Sandalwood company Quintis has shrugged off the trade war with Beijing by partnering with a major Chinese company, in a bid to boost its products in traditional Chinese medicines.
Quintis has signed a Memorandum of Understanding with Foci Pharmaceutical to explore whether they can collaborate to improve the standards, quality and innovation for its Kununurra grown Indian sandalwood in traditional Chinese medicines.
Richard Henfrey, chief executive of Quintis, said it was anticipated binding agreements could be put in place over the next six months. This includes a possible joint venture value-adding facility in China.
“There’s not a set dollar value (to the MOU) — rather it’s an agreement to collaborate. But there’s certainly an ambition that we will be investing in and building the market,” Mr Henfrey said.
China is already a big market for Quintis and Foci has in the past six months ordered shipments of the company’s processed sandalwood heartwood from trees grown in Kununurra.
The supply of sandalwood to China has not been affected by a deteriorating relationship between Australia and the Middle Kingdom that has resulted in bans on a sweeping range of Australian agricultural products, including timber.
Local exports were targeted last year after the Morrison Government called for an inquiry into the origins of coronavirus.
“(Political tensions mean) there is potentially some risk, but this product is being imported as a medicinal ingredient, not a timber,” said Mr Henfrey, who joined Quintis a year ago from publicly listed vitamin supplements business Blackmores.
“It is obviously a very processed wood. So far we haven’t had issues getting any product in.”
While Quintis headlines have focussed on hotly contested debt claims and threats of bankruptcy with former boss Frank Wilson, the business has been focussed on gearing up for leap in production as its 12,500ha plantation matures.
Last year Quintis, harvested 101ha (27,000 trees) — it’s fifth and biggest harvest. That is set to double this year as more trees mature.
“Our future harvests will be significantly bigger. Therefore, we are doing a lot of work now to build a scaled harvest process,” Mr Henfrey said.
Quintis is also scaling up by upgrading its Mt Romance processing facility near Albany, enabling a four-fold increase in volumes of sandalwood distilled into oils.
