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SPRING EDITION 2008

the real tale of australian sandalwood10 ways to strengthen your businessare you part of the $12 billion trend?

springSPRING EDITION 2008

Since our last issue of Oily, we have been busy with many improvement projects. Several of which are now ready to share.

Firstly, we are excited by our new partnership with the business-coaching specialists at Aromatherapy Home Business (AHB). Our collaboration has resulted in content that provides good sound business advice, plus the industry-specific elements that are essential to running a profitable business. In the space of a few short months, the training will give you all the tools you’ll need to enable you to introduce new strategies into your business.

Secondly, our cover story on Mount Romance’s Certified Organic Australian Sandalwood provides an insight into this ethically motivated company. Come with us behind the scenes as we explore this truly fascinating Australian tale of success.

We invite you to find a comfortable chair whilst you sit back and enjoy the read.

Eliza McGivern, Editor

THIS ISSUE

Spring cover:LemonCitrus limonumLemon Essential Oilis extracted by cold pressing. It offers a fresh, stimulating aroma and its vibrancy enhances uplifting vaporiser blends. Lemon oil acts as an astringent, so it can be useful in skincare for teenagers or oily skin types and for toning ageing skin.Visit www.seoc.com.au for more information.

04 Harvest: Certified Organic Australian SandalwoodHow a company put the heart back into theWestern Australian Sandalwood industry.

12 SME (Small to Medium Enterprises) Forum: Your Recipe for Success10 ways to strengthen your businessA look at how you can improve your business.

18 Lifestyle:Consumerism with a ConscienceTake the LOHAS test to see if you live a life ofhealth and sustainability.

20 Events: Australian & International Events GuideMust-attend expos for SEOC customers.

22 Product Specification:Certified Organic Australian Sandalwood

Specification for manufacturers.

23 Formulation: Organic Sandalwood BalmFeaturing Certified Organic AustralianSandalwood.

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During the ’s Sandalwood was a primary export earner for Western Australia. Wood was sold throughout Asia for decades resulting in over 300,000 tonnes being exported by the early 20th Century. In 1919 the first fully operational manufacturing plant was established to produce oil for a variety of industries including European perfume, luxury soap and the pharmaceutical industry.

Initially only capable of producing crude oil with a low santalol content, it was believed that Australian Sandalwood was second-rate in comparison to Indian Sandalwood (Santalum album).

But in the 1920’s, improvements in production and scientific control meant that higher quality oil, with higher santalol levels, became available. This advancement led to the inclusion of Australian oil in pharmacopoeias of Britain, France, Belgium and Japan.

Throughout this era, medicinal Australian Sandalwood was used internally and externally and was recognised for being just as effective as the imported Indian oil. In time though, the introduction of antibiotics into the medical world, meant that medicinal Sandalwood became obsolete and after a gradual decrease in demand, production ceased in the mid-1960’s.

It wasn’t until the end of the ‘90’s that Sandalwood was brought back into the economic mix due to its popularity within the >

The heart of the landCertified Organic Australian Sandalwood Oil

Over 150 years ago Sandalwood (Santalum spicatum) was the heart of Western Australia’s export market. Today, again, Sandalwood is pumping life into the outback economy and proving sustainability is also profitable.

HARVEST

Opposite: Elder, Dusty Stevens (right) and Kenny Farmer (left) of the Kutkabubba community are harvesters from the semi-desert Shire of Wiluna.

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HARVEST

aromatherapy and perfume industries. In 1997, Mt Romance Australia Pty Ltd took great steps to re-introduce the oil to the world market. They negotiated a long term supply contract with the Western Australian Government and exported Sandalwood to most continents across the globe.

Today, we are witnessing the next phase in the lifecycle of this native Australian oil. Western Australian global exporter, Mt Romance Australia Pty Ltd (of which Australian Sandalwood Oil Co Pty Ltd is a subsidiary), was granted Organic Certification in August 2006. The company achieved this certification in accordance with the Australian Organic Standard 2006, through the Australian Certified Organic organisation (ACO). ACO is an accredited organic certifier with the United States Department of Agriculture (USDA) therefore Mt Romance has also been certified in accordance with the National Organic Programme (NOP) in June 2008.

Before any oil can be produced, there is a comprehensive infrastructure in place that is followed by all associated industry partners. The environment is protected through conservation and regeneration programs overseen by the Forest Products Commission (FPC). Local Indigenous communities are supported with commercial partnerships through the Songman Circle of Wisdom. And finally the oil production is controlled to meet high quality specification and now also to meet organic standards.

HarvestingThe Forest Products Commission (FPC) is responsible for the >

Opposite clockwise from top left: Young Sandalwood trees are hemi-parasites, needing a host tree to feed off whilst establishing their own root system. Sandalwood flowers whilst striking have a putrid odour, similar to that of offal. Their role is simply to be germinated in order to produce seeds. Dr Richard Walley OAM was the founding chairman of the Songman Circle of Wisdom and integral in the development of the Indigenous Certification standards. Seeds fall to the ground and so the cycle continues.

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Sandalwood harvest with their main objective being to conserve the Sandalwood species in Western Australia.

Any harvesting that occurs on Crown Land must be done so by a licensed harvester. This ensures full traceability of every wood chip produced from the heartwood of this native plant.

The average tree can take up to 25 years to mature, certain regions may vary depending on climate and conditions, some shorter, some longer.

The natural regeneration of Sandalwood has been affected by the declining population of the woylie, a small marsupial that is the natural distributor of the seeds. With increasing numbers of feral animals the woylie has now become an endangered species and consequently Sandalwood forests are being replanted and regenerated by the harvesters.

When the tree is harvested, the whole tree is removed, roots and all. After harvesting a mature plant, two small trenches are dug in the ground and six seeds are planted in each trench next to a host tree close to where the original tree was removed.

Community AllianceThere are many Indigenous communities involved in the harvesting of Sandalwood. They are all licensed and they sell their wood to the FPC. Mt Romance then purchases the wood from the FPC and extracts the oil as per an Indigenous Certification which has been issued under the Songman Circle of Wisdom Indigenous Plant Certification Protocol.

The oil extracted from the wood chips is sold at a premium and 100% of that premium is returned to the community to facilitate buying new harvesting machinery or to assist the community in >

HARVEST

Opposite clockwise from top left: Local harvester Albert Phillips prepares a truckload of wood to be de-barked. Tumblers remove the leaves and bark from the wood and branches. De-barked wood ready to be chipped. Wood chips are made from the heartwood and are steam distilled to produce the valuable Sandalwood oil.

The precious Sandalwood oil is extracted from the dark centred heartwood of the trunks and branches.

other ways. This agreement between the Indigenous community, the FPC and Mt Romance ensures that true and fair trade is adhered to and that no one entity profits more than another.

Oil ProductionAustralian Sandalwood oil is extracted through the steam distillation method. Once a sandalwood tree is harvested, the bark and leaves are removed and the remaining parts of the tree are divided into roots, butts and logs. When this has been completed the wood is chipped, in order to create larger surface areas to enable the extraction process.

Strict quality control is employed to ensure the chipped wood is neither too big nor too small as this can affect the final yield and quality of the oil. The wood is then placed in a distiller vessel and steam is passed through to extract the oil. The volatile sandalwood oil evaporates in the steam and when the vapour is cooled in a condenser the result is a condensate that has both oil and water phases. Sandalwood oil is lighter than water therefore it floats above the water component of the condensate enabling it to be easily collected. The last step is the removal of trace amounts of water from the oil and then finally filtration.

These days the demand for Australian Sandalwood is becoming stronger as the availability of Indian Sandalwood slowly dwindles.

Research is proving that the Australian oil has highly beneficial antimicrobial properties and anti-inflammatory effects due to its unique chemical components, E E farnesol and epi- -bisabolol.This plus the new organic certification, make it even more appealing for the aromatherapy, natural and organic cosmetic industries to embrace the benefits of this amazing oil. �

HARVEST

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By Lucille Wilson.

Our thanks and appreciation goes to Mike Ray and Louise Burgler from Mt Romance Australia, for their valuable input in compiling this article. Photographs reprinted with kind permissions of Mt Romance Australia Pty Ltd.

SME FORUM

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For the past few months, we have been working behind thescenes on a joint-venture training program developingBusiness Coaching that has been specifically tailored for ourindustry. We believe the program is the first of its type inAustralia and we are excited that it’s now ready to offer toSydney Essential Oil Co. customers.

Our training partner, Will Cotterill from AromatherapyHome Business (AHB), will be conducting the coaching inan on-line and email format. The content is comprehensiveand we believe it will be useful regardless of where you arestarting from. If your business is still at idea or conceptstage, the coaching will guide you through all facets ofestablishing and operating a profitable business. For thosewho are already established, you’ll learn how you canimprove on what you are already doing, extend yourproduct range to grow your profits, or at the very least youcan give your business a thorough check-up.

And now, we will hand you over to Will Cotterill, as he hascontributed the following “10 ways to strengthen yourbusiness” article for this issue of Oily. �

Your recipe for success

Luscious body scrubs improve the texture of your skin and give it a glowing appearance. Try Sandalwood oil in your formulation for an exotic aroma and re-hydrating effect.

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10SME FORUM

With all the talk of rising costs of living, decline in consumer spending, tighter credit conditions and general economic doom and gloom, it is all too easy to start feeling a bit nervous about what is around the corner for your business.

Well, it is not the first time there has been a down turn in the economy and it won’t be the last. Business still goes on, and in fact tough times can be used as a perfect opportunity to take a close look at your business and how you can improve and strengthen it.

I believe that challenges can bring out the best in you, and I also believe that when there is change, there is opportunity.

Here are my top ten tips for using the tough times to strengthen your business.

1. It all starts with attitudeFirst things first, you need to believe in the statement I just made above. You need to believe that challenges will bring out the best in you and that when there is change, there is opportunity. If you don’t, then you are going to find it hard to rise above fears and limiting beliefs. If you do, then you will already be one step ahead of 95% of the business community, and your business will not only survive the tough times, it will thrive.

2. Time to get organisedA good attitude is the first step, but it needs to be backed up with action, and action is most beneficial when it is organised action. You’ll need some dedicated quiet time to take stock of where your business is at now, where you want your business to be heading and finally what action you need to take to get it there. Think of

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ways to strengthen

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your action plan as your road map through rough terrain; keep it close to you at all times, keep checking it to make sure you are staying on track and don’t let any bright shiny objects distract you.

3. Hone your cash flowNow’s the time to really keep a close eye on your cash flow and to maximise not only the amount of money coming in, but also the speed at which it comes in. Also, look at how you can slow down and minimise money going out. Increase transactions that bring money into your business quickly and keep your stock turning over. If you have slow moving stock, now is the time to package it up for a sale. Finally, take extra care compiling your cash flow forecasts so that you can prepare well for the leaner months.

4. Work well with creditors and debtors When times are tough your customers will want to stretch out their payments, while your suppliers will want to be paid early. The best approach to take in both cases is an open line of communication. Stick to trading terms and negotiate solutions if things become tight. Trying to arrange extended credit can help to free up money which you can invest in marketing your products.

5. Give your working assets a health check nowMake sure that your equipment is serviced and in good working condition so that you don’t get any expensive surprises down the track. As long as your equipment is working hang on to it, even if it is fully depreciated, and only replace things when it is absolutely necessary. >

your business

SME FORUM

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6. Look closely at your expenses – it’s time to streamlineIt is very easy for businesses to pick up a lot of small, unnecessary expenses that stay under the radar during stronger economic times. Take the time to have a good look at where your money is being spent, and cut away the debris. Now more than ever, you should be shopping around to reduce general variable costs, as well as considering ways of reducing the unavoidable fixed costs.

7. Maximise your marketing investmentsDuring tough times it is important to invest marketing money wisely. To do this pick three or four marketing strategies that you know yield the best return on investment and focus on them. Low cost marketing tactics designed to keep existing customers buying your product are a good option. Also offer new customers exceptional value to start buying your products. Be generous to win them over and then continue to offer great service to keep them. It is not the time to be trialling untested strategies right now, so stick to what you know works for you. Remember to make your marketing messages suitable for the current economic conditions.

8. Working together – who can you form a strategic alliance with?

Two of the most important questions you can ask are: Who else has my customers? Where would I find existing lists of potential customers? Finding partners with whom you can form a strategic alliance with is one of the most cost effective and powerful ways to grow your business. You can offer them a percentage of sales to endorse your product or, you can offer them promotional products

Imagine...If you kick off your coaching in August,

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to use as value ads and gifts. Create win-win situations that are going to increase profits for both businesses.

9. Review and make necessary changes to your financing sooner rather than laterLook at whether your business needs to restructure long term debts to help cash flow. Lenders are generally happy to work with you providing you are consistent with your repayments. Make sure you have a short term finance plan in place too, just in case you need a little help during a quiet period. It is better to get these facilities in place as a precaution, rather than waiting until you are in desperate need of them.

10. Analyse and focus on your core businessWhen you analyse your product costs and compare them to the revenue they generate, you can begin to rationalise what your core business is. You need to make tough decisions to let go of products that are not giving you a good enough return so that you can focus your efforts on the ones that are.

Be positive, be brave and relish the challenges ahead. Look at how you can implement the information above now, and start to transform your business into a leaner, fitter and healthier model capable of surviving any economic down turn. �

By Will Cotterill – Aromatherapy Home Business

you could have your new product in the market before Christmas…

To find our more about the AHB Business Coaching program, please visit our website for details www.seoc.com.au.

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LIFESTYLE

Take a moment to scan this list and

mentally tick the items that have a current

connection to your personal or business

lifestyle.

Alternative therapies (Aromatherapy,

Naturopathy, etc.)

Personal development books or programs

Organic or natural personal care

products

Spa visitations

Organic furnishings or clothing

Natural household products (paper

goods and cleaning products)

Organic or locally grown food or drinks

Fair trade products

Vitamin & mineral supplements

Socially responsible investing

Renewable energy

Carbon offsets

Hybrid and electric cars

Green and sustainable building products

Water-wise habits

Ethical business relationships

If you have nodded yes to any of these,

then you are most certainly part of the

market segment known as LOHAS.

LOHAS, an acronym for Lifestyles of

Health and Sustainability, relates not only

to attitudes, but also to buying habits and

social behaviour of consumers and

businesses. Current research has reported

the LOHAS consumer market in Australia is

estimated at $12 billion and growing*.

LOHAS consumers want to integrate

healthier and more sustainable products

into all aspects of their lives ranging from

their nutritional, physical and mental well-

being, to their finances, homes, holidays

and work lives. Choosing a LOHAS lifestyle

is not restricted by age or socio-economic

circumstance. And being a LOHAS consumer

doesn’t mean you stop shopping. Typically,

most LOHAS consumers introduce

meaningful and affordable products into

their lifestyles on an as-needed basis.

LOHAS companies apply what is

described as ‘responsible capitalism’ by

providing goods and services using

environmentally friendly and economically

sustainable business practices. Authenticity

is their core value. Consideration for

people, planet and profits integrate with

ethics of sustainability, growth and

positive improvements.

At SEOC, we are committed to regularly

reviewing and updating our LOHAS

business practices. For example, you may

be reading this article on-line rather than

a print copy. But if not, you’ll notice that it

has been printed by a printer who uses

waterless presses and vegetable inks on

environmentally responsible paper from

sustainable sources. On the product front,

Organics continue to be a major focus for

us. In 2003, organics represented 8% of

our key product groups. This grew to 28%

in 2006, and we are actively developing

new products that will come to market this

year, that will help us reach our target of

40% in 2008. So stay tuned… �* Report published August 2007 by Mobium Group,

Australia.

Consumerismwith a conscience.Is it possible?On a daily basis, millions of Australians actively strive for healthier and more sustainable lives. When choosing products, thought is given not only to their personal needs, but also to the impact on the planet and environment.

EVENTS

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VISIT SEOC AT THE FOLLOWING INDUSTRY EVENTS

August 21-22, 2008 Sydney, Australia

Natural Therapies & Natural Health Expo

AJC Convention Centre, Royal Randwick (new venue)

Australia’s largest annual trade event for the natural healthcare industry is a

must-attend event for complementary healthcare practitioners, therapists,

medical practitioners, naturopaths, pharmacists and retailers of natural

health products.

Source the best products and services for your clients at this two-day

product exhibition, combined with an informative and educational three

day workshop and seminar program. CPD points from ATMS, ANTA, NHAA

and IFA.

Register to attend by visiting www.naturaltherapyexpo.com.au, and enter

promotional code NTSSEO when prompted to receive a $10 discount on any

of the seminar workshops or packages.

The Natural Therapies & Natural Health Expo is a trade event for natural

health professionals only and is not open to the general public.

Visit SEOC at Stand 16

www.naturaltherapyexpo.com.au

November 12-14, 2008, Hong Kong

Cosmoprof Asia

Hong Kong Convention & Exhibition Centre

Recognised as the premier beauty event in Asia for suppliers and buyers

for global networking in the beauty and health industry. Cosmoprof is a

trade-only event.

To enjoy FREE & quick admission, please pre-register on-line by

30 September.

Visit SEOC in Hall 5, Booth 5M1A

www.cosmoprof-asia.com

Sydney Essential Oil Co. will be exhibiting at some must-attend industry

OTHER INDUSTRY EVENTS (AUG-NOV)

August 30-31, 2008 Sydney, Australia

Sydney International Spa & Beauty Expo

Sydney Convention & Exhibition Centre

Experience the world of spa & beauty

at Australia’s largest industry event.

www.internationalbeautyexpo.com.au/

sydney2008

September 24-26, 2008 Tokyo, Japan

BioFach Japan International Organic

Trade Fair & concurrent event

Natural Products Expo

Tokyo Big Sight (Ariake), West Hall

All natural and organic: Functional

Foods; Supplements & Vitamins; Personal

Care & Spa Products; Raw Ingredients

& Materials; OEM/Contract

Manufacturing/Supply-related Goods

& Services; Herbal Products & Alternative

Remedies.

www.biofach-japan.com

www.naturalproductsjapan.com

October 15-18, 2008 Boston, USA

BioFach America Organic Products Expo

& concurrent event

Natural Products Expo East

Boston Convention & Exhibition Centre

Together these two expos form the largest

supplier platform for natural & organic

products in North America.

www.biofach-america.com

www.expoeast.com

October 30-31, 2008 Melbourne, Australia

Natural Therapies & Natural Health Expo

Camberwell Centre, Camberwell

Trade event featuring natural medicines,

homeopathic remedies, supplements,

essential oils, flower essences, bodywork

supplies, business and clinic services,

courses and training providers, natural

health magazines, books, CDs and more.

www.naturaltherapyexpo.com.au

SEOC SEMINARS

The April 2008 seminars dates were the

last for the time being. The classes are

temporarily suspended, as we redevelop

the content and presentation.

BUSINESS COACHING

The all-new industry-specific Business

Coaching program is now available

in convenient on-line and email format.

Customers wishing to find out more

can visit our website www.seoc.com.au

for details.

events over the coming months. We’d love to see you there!

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PRODUCT SPECIFICATION

Product Sandalwood Oil 100% pure

Botanical Name: Santalum spicatum

Type: Certified Organic

Origin: Australia

Appearance: Fluid liquid

Colour: Pale yellow to deep yellow

Odour: Floral, woody

Plant part used: Heart wood

Extraction method: Steam distilled

Physio-chemical properties

Specific Gravity at 20ºC/20ºC: 0.945 – 0.980

Optical Rotation at 20º C: -16.0 – +4.0º

Refractive index at 20ºC: 1.500 – 1.517

Solubility in 70% ethanol: max 5 vols. v/v

Oil Components

-santalol 10% – 25%

epi- -bisabolol 2% – 12.5%

-santalol 10% – 30%

epi- -santalol 0.5% – 3.5%

z- -trans-bergamotol 2% – 10%

E E farnesol 2.5% – 15%

z- -curcumen-12-ol 2% – 15%

z-lanceol 2% – 10%

Other InformationPackaging: As requiredSupplier Certification: NOP Licence no. 10109P

For more information, contact Sydney Essential Oil Co. 02 9565 2828.

FORMULATION

Phase Raw Material % w/w

A Sunflower Oil – certified organic 75.0

Beeswax – certified organic 12.0

Palm Oil – certified organic 4.5

Cocoa Butter – certified organic 2.0

Jojoba oil – certified organic 2.0

B Shea Nut Butter – certified organic 3.0

Rose Hip Oil – certified organic 0.4

C Sandalwood Australian oil – certified organic 0.7

Vitamin E – natural 0.4

Organic Sandalwood BalmPerformance: Rich, nourishing and immediately soothingAppearance: Creamy, smooth, pale lemon coloured balmStability: Expected shelf life 18-24 months subject to manufacturing practiceRecommended uses: Relaxing massage balm, moisturising body balm, sleep-time balm, sportsman’s foot balm, meditation balm, rough elbow balm.

Method of Manufacture1. Combine ingredients in Phase A and heat to 70°C maximum.2. Slowly cool to 50°C and add ingredients from Phase B, mix through.3. When the balm reaches 45°C add ingredients from Phase C, mix through.4. Pour the balm at 40°C and allow to cool slowly to room temperature.

For ingredients, contact Sydney Essential Oil Co. 02 9565 2828.

Disclaimer Product formulations are included as illustrative examples only. Whilst all care has been taken

in presenting example formulations, Sydney Essential Oil Co. accepts no responsibility concerning any

product manufactured using such formulations. The responsibility for the performance for marketing

claim and adequate testing for stability of any product prior to sale lies with the manufacturer thereof.

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SLUG

Sydney Essential Oil Co Pty Ltd ABN 95 096 439 299

Unit 4, 2-10 Fountain Street Alexandria NSW 2015 Australia

PO Box 171 Alexandria NSW 1435

T: + 61 2 9565 2828 F: + 61 2 9519 8009 E: sales@seoc.com.au

Order on-line www.seoc.com.au

Office hours: 9am-5pm Monday to Friday

Oily is printed on environmentally responsible paper manufactured using

Elemental Chlorine Free (ECF) pulp sourced from sustainable, well managed

forests. Our printers use waterless printing presses and vegetable based inks.

Oily is also available to view on-line. If you’d prefer to opt-out of receiving

a print copy, please let us know.

© Copyright 2008 Sydney Essential Oil Co. Pty Ltd. All rights reserved.

No part of this publication may be reproduced, stored in a retrieval system, or

transmitted in any form or by any means, electronic, mechanical, photocopy,

recording or otherwise, without prior written permission of the publisher.

Contact marketing@seoc.com.au with any requests.