Scent of success in Somaliland
By Katrina Manson
The 34-year-old mother of five has done well to avoid being included in her homeland’s 50 per cent unemployment rate, in an east African region better known for piracy, terrorism and daily mortal combat than fragrance.
“I like the work and I earn more than when I used to sell goats in the market,” she says, her fingers working swiftly, legs outstretched, in a room musty with the hint of incense. “I need to be here – my husband left me and I have not seen him in a long time.”
An aromatic resin prized since ancient times for use in cosmetics, medicine and incense for the gods, frankincense was once so valuable that, according to the Bible, three astrologer-priests put it on a par with gold and myrrh, another gum resin, when they set off for Bethlehem.
Two thousand years after the three wise men’s journey, the price of gold is hitting new highs, while frankincense bumps along at $1.65 a kilogramme.
Keenly watching this price is 33-year-old Guelleh Osman Guelleh, Somaliland’s biggest natural gums exporter. His family’s trading company, Neo Trading/Beyomol, buys and sells $600,000 of aromatic resins a year, and employs dozens of people, such as Ms Jama.
Mr Guelleh, sitting in a hotel garden gazebo in Somaliland’s capital, Hargeisa, says: “There is a lot of room for production to be increased, but the main obstacle is we’re pressured on price. The lower the price, the more problematic it is for farmers to go out and spend time tapping and collecting.”
Each tree is handed down through generations of local clans who appoint someone to tend and slash the bark of the stout leafless Boswellia tree, which grows wild in the region’s sparse mountain forests. They return sometimes months later to collect the exuded resin. Low prices, despite tripling since 2000, must rise further and demand become more consistent if painstaking tapping is to be viable.
Transported by donkey and camel to Burao, much of the gum is processed by hand, although some machines have been imported from India.
Mr Guelleh began exporting natural gums in 2002 and says production of frankincense could reach 12 times what it is today. In the five years to 2009, port exports have already risen 22 times to 5.5m kg.
His is a sizeable business in Somaliland, which declared independence from Somalia in 1991. The economy badly needs to diversify away from its precarious livestock industry, which accounts for 40 per cent of gross domestic product.
Mr Guelleh, who read economics in the UK at the University of Nottingham, speaks of developing supply sides, consistent demand and shifting the balance of the value chain as crucial to the industry’s future. “When you look at the value chain, most of it is in Europe, so we need to transfer some of that here,” says Mr Guelleh, who wants to set up his own refinery and start distilling the more valuable essential oil.
He also wants to find new markets. Most of his material goes to Marseille, where perfumers extract and bottle essential oils; the rest goes to the Middle East to feed an appetite for frankincense chewing gum.
“We’re trying to get to Korea, to the Far East, and trying to diversify into packaging,” he says.
But export prices are rising. His container export fees have risen steeply because of the piracy off the coast, while potential trading partners are put off by the risks of doing business in so chaotic a region. “The onus is on you in a huge way to prove that Somaliland is different in every way to Somalia,” says Mr Guelleh.
The Roman army invaded Arabia in search of frankincense, Syrians offered it up to Apollo and Egypt’s pharaohs were embalmed with it. Somalilanders in search of more viable economic and national independence may hope that the fabled power of frankincense will be restored in modern times.
Source: The Financial Times Limited 2011. FT.com : http://www.ft.com/cms/s/0/728582dc-66bf-11e0-8d88-00144feab49a.html#axzz1Jc7cxxGg