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Eco-Solution icon Eco-Solution: Santanol

Harvesting a Sustainable Supply

Key Environmental Performance Areas:

  • Resource Management (Operations)
  • Traceable Products (Operations)

Manages approximately 2,200 hectares of Indian sandalwood trees in Kununurra, Western Australia.

Began planting trees in the late 1990s and harvested first trees in 2014.

Meeting demand for ethical, sustainable, and reliable Indian sandalwood and oil.

Challenge

Unauthorized harvesting of indigenous Indian Sandalwood trees has had significant negative effect such as deforestation and habitat loss on the forests of India and Sri Lanka, and in significant areas of its native range in South East Asia. This has put unsustainable pressures on Indian sandalwood (Santalum album) oil use in fragrances, flavors, aromatherapy, skincare and pharmaceutical industries. Consequently, some perfumers have removed sandalwood oil from their formulations or have replaced it with synthetic products.i

Santanol is a sandalwood plantation manager, managing approximately 2,200 hectares of Indian sandalwood in northern West Australia (Kununurra). Sandalwood, and its oil, is used in perfumes, carvings, incense, toiletries, and medicine amongst other products.

Response

In order to manage the negative impacts of sandalwood harvesting, Santanol has developed a protected plantation approach over the past two decades in Kununurra, Western Australia, which is helping provide a more sustainable, ethical, and reliable supply of this key ingredient for customers, including perfumers. Several factors differentiate Santanol’s approach:

  • The company owns and manages the entire process from propagation to distillation.
  • All of Santanol’s oil and wood products are traceable back to the seeds it plants.
  • Santanol’s mixed-age plantations ensure that it will have a continuous supply of products in the future.
  • The sandalwood oil is extracted from the heartwood of the trees through steam distillation, which can be more efficient at extracting the oil than other methods.

Resultsii

Since its first harvest in 2014, Santanol has harvested several tons of Indian sandalwood. The oil is now used in the flavor, fragrance, aromatherapy, and body care industries. Santanol conducts research as well as a development and breeding program to continuously improve growth rates and oil content. In order to ensure an ongoing supply, the company aims to replant at least 40 percent more seedlings than it harvests every year. Santanol also focuses on broader environmental efforts, such as conserving natural resources by using a water-efficient irrigation system and a clean source of energy in its new distillation factory, and social efforts, such as the implementation of an aboriginal engagement plan beginning in 2016.

Santanol began participating in KKR's green program in 2016.


i InAcres. "Why Sandalwood." n.d. Web. 26 May 2016. http://inacres.com/why-sandal-wood/.

ii Self-reported portfolio company data is not calculated, reviewed or independently verified by KKR or KKR Capstone. For more information regarding the results methodology for companies evaluating their own data, please see the methodology section. There is no guarantee that any GSP-related avoided costs or added efficiencies will positively impact the portfolio company’s valuation or performance.

Unless otherwise noted, portfolio company data represents 2015 results, published in August 2016. These case studies may contain forward looking statements including descriptions of planned projects and projected results and savings. These statements are subject to the risk that the projects will not develop as planned or at all or that projected results and savings are not realized.