RugoFarm S.A., a private agribusiness enterprise in Burundi, producing patchouli oil, an essential ingredient used in the cosmetics and perfumer industry. RugoFarm is implementing a project with funding support from the TradeMark East Africa Challenge Fund (TRAC). Establishing a fully integrated value-chain of patchouli oil, RugoFarm will purchase and process the entire harvest of dried patchouli leaves from 3,000 smallholder farmers (SHFs) working in 60 farmer groups and export the patchouli oil to a pre-identified international patchouli market. The product is in high demand and RugoFarm plans to increase the supply of the raw material by distributing seedlings to smallholder farmers who will then grow and harvest the crop. They have also set up an out-grower nursery to nurture and multiply thousands of seedlings that can be distributed to RugoFarm’s smallholder patchouli suppliers.
The key objective of the project is to commercialize smallholder patchouli production and improve household farm incomes through a outgrower patchouli aggregation and processing business model. While the majority of farmers in this region are subsistence farmers, the introduction of the crop is expected to generate a new income stream over time that will increase household incomes. Fifty-two ‘lead’ farmers were identified and trained by RugoFarm in how to cultivate, package, plant, maintain and harvest patchouli. The role of the ‘lead’ is to represent the farmers in the group; act as a role-model by establishing and maintaining a demonstration plot for other farmers; act as a facilitator for a raised awareness of cropping best practices within the group while organizing training sessions. To date, the number of trained farmers working under this business model has grown from 150 to 1,000 during 2015.
RugoFarm recently installed a state-of-the-art patchouli distillation process, manufactured in Kenya at their distillation factory in Rugombo, north-western Burundi. As a result, the company will process the patchouli leaves from its suppliers and produce the patchouli oil through a steam distillation production line. The processed patchouli oil will then be exported to its partner, ‘Astier Demarest’, a perfumery company in France, who signed a long-term marketing partnership with RugoFarm. RugoFarm have achieved an increase in the total tonnage of oil exported from 1.3MT of patchouli oil to 5MT per year, however the volume will continue to increase drastically once the 3,000,000 cutting threshold is reached and more farmers are participating in the patchouli production. RugoFarm have established 6 nurseries in the 4 communes of Rugombo, Mabayi, Mugina and Murwi. The nurseries were set up to fast-track the multiplication of patchouli cuttings and a total of 1,000,000 cuttings have been multiplied, with RugoFarm distributing 700,000 cuttings to 743 farmers as of February 2016.
In collaboration with ‘Astier Demarest’, RugoFarm procured lab equipment to improve both the filtering process and storage of the finished product, the former reduced from 7 to 2 days. Additionally, RugoFarm purchased a distillation unit (steam boiler system) manufactured by ASL Limited of Kenya which will help expand their steam boiler capacity from 2,500L to a 12,500L therefore ensuring higher levels of productivity at their factory in Rugombo, Cibitoke province, Burundi. Enhancing their production capacity was not without its challenges as Rugofarm experienced a number of issues tied to the importation and clearance of the equipment imported from Kenya that delayed its installation in the Rugombo facility. However, with much patience and a good deal of commitment to resolving inefficiencies and obstructions within the Burundian Customs bureaucracy RugoFarm was able to installing the equipment as planned.
“The work we are doing in Rugofarm to promote Burundian patchouli oil to international buyers is hugely valuable to the country as we are not only raising the profile of Burundi as a reliable supplier of high-quality products to distant markets, but sending out an obvious signal to the country’s entrepreneurs that they can engage in business beyond the borders of our country.” – Chadrick Habonimana, CEO Rugofarm S.A.