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Sandalwood Oil Facility opens in WA

WA’s liquid gold smells so sweet to world’s best perfumeries, with sandalwood JV giving hope to Goldfields community. Source: The West

The joint venture project will take wild sandalwood from WA’s Gibson Desert to the world’s best perfume houses.

A new sandalwood oil processing facility opened in Kalgoorlie, marking the start of an ambitious project to take wild sandalwood from the Gibson Desert to the world’s best perfume houses.

At the same time, the new Dutjahn Sandalwood Oil facility will help to create a sustainable income source for the Dutjahn custodians.

The facility is an equal joint venture between the Dutjahn indigenous stakeholders and Perth businessmen Keith Drage and Ron Mulder, founders and owners of WA Sandalwood Plantations, which manages and part owns 13,000ha of Australian spicatum sandalwood across the wheatbelt.

Mr Drage and Mr Mulder partnered with the Dutjahn several months ago after Melbourne-based private company Australian Botanical Products backed out of a similar arrangement.

Sandalwood for processing at DSO will be sourced from three channels, including wild trees harvested from Dutjahn land by the Kutkabubba Aboriginal Corporation’s Indigenous Martu harvesting enterprise, headed by Clinton Farmer.

DSO will also purchase a similar amount of sandalwood from the Forest Products Commission and from WASP plantations.

The facility has the capacity to process 400 tonnes of sandalwood each year. Mr Drage said it was expected to turn over at least $100 million over the next decade, which includes a guaranteed supply of $40 million in sandalwood from the FPC.

Often referred to as liquid gold, Australian sandalwood oil sells at about $US1500 ($1960) a kilo. Mr Mulder said DSO’s end product would target the finest perfume houses in Europe, which is the premier market for sandalwood oil.

He said sandalwood from WASP, which started harvesting its plantations just two years ago, had until now been processed via a third party and was sold to the mid-range aromatherapy market.

“Having our own processing facility and the control this offers is vital in securing the top-end fine fragrance market, which needs the security that batch after batch will be exactly the same,” Mr Mulder said.

Advanced negotiations with fine fragrance customers are under way.

Separately, through DSO’s contract with the FPC, DSO will pay a voluntary 10% royalty, expected to be worth about $2 million over the next decade, to the K Farmer Dutjahn Foundation.

That levy will be used to develop a ranger program and indigenous sandalwood management plan for the Central Deserts.

Indigenous Affairs Minister Ben Wyatt said DSO presented a fantastic opportunity for the local Aboriginal community given it would sustainably use the vast and pristine central desert sandalwood forests to create employment opportunities. DSO chairman Darren Farmer, an indigenous native title holder, said the Dutjahn were ready to show hope, inspiration and set the scene for mainstream support for a transfer of real economic benefit from native title determinations.

DSO starts its operation with four staff based at Kalgoorlie, which will increase as the business expands. It also includes a research facility in the Great Southern, headed by Stephen Birkbeck, who founded Mt Romance in 1990.