The Godfather of sandalwood

Simon ConstantineAs well as being nominated as the Gorilla Perfumer by his brother Jack, Simon Constantine also heads the Creative Buying team at Lush. His work takes him all over the world and some of these research and buying trips can be a little bit off the beaten track.

Simon often travels with Agnes, our essential oils buyer and an industry expert.

We’ll be publishing a series of Simon’s travel journals here.

Dowload this sandalwood story in .pdf format.

Long known to Lush is the debacle of Indian sandalwood oil. We have always bought large quantities of the oil to use in our fragrances both for its great odour and its properties on the skin. However, over the years, stories started to reach us of illegal activities surrounding the collection, production and selling of Sandalwood and its oil. As we began to discover more about these and as its price on the open market began to soar, we realised that we could not ignore this any longer.

Already, we have researched and begun to buy New Caledonian Sandalwood as a substitute to the Indian oil. The New Caledonian had a slightly poorer odour quality, but was a viable substitute until we were able to purchase Indian quality again. Then, in the summer of last year, we discovered a great project growing sandalwood sustainably in Western Australia and signed up to buy this when it reaches the market in a few years time. A positive move, but there remained a niggling feeling that, at some point in our buying history, we had bought sandalwood from India. What was the real story behind the fables and legends that surround it? We decided to find out for good.

SOUTH INDIASandalwood is one of the most important natural materials in Indian culture, deeply embedded in religious festivals and in Ayurvedic remedies for sexually transmitted diseases, amongst other benefits. In fact, I had heard tales of a ritual where the oil of sandalwood was rubbed on an effigy of a large penis, so these may be related somewhat, I couldn’t say. Anyway, today in India, sandalwood covets a highly desirable material to own and, with its value ever-increasing as stocks begin to dwindle locally, it’s said to be an excellent investment, like gold or property, it never goes down. The primary growing regions of sandalwood trees, the species known as Santalum album, are the forests of South India in the regions of Karnataka, Tamil Nadu, Kerala, Andrha Pradesh and some from Maharastha. These regions have always had sandalwood trees, which only grow parasitically, latching onto the roots of several different plants as they grow. Usually, a tree in the wild will need around thirty to forty years for it to develop the valuable ‘heartwood’ in the centre of the trunk, and it’s here where the valuable oil is and it’s this oil that Lush buys and uses.

To find out more about the current situation of sandalwood processing and supply, it’s best to look back a few decades to understand better the problems associated with it. During the late 1980s in the region of Karnataka, a modern day Robin Hood emerged from the forests in the area, a young man sporting a large handlebar moustache and a penchant for poaching, smuggling, kidnap and murder. Veerappan, born into a lower caste society in a small village called Gopinatham, soon realised he was destined for greater things than the lowly existence of subsistence farming. As a young boy, he illegally felled bamboo and smuggled it to local craftsmen. As he matured, he found work poaching elephants for their ivory where he inherited a lust for power that gunfire gave him.

Gradually, Veerappan established himself as a ruthless leader and began to realise the value of the natural resource, which surrounded him in abundance: sandalwood.

It was a lucrative commodity that grew wild in the local forests and enabled him to grow a substantial organisation hidden in the forests away from prying eyes. The small villages in the area became great recruitment grounds for his operation and soon blazing and bloody battles raged between the local authorities and Veerappan men as they fought for sandalwood, elephant ivory and small arms smuggling. During his reign, Veerappan was known to have killed numerous high standing members of government and police force, embarrassing and violently murdering those who promised to capture him. Methods implemented by both sides were unorthodox, the police hatching plans to poison his food at a banquet and planning numerous booby traps, while Veerappan brazenly attacked police stations and kidnapped a well-known Bollywood star, marching him 400km through the wilderness. He established an almost mythical status in which stories abound of his escapes from jails and dangerous situations, using his cunning and guile.

Sleeping rough most of his life, his camps would move regularly to avoid capture and he was said to have poached $2,600,000 of ivory and smuggled 10,000 tonnes of sandalwood during his time. Whatever the truths of his situation, the net finally closed in on him in 2004 when a special task force despatched to capture him fell on his camp and caught him and two of his associates. Interestingly, he was killed while in captivity and so, too, was his widow, who was captured some time later. The reason behind this was never clear, but it was suspected that for him to have operated for so long from the forests of South India, he would have had to handed out some backhanders to leading officials and may have had held undesirable secrets.

It is with some trepidation then that Agnes and I are waiting in the cool restaurant of our hotel in Bangalore, the capital city of Karnataka state, and the city in which Veerappan famously escaped police custody by allegedly slipping his cuffs and disappearing from a window. As we sit waiting to be told to come down to meet the men who can sell us sandalwood, we see a large gentleman sat motionless in the arm chair in the lobby. He’s wearing a grey collarless shirt and heavy sunglasses and Agnes steals a sneaky photograph of him as we began to wonder if this was such a good idea.

Determined to find out the state of the sandalwood industry four years after Veerappan’s demise, we nervously descend the stairs to informally chat with our potential suppliers. In the cool shade, Agnes and I shake the hand of the man we had spied from the balcony of the restaurant; accompanied by his son, we are introduced to both of them. The father sits solidly with a large frame and two keen, beady eyes weighing us up, a waiter begins to pour him a coffee, he waves his hands after about a quarter inch has been poured and then tops the rest of the cup up with milk and sugar. Uncomfortably, we begin to ask general questions about the sandalwood and the state of the industry.

Soon, our efforts are split as Agnes attracts the attention of the father, whose wheezing voice is hard to understand as he regales his stories. Meanwhile, I talk to his son, a large guy in his thirties, as he cautiously answers my questions, pausing occasionally to listen to his father’s words before continuing our conversation. There is a veritable gabble as they both chatter away hoping to sell us some quantity of oil today. Excited at first they are keen to help and later when we compare notes, Agnes and I see large disparities in what the two were telling us. However, we were able to establish a few basics that seemed to tally up.

Sandalwood production is banned in the state of Karnataka; however, the cultivation of the wood apparently isn’t. This means that wood can be cut in the forest, but then is sent to factories, which surround the state’s borders where the oil can be processed. To buy the wood, there are official auctions in which the wood gathered is then sold to the highest bidder; it is this that all Indian sandalwood should come from. However, our suppliers also tell us of other licenses that can be obtained, which enable a manufacturer to legitimately process wood that is logged and sent direct to the factory.

‘Do you have one of these licences?’ We ask.
‘Yes,’ they reply together, then the son turns to me to detract from the question. ‘Can we see it?’ I ask him anyway.
‘Oh, no. It’s very private; if we showed you, it would make other people angry.’ Uneasy grins and nervous chuckles circulate the table on both sides. In truth, the auctions are unpopular, they drive the price high and the successful bidders are those that bribe the officials the most. They also only sell the whole tree and the processors are only after the heartwood, a milky coloured fragrant centre of the trunk. Therefore, they are buying a large percentage of useless wood. The wood can be ground for use in the incense market and Taiwan was the largest importer of this until it banned imports recently creating problems in this market, too.

Onto the next problem, the Indian government has banned any export of sandalwood or its oil outside of India. Now, the primary consumer of the oil is the local chewing tobacco industry, small packets of tobacco, which are banned in some states, as they are hugely carcinogenic. How do we receive Indian oil then? ‘Oh, it is not a problem. We have a Dubai company, you can buy from that and we send you the oil, no problem.’ No problem then. The fact is, the oil is readily available to the open market, it is just smuggled out of Indian territory, then sold onto predominantly Middle Eastern customers or a few multi national US flavour and fragrance companies. This practise remains from the days of Veerappan, where large quantities of oil were supposedly sealed with the official seal, the agmark. When I was working in the perfumery six years ago, we used to receive these tins. Looking back now, we must have had some counterfeit agmarked sandalwood. In fact, I remember one canister that had been sealed in the UK using the supplier’s own seal turned back to front, so we couldn’t read it.

Intrigued by the US company they mentioned, we asked how much they use. It turns out to be around 50 tonnes of Indian oil, a huge amount considering the price has escalated to around £1,000 per litre of oil now. To understand how much sandal-wood this equates to, around one tonne of wood will yield 50kg of oil, which means this particular company is using around 100 tonnes of wood a year. On current market value, this is around £50 million; with these values, it’s easy to see why it quickly attracts unsavoury characters. Operating in poor areas under partially corrupt local government provides the perfect breeding ground for illegal and lucrative industries such as this. The national government have set a ban on export, but in the past, there was an upper quota on exports of 10 tonnes. The 50 tonnes being sent to the US alone breaks this. We ask what other sources are available outside India.
‘Well we have operations in Africa where we have set up factories in Tanzania,’ the son tells me.

Agnes gleans from the father that they pertain to have two factories in Tanzania that produce 1 tonne and two tonnes of oil a month respectively. It is doubtful that they themselves own the plants, but the fact that operations are established in other countries using Indian methodology doesn’t sound like the best plan to us. Operations outside India can only mean one thing: resource is running short inside India. The pressure on the market has driven the price up and forced processors into new markets. The information we received about these issues was convoluted to say the least, but we were able to make out that Tanzanian wood itself was not legal for export, however the oil may be. Through other contacts we had already heard about the Tanzanian facilities; they had been set up over the last six years by three competing operations. Two successfully bribed local officials to export the wood and oil, while one was not so lucky. He sent container loads of wood back to his processing plant back in India where his competitors quickly reported him to the authorities and he lost the entire consignment. This threw dark light over two containers of sandalwood we had been offered shortly before leaving by an unknown Kenyan company.

This new source of wood produces lower quality oil, which can’t be resold easily as the Indian variety. Quality control is also an issue to be aware of. Adulteration has become so rife in the sandalwood business that it has forced many businesses to turn their back entirely on using it. Many perfume houses, unable to stomach the price and quality issues, no longer use natural oil, opting instead for synthetic reproductions with little of the true value of sandalwood.

The fact that the predominant market for the wood is the local trade of tobacco flavours, and the little means of quality control could mean there is opportunity to adulterate the Indian oil with Tanzanian, which is around half the price. This would produce reasonable oil with increased profit. In fact, the production figures that we were quoted for this new opportunity said that around 30 tonnes of oil was being ‘imported’ from Tanzania. The reliability of these figures is disputable, but still, large quantities of oil are produced and the market place seems none the wiser.

As we finish up our meeting, we touch on smuggling and illegal operations, which these guys may have heard of, obviously not taking part in such underhand methods themselves! In fact they had heard of a few illegal factories running, one in Silvasa, near Mumbai and two in Goa. We thanked them for this information, shook hands again and decided to take a trip to Goa to see one of these factories for ourselves.


As we board the small aircraft for the short flight to Goa, both myself and Agnes are a little nervous. The flight is 45 minutes from Mumbai airport and we watch the ambitious crew try to serve breakfast and collect it before we land. My spicy omelette is whipped away from under my nose minutes before we descend to the sought after holiday destination. Most people arriving are holidaymakers, here to enjoy the sun and numerous beaches. We on the other hand are not so lucky; we have a meeting with an illegal sandalwood processor. The humidity hits us, it must be around 80 -90% and beads of sweat begin to trickle down my back. Waiting out the front of the airport is a sleek, brilliant-white Mercedes. Two guys, one heavy set and both sporting thick moustaches, greet us. We are put in the back of the Mercedes with a driver dressed in equally brilliant-white uniform, crisply pressed collarless shirt and trousers with one clean line running down each leg. We settle into the air-conditioned luxury while we drive silently inland for about 45 minutes.

We reach the factory, which is set away from the main road and has a non-descript appearance. The car pulls away and leaves us to enter the yellow building, its modest exterior hiding its dubious contents. Once inside, the smell of incense is strong; the room next to the reception has several sticks burning away, the smoke fills the room as we sit and we are offered drinks. We ask to see the factory and the operation they are running here and are ushered into the main body of the factory. Our guides are pleasant in their description of how things work here. Comfortably talking about how they process the wood, they point to huge piles of Sandalwood heartwood stacked up as high as the tall ceiling and even allow us to take photos. They also point to the pile of Tanzanian wood; wood we had been informed could not be exported legally from Tanzania, again a huge stack.

They talk us through the process of distillation of the oil. Basically, the wood is chopped into very small chips by hand and we watch two men cutting the wood with small axes. Then, the wood is ground to a powder, so it will release the oil much quicker when it is blasted with steam during the distillation. We see the oil slowly collecting in a thick scum on the top of the water in front of the distillation vessels. The oil is skimmed from the top with a ladle, much the same as cream from milk. The precious oil is then poured into containers and sold to customers. The factory was all very straightforward: they had a small lab that tested the quality of the oil and they presented several samples of fractions and by-products of sandalwood that we could use. However, the most intriguing part of the trip was simply the location of the factory. Apart from hearing that at least two illegal factories operated out of Goa, there was one other factor. Goa was a seaside town, imports and exports from the local port were easy and the controls here were said to be much more lax than in neighbouring states. The fact they had large quantities of Tanzanian wood meant they had easily imported the wood here and it followed that exporting the oil to Dubai, for instance, may not be too difficult from here either.

We sat with the factory operators where we tried to ask a few questions about the origin of the Indian wood. There was a strange tension in the air, they seemed unable to understand the questions we asked, but when our Indian guide asked the same question, in English, they seemed to be able to answer. We wondered how they received the wood, as they said it came from areas inland.
‘Do you know where exactly the wood has come from?’
‘No.’ A very blunt answer. They just received the wood and processed it.
‘How long has the factory been here?’
‘Five years.’ Feeling the pressure building, one of the guys pulled his iPhone from his pocket, a quick conversation followed between him and his boss before the phone was passed to our Indian guide.
‘Hmm, yes… Ok…. Yes, it’s been very interesting, thanks.’ Was about all I could pick out from the conversation before it descended into Hindi.

He hung up the phone, and we all sat opposite each other. I was asked if there were any more questions that we would like to ask, I thought about going for the jugular: ‘So this wood you have here has been legally logged has it?’ or ‘So how much do you pay at the docks to send the oil to Dubai?’

However, it did spring to mind that we had been driven here and had no real way of leaving if they took offence. Instead, we all sat shifting awkwardly in our seats, sipping flat coke and nervously shovelling biscuits into our mouths to make up for our short-lived breakfast. We all began to feel like it was time to leave. The two men sat opposite us, both playing with pens and paperclips, fidgeting until we eventually made our excuses. Thankfully, we were offered the car home and, as we left, I took some photos of the factory.
‘If I disappear, at least my camera will leave some trace of where I went!’ I thought. It was obvious that the only person who was going to offer us any further information would be the boss himself.

The Godfather

Several days later, we wait in the bar of our hotel. A young girl from the Philippines sings badly in the corner to the backing track of her keyboard, transforming the Beatles and Rolling Stones into soulless mediocrity for the pleasure of a few uninterested business men dotted around the place. Agnes, our guide and I sit around chatting excitedly about the events of the week so far. The atmosphere is good and we are laughing and joking, feeling safe in the security of the bar after the awkward situations so far. We are expecting the boss of the company we visited in Goa to arrive any minute. He promised to be there at 11:30 and it’s already 12, so we start to get a little more anxious. Eventually, our guide gets a phone call and he disappears to meet him in the lobby. Soon, he is back with two men: one a quiet accountant in a sweater, and a small statured man with slightly bulging eyes which throw furtive glances at all of us as he gently shakes our hands. He was dressed in a well-cut suit and as he sat in the chair he had an air of authority and odd menace about him. He handed his card round with a flattering photo of himself, giving him a soft glow and warm radiance, which he really didn’t possess.

We settled in and ordered drinks while treading carefully around what we really wanted to talk about. Finally broaching the subject of where the sandalwood in his factory actually came from we ask, ‘Is the wood bought at auction?’
‘Well, all sandalwood should be bought at auction… but I buy mine on the grey market.’ Quite what the grey market was we couldn’t be sure, it seemed pretty black or white to be honest, either the government had sold them the wood or they had illegally collected it, bypassing the process completely.
‘Oh, ok, and so you are not allowed to export from India then?’
‘No, but we can sell through our Dubai company’ he answered, rolling his head from side to side in a non-committal gesture.
‘So you must have a license for all this then?’
‘Oh, yes, it’s not a problem,’ he replied.
‘And we are able to see this license?’
‘No, it’s a trade secret.’ He said bluntly and sipped his drink menacingly, something I hadn’t seen done before.

Gradually we scraped away the layers and began to piece together the size of his operation. Unlike the previous conversations we had had, his answers seemed true and unabashed.
‘So how much oil is produced each month in India?’
‘Around 7- 8 tonnes’
‘Right, and how much do you produce?’
‘Around 5.’
‘Ok, so you must be the largest processor of oil in India then?’
‘Yes, I used to produce 10 tonnes, but since my stroke, I have reduced my business.’ In fact, now I could see the slight droop of his right cheek and lip; the cheek, which bore an ominous scar.
‘And what about these large US companies, do they still buy Indian oil?’
‘Well, they used to buy around 30-35 tonnes, but now they are moving to Indonesian, as the price is better’
‘Ok, so the Indian wood has had a reputation in the past, is it sustainable now?’
‘Well, I don’t plant any new ones, it takes too long. I will be dead when it’s ready. I don’t like the reputation of sandalwood; I tell people I am an essential oils seller, not Sandalwood, as they have perceptions of this.’

As the conversation continues, we get on to the increase in price.
‘Well, sandalwood is like property. It’s an investment. It never goes down.’
‘Well, if more sandalwood goes to the market, then the price would go down wouldn’t it?’ We ask.
‘No…’ He slurps at a bitter lemon juice before he continues. ‘I control the price. If it goes down, I hold back on supply, the price goes up.’
Legal or not, this guy effectively runs the sandalwood market place and has done since his father set the business up in the 1960s. It’s now that we realise the true extent of his reach. He is set to tour the world looking at other potential processing set ups, Tanzania, Indonesia, New Caledonia, Fiji, Papua New Guinea, Australia; no leaf is to be left unturned. If there are no problems with availability of Indian sandalwood, he’s certainly acting like there is. We joke with him ‘Veerappan must have been a nuisance for you when he was alive, though?’
‘Yes, he got us attention, bad attention’
‘But you must have been buying some wood, indirectly of course, from his logging?’ ‘No.’

We didn’t push it any further. There is no front to this man; he wasn’t interested in playing games or unnecessary attention, just in supplying sandalwood whatever the cost. He has been approached by multi-nationals companies before and been shot of them when they have argued with him, confident in his position on the market. Who knows the method he employs to collect and process the wood, but it’s clear that he wields great power on the sandalwood scene and is responsible, in part at least, for the depletion of sandalwood in India.

The meeting finishes, he shakes our hand softly and gives us all a friendly, albeit lopsided, smile goodbye. As he slips quietly out into the manic, Delhi traffic we all take seats and breathe a big sigh of relief.
‘Phew… he was the big guy,’ our guide says. ‘The Godfather of sandalwood!’


2 thoughts on “The Godfather of sandalwood

  1. Fabulous story…makes me appreciate my Floating Island and anticipate all things Sandalwood. Best of luck on your research and buying travels!

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