Essential Oils Project – Introduction
Charkes Starling, the co-owner of Fair Packers, the Fair Trade Rooibos tea packaging company, prepared the following proposal for the BI. The great news is that this project has been fully funded by Old Mutual and will commence in February 2009.
This project has the potential to revolutionise the community’s income situation as initial results are very encouraging.
Below is a summarised version of the proposal:
The Bulungula Incubator is seeking funding for an income generating initiative to train and support rural women to farm plants with oil distillation potential as well as other organic plants with strong niche markets.
The essential oils industry – valued at around $10-billion – is enjoying huge expansion as global consumers gravitate towards natural products in flavours and fragrances. The industry is viewed nationally and internationally as an opportunity for vulnerable small and emerging farmers and rural communities to enter the commercial sector of agriculture.
The Bulungula Incubator Essential Oils Cluster will start with the production of lemongrass, for which the Incubator has an existing market. Once established, there is the potential to expand the initiative to include up to 19 other plants suitable for the extraction of essential oils.
The project has been conceptualized and designed with consideration of the needs of rural women, and the importance of income earning capacity in promoting gender equity. The proposed crops are well suited to the local growing conditions, environmentally friendly, non-invasive and not susceptible to usual crop pests.
Brief Project Description
The aim of the Bulungula Incubator Essential Oils Cluster is to
The project will be developed over two phases.
Phase 1: An initial grant of R 993,946 is being sought for Phase 1, to establish a sustainable project, generating between R1,9 million and R3,5 million return for local women over the first 5 years.
During phase 1, the Bulungula Incubator will:
- Build local capacity to grow, process and sell lemongrass (and three additional crops with oil distillation potential)
- Establish an organic certified farming cooperative involving a minimum of 20 households by year 2.
- Expand existing market (currently secured for minimum of 5 tons) through effective marketing and sales efforts.
- Enable each participating household to generate an average income of R2000 per month
- Identify opportunities to expand the project to include other villages to form an essential oils cluster
- Develop long term strategy that includes farmers in value adding and processing plant (Phase Two)
Phase 2: Investments will be sought for R1.5 million to create a processing facility that will yield R500,000 profit annually above and beyond the income earned from farming. The community will own a minimum one-third stake in the business.
The Phase Two business design is modeled on a similar initiative established by the project manager in partnership with historically disadvantaged individuals in the Rooibos industry, and touted internationally as a model of good practice in Fair trade.
The Oil Distillation Facility will be established as close to Nqileni Village as possible and will build local capacity by training and employing community members in administration, operations, planning, marketing, sales and management.
Timeframes and key deliverables
|Six||Office established||Successful project plots established for lemongrass (Crop A), with three trainee farmers||Website established|
|12||Local administrative assistant trained||Three additional farmers trainedOne crop diversification (Crop B)||Quarterly newsletter developed||Five tons lemongrass sold (contracted)|
|18||Constitution of farming co-operative drafted||Six additional farmers trained||International Trade show participationQuarterly newsletter||Ten tons lemongrass soldFirst sales of Crop B|
|24||Cooperative established with organic certification||20 farmers trainedThree crops successfully grown.||2nd International Trade showQuarterly newsletter||20 tons lemongrass soldSales of Crop B and Crop C|
Phase 1 will fall under the control of the Bulungula Incubator (BI) and all processes and outputs from Phase 1 will be entirely owned by the local community trust.
Phase 2 is designed as a business venture, to be part owned by the Community Trust who will have a minimum one-third ownership.
The initial project director1 will be engaged as a field officer for a minimum 24 month period. Thereafter the project will be mentored by BI staff in the field. Phase 2 development will drive the sustained success of Phase 1.
1 See brief bio for project director below”
- Has extensive working experience and understanding of Organic Certification requirements and processes.
- Has an in-depth understanding of Fair Trade Certification requirements and processes.
- Has been a Trustee on the Board of Fair Trade South Africa (FTSA) for the past three years.
- Has worked intimately with small producer groups in the Western & Northern Cape, and has a sound understanding of the limitations and challenges that exist within these frameworks.
- Is a founding member of the Trust Organic Small Farmers international alliance (www.trust-organic-small-farmers.org)
- Is the owner and founder of Gold Scarab Fine African Tea (www.goldscrab.com)
- Is the founder and Managing Director of Fair Packers (Pty) Ltd, an initiative established in partnership with historically disadvantaged individuals in the Rooibos industry, and touted internationally as a model of good practice in Fair trade.
- Has a solid understanding and track record in developing sustainable agri-business models and currently exports South African rooibos tea to more than twenty international companies across Europe, Canada, the USA, New Zealand and Japan.
- Has a well established network of clients and agents interested in purchasing a variety of bulk botanicals, both domestically and abroad.
- Has 15 years experience in advertising, marketing and sales management.
- Has 12 years of business administration and management experience.
- Has working experience on commercial farms including sheep, dairy, fish, various fruit and vegetable crops and bee-keeping.