Ethical investment can build stability, says Treatt

By Jess Halliday

- Last updated on GMT

Related tags: Essential oil, Oil

Companies that want to source ingredients ethically should consider
investing in less-stable parts of the world, according to Treatt,
which has major organic operations in Kenya and India.

Food manufacturers generally prefer to source ingredients and materials from countries at low risk of political or environmental instability, so that there is a greater chance that they can have an uninterrupted supply. Hugh Bovill, managing director of flavour and fragrance ingredients supplier Treatt, told that investing in production in places where there is conflict can help bring more stability to the area. This is as a result of bringing viable business opportunities and a source of revenue to the local population. "If you are to help people and help achieve stability, you have to invest,"​ he said at the IFT trade show in New Orleans at the weekend. "Some customers want to invest in parts of the world that otherwise might be difficult".​ Bovill agreed that there is, to some extent, a conflict of rationale between a marketing desire to have an ethical supply chain and the need for that supply chain to be secure. But in all situations it makes good risk management sense to have an alternative supply source of crucial raw materials, that can be tapped in case of unexpected interruptions. "In terms of protecting supply lines, companies tend to buy in more than one country,"​ said Bovill. In addition, to help minimise the risk and protect the customer, Treatt carries inventory of the essential oils it sources from less secure places to last "some months".Treatt and Earthoil ​Treatt recently acquired the remaining 50 per cent of the joint venture it entered with Earthoil in February last year. Under the terms of the original contract, Treatt had no involvement in the day-to-day running of the Earthoil business, but it did have the option of acquiring the company in full by 2012. However over the first 12 months, Treatt saw disappointing results coming through from the arrangement. For the six months ended March 31, for instance, losses totalled £232,000, compared to £23,000 in 2007. Bovill told that Treatt "can move forward in existing products and fully utilise Treatt resources".​ In addition, more products can now be brought online - from all parts of the plant. Kenyaand India ​ Treatt's main organic essential oil operations are located in Kenya and India. In Kenya the enterprise grows essential oils including lemon grass, tea tree and palma rosa, on the equator. The small-scale plantations resemble kitchen gardens, and are visited by field officers on mountain bikes. Here, Treatt also operates a sustainable method for the production of cold pressed macadamia oil; the macadamia nuts are cracked open, then the shells are burned to generate steam for distillation. In addition to the obvious benefits of cheap energy, Bovill said it is expensive to extract essential oils, so development of cheaper ways to do it bring additional benefits to farmers and processors. In India, Treatt works with around 400 mint growers. It owns the organic certification on their products, so if they want to sell their mint as organic they have to sell it to Treatt. The farmers grow mint for six months of the year, and pulses and rice for the remaining months. Given the scales of the operation, the company uses a peer surveying system, with the farmers watching over each other's activities in groups of four to make sure they are adhering to organic standards A former Soil Association certifying officer goes out to India four times a year to organise the annual audit, during which farmers are selected at random. The harvested herbs are all processed in India, using the village still. This is rented by the hour, and the owner is paid for his services in oil. The oils are then shipped in drums, and the customers take the raw product without any further involvement at Treatt's own facilities. Transparency is also an important element. Treatt's customers pay the farmers directly, into a community fund. This means that they are aware of the price the farmers are being paid for their oil. Bovill said that customers often want to visit the growers, as well. In addition to the mint that is already available, Treatt will start to offer organic menthol from peppermint later this year. Bovill said he believes this to be an industry first.

Related topics: Formulation & Science, Fragrance

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