1. Capital Requirements
Capital needs can be broken down into initial setup (startup) costs and operational costs.
A. Startup / One-Time Costs
| Item | Estimated Cost (USD) | Notes |
|---|---|---|
| Land acquisition or lease | Varies by location | Consider agroforestry-compatible sites |
| Nursery setup | 5,000–15,000 | Shade nets, propagation beds, irrigation |
| Seedlings / Tissue-cultured saplings | 2,000–8,000 | Aquilaria malaccensis, sandalwood, companion crops |
| Inoculation lab & equipment | 3,000–10,000 | Fusarium + MnO₂ inoculation, safety gear |
| Distillation / extraction equipment | 10,000–50,000 | Steam or SC-CO₂ distillation for premium oil |
| Processing & packaging facility | 5,000–25,000 | For chips, incense, candles, perfumery |
| Vehicles / transportation | 10,000–30,000 | For plantation and product distribution |
| Branding & marketing | 3,000–15,000 | Design, website, labels, promotions |
| Legal / licensing / certifications | 1,000–5,000 | CITES, DENR, export permits |
Total Estimated Startup Cost: ~$40,000–150,000 (depending on scale, export readiness, equipment choice)
B. Annual Operational Costs
| Item | Notes |
|---|---|
| Labor & staff salaries | Plantation workers, technicians, artisans |
| Fertilizers, soil amendments, bio-inoculants | Crown BioGrow™, MycoResin, organic inputs |
| Maintenance & utilities | Irrigation, pruning, pest control, electricity |
| Packaging materials | Eco-friendly pouches, glass vials, boxes |
| Marketing & trade promotions | Trade shows, digital campaigns, collaborations |
| Logistics & export handling | Shipping, documentation, customs fees |
Operational costs typically run 30–50% of annual revenue in the first 3–5 years for plantation-based agroforestry businesses.
2. Funding Sources
- Equity Financing
- Private Investors / Venture Capital – High-growth potential; investors may expect 20–30% IRR.
- Angel Investors – Smaller capital, strategic support.
- Cooperative / Farmer Shares – Community investment for plantations.
- Debt Financing
- Bank loans / Agricultural loans – For nursery, equipment, plantation expansion.
- Government development funds – DENR, DA, or agricultural enterprise programs.
- Grants & Incentives
- Sustainability or agroforestry grants – Carbon credits, environmental incentives.
- R&D support – For inoculation technology, SC-CO₂ extraction.
- Self-Funding
- Personal savings or reinvestment from existing businesses.
- Useful for seedling nurseries and initial small-scale trials.
3. Investment Planning
A. Investment Phases
- Phase 1 – Nursery & Plantation Establishment (Year 0–1)
- Acquire land, establish nursery, plant first crop of Aquilaria.
- Develop inoculation protocols, initial branding.
- Phase 2 – Production & Value Addition (Year 1–3)
- Begin resin formation, harvest chips, extract small-scale oil.
- Launch initial product lines: incense, candles, artisanal beads.
- Phase 3 – Scaling & Export Market Entry (Year 3–5)
- Expand plantation, increase product line, secure export certifications.
- Focus on high-margin luxury products (oil, perfumery, gift sets).
- Phase 4 – Innovation & Diversification (Year 5+)
- Launch wellness, artisanal, and limited-edition luxury lines.
- Consider subscription boxes, workshops, or tourism experiences.
B. ROI & Breakeven
- Breakeven: Typically 5–7 years for Agarwood plantations (resin formation takes 3–5 years).
- ROI: High for premium oils and value-added products; moderate for chips/incense.
- Revenue Diversification:
- Raw materials (chips) → steady but lower margin
- Oil & perfumery → high margin, export-driven
- Artisanal/wellness → niche domestic + regional
C. Investor Incentives
- Equity participation in high-margin value-added products.
- Priority returns from export revenue.
- Branding visibility: “sustainably sourced Philippine Agarwood.”
- Opportunities in carbon credits or environmental certification programs.