The worldwide annual demand for Indian sandalwood is estimated to be about 28,000 tons per year.
This contrasts with an annual supply of legal Indian sandalwood from India of no more than 200 tons.
The large discrepancy between available supply and global demand has continued to widen over recent decades, because the worldwide stock of Indian sandalwood trees growing in the wild is almost extinct as a direct result of sustained and excessive illegal logging and overexploitation.
As Quintis’s growth accelerates further, it gradually continues to replace India as the quasi-monopolistic commercially relevant global supplier of Indian sandalwood, while the wildly grown supply of Indian Sandalwood from India continues to decline.
Noteworthy new competitors are not in sight and Quintis has more than a decade-long time-to-market and know-how advantage over any potential competitor.
This unique market situation offers exceptional return opportunities for us, our investors, our partners as well as our JC Indian Sandalwood Investments.
The official supply of Indian sandalwood from India has fallen almost 90% in the past ten years, because the natural Indian sandalwood population in India has almost disappeared. Despite strict export restrictions imposed by the Indian government as well as effective state media coverage aimed at dissuading illegal smugglers, the natural population of the Indian Sandalwood tree is now almost extinct and the tree is now a protected species. Only a very small fraction of India's supply in Indian sandalwood is today sourced from private or state-owned plantations.
Quintis, our Australian asset partner, has recognised the potential of this exceptionally favourable market situation many years ago and today is the world's largest supplier of sustainably and legally sourced Indian sandalwood.
Quintis not only plants, cultivates and harvests Indian sandalwood on its plantations in Australia, but also processes the wood and markets and sells many of the related end-products. The tight supply situation on the international markets for Indian sandalwood provides Quintis with the role of a natural resource "monopoly“, which gives it favourable market powers or as Frank Wilson (the CEO of Quintis) puts it: “We are a price maker, not a price taker”.
Naturally, this extraordinary market situation has attracted interest from new competitors. However, to date, Quintis maintains a significant time-to-market and know-how advantage over its nearest competitors, none of which are currently able to supply commercially relevant quantities of Indian sandalwood or are likely to do so, for the foreseeable future.
Naturally, this favourable market constellation attracts new potential competitors and attempts at imitating the cultivation of Indian sandalwood on plantations.
To date, however, nobody apart from Quintis has been able to acquire the necessary know-how to cultivate commercially relevant quantities of plantation-grown Indian sandalwood.