher ratio and sweeter juice for ratio 18+!TrendsThe variety – Valencia.You may see a juice and a concentrateFrom its oranges Cuba produces a wide range of orange products includingFCOJ (frozen orange juice concentrate) 66 Brix ratio 10-40low pulp FCOJfrozen and aseptic NFC (not from concentrate) - juicefrozen and aseptic cellscold pressed oildistilled oiloil phasewater phased-limonene141
Cuba’s oranges have a wide range of ratio as shown in thediagram that illustrates the ratio between Brix and acidity.As the season moves forward the fruit is sweeter and hasdifferent uses:Low Ratio (Acidic) – Mainly for NectarMedium Ratio – Low and High Ratio JuiceHigh Ratio (Sweet) – Mainly for Blends.Thus to summarise, Cuba is the largest high ratio orange producer, it produces approximately 350,000tons of fruit; a large proportion of which is top quality product and there is a wide Brix/acidity ratioranging between 10-40.CITRUS OILSThe Citrus Oils and Pictures of the Citrus Oils ProcessThe chart of the process of cold pressed oil and distilledoil.142
Cuba’s citrus industryThe chart of the process of d-limoneneThe chart of the process of water phase and oil phaseThe various citrus oil products produced are:• Cold Pressed Oil• Distilled Oil• Oil Phase• Water Phase• D-LimoneneClimatic FactorsWhen dealing with nature, various countries suffer from various disasters including droughts, floods,earthquakes, fires, freezes, etc. One major influence on the Cuban citrus industry has been the impactof hurricanes.The Citrus Revolution in CubaTop quality productsWaiting list of customersWorldwide market leaderOver the last 16 years Cuba has become an importantfactor on the world’s citrus map introducing its productsworldwide but especially to Europe and even to Japan.143
Also Cuba has recovered very quickly from hurricane damage – and no “force majeure” was declaredand contracts were fulfilled. There is no doubt that the hurricane that hit Cuba a few years ago had agreat influence on the market for special Cuban products, but the very fast way in which the Cubanshave recovered without any foreign assistance, should set a good example to the world’s citrusindustry!FUTURE PROSPECTSSixteen years ago Cuba was not known on the world's citrus map, but today things are different. Fromknocking on customer’s doors to sell Cuban products, today customers are asking for Cuban products,thanks to their quality!The future prospects for the industry appear good with increases in both production capacities andcontinuous quality upgrading. Thus, a number of positive developments are taking place including:• Constant investment in new equipment e.g. new evaporator and new aseptic line at JagueyGrande• Constant growth in production with 1,000 new hectares of plantations each year• The introduction of new varieties• Developing new marketsThe Cubans have…• The land• A major part of the agricultural andlogistic infrastructure• The labor force• Technical and scientific resourcesand…The will to continue developing the Cuban Citrus Industry!144
Cuba’s citrus industryThe potential is definitely there!The Cuban citrus industry is moving forwardSo, I hope that next time, when you hear the name Cuba, you will NOT only think about this…But also about the juices, concentrates and Citrus Oils!Reut Berezovsky is a Director at Waknine & Berezovsky Co. Ltd. & Prodalim B.V.,a major international trade house for fruit products. She holds a BA degree inBusiness Administration and International Relations from the Hebrew University ofJerusalem and a MA degree in Communications Studies from the Bar IlanUniversity, Israel. Before joining Waknine & Berezovsky in 2000, Reut workedseven years as an economist at the Tel Aviv Stock Exchange in Israel.145
DEVELOPMENTS IN INDONESIAN ESSENTIAL OILS AND THEESTABLISHMENT OF THE INDONESIAN ESSENTIAL OIL COUNCILWien Permadhi GunawanChairman, Indonesia Essential Oil Councilc/o Indesso Aroma, J1 Tanah Abang II/78, Jakarta 10150wien.gunawan@indesso.comIt is a great privilege for me to share some facts and opinions on the latest developments in Indonesianessential oils. My brief presentation consists of a short country introduction; an overview of theexisting essential oils industry; the challenges and opportunities facing the sector; government concernand support; the development strategy for the sector and the establishment of the Indonesian EssentialOil Council.Before we talk about the latest development of essential oils, let me first give a brief introductionabout the country. Indonesia is blessed with very fertile land with more than 150 active volcanoes andhas the second highest level of biodiversity in the world. The agriculture sector accounts for 44% ofthe workforce out of a population of 234 million. Important agricultural products are palm oil, rice,rubber, cocoa, coffee, tea and spices.IndonesiaFertile landThe history of spice trading goes back to the early 16 th century when Banda-island and Malukuarchipelago became the first foothold in Indonesia for the Portuguese. The importance of spiceproducing islands has been acknowledged with the exchange of spice-islands with recent prosperousislands between the Dutch and the British rulers during the colonial era. Banda Island was exchangedfor Manhattan Island, New York during the second Anglo-Dutch war. Banda was famous for nutmeg.The Anglo-Dutch treaty in 1824 mentioned Bengkulu (bencoolen) Province as part of the swap withthe island currently called Singapore and some part of the Malaysian peninsula. Recently shocked bystrong earthquakes, Bengkulu is still the major area of patchouli oil production.EXISTING ESSENTIAL OILS INDUSTRY OVERVIEWSince the beginning or mid 20 th century, Indonesia has been producing patchouli oil, vetiver oil,nutmeg oil, clove leaf oil, citronella oil and so on. Besides these traditional essential oils, Indonesiahas always been a major producer of forestry related products for the flavor and fragrance industrysuch as turpentine oil, cajeput oil and benzoin gums.146
Indonesia’s essential oilsThe estimated export value in 2006 was approximately USD 94 million with important destinationsincluding the USA, EU, India, China and Japan. Patchouli oil accounts for close to 40% of the exportvalue and accounts for approximately 90% of the world market share. Nutmeg oil and clove leaf oiland its derivatives account for more than 80% and 70% respectively of world market shares. Althoughnot accounting for major world market shares, vetiver oil, citronella oil and sandalwood oil are alsocontributing significant shares. The other important essential oils are cananga oil, massoia bark oil,cajeput oil and ginger oil. Besides the above essential oils, there are also new or less explored essentialoils including kaffir lime leaf oil and calamus oil.PATCHOULI OILPatchouli Oil OverviewIn discussing Indonesia, people in the essential oils industrywill always be reminded of patchouli oil. With growingareas in excess of 29,000 hectares, theoretical patchouli oilproduction should exceed 1,400 tons per year.Sumatra Island is still the main patchouli growing area withabout 60% of the total growing area in Indonesia. Sumatrahas an estimated 16,544 hectares, Java has 12,112 hectaresand other areas total some 899hectares. In <strong>2007</strong>, a combinationof severe climatic conditions,competing agricultural crops andplant diseases (such as “budok” amycoplasm like organism whichhas no cure as yet) has resulted inPatchouli growing Areas lower output than usual. Java’s oiloutput and quality has increasedin the past few years mainly due to a more efficient field distillation set up. Budok diseaseMost patchouli comes from traditional small-scale plantations with anaverage area of less than 5,000 square metres. In Sumatra, patchouli isplanted when a forest has to be cleared for another plantation such asrubber. The nomadic farming system of patchouli creates difficulties inmeasuring accurately the supplysituation of this commodity.Small plantationInaccurate measurement of supplyresults in patchouli price volatility due tounbalanced supply and demand.Moreover, the majority of the oilfrom Sumatra still comes fromcrude field distillation units with Patchouli cultivationoutput of less than 1kg per 6 to 8hours. The long supply chain system and the difficulty for farmers ingaining access to working capital or processing technology has beenanother major problem. Patchouli oil was traded as low as USD16/kgField distillation unit147
last year but easily breaking more than USD60/kg level in September <strong>2007</strong>. This is certainly far froman ideal situation. There is much that needs to be done with patchouli; multi pronged approaches arenecessary for e future sustainable development and to ensure consistent supply of good qualitypatchouli oil.VETIVER OILVetiver Oil OverviewAnother essential oil, which has drawn ourattention, is vetiver oil. Currently, more than90% of plantation and oil production comesfrom Garut area in West Java. Vetiver wasoriginally planted in Garut by the Dutchbefore the World War Two. The post warchaotic situation in late 1940s and 1950smade Haiti an alternative vetiver source.After years of decline, production of vetiveroil in Indonesia is approximately 15 tons peryear.The main problems with this oil areinadequate post harvest material processingand poor distillation technique, whichresults in low oil quality. Smokey/burnt oilis a usual phenomenon, as distillers need aquick result and apply excessively highdistillation pressure. Efforts are underway toimprove this. Of course, an incentive mustbe provided so that distillers are willing tofollow such improved material processingand distillation techniques.CLOVE OILClove Oil OverviewOne of the most successful developments in essential oils inIndonesia is clove oil. The total clove plantation area is inexcess of 438,000 hectares producing approximately 76,000tons of clove buds. The main use of clove buds is for the kretekcigarette industries. In kretek cigarettes about 30g of dried cutclove buds are used per 100g of dried tobacco leaves. The cloveoil industry is actually a by-product industry since the main cropof clove trees is clove bud. Meanwhile, the majority of oils aredistilled from dried leaves and a certain significant portion from148
Indonesia’s essential oilsclove stems. In Indonesia, the kretek cigarette industry is a large industry with millions of peopleinvolved and billions of dollars tax and levies paid to government.Clove oil is produced by hundreds of traditional distillersmainly in Java and some part of Sumatra and Sulawesi.Annual production (all types of clove oils with clove leaf oil asmajority) is stable at approximately 2,500 tons. Isolates andaromatic chemicals derived from clove oil have beendeveloped during the past 10 to 20 years. Most of the aromaticchemicals derived from clove oil are available from Indonesia.CHALLENGES AND OPPORTUNITIESLearning from the overview of the above three essential oils, we observed several challenges andopportunities in developing the Indonesian essential oils industry. The first challenge should be how toshift traditional cultivation systems to modern cultivation systems and good agriculture practice toimprove productivity as well as to ensure sustainability. This is mainly for seasonal plants such aspatchouli, vetiver and citronella.The second challenge is how to modernize processing equipment. Good manufacturing practice willimprove product quality as well as cost efficiency. The third challenge is to improve the economicscale of business and shorten the supply chain through farmer/distiller cooperatives. The fourthchallenge is the dissemination of agricultural information to improve supply-demand balances toensure market certainty with a more accurate crop calendar.We also see some opportunities such as several important essential oil buyers or users who operate inIndonesia, becoming further involved in the development of the industry. Other opportunities are thegrowing local per capita consumption; increased demand for new applications such as aromatherapy,insect repellent and attractant products. Last but not least, decentralization of economic developmentin the third largest democratic country in the world can be noticed as another important opportunity.More economic stimulants in rural areas must be seen as an opportunity with for example the Phak-Phak Barat regency’s focus on developing patchouli plantation and distillation.GOVERNMENT CONCERN, SUPPORT AND DEVELOPMENT STRATEGYThe Indonesian government has recently showed concern and support, mainly through the Ministry ofIndustry, Directorate General of Small and Medium Enterprises which has set policies such as puttingessential oils as a priority commodity for short and medium term development, standardized essentialoil quality (at least 20 essential oil commodities will have National Standard reference) andencouraged foreign and domestic investments in the less developed sectors such as turpentine oilderivatives, new types of essential oils industries as well as the flavor fragrance industry.149
The government also sets capacity building programs including farmer upgrading on agronomicaspects, distiller upgrading on processing aspects and training on managerial aspects. The otherimportant program in conjunction with research institutions is the plant-breeding program. Newvarieties of patchouli and vetiver plants will be released in the near future.The last important component in the development of the Indonesian essential oils industry is, ofcourse, access to information. Price data in a timely and accurate manner, information on plantgrowing areas and shared modern processing facilities will keep Indonesian essential oils developing.The strategy introduced by the Indonesian government through the Ministry of Industry is theclustering approach. Thirty-two industrial clusters have been decided with the essential oils industry asone of the clusters, which will be regulated and facilitated by government with a clear road map. Theclustering approach needs academicians, businessmen and government involvement to firstly identifythe potential growing areas and encourage the development of production centres for strategicessential oils. This identification can be done with the full support of the Ministry of Agriculture. Thesecond strategy is to develop a good manufacturing practice manual for distillers and nationalstandards for strategic essential oils. The third strategy is to conduct training, knowledge and skill setsharing for farmers and distillers. The fourth strategy is an on-going effort to provide field distillerieswith more efficient equipment with the help of Ministry of Industry and other institutions.THE ESTABLISHMENT OF INDONESIAN ESSENTIAL OIL COUNCILThe establishment of the Indonesian Essential Oil Council is actually an effort to answer the abovechallenges and opportunities by providing an organization for the implementation of the abovestrategy. The Council is a framework for the Indonesian essential oils industry to achieve sustainabledevelopment. All stakeholders in the industry from farmers/farm cooperatives, distillers, collectors,exporters, government institutions, universities, all the way to the main user of essential oilsparticipated in the Council. Several established associations such as Indessota (Indonesian EssentialOil Exporters Association) and AFFI (Indonesian Flavor and Fragrance Association) are alsorepresented in the Council. In the domestic arena, the Council’s main task is to provide and coordinatetraining, advocacies, as well as information sharing channel at www.atsiri-indonesia.com. In theinternational arena, the Council will actively promote Indonesian essential oils in the internationalmarket and work with regulatory bodies and concerned parties to ensure that the product meets currentand future regulatory requirement.There is still lots of work that must be done. We all understand that the current situation of Indonesianessential oils, particularly patchouli, is not beneficial for the industry. Immediate actions are essential.The Council needs full support from all stakeholders (including international buyers) to developIndonesian essential oils for the mutual benefit of all stakeholders.Wien Gunawan is an MBA graduate from the Indonesian Institute ofManagement. He has a long and distinguished career in the flavor andfragrance industry. His professional career began in 1972 with Indesso, afamily owned company, which is sole agent of Firmenich products in Indonesia.Serving as Director in Firmenich Indonesia, a joint venture company from1994. From 1997 as Vice President of Sales & Marketing for Indesso, he helpedtransform the Indesso & Firmenich team into a leading flavor and fragrancebusiness in the Indonesian market. He is also serving as a member of IndessoBoard of Directors. In <strong>2007</strong> he was appointed Chairman of the recently formedIndonesian Essential Oils Council.150
Other Presentations151
AROMA MARKETING – NEW APPLICATIONS OF ESSENTIAL OILS ANDSYNTHETIC AROMATIC SUBSTANCESMrs Monika KaletaPollena Aroma Flavours & Fragrances Ltd.ul Klasykow 10 Warsaw 03-115, Polandzapachy@pollenaaroma.com.pl“For people could close their eyes to greatness, to horrors, to beauty, and their ears to melodies ordeceiving words. But they could not escape scent. For scent was a brother of breath. Together withbreath it entered human beings, who could not defend themselves against it, not if they wanted to live.And scent entered into their very core, went directly to their hearts, and decided for good and allbetween affection and contempt, disgust and lust, love and hate. He who ruled scent ruled the heartsof men.”Patrick Suskind, “Perfume”The history of fragrance substances is intricately connected with the history of mankind. Theproduction of scent is presumed to have started many thousands of years ago, just after prehistoricman learnt how to create and control fire. At present, smell is thought to play a much more importantrole in human life than originally supposed. During the past few decades, research on chemicalcommunication between humans has been intensified. The year 1982 can be treated as the date of birthof a new field of science: aroma-chology involved in penetrating the relationships between ouremotional states and the world of fragrance. According to a commonly accepted definition of aromachology,it focuses on getting to know the rules of inspiring certain feelings and emotions, such as joy,sensuousness, happiness or prosperity with the use of smell. For this purpose, the latest scientifictechniques have been used. Not only has the influence of smell on feelings, mood or emotions beenexamined, but also reactions in other related fields, such as electrical activity of the brain,physiological parameters, e.g. pulse, or conditioned or unconditioned behaviours. The conducted testshave proven beyond any doubt that all impulses reach directly the limbic system where they areregistered by our sub consciousness. The limbic system itself is responsible for the process oftranslating emotions to body reactions. The discovery of the fact that you can modify humanbehaviour with the use of properly selected fragrance substances has given grounds for thedevelopment of new applications of fragrance in business. The works of Teerling, Knasko or Hirschare here worth particular attention.Teerling and his collaborators were involved in research on the impact of smell on the reactions ofcustomers in a textile department. Research conducted simultaneously in several cities proved thatfragrance might significantly affect the length of stay of a person in the shop. It was also noticed thatthe drop in the sales of certain products in a given period amounted to 2.89% in conditions withoutany fragrance and only 1.22% when rooms were aromatised.Knasko used a similar idea in his research conducted at a jeweller’s. Fruit and flower aroma and spicyaroma were put into air-conditioning. Prolonged time spent in the shop was observed, even thoughcustomers did not buy more. Fruit and flower aroma affected both women and men in a similarmanner, while spicy aroma only influenced men.Results of the research by Hirsch seem most interesting. Research was conducted in a casino. Giving adistinct aroma to the area around gambling machines increased the number of coins inserted into the152
Aroma marketingmachines located close to the source of the aroma by about 45.11% as compared with the area free ofthis smell. At the same time, it was checked which dose of smell activated a gambling desire inpeople. A high dose increased the number of inserted coins by 53.42% while a small dose by only33.66%.Many countries, for example the United States, Japan, Australiaor France have used this form of fragrance message for a longtime. It is applied by 60% of companies in the United Statesand around 30% of companies in Western Europe. Currently,aroma marketing is at the peak of its popularity in the Polishmarket. The very idea of this type of marketing consists in theproper adjustment of a fragrance to the circumstances and thesurroundings. It helps create a unique and exceptionalatmosphere that forms a basis for building a characteristicimage of a given place. As a result, a potential customer is in agood mood, wants to stay longer in a given place, perceivesservice as more friendly than in reality, is more eager to make adecision concerning the purchase and exhibits willingness to return to a given place.What does it look like in practice? To answer this question, let me invite you on a virtual trip. We willstart our journey early in the morning. What is the most beautiful smell of the morning? The answerseems to be obvious: it is the magic aroma of freshly ground, brewed coffee. In order to strengthen thisdrink and add the captivating power to it, many cafe owners spray aromas similar to coffee all aroundto tempt and encourage people passing by to enter the place to have a small cup of coffee. There is along way ahead of us, so we will also make use of this invitation. Strengthened by a large dose ofenergy, we set off towards the skyscrapers where a lot of companies are based. Already at the door weare welcomed by a pleasant, fresh smell supposed to create a good first impression. Here we canencounter two techniques. The smell may be a light fruit and flower fragrance or a more decisive,elegant and intriguing one. Due to the size of the building, the lift is its obligatory element. Differentpeople react to the lift in different ways: some fear the limitation of space and closure while others areafraid of the speed, so we usually meet soothing and relaxing smells in lifts. They include the smells ofcitrus oils, orange, lemon or bergamot known for their soothing properties. Frequently they are mixedwith herb oils of sage or lavender which excellently alleviate strong nervous tensions. Subsequentrooms in the building are also filled with fragrances. For example, in office spaces smell is supposedto create a nice atmosphere conducive to effective work. As Japanese research has shown, sprayinglemon oil in a room reduces by 54 percent the number of mistakes made while working on a computer.Isn’t it the dream of all bosses? In a conference room we encounter a smell that is aimed at stimulatingparticipants at a meeting to think creatively and at the same time to kill the unpleasant smell ofcigarette smoke so frequently accompanying brainstorming. In the centre of the company, in the roomof the chairperson, we notice the smell that establishes the impression of strength, prestige andexceptionality. What are our feelings towards a company presented in such a way? As research shows,the offer of such a company becomes 20 percent more attractive. The scope of services and the qualityof this company is rated twice as high as it is in reality. This is a huge promotional success of thecompany and all this is achieved with fragrance only. Leaving the building, we hold in our handsfragrant advertising materials in which scented print has been used.The next point of our excursion is a dentist’s surgery perceived by many of us as an unavoidablenecessity that has nothing in common with pleasure. Often when in the waiting room, our hands aresweating and we feel anxious or even afraid. But nowadays this image is becoming a thing of the past.Dentist’s surgeries offer us a nice surprise. The waiting room we are now looking at smells of fresh153
oranges and cedar, which relieves the tension and the stressconnected with waiting. Properly selected decoration, colouringand music only add to this. In this way the success of this place iscreated, as there is a group of satisfied and faithful customers beingthe guarantee of best publicity.Now we are going to another place where we often meet aromamarketing: a shopping centre. Loads of shops, service points andcatering points have been gathered in one building. Their ownersdo their best to outshine others and win a customer. One of the bestways to increase sales and strengthen the brand is to make use ofhuman senses. To achieve this aim, touch, sight, hearing and tastehave been used for long, and are now joined by smell. In the centrewe are now in, for example, the so-called fragrance islands havebeen installed. The smell skilfully leads a customer in a selecteddirection: the smell of bread leads us to the grocer’s, the smell oflavender to places meant for entertainment and relaxation while asophisticated aroma of perfume leads us to exclusive boutiques. This form of marketing is becomingmore and more common in shopping centres. Smell depends on the kind of product and the form inwhich it is supposed to be perceived by a customer. For example, in the department with kitchenfurniture a composition of vanilla and spices fits well. Compositions imitating the smell of sea breeze,hot in the sun of the beach combine well with the display of sofas and armchairs. Like the touch of amagic wand, it helps us to feel on holiday for a while. Also clothes shops implement this type ofmarketing idea. For example, the premiere of a spring collection is accompanied by the smell of springflowers, like hyacinths or lilies of the valley. A summer collection is well characterised by fruit smells:warm oranges, juicy tangerines, fresh grapefruits filled with sunbeams. Before Christmas, the strugglefor customers is becoming more intense. Traders are more eager to use any form of advertising to gainadvantage over their competitors. Then, more and more often, they reach for aroma marketing and thiscan be seen most clearly before Christmas. Shopping centres tempt you with smells: cinnamon, cloves,juicy oranges, vanilla and baked apples. You can often hear:“...Actually I don’t usually eat gingerbreads for Christmas but there was such a nice smells that Idecided to buy them.”“...Actually I don’t quite like chocolate but the confectionery stall tempted me with such a nice andsweet chocolate smell that I chose to buy three bars of chocolate to put under the Christmas tree.”Thus, a properly matched smell becomes a key to our wallets. Let’s take St Valentine’s Day as anexample. This is the time when we give generous gifts to our one and only beloved person. Marketingspecialists rack their brains on how to attract a customer so that they choose exactly this product in thisparticular shop. One network of clothes shops made an innovative attempt. All of their shops smelledof strawberries. They not only put baskets with strawberries in the central parts of a shop but also usedspecial devices to allow for a steady and slow release of smell.The next stage of our journey is a five-star hotel. The hall and the reception desk should make thegreatest impression on a guest. There we encounter pleasant, delicate smells, preferably citrus orflower notes. Another place where a pleasant aroma may be met is a hotel restaurant. Frequently, spicysmells are used in such places or wine smells with a delicate fruit note. They are supposed to bringabout greater appetite of a customer and at the same time hide the mixture of smells coming from thekitchen. A café is a place where you are encouraged to drink a cup of coffee and taste a dessert. Insuch a place we can find the smells of coffee, vanilla or cream. Rooms are the most important place in154
Aroma marketinga hotel; it is here that the customers spend most of their time. They must be free of the smell ofcigarette smoke or chemical agents used to maintain cleanliness. Some hotel networks choose oneuniform type of smell for all of their hotels throughout the world, based on the assumption (held alsoby many banks) that thanks to this a guest may feel secure, almost like at home, no matter whichcountry they are in. Other hotels try to create exceptional atmosphere related to the specific characterof a place. Guests associate the comfort and excellent care with the pleasures they have experiencedwhile staying in a given town.As it can be seen from our short virtual excursion, aroma marketing has become an element ofnumerous spheres of our life. Starting with the already mentioned cafés, shopping centres, hotels,through banks, airports, cinemas and theatres and many other places.What is the technology of preparing fragrance compositions used in aroma marketing like? There is noone universal way. Everything depends on an individual order of a customer, on their requirements,needs and preferences. Work begins with a deep examination of the place that is to be aromatised.Then, the work begins of the perfume makers who develop the fragrance composition. For thispurpose, they use both natural fragrance substances and synthetic ones. At the same time, specialists ininterior design begin their work. They choose appropriate colouring, furniture, and music, simplyeverything that may affect the perception of a place. Only such complex activities bring the intendedresults. Let’s look at several examples from the Polish market.We encountered aroma marketing for the first time in 1998 in Lisbon at the EXPO 98 fairs. The themeof the Polish Pavilion was amber and the sea. The organisational committee of the Polish exhibitionturned to the company Pollena Aroma Ltd. with the request to develop a special fragrance compositionwith the method of aromatising exhibition halls. This was a real challenge that turned out to be asuccess. The letter of congratulations we received from the organisers was a real proof of oursuccessful performance.Nowadays, Polish entrepreneurs make use of this type of promotion with growing intensity. Forexample, Polonia Palace Hotel in Warsaw has applied this innovative form of marketing. Alsoschools, like English Perfect or British School have found something interesting in aroma marketing,introducing it as an element of image creation and a means having positive influence on concentrationand in consequence on learning results.SPA hotels, e.g. SPA Hotel – Azzun make a large contribution in the fragrance marketing market aswell. In such places the predominant smells are those that remind one of quality perfumes synonymouswith success and also the smells of cedar or green tea soothing for guests. The network of Irena ErisSPA Hotels is worth paying attention to. One of the elementary rules of this network is relaxation andregeneration of body and soul. Ms Irena Eris attaches great importance to the high quality of productsoffered to her guests and the origin of these products. She highly values natural products. In order togain a unique character of a place and at the same time reinforce its therapeutic influence, she hasinvested in aromatherapy.Event actions whose inherent component is a well-designed smell have become very popular. Oneexample of such actions was the Finlandia Grapefruit event organised for the company Brown-Formanin the Warsaw club Cynamon. Extraordinary arrangement of the place in which pyramids of fruit andbottles of Finlandia vodka have been most important has been supplemented by a refreshing smell of aripe grapefruit. Guests will long remember the impressions of the meeting, appealing both to theirtaste and smell.155
A similar idea was used in the preparation of the Golf BusinessConference event held in the Sofitel Hotel in Wroc!aw. Realconditions have been imitated by using the smell of freshly cut grasssprayed around the golf game simulator.Also artists are using smell more and more frequently. For example,the premiere of the film “Jasminum” by Jan Jakub Kolski was filledwith aroma. Press materials for journalists smelt of jasmine and thecinema hall was equipped with devices emitting smells of birdcherry, cherry, plum and jasmine. The fragrant message is used moreand more by theatres and museum. The exhibition prepared by theArchaeological Museum in Gda"sk is worth pointing at. Whilevisiting, you can really smell the streets of the old city. Attemptshave been made at reconstructing smells typically pervading the city on a market day.Two furniture producers have presented a specific setting for their products at the fairs of Furniture,Accessories and Interior Equipment – Furniture 2005 in Poznan. At the stall of furniture producerKler, a delicate fragrance composition was present in the air with the smells of cedar, cypress, jasmine,ginger and thyme in it. At the same time, the stall of MM International was seducing customers with acomposition based on the smells of rosewood, orange and bergamot orange.At the International Book Fairs in Warsaw held in May <strong>2007</strong>, the image of Reader’s Digest was madecomplete with the smell of baked cookies.The World Coffee network of mobile cafés is active in the Polish market and has for many years madeuse of aroma marketing. As its managers claim, sales of coffee have increased by about 40 % thanks tothese activities.The technique of microcapsuling has given a boost to new forms of aroma marketing. At present, it iscommonly used by cosmetics companies who distribute their products through consultants, likeOriflame or Avon.KORONA S.A. has taken advantage of this method of advertising that is original for a companyproducing candles. Thanks to fragrant advertising, they can reach a wider group of recipients.Such examples can be multiplied endlessly. Marketing specialists claim that an era of aromamarketing is coming. The conditions on the market are hard and only those who apply creative andinnovative methods of addressing the customer have the chance to survive in and increasinglycompetitive world.Literature1. Aroma-Chology: A Status Review by J. Stephan Jellinek, Perfumer & Flavorist vol. 19September/October 19942. Human Pheromones, Chemical Communication system among Humans byMichael KoberdaMonika Kaleta graduated in chemistry from Cracow Jagiello!ski University in1999. She works as a perfumer at “Pollena Aroma” Flavours & Fragrances Ltd. inWarsaw, where she finished Perfumery School. Using her knowledge of perfumeryshe also lectures at the Higher School of Health and Beauty in Warsaw.156
WHY PERFUME PRODUCTS?Dr. Tony CurtisUniversity of Plymouth Business School,Plymouth, Devon PL8AA, UKt.curtis@pbs.plym.ac.ukINTRODUCTIONA successful product is an entity which customers perceive to meet and provide their benefit needs andwants. The entity may be a physical product, a service or a mixture of both. In the marketing of makeupit is said that ‘In the factory we make cosmetics, in the shop we sell hope.’ Products have featureswhich deliver benefits; we can view a product as an ‘input-output’ device. The inputs are the featuresthat are designed or formulated into the product. The outputs are the benefit sets that the customersand users need, want, expect, value and pay for (Figure 1).Figure 1 – Input-output model of productNot all customers are the same and different segments demand different benefit sets. In personal careproducts, manufacturers formulate different products for men and women. This process of dividing amarket into subsets is called market segmentation.MARKET SEGMENTATIONThe aim of market segmentation is to define a group of customers who have similar needs and aredifferent to other groups. The process has to be practical and the resulting segments should bemeaningful. It is easy to apply several segmentation processes and end up with many small segments.In most cases, it is not practical to market too many small market segments. The process ofsegmentation is not to be regarded as analytic and convergent. It is an open-ended process without aunique single right solution, just as in product design. The process does need analytic skills but theseneed to be directed in a creative problem-solving framework.157
Consumer market segmentation variables• Gender: many products need different variants for males and females e.g. perfumes andcosmetics.• Age: people have different needs and wants at different stages of their lives. Teenagers havedifferent cosmetic demands to older consumers.• Race: different cosmetics are required for different coloured skins e.g. pale skinnedEuropeans are more sensitive to UV radiation than people with darker skins.• Religion: religion affects a whole range of products such as food, drink, cosmetics andpersonal care.• Geographic: this not only includes issues such as country of residence but also otherapproaches e.g. city dweller as opposed to rural residence.• Personality and lifestyles: lifestyle affects the range of products people want e.g. sportsenthusiasts with ‘sport’ variants for personal care products.• Socio-economic groups: professional status and income affect some purchases e.g. moreeducated and higher earners tend to be more frequent customers for prestige perfumes andcosmetics.• Purchase occasion: some products are purchased at specific times of the year e.g. perfumes(duty free on holiday, Christmas and birthdays).• Consumption behaviour: a typical classification would be heavy, medium, light and nonuserfor a product e.g. frequent use variants of shampoos.The above is a starting prompt list. Variables may need to be interpreted for any given situation andnovel segmentation approaches will need to be devised. Figure 2 shows the process. Sometimes thesegmentation variables are rather simple and provide just a few relevant variables. Table 1 shows therange of products devised and issues that might be considered by a fabric-care formulation scientist.Figure 2 – The segmentation process158
Why perfume products?Table 1 - Some Selected Segmentation of DetergentsStandard variable Interpretation CommentsGeographic Hard water and soft water area In hard water areas washing machines need to beprotected from scale build up from temporaryhardness (water from chalk and limestonesources).Out of town useIn rural areas, with septic tank use, formulationsmay need modification.InternationalThe popularity of various types of washingmachines varies from country to country (e.g. toploading against front loading automatic).ConsumptionSingles in studio apartments are Different sized packs.lighter users than large familiesBenefitsCleaning: food stains etc. are different Biological and non-biological products.PersonalityOther segmentationissuesMethod of washingto other soilCost: Heavy users on tight budgets(e.g. large families) need to haveeconomy of washing, professionalsingles not so concernedAllergies: Concern for allergicreactionsAppearance: Maintenance ofappearance of fabric: colourAppearance: Maintenance ofappearance of fabric: nature of fabricSome people just want to clean theirclothes; others are more concernedwith ecological issues. Lowtemperature also saves energy andcarbon dioxide emissionsHand washing, automatic machines,top loading machinesPremium products such as branded detergentpods and economy generic powders. Lowtemperature washing reduces costs.Low allergy, non-biological formulations;possibly without perfume.White fabrics may need bleach and opticalbrighteners. Coloured products may need ‘colourcare’formulations. Black fabrics can showpowder streaking, specially formulated liquidproducts.Cotton is different from wool and silk. Differentproducts needed for different fabrics.Low temperature and eco-friendly formulations.High foam detergents, formulated for handwashing, will be a disaster in an automaticwashing machine (it can flood the kitchen withsuds) and low foam products are needed.Detergent tablets and liquid pods.Ease of useSome people find measuring out aquantity of detergent irritatingPlace of wash Home, launderette and open air In developed countries small vending packs maybe needed for launderettes. In less developedcountries washing is often done by hand withbars of laundry soap.B2B applications Laundries form a different market Bulk deliveries.The Nature of ProductsProducts have a range of features and benefits. These can be defined as hygiene features andmotivating features. If the product has all the required hygiene features it has the possibility ofentering the race. However this is like a ‘fun-runner’ in the London Marathon; there is not much159
likelihood of winning the race. Hygiene features are the core benefits provided by basic product(Figure 3). They are expected and, if given, no notice is taken of them. If they are not provided, thecustomer will disappear. A hotel will not advertise ‘All our rooms have beds’, this is expected. If thehotel advertised ‘Our rooms are very cheap, bring your own bed and sleeping bag’ they are not likelyto gain much business. A person does not buy a given car because it has four wheels and has an engineand provides transport. People expect more: air conditioning, in-car entertainment, satellite navigation,smart engine management system, good styling etc. The goal posts are always moving, last year’saugmented product will be this year’s expected product. If we want to be champions we had better bedeveloping the technologies to create the potential product. If we want to be a world-beater, blue-skyresearch will be needed to invent the technologies for the ideal product of the future.There is an interaction between the benefit needs of society for the ideal product and the enablingtechnologies. The new product development question is the ‘chicken and egg’ problem. Which comesfirst, the technology or the market identification of the benefit need? Which is more important? If wehave a benefit need and no technology we do not have a product. If we have a product but no need; wedo not have a product. To have a successful product we need enabling technologies and real demandfrom the market for the benefits: consider a double gate situation as found in some electrical circuits(e.g. relay logic systems); both gates have to be open for success. The creative process can start fromeither platform. A perceived market need can set off a search for the technology or a technologydeveloped for one purpose can be implemented to produce entirely new products. What is needed isthe way to link the benefit needs to the technical or engineering definition of the product; this isprovided by the Plymouth Model (Figure 5).Figure 3 – Levels of product from basic to idealPlymouth Model for the Architecture of ProductThe Plymouth Model provides a framework for the analysis of an existing product or a template todraw up a product innovation charter definition for a new product. The treatment below is given in thecontext of new product development. Prior to the application of the Plymouth Model the segmentation160
Why perfume products?process should be completed. The needs of dissimilar segments are different and these variations needto be reflected in the marketing mix, for each of the selected target market segments.Market PositioningEarlier in this paper we noted that for white cotton the proposition, the positioning statement, for adetergent might be ‘Washes whiter.’ For a low temperature product, designed for coloured specialfinish fabrics, the positioning statement might be ‘Colour care, easy iron.’ (Figure 4) The formulationof the product will need to be different to reflect the different functional (benefit set) needs andproduct positioning.Figure 4 Product positioning mapAlthough this model is simple it does allow the product proposition to be compared with that of otherproducts in the market place. It is one tool for new product visioning. If the spread of products leaves ahole in the cover of the domain of all possible market positioning, then this might indicate that therewas a gap in the market. Market leader companies are always attempting to find good market gaps andthen be first to develop products for them. Another strategy, followed by the market followers, is tocreate ‘Me too’ products. Here, the engineer or formulation scientist re-creates a product with verysimilar or even identical market positioning. The trick to this process is to find the ‘right’ variables forthe product positioning variables. Figure 4 shows this process in two dimensions. Segmentationvariables form a multi-dimensional space and products can be mapped in a multidimensional space. Inthe detergent example two additional vectors might be ease of use and degree of eco-friendliness.161
Figure 5 - The Plymouth Model of ProductHaving defined the market segment and the positioning of the product in the segment the next stage isto complete the attribute analysis. For a market driven process this should get started with the analysisof the benefit set. There are two types of benefits: intangible and tangible (Figure 5).Intangible BenefitsMany of the products we buy have an aesthetic component. The textile technologists, working with thefashion designers, are creating clothes that are fashionable and make people feel good. To maintain thefabric in tip-top condition a good fabric care system is needed (detergent and conditioner) withappropriate perfumes. In the levels of product model (Figure 3) we largely concentrated on physicalfeatures and performance. However, for many products, a significant proportion of the benefit set is inthe intangible benefits. It may be on these intangible benefits that the business is won or lost. Theperfumed candle for a romantic dinner for two is about creating a sense of occasion with anappropriate ambiance. The product packaging will not announce ‘As effective as a 20 watt electricbulb but only 10% as efficient and a great fire hazard.’ It is more likely to say ‘Relaxing and romanticscent of tropical ylang, jasmine and sensual sandalwood.’Often, successful marketing communications will be focusing on the intangible benefits. The oldslogan in the UK for ‘Colgate [toothpaste] ring of confidence’ was focusing on self-assurance,coolness and social acceptability. Deep in the small print you might find ‘kills the bacteria that causebad breath.’ Marketing it as ‘disinfectant for the mouth’ is not likely to hit the success button.Although we are not able to measure 21 litres of confidence, 12 kilograms of love, 33 metres of162
Why perfume products?reassurance, or 60 decibels of compassion; these are some of the most important things in our lives.Products that get us to deliver these benefits are more likely to be purchased.Tangible BenefitsThese are the actual physical things we wish the product to deliver. In some ways the process can beregarded as mission aims and objectives, for the product innovation charter. The mission is thedelivery of the intangible benefits and the aims and objectives of the product are the explicit,measurable outcomes needed. As such, tangible benefits should be expressed as measurable outcomes.This is important, as we need to evaluate performance, performance evaluated against the tangiblebenefit objectives we have set ourselves. This can be cleaning power of a detergent powder,substantivity of a hair conditioner or uniform emanation of an air freshener.Feature AttributesHaving defined what the product has to achieve, the scientist and technologist can use these as designparameters for the product innovation charter. The creative process can then be sought to find the mosteffective and efficient design and formulation solutions. This might be organic essential oils for afashion fragrance, natural active ingredients for a cosmetic or even innovative packaging (e.g. ‘ToiletDuck’ in the UK).Signal AttributesIn many cases the core benefit of the product is a hygiene factor. All shampoos should clean the hair.For many household and personal care products a desired intangible benefit is ‘well-being’. We do notassociate well-being with the aroma of half eaten pizza, stale beer and cigarette smoke, in the partyroom, the morning after the party. Concepts of ‘fresh as an Alpine spring meadow’ are more likely tobe the order of the day. A detergent is odourless and in any case it is rinsed away (we hope!) at the endof the cleaning process. The vast majority of household and personal care products are fragranced.How do I know the room is clean and get the sense of wellbeing? Because it smells clean, just like anAlpine meadow in spring. Other elements of the product can help the product to communicate. Colour,texture, shape, feel and appearance can all assist the marketer developing working on new products toget the product to ‘signal’ (communicate) its intended market positioning. In the UK an antidandruffshampoo may be fragranced to have a ‘medicated’ type odour and a pale blue colour.Some aspects of odour perception and communication are part of people’s biological makeup e.g. thesmell of burning is a universal communication of potential danger. Other aspects are part of people’scultural heritage. Just as with food there are different culture implications and uses of perfumes andperfumed products.The biology of odour perception is different to other senses. Odour sensations are transmitted to thelimbic system. This area is considered to also be involved with feelings, moods, emotions, sexualbehaviour and memory. Laboratory experiments have demonstrated that odours can affect mood andtrigger memories. The developing science has been called ‘aromachology’. The bottom line formarketers is that odours provide a powerful, non-verbal, channel of communication with the ability toaffect moods and emotion. With a hair conditioner the advertisement is seen occasionally and for afew seconds. The user sees the pack every time the product is used. The odour is perceived in thewashing process but the fragrance is often substantive (designed to remain on the hair) so the hairsmells ‘right’ for the whole day. In the branding of consumer products packaging and signal attributesare vital aspects of the integrated communications strategy.163
A practical illustration is in how appropriate perfumes can help marketer’s position bath and showerproducts. Many bath products (e.g. foam baths) are based on the platform of ‘relaxing’. Have you hada bad or stressful day? Half an hour in an aromatherapy bath is the ideal de-stressing programme.Many shower products are platformed on ‘invigoration’ and get up and go!’ Different fragrances in theproducts can help signal this type of product positioning. For ‘relaxing’ the claim might be ‘containsrelaxing aromatherapy oils’. For ‘Get up and go!’ the product might have ‘Invigorating citrus oils’.These messages may be culturally dependant and detailed knowledge is needed on different markets.Moreover these issues, as with other consumer products, change with time. 50 years ago few homes inthe UK had a shower, now the majority of homes have a shower. In the UK hand bar soap is in PLCdecline with liquid hand wash products gaining market share. This is not true in all countries wherehand soaps are still in PLC maturity. A major activity in creative perfumery houses is the marketresearch and intelligence to understand the different demands of various markets and how these arechanging with time.PerformanceOne important rule of science is: ‘to control, you have to measure.’ In setting the desired tangiblebenefits we should express these in ways that can be quantified or assessed. Simple parameters such astemperature can be easily measured but products often throw up more challenging issues. A hairconditioner may claim ‘easy comb’. Just what does this mean and how do you measure it? Cosmeticchemists have come up with a solution. Wash standard swatches of hair under standard test conditionswith the test formulations and the control standard. Attach the test swatch to a frame and insert acomb, connected to a force measuring device; then measure the force needed to move the combthrough the hair. The cosmetic scientist then has a set of benchmarked figures to support the claim‘easy to comb’ and can set about improving the product performance even further, the feedback loop iscompleted.What are needed are measures and estimates of performance that indicate the products performance inthe customer’s end use situation with methods that indicate the probable level of customer satisfactionwith the products performance. To set a tangible benefit aim without setting standards and devisingmethods of estimation is a complete waste of time.Legal ConformanceConsumers demand products that are safe, want to exercise choice and need information (the Kennedyrights). To satisfy these public demands there is a tangle of laws. These may be specific aboutmaterials that may not be used (e.g. IFRA banned perfume ingredients). Regulatory compliance is amajor demand on technical staff. Product descriptions have to give specific information, often usingvery prescribed and detailed protocols (e.g. perfume, cosmetic, food and drink labelling). In the UK asmall specialist craft producer of ‘home made’ ice cream ran into legal problems with their ‘Rum-n-Raisin’ ice cream, made with real rum. As this contained over 0.5% alcohol a ‘Licence to sell alcohol’was required. The licensee had to attend a specified training course (normally designed for publicans)and the product could only be sold to people over 18 (bring your passport to buy an ice cream). This isa particular problem with new classes of products and considerable legal/technical judgement may beneeded; just when does a food become an alcoholic drink?164
Why perfume products?Account ConformanceIndividual companies may have their own specific requirements. Some cosmetic companies want tomake the claim that their product contains no animal derived products, so this may restrict the use ofsome ingredients (e.g. should bees wax be classified as an animal derived product?). A key area forfood technologists is the concern with healthy eating. ‘Junk’ food is perfectly legal. Simple rules canbe perverse; ‘Let us ban all high fat foods’ clears the cheese counter for you. Some considerabledebate is needed between the supplier and the customer company to get sensible interpretations andsuitable re-formulated products (e.g. ‘bad’ hydrogenated fats eliminated, low salt recipes etc.). In theUK some major supermarkets are moving to more demands for ‘fair trade’, ‘natural’, ‘organic’ claimsfor their product ranges. A difficult area recently has been the request for ‘non allergic fragrances’,clients not fully understanding the issues. The industry is working towards developing the level ofunderstanding of these issues with manufactures and retailers of fragranced products.Supporting ProductsSystem ‘components’ have to integrate in the customers’ end use situation. A washing machine is, inthis sense, not a complete washing system; to function the machine has additional needs: electricity,hot water, cold water, detergent, bleach (in some countries liquid bleach is added in washing whites)and fabric conditioner. When liquid detergents were first introduced to the UK market the machineswere not designed for this type of formulation. The improvised solution was the ‘detergent ball’, to befilled up with the liquid formulation and added into the wash in the drum. The performance ofperfumes in wash products has to be evaluated in the appropriate washing machines. In thedevelopment of new products and in moving into new international markets it is essential that thecustomer has access to these supporting products that are necessary for the actual performance of theproduct to deliver the benefit. Poor quality in any part of the system will cause problems.ServiceMany products need services. Another company may provide these; in this case they should beconsidered under supporting products (e.g. electricity and water supply for a washing machine). Asignificant part of the creative perfume or flavour house is the provision of technical service.Product MixThis is the range and depth of products to be offered. A hair care company might focus on a specificproduct segment or provide a full range (hair colour, permanent wave, shampoo, conditioner etc.); thisis the product range. Within a specific product group a company may offer a single variant (littleproduct depth) or and number of different offerings (e.g. different fragrance variants for a fabricconditioner).165
Table 2 Summary of the Plymouth Product ModelPlymouth ModelelementAttributesMarket positioningIntangible benefitsTangible benefitsFeature attributesSignal attributesPerformanceComplianceLegal conformanceAccount conformanceExtensionComplementary productsServiceRange and depthComments and selected examplesWhat is the proposition being made to the customers and users in the target segment (thisprocess must be repeated for each market segment) e.g. Up-market, down-market, easyto use, advanced eco-friendly etc.Love, security, status, self-confidence, freedom, well-being, belonging, excitement,comfort, relaxation etc. Things that are important to the buyers and users but may not bemeasured in the normal sense; we have yet to devise the sex-meter.Hair shine (hair conditioner), clean clothes etc.The precise formulation or product design elements. Can include materials ofconstruction, manufacturing process and sources of raw materials e.g. organic,sustainable, fair trade etc.Colour, texture, odour, sound, shape etc can all signal properties. Strawberry ice-creamwill be pink, not green. These are elements that are designed or built into a product toallow the product to communicate.The methods of test to measure the products ability to deliver the tangible benefits e.g.stain removal measurements for a detergent, substantively for a hair conditionerfragrance etc.Labelling, ‘must not haves’ (e.g. banned food additives, IFRA banned fragranceingredients), ‘must haves’ (e.g. tamper evident packs for food, correct labelling), safetystandards etc.Issues that are not legal requirements but have become demanded by specific accounts.Sometimes these are rather specialist (e.g. Kosher compliance for a manufacturer of foodproduct for the Jewish market) or more general (e.g. ISO 9000 compliance for suppliersas a quality audit requirement). In the briefing process it is important these accountconformance requirement (e.g. ‘must haves’ & ‘must not haves’) are known to the NPDteam, good understanding of the purchasing company’s DMU is essential (e.g.companies demanding organic, fair trade essential oils in their products).It is essential to take a systems view of a product. Most products are used in conjunctionwith other products and services. The complete system must deliver the expectedbenefits to the required standard or you do not have a product. That new washingmachine is a bit of a dead duck if the detergent foams too much.Typical services are: design, technical support, installation, training and maintenance.Service is an important element of the total package from the creative flavour orperfumery house.Product range: the number of different lines that the company decides to make. Does amanufacturer of cosmetics (benefit definition of business: beauty) also market hair careproducts?Product depth: the number of different sub-variants of the product that the companydecides to offer e.g. sizes, thickness, flavours, colours, perfumes etc.References1. Curtis, T. (2008), ‘Marketing for Engineers, Scientists and Technologists’, Wiley (in press)2. Curtis, T., Williams, D. (2001), ‘An Introduction to Perfumery’, 2 nd Edition, Micelle PressDr. Tony Curtis worked for Bush Boake Allen for 24 years in various technical roles.He has been teaching Marketing and Aroma Trades Studies at the University ofPlymouth for 17 years. He gained his PhD from University College, London insesquiterpene chemistry. He is a Fellow of the Royal Society of Chemistry, Fellow ofthe Chartered Institute of Marketing, Member of the Society of Cosmetic Scientistsand Honorary Member of the British Society of Perfumers.166
<strong>IFEAT</strong> Business167
REPORT ON THE <strong>2007</strong>BRITISH SOCIETY OF FLAVOURISTS TRAINING COURSEAT THE UNIVERSITY OF READINGPresented by Michael G. Boudjouk<strong>IFEAT</strong> places a high priority on supporting educationprogrammes within our industry. For many years, <strong>IFEAT</strong> hasgiven financial assistance to the University of Plymouth insupport of its training courses in perfumery (see followingreport by Dr. Tony Curtis) and to the annual course run by theBritish Society of Flavourists at the University of Reading’sSchool of Biosciences in the UK. The first training course atReading was held in 2002 and the programme hassubsequently evolved into a three week intensive annual eventwith a well proven and successful formula.The overall objectives of the course are:• To improve the training available to graduates, including M.Sc. and Ph.D. postgraduates, whowish to develop and apply flavourings for food and beverages.• To emphasise the practical nature of flavour creation and its relationship to chemical structureand the biochemistry of foodstuffs.• To use the combined expertise of Reading University and experienced BSF Flavourists tobenefit the flavour and food industries.While lectures are given by the BSF experts and University staff throughout the course, hands-on,practical and creative training is the core element. The course commences with gaining practicalfamiliarity with the taste and smell of over 150 natural and nature-identical raw materials, plus the artof creative flavouring. The training ingredients include herbs and spices, essential oils, extracts,isolates and oleoresins, natural defined chemical substances, nature identical and artificial substances,process flavourings and smoke flavourings. The course emphasises the development of individualcreative flavouring skills. This involves practical ingredient training, thus• Each ingredient is evaluated after dilution in sugar syrup or salt solution by the students.• The emphasis is on practical participation.• Each ingredient is odour assessed and tasted by the students and rated against selectedorganoleptic parameters. The group rating was plotted against a previous expert score and thedifferences discussed by the group.• Some 150 ingredients were assessed in 6 working days.The course emphasises practical creative training. In particular the emphasis is on individualcreativity. Each student is given an initial briefing on how to use the results of the ingredientevaluation in the creation of flavourings. Then working in pairs the students create simple flavouringsand these are then evaluated by the group. As part of their final assessment each student then has toproduce a final creation for evaluation.As the course progresses, flavour creation exercises continue to more sophisticated levels. Thestudent’s knowledge base is extended through lectures and demonstrations of processes. Flavourtopics covered include flavour chemistry and biochemistry; practical and theoretical flavour analysis;168
BSF Training Courseflavour legislation; solvents, carriers, encapsulation and flavour release; practical generation ofmodern process flavourings and their use in combination with herbs, spices and other food ingredients.Each of the trainees is required to demonstrate their flavour creations and to undertake a writtenexamination. All 9 participants in the <strong>2007</strong> course were successful in obtaining diplomas.What happens to the trainees after they have successfully completed the course? All eight studentshave returned to their companies as much more accomplished flavourists and several have since beenpromoted. One member of the course was Bob Swaine, the flavor training manager from P&G USwho participated in order to learn how the University of Reading went about its training. Meanwhile,Reading University M.Sc. or Ph.D. students have submitted the work as a module in their studies.Several students from the previous courses are now Senior Flavourists or Technical Managers.The award of Best Student from the <strong>2007</strong> trainees was Mark Xerri of Madalien Ltd., Malta.Mark Xerri169
This slide collates the diplomas awarded since the initiation of the course in 2002. It demonstrates thewide ranging geographical origins of the participants.The flavourist training course has clearly proved itself as beneficial to our industry. This has beenbrought about by effectively combining the resources of the British Society of Flavourists, theUniversity of Reading and <strong>IFEAT</strong>. Long may this continue.The next course has been organised for the three weeks commencing on the 6 th May, 2008. Places arelimited to 10 students and already 5 confirmed applications have been received. If more applicationsare received, consideration will be given to running a second course in 2008. Those interested canrefer to the advertisement in the conference programme and application forms are available from the<strong>IFEAT</strong> desk or via the website.170
UNIVERSITY OF PLYMOUTHREPORT ON EDUCATION ACTIVITIESDr. Tony CurtisUniversity of Plymouth Business SchoolPlymouth, Devon PL8AA, UKt.curtis@pbs.plym.ac.ukACTIVITIES 2006-<strong>2007</strong><strong>2007</strong> British Society of Perfumers Residential WorkshopThe major activity for <strong>2007</strong> was in collaboration with the British Society of Perfumers to presentthe <strong>2007</strong> ‘British Society of Perfumers Residential Weekend’. Thirty delegates attended the threeday event.Delegates at the <strong>2007</strong> British Society of PerfumersResidential WorkshopDelegates were briefed by Dr. Tony Curtis to create a fragrance that evoked the spirit of ‘CapeTown’ (location for the 2006 <strong>IFEAT</strong> conference) and to produce a perfume in a bubble bath base.171
Fragrance CreationWork in Progress for PresentationOn the Sunday afternoon the four teams presented their fragrances to the client panel (thecommittee of the British Society of Perfumers)The Winning Team<strong>IFEAT</strong> DISTANCE LEARNING DIPLOMA IN PERFUMERYIn the academic year 2006-<strong>2007</strong> five studentsgraduated with the Diploma in Perfumery, fifteenstarted the programme and at the time of theconference some nineteen students were active in theprogramme.Neil Wiltshire<strong>2007</strong> <strong>IFEAT</strong> Best Perfumery Student172
University of Plymouth Education ActivitiesFUTURE DEVELOPMENTSWork continues in the preparation of the up-dated coursemanuals. The new course book ‘Marketing for Engineers,Scientists and Technologists’ will be published by Wiley inthe spring of <strong>2007</strong>.The new Perfumery course will be launched in the autumn of2008 and the Flavour version in the autumn of 2009.It is intended to hold a residential course in late 2008, detailswill be available late spring 2008.ACKNOWLEDGMENTSThe above would not have been achieved without theenthusiastic and expert help of the people below.<strong>IFEAT</strong> ExaminerJohn AyresUniversity of PlymouthPat TrudleySally Bishop-HowesBob BaggottSharon HeardUniversity of ExeterAli GreenUniversity of the South WestLorraine KirbyNone of this would have been possible without thesupport of the <strong>IFEAT</strong> Education Committee and thesponsorship of individual <strong>IFEAT</strong> company memberswith aroma samples etc.173
<strong>IFEAT</strong> STUDY TOUR OF EGYPT 2006Ian McleanS&D Botanicals (Pty) Ltd.6, Charles Booth Ave., Camps Bay, Cape Town, 8005South Africaian.mclean@sdcldn.comBy way of introduction, I recall the Chairman of the Organising Committee's opening remarks at thewelcoming function that study tours are expensive, both in money and time and it was thereforeextremely important that such tours were of value to participants and their sponsoring organisations.In a nutshell, the Egypt Study Tour was worth a great deal more than the cost of participation. It wasan outstanding success and from the participant's experience, appeared to go completely according toplan, despite a few minor adjustments for inclement weather and mode of transport. That it went sowell, especially considering the distance travelled the range of visits and the other activities that werepacked into a busy schedule, with little room for error, is a huge credit to the Organising Committee.While the programme ticked along seamlessly and without a hitch, it was quite obvious that anenormous amount of planning and co-ordination had preceded the delegates' arrival.The Organising Committee was chaired by Mr Hussein A. Fakhry (A.Fakhry & Co) and supported byMr Tarek Abou-Bakr (Fridal), Mr Alaa Hashem (Hashem Bros), Mr Mohamed Roushdy (KatoAromatica) and Dr Sayed Machaly (Machalico). The Chairman and his extremely able and ubiquitousProgramme Coordinator, Mrs Chérifa Rachad-Fakhry (A. Fakhry & Co) seemed to be everywhere atonce and admirably kept it all together, enhancing the value of our Egyptian experience withencyclopaedic knowledge and good humour throughout.A special mention in dispatches for the tour agency Liberty Egypt. From the first day until the lastdelegate left for home late on Sunday 3 rd June, the Liberty personnel were remarkable, accompanyingthe tour group throughout the programme - smiling, courteous and efficient to the end.The Conrad Hotel, located on the banks of the Nile in downtown Cairo was well chosen, withsympathetic staff and was a splendid home base. The 'Cleopatra' Room at the Conrad Hotel was thefirst venue for evening cocktails and dinner with members of the Egyptian Essential Oils Industry. Theorganising Committee Chairman, Mr Hussein Fakhry gave a detailed overview of what is clearly avery substantial industry.The scene was well set for the 'Egyptian Essential Oilsadventure' and the 'Group' were eager to get going.This is a specially airbrushed photograph due to thesingular lack of good looks among the members, with afew exceptions of course!The group comprised thirteen delegates from ninecountries.The Study Group174
<strong>IFEAT</strong> Egypt Study TourDelegates included:Yasuko Inoue, of Y.Inoue & Son (Hong Kong) Limited; Rob Schlomann of John H. Elton, Inc, ForestHills, New York, USA; Clarke Teng of Taiwan Fine Chemicals Company Limited, Taipei, Taiwan;Guy Vincent of Aromatherapy Associates, Brentford, United Kingdom; Pradeep Kapoor of JagatAroma Oils Distillery, Kannauj, India; Gary Zak of Global Essence, Inc., Freehold, New Jersey, USA;D.A Perera of EOAS Organics (Pty) Ltd, Ratmalana, Sri Lanka; Vasanth Venkatasamy of JasmineC.E. (Pvt) Ltd, Tamilnadu, India; Greg Dowles from Berjé, Bloomfield, New Jersey, USA; JimCasson of Frith Farm in Basingstoke, United Kingdom; John Fergeus of Australian BotanicalProducts, Victoria, Australia; Tirta Salim of PT. Indowangi Nusajaya, Medan North Sumatra,Indonesia and Ian Mclean of S&D Botanicals (Pty) Ltd, Cape Town, South Africa.The Study Tour promotional brochure advised participants to expect tough travel and a busy schedule.The tour, it said 'is for the dedicated industry enthusiast'. In case we did not believe it, Day One,Sunday 27 May, set out to prove the point…although it all started very gently with a surprisingly shorttrip to Kato Aromatic based close to Cairo in Harreneya near the Pyramids at Giza.Kato Aromatic, founded in 1971, and a pioneer in theEgyptian market, produces and exports more than 60essential oils, flavours and fragrances as well as herbs andonions. Kato Aromatics is an important entity within theKato Investment Conglomerate. Mr Mohamed Roushdy,Managing Director, gave an introductory presentation andled the guided tour of Kato's impressive productionfacilities. For those of the group unfamiliar with large scale,diverse essential oil production, the scale of the facilitieswas an eye-opener and an indication of what was to follow.Chamomile distillation in a gardensetting at Kato AromaticsWith delightful gifts of Jasmine perfume, silver cardholders and other artefacts, a very fragrantsmellingbus departed Kato's well-manicured gardens and tidy facilities in the direction of Alexandria,into the desert. This was a new experience for many of us – from green Delta to dusty sand - arrivingafter a considerable drive at the 'Diva' Farms located on the periphery of the Delta and basically in theDesert.Fridal parsley fieldsDiva FarmsThe Diva Farms comprise some 10,000 hectares of aquiferirrigatedland and provide contract growing opportunities forFridal F. Tarek Abou Bakr & Company across a range ofproducts. Diva Farms is a huge farming operation, withcrops ranging from wheat to wine grapes, bananas todeciduous fruit, and specifically Fridal's curly parsleyplantings. We saw a lot of parsley that day and it wasinevitable that Fridal's Chairman, Mr Tarek Abou Bakrshould be given the nickname of "Mr Parsley" by the TourGroup!Having almost over-dosed on parsley, we headed back into Nile Delta towards Fayoum to visit anorganic Small Farmer Co-operative. Hussein Fakhry and his wife Chérifa, who provide support and175
markets for the Co-op, joined the tour party for a walk into the herb fields and a demonstration of herbdrying and processing. With considerable charm and with open hearted hospitality, the Co-opManager and his family invited the group to enjoy somesplendid food and take away samples of the Co-op'sproducts. Everyone seemed pleased with the visit. It wasrural Egypt at its very best.One of the remarkable aspects of this tour was theintimate introduction to rural life in the Nile Delta. Thenarrow roads meandered through small towns andvillages, past hundreds of small verdant farms in apicture book setting of palms, busy people and animals -and abundant harvests. It made a lasting and dramaticimpression on the group and a wonderful impression ofthe real Egypt and its people.Dressed for the occasionFayoum Organic Co-operativeWhile it was a wonderful drive through this part of the Delta, the narrow roads, edge to edge farmsand oddly shaped bridges eventually became a major obstacle for the over-sized...for the job…tourbus. It was a marvellous bus, just a bit big. The driver was outstanding and extremely patient witheveryone giving him advice at the same time, including the amazed onlookers. It was probably the firsttime that a vehicle of that size had ever been in some of the villages. It was a wonderful day albeitlong, tiring and a lot of driving and ended well with dinner, a glass or two of Rubbayyat Red and anovernight stay at the somewhat surprising 'Auberge du Lac'. Worth a visit.In a somewhat smaller, more manoeuvrable bus, westarted the second day near Beni-Suef at Fridal'simpressive almost- complete production facilities.Probably complete by now, these facilities will allowcontinuous processing of herbs, primarily – youguessed it - parsley, and other herbs, from freshlyharvested, through washing, cleaning, steampasteurisation, drying and packaging, with herbs beingdelivered from outlying growing areas including DivaFarms. Very impressive.Small scale co-operatives Located near these new facilities is the importantgeranium growing area that provides some 95% of theEgyptian geranium oil output. There are between 30–40 co-operative-owned distilleries suppliedmainly by small-scale farming operations, with larger companies purchasing oils on a contract basis.The estimated geranium oil production for <strong>2007</strong>/2008 is very substantial at between 80-100 tonsWe visited an operating co-operativedistillation unit which was one ofmany highlights of the study tour. Itwas a very festive occasion thatattracted a fair crowd from the nearbyfarmers and contract growers and wewere even treated to ice cold cocacolaby our hosts.Oil-fired boilers and a festive atmosphere176
<strong>IFEAT</strong> Egypt Study TourLeaving behind the small-scale farmers and co-op-owned distillation facilities, the programme shiftedto Fridal's substantial essential oil and concrete production facility and existing herb processing plant.Tagetes was 'in the pot' and freshly harvested curly parsley was being processed, from cleaningthrough to drying and packing. A busy factory with plenty on-going all at once.Back in Cairo, we enjoyed some of the delights of the other side of the tour – all so well organised intothe programme…namely the famed Rubbayyat Restaurant in the restored and very impressive andextravagant Mena Palace near the Giza Pyramids. An evening of dinner, dancers, crooners, extremelyenergetic traditional Egyptian music and the inevitable Whirling Dervish. I don't know how thesepeople do this. I would be ill! All of this was happily washed down with some more wonderfulRubbayyat Red! An Egyptian secret.Day Three saw us in Kalioubeyya to visit the fields and factory of Hashem Brothers. The HashemBrothers family partnership was established in 1974, with the essential oils and aromatic productsdivision being formed in 1994. Today, Hashem Brothers is one of the foremost producers of oils andaromatics products in Egypt with a range of nearly 50 quality essential oils, concretes and absolutes.Before the tour, for most of us 'Jasmine and Egypt' weresynonymous. After the trip, we will never forget jasmine andEgypt! It was a special privilege to be present during jasmineharvest and interacting with the jasmine pickers at HashemBrothers. Happy pickers enjoying their task and our company.There was a great deal of ululating going on which reallyimpressed Yasuko Inoue who tried to do it, veryunsuccessfully despite the women's enthusiasticencouragement and enjoyment at her efforts. Ululating isundoubtedly difficult or even impossible for a Japanesespeaker. Much fun was had at Yasuko's expense, although shetook to picking jasmine blossoms rather well.Jasmine – the scent of Egypt;Yasuko Inoue picking jasmineIt was a wonderful experience to see the whole process from picking, pickers weighing in, with theirbrimming baskets and the production processes of solvent extraction, concretes and absolutes… not tomention the great lunch and fine Egyptian food.By now, we were beginning to take to this Egyptian food and we had another slap-up meal at thepopular Abu El Sid Restaurant in Cairo in the evening! I can assure you all that we were earning oursuppers despite what you may be thinking. It's a tremendous strain to put away so much good food.Day Four, Wednesday, was yet another interesting day with avisit to Machalico at Gharbeyya, about 100 kms north of Cairoand the agricultural sites at Bassioune and the MachalicoFactory at Mehallah, located alongside the agricultural site.Baskets brimming withjasmine flowersMachalico has an advantage with 60% of its raw materialcomes from its own agricultural sites, producing concretes andabsolutes of a wide range of flowers including jasmine,marigold, carnation, bitter orange, geranium and cassia, amongothers. Agreements with small geranium producers in Beni-Suef provide for approximately 20 tons of geranium oil peryear.177
The Bassioune site was in an idyllic setting of datepalms waving in the breeze with bitter orange treeslining the roadways and violets forming a carpet underthe palms. Delightful environment, well ordered andneat.We followed a very energetic and enthusiastic Dr ElsayedMachaly around the farm … at breakneck speedI might add, especially considering the fact that he hada serious limp and we 'younger ones' had a timeMachalico’s Bassioune Farm keeping up – visiting the fields, pickers, carnation andviolet leaf harvest and weigh-in before following theraw material making its way through the fully-operationalproduction facility coping with different products simultaneouslyand good exposure to the production of concretes.All in all, a well organised farm and impressive productionfacilities. Dr Magued Machaly's daughter, Ayat…meaning LittleMiracle…had co-ordinated another superb sit-down lunch,rounded off with the most outstanding dessert of mixed baklava.While the Tour promotional material spoke of heavy travelling, it Machalico’s Concretesgave no health warning about 'heavy eating' and gut-stretching weight acquisition. But we wereenjoying it and no one was complaining especially after ourthree kilometre speed walk before lunch!We literally 'zoomed' back to Cairo after a great visit toMachalico. It's worth mentioning that the OrganisingCommittee had sorted out Cairo's legendary trafficcongestion. All our trips were comfortable, quick and trafficAyat’s colour co-ordinated Baklava free due primarily to the organisation of escort vehicles,whose drivers made a point of clearing the way ahead for thebus with frequent blasts on the horn and siren. They seemed to enjoy it and we felt like a presidentialmotorcade. I can recommend it.All work and no play makes Jack dull, so still with the social programme we hit the Giza Plateau forthe Sound and Light Show and what turned out to be a highly memorable and thought-provokingevening. The history of Egypt, the Nile and its Pharaohs is indeed the history of civilization. Wewitnessed some breathtaking negotiating skills by Greg Dowles who managed to parlay up the price ofa glass pyramid from the curio sellers before we all headed back to Cairo for yet another memorablemeal in a downtown restaurant.…It's worth noting that a fairly high level of sustainable stamina is a definite requirement for suchtours, although the opportunities for 'partying' per se were rather self-regulated due to the earlydepartures and the long days – just in case you all think that it was all fun, fun and more fun. It wasserious stuff, I can assure you.Day Five and another long drive and a visit to A. Fakhry and Company located north of Tanta in theDelta. Your Chairman of the Tour Organising Committee, Hussein Fakhry, travelled in the bus with usand through a microphone – nice touch - provided an enlightened commentary and insight into Egypt,178
<strong>IFEAT</strong> Egypt Study Tourits history, its agriculture, its demographics and its opportunities and threats. He was very open andforthright in his comments and raised some contentious issues that currently affect and will affect theEgyptian industry in the future, such as injudicious use of water, water shortage, pollution, productionissues and quality. It was refreshingly honest and candid.Hussein was able to pull together the various elements and visits so that by the time the bus hadarrived at the Fakhry establishment, many loose ends had been neatly tied, leaving everyone with athorough overall understanding of the Egyptian Essential Oils Industry.A Fakhry and Company has been involved in essential oils andextracts since 1955 and is fully and demonstratably committedto working with an environmentally-friendly/organicemphasis. Its activities are organised around a nucleus of 65hectares of fields planted with some 50 varieties of organicallycertified aromatic crops. This organic nucleus as well as aconventional farming network of over 1,000 hectares gives theCompany considerable advantage and is able to produceapproximately 130 different variously-certified naturals,including essences, essential oils, hydrolats, concretes,absolutes, waxes and a number of specialty fresh and driedbotanicals.Environmentally friendlytransport on Fakhry Farm with‘Hummer’ the muleHussein Fakhry outliningactivities before a high speedwalk around the farm to workoff the baklavaIt was a wonderfulvisit. Each visit hadbeen different and each with its own characteristics and'personality'. And so it was with the Fakhry establishment.There was much evidence of a sincere and total commitmentto organic production.A well-co-ordinated experience of fields, nursery,composting, harvest, transport, production and sensoryevaluation of the end product – in a charming setting under aspreading grape vine, to the haunting accompaniment of anEgyptian version of a horizontal harp (I was told the name butcannot remember it I'm afraid) and ice-cold refreshments and dare I say it – another splendid lunch,taken al fresco along the banks of the Nile tributary.Hussein Fakhry describes his activities as "'doing different things and doing things differently". That'sfor sure!Back to Cairo for the final event of the programme - a farewell dinner on the Nile Pharaoh, anelaborate 'Cleopatra-style' barge that cruised up and down the Nile while we chatted and enjoyed foodand refreshments, with a band and floor show and a few simple-minded members of the tour party -press-ganged by the Organising Committee no less - displaying their complete lack of talent at bellydancingunder the tutelage of a – ahem – gorgeous looking teacher with great - ahem – eyes, except forone member of the group who showed remarkable talent and for reasons of anonymity and potentialtrouble at home, won't be mentioned, with payment of a small fee of course.179
On a serious note and in conclusion:! The tour was an invaluable learning experience;! It provided a clear picture of the diversity, sophistication, range and quality of aromaticproducts and production facilities available from Egypt;! There will be good commercial spin-offs from the group's exposure to the Egyptian essentialoils industry and vice versa;! There will be valuable lessons that the group members take back to enrich their ownendeavours. (As a previous speaker, Tony Curtis, remarked in his address - "Adding value tothe individual is adding value to firm and the industry". Never a truer statement with regard tothis study tour to Egypt. I can certainly speak for myself and I'm sure the others would agree).! Attending the Study Tour satisfied a long-held wish of most of the delegates who wereunfamiliar with the Egyptian industry and were able to see and experience it first hand and indetail.One should not under-estimate the amount of work required to organise such a programme.Grateful thanks are due to your Committee for a superbly organised and executed programme thatmore than satisfied… and without exception, all the members of the group left Egypt very satisfiedwith the tour, the organisation thereof and no doubt fond memories of friendship, fellowship,hospitality, good humour, generosity and enthusiasm of all those involved. And it will be good forbusiness, I'm sure of that.Most significantly, the genuine willingness of the Egyptian essential oil industry's leading members toshare their knowledge and experience underpinned the success of the tour.The very able Programme Co-ordinator, Chérifa Fakhry gave a gift to each member of the group of abeautiful silver "Key of Life' or 'ANKH', the symbol of Egypt. It was a fitting gift as a reminder of anoutstanding and memorable study tour. Perhaps it would make a good brand or symbol for EgyptianNatural Products – A key to the other side of Egypt - a vibrant and fragrant side of Egypt with agrowing and undoubted potential to become the world leader in essential oil production?After all, they have been at it for thousands of years so why not? Earlier today, we heard Dr Hans vanBergen talking about how bemused and troubled Cleopatra would have been at all of the 'REACH'issues. I would suggest that Cleopatra would have been well pleased with this Study tour and theshape of the Egyptian essential oils industry.Finally …as mentioned at the beginning of this address to you, I referred to the organising Chairman'sintroductory remarks at the welcoming function in the Cleopatra room at the Conrad Hotel. HusseinFakhry stressed that companies and individuals spend a very considerable amount of money attendingsuch tours and therefore want to see a return on their investment. That goal has certainly beenachieved and I would urge the industry to send your people on future study tours. It's great investmentwith long term benefits.180
<strong>IFEAT</strong> Egypt Study TourOn a very final note, I don't think we will ever smell jasmineagain without thinking of Egypt, its essential oils industry,the people we met and the wonderful experiences we had.However, to experience some different Egyptian aromas andget the Jasmine out of my nose briefly, I headed for the GizaPlateau and rented a rather smelly and moth-eaten camel,paying extra for a quick whip around the Pyramids.We will never smell jasmine againwithout thinking of EgyptThe miserable bastard wouldn't budge despite twisting itsear and yelling.How do you say 'MUSH!!' in Arabic?To get the jasmine out of my nose…Thank you to all those involved in this Study Tour. It was outstanding! I will definitely be booking forthe next one!Ian Mclean was educated in Zimbabwe and South Africa, graduating from theUniversity of Cape Town in 1977. He has been active in ‘natural andorganic’ agriculture for many years with a more recent focus on theestablishment of essential oil and other plant extract production platforms insub-Saharan Africa, emphasising ‘triple bottom line’ sustainability, organiccultivation, fair and ethical trade. He has considerable experience in agribusinessand agro-industrial enterprise development, value-addedprocessing, organic agriculture, special crops and international marketing.He lives in Cape Town, South Africa.181
Change language