I was reminded via an email that I hadn’t updated this Blog since January 2019. To say that the time since that update has flown by would be an understatement although the preoccupation behind the scenes has remained a focus on generating monies outside of this informal liquidation of assets in order to fund the processing and the sales and marketing efforts.

To be fair, the absence of fresh information simply reflects a lack of genuine progress.

Have we been processing non-stop since the January update? Yes.

We continue to run a low cost, low scale production operation in Trat with just a handful of boilers. Costs run at anywhere between around £800 and £1,500 per month dependent up incidental costs and this overhead continues to be privately funded i.e. is not being paid for out of operational income.


Because we still have no operational income because we still have no sales. That is where capital needs to be invested in this business.

Since the January update we could have reported an upswing in interest in Thai Agarwood from the Arabian Market. There certainly seemed to be one! We even had one visit to the production facility by an interested buyer. Rumours continue to circulate that Arabic buyers are increasingly trying to circumvent the usual agents and forge direct relationships with factory owners for regular supply deals.

Given the shrinkage over the past couple of years in the production side of the Thai market (where as previously reported several high profile Agarwood producers and marketers have been forced out of business including the largest exporter, according to official research statistics, of agarwood oil from Thailand) this would all appear to bode well for us and I would be lying if I hadn’t had periods of genuine optimism at various times.

In particular, we made our first official documented sale and signed an agreement to supply one kilogram of oil per month going forwards. The is against the backdrop of our oil, when sampled, generally appearing to be more acceptable these days than the oil we were producing originally and this is down to experience and learning on our side. That supply contract would have allowed a doubling of production capacity (which requires capital expenditure in new boilers and infrastructure) and would have allowed us to start establishing a proper presence in the market place. We even received a cheque for the first consignment and delivered some initial inventory.

However, this was via an agent and further up the supply chain there were issues and after nearly four months of being as patient as we could be we had to reclaim our inventory and return again to square one.

The conundrum remains the same. There is neither the external financial resource available to expand production at this time and nor is there the inclination to do so as if we increase production capacity we increase overheads and to what end? To have more finished product to hold in storage (another cost)? It simply isn’t worthwhile. We have enough raw materials held at the production facility to keep that ticking over until the end of the year at which point the lease runs out on the warehouse and we can look at the merits of relocating. Between now and next year the aim is to deploy financial resource to going out into the world and seeking out supply deals rather than continuing to hope one will come to us. Initial focus for such efforts will be Singapore (middle men / agents) and Dubai (more agents but also end users).

This requires the injection of thousands of pounds on top of production budgets and whilst the costs of such enterprises is not tens of thousands of pounds it is still a significant cost, relatively speaking, wherein the budget has to be generated externally with no access to trade financing. Whether this be a debt or a write-off behind the scenes it still needs generating and that is easier said than done.

Such a funding situation remains as untenable as it was ten months ago when this blog was last updated and relatively recent conversations with a lawyer, who is also an investor both in the original funds and also directly into Agarwood via the funds’ main supplier (the now defunct Touchwood) confirm that any obligation here is not a legal one.

The issue remains though that we invested in assets and some of those assets still exist. They haven’t vanished. To walk away simply renders them all worthless. It may very well be that in practice, given the historical costs to potentially offset, that the assets are indeed worthless; but somebody somewhere would find value in them if we walked away (assuming we didn’t set fire to things on the way out of the door).

With that moral conundrum still facing us we plough on.


If we manage meaningful forays into the global market with no sign of any improvement in our ability to generate income from thus business, then at that point we will have to seriously take a view.

A line has thus to be drawn now at December 31st or whichever date thereafter we complete following up on any enquiries generated from sales efforts. If there is no sign of any change in our fortunes at that point, then tough decisions will need to be made.

If we receive any verifiable good news between now and then it will be reported here but if there are no updates on this website then that is indicative of a continuing failure in the sales efforts. Production will continue in the meanwhile.

Aequus October 2019