Nu 98 mn Agarwood investment in Pemagatshel

2026-02-20 - 07:54

An MoU was signed at the Invest Bhutan Summit between Singye Namgyal, founder of Himalayan Agarwood, and Surya Narayanan Ramachandran of Fouad Alghanim & Sons Group of Companies, marking the start of a proposed Foreign Direct Investment (FDI) partnership for commercial agarwood cultivation in eastern Bhutan. The project plans to plant around 16,000 agarwood trees across 17.85 acres in Nanglam, Pemagatshel. A pilot plantation has already been in place for six to seven years. The total project cost is estimated at Nu 80 million (USD 0.88 million), structured as a long-term agroforestry investment with a projected timeline of over 10 years. Equity participation is expected to range between 49 and 51 percent. The plantation will focus on Aquilaria malaccensis, a high-value aromatic species used in perfumery, incense, traditional medicine, cosmetics, and aromatherapy. Resin forms when the tree responds to infection, either naturally or through controlled inoculation. Bhutan’s southern and eastern subtropical regions are considered suitable for sustainable cultivation. The project is expected to create around 100 jobs. Workers will receive local training in plantation management and inoculation, with selected staff sent abroad, including to Malaysia, for advanced training. The final investment agreement is expected to be signed in Kuwait, after which funds will be deposited into the company’s FDI account. Beyond cultivation, the project includes plans for value addition through small-scale oil distillation and production of by-products such as agarwood oil and soap. While machinery is already available, the next phase will focus on improving road access, infrastructure development, and factory construction. The initiative also aims to benefit nearby communities by offering training to farmers and purchasing agarwood from them. The plantation model is designed to reduce pressure on wild stocks, ensure traceable exports, and align with conservation goals and CITES trade regulations. Commercial harvesting is expected to begin from the sixth year onward, following resin induction between years five and eight. Financial projections estimate a break-even point in the seventh year, with strong export potential to markets in the Middle East, India, China, Japan, the European Union, and the United States. The project positions itself as an investable opportunity due to agarwood’s status as a rare, high-value commodity with sustained global demand. The use of a native species suited to Bhutan’s ecology, a plantation model aligned with conservation and compliance, and strong upside potential from value-added processing are highlighted as key strengths. The long-life nature of the asset is expected to appeal to patient capital. Demand drivers include luxury perfumery, religious incense, traditional medicine, and wellness products, with key markets identified as the UAE, Saudi Arabia, India, China, Japan, the European Union, and the United States.