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Sustainable Raw Materials in Nepal

Sustainable Raw Materials in Nepal

Nepal, a small country nestled between two economic giants, India and China, serves as north-south export route for both countries. However, after years of political turmoil, Nepal is slowly emerging with its own specificities in a sustainable supply chain for naturals that is reliant on local community partnerships.

There is a long tradition of collecting plants in Nepal, as well as a number of villages that still rely on it to provide a much needed income. Humla, which is located in the far western part of the country, 3,000m high in the Himalaya, has a yearly food shortage of about four months in a number of remote villages.

Throughout Nepal, villagers are organized in community groups who manage their unit of land and are liable for its sustaina­bility. These communities are being trained in the responsible collection of wild plants, with a rotational system of harvesting, thanks to non-governmental organizations (NGOs) like the Asia Network for Sustainable Agriculture and Bioresources (ANSAB), which is involved in natural resources and biodiversity management.


The Current State of Nepalese Naturals

The free trade agreement existing with India naturally drives most goods across Nepal’s southern border. After depleting their own resources, Indians trade large quantities of plants with Nepal to supply the Ayurvedic medicine industry, with little regard to sustaina­bility. In Nepalgunj, brokers provide cash advances to collectors and although they tightly control prices, payment is quick.

One such example is Jatamansi (Nardostachys jatamansi).While collecting 5kg per day, a family will generate 20% of its annual revenue with 100 to 150kg of rhizomes. By law it is forbidden to export the rhizomes—only the processed product can leave the country.

In Humla and Jumla, the wild rhizomes are collected in community-managed lands and government-owned mountain pastures. A rotational system of collection has been implemented in these lands, which spans over three years and allows the plant to regenerate naturally. Cultivation is possible through propagation from the rhizomes, however this technique is seldom used due to relatively limited results on large scale trials.

Former irresponsible collection has pushed the much sought-after plants to higher and steeper locations in the mountain. Collection is thus supervised by the local communities and takes place within a range of a five hour walk. Collectors bring the rhizomes to the local distillation units at Chaudhavisha in Jumla and Rodikot in Humla.

Oil yield is 1% and the price paid to collectors is around US$6/​kg of rhizomes. When produced in Humla, the only possible transpor­tation is air cargo, which is responsible for the high FOB price in Kathmandu. But worth noting, Nepalese oil sells with a Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) certificate.

Meanwhile Jatamansi rhizomes enter India through the border at Nepalgunj. Along the process, it is common for rhizomes it is common for rhizomes of Jatamansi and Sugandhawal (Valeriana jatamansi) to mix together, along with cheaper Chinese Jatamansi rhizomes and “Jatamansi marc”, a residue of former distilla­tions. The resulting oil is exported all around the world as Indian Jatamansi oil. Ironically it has set the standard, with its distinctive animal note, characte­ristic of Valeriana jatamansi. Perfumers in the industry, tend to reject the deep, dry and warm linear woody smell of the Nepalese oil with its intense earthy note, considering it an adulterated material.


Nepal’s Forest Management Practices

Nepal has a well-organized system of shared responsi­bilities and fees regarding Non-Timber Forest Plants (NTFP), for any collected resource within the different areas, depending on their status.

For government forestsa, the District Forest Office (DFO) imposes a harvesting licence and the payment of royalties on the trader, rather than charging collectors individually.

Members of Community Forest Users Groups (CFUG) control their forest and manage the harvest to the best of their interests while ensuring its sustaina­bility. The DFO normally proves to be tolerant towards members provided that harvested quantities remain reasonable. In return, members abide by a set of rules, such as prohibiting the chopping of branches and the entrance to harvest areas until the fruits have matured. The CFUG determines the starting date for harvesting and collection is open to members only, through the payment of a conservation premium.

Nepal’s forest organization also includes leasing and private ownership of land. The lease system is implemented for the alleviation of poverty. Full use of the allotted area is granted to the pro-poor group who is handed over the piece of land to manage. Private forest owners bear value-added tax VAT on generated income.

While DFO and CFUGs are jointly responsible for good collection practices (GCP), both leasehold and private forests tend to go beyond this primary goal and bring added value to the land providing full-time maintenance, such as cleaning, pruning and planting operations.


A Diverse, Natural Landscape

There are over 7,000 plants in Nepal, which spread from the lower tropical lands up to nearly 6,000m high in the Himalaya through the mid-hills at 2,000/2,500m, an enriching experience due to the encounter with many ethnic groups, who make up the Nepalese population.

As opposed to the fertile lands of the districts along the Indian border, life in the mountains and hills is influenced by the tough landscape and climate and poor roads, if any.

Chemical fertilizers are prohibited on planes. They are unavailable in the high lands nor in the remote districts of the mid hills, due to the high cost of transpor­tation. Sheep and goats are the best source of manure. As a result, qualities are de facto organic.

With their chronic food shortage, high altitude farming mainly consists of staple foods with low productivity (potatoes, wheat, barley), while grazing is most common for animal husbandry (sheep, goats and yaks).

Farmers are learning to end seasonal burning, which is said to promote grass for grazing so that plants can grow. Pockets where a specific plant is plentiful, are preserved by villagers who keep watch against trespassing herds, which then slowly tend to disappear for lack of pasture. With the help of NGOs, villagers are establishing nurseries and receive training to grow fodder for their livestock. Sharing responsible collection practices and proper drying techniques has improved quality of raw materials, as well as the preservation of the environment.


Cultivating Efficiency in Seabuckthorn and Dhatelo

Among many other plants, villagers in western Nepal collect the fruits of Seabuckthorn (Hippophae salicifolia and H. tibetana) and Dhatelo (Prinsepia utilis), extracting the oil from the dried seeds.

Much remains to be done, equipment is not very sophisticated and extraction takes place at night due to the lack of electricity during the day, but the situation is improving. With the help of French company Nateva, a plant extract and essential oil manufacturer, which provides technical expertise and developmental work at the lab level, a new expeller has been acquired for processing the oils in Simikot; and partial financing by German federal organization, Deutsche Gesellschaft für Internat­ionale Zusammen­arbeit (GIZ), tops off the 60% provided by the local stakeholders.

The fruits of Seabuckthorn crush easily and the vitamin-rich fresh juice is highly praised and consumed by tourists in Nepal. The tiny seeds are processed into oil used locally for the treatment of burns and wounds. It is well-known in the cosmetic industry for its nourishing and revitalizing properties and proposed by Nateva as an anti-wrinkle agent.

From the fruits much enjoyed by the children to the thorny branches woven into fences and the residue of the seed extraction into wash cloths, Dhatelo recycles naturally. Traditionally used as cooking oil in every household, it has a yield of 30% and is promoted for its hydrating properties in skin care, repair and shine for hair care. With production potential of 80 tons, availability is not a concern. This is a good example of value creation for an existing resource, achieved by the combination of a local initiative brought forward by Himalayan BioTrade (HBTL) and sustained marketing support in the French cosmetic industry.


Steep Challenges

Following the fragrant trail of the Himalaya, a very memorable trip took me to Dolakha in the central part of Nepal. The hike to forage for Sunpati, the endemic dwarf rhododendron (Rhododendron anthopogon), is quite an experience. After an 11 hour, steep walk up to 4,000m in the Gaurishankar Conservation area, and a night in a cave, one of the reasons why I immediately loved the smell in the warm yet crispy air, remains linked to the happiness of reaching the mountain top at Shiyama. The season was late, patches of snow were still present and there was an aromatic resinous and balsamic green fragrance floating around with a raisin fruity and leathery touch.

The collectors and processing team establish their camp for the month-long harvest near the distillation site which stands at an altitude of 3,500m, as the plant grows at the limit of the vegetation. It took 25 days for a team of five men to carry the parts of the 2,000 liters still, to be assembled on-site. I don’t know of any other place in the world, where you need to carry the oil drums on man’s back for such a distance downhill!

2,000 meters below, life is a bit easier when not exposed to earthquakes—Dolakha and neighboring districts suffered a lot in 2015—landslides, which occur every year during the monsoon, or regular outbreak of diseases claiming lives, like the Swine flu in Jajarkot last year, due to lack of health workers and locally available treatment.

In the hills, livestock husbandry and arable cropping (paddy and maize) are standard, and together with the daily search for fuelwood, contribute to deforest­ation. Available land for farming is scarce and every single patch is turned into a terrace field.


A Multi-Purpose Plant

Similarly to higher altitude crops, wild crafted plants are collected for trade and medicinal use, while seed oils, like Chiuri (Diploknema butyracea) butter are traditionally used for cooking. A common and multi-purpose tree growing extensively throughout Nepal, Chiuri is highly valued nationwide. Each family has its yearly stock of ghee, which is also used for dry and cracked heels and lips. It also sells as a popular base soap and for butter lamps in monasteries. Considered as an alternative to Shea butter, Chiuri (or Pulhwara) is raising interest among the cosmetic industry worldwide.

A few years back, Chiuri was expelled manually. Village communities, along with the help of GIZ and local funding, joined together to build drying facilities and much larger traditional wooden equipment to accommodate large quantities. Since then, with the growing success of Chiuri butter, an expeller has been purchased in China, with a proper heating system, which has substantially improved the quality of the product.

These were different parallel projects around Chiuri, spread over several districts and concerning a number of villages. While the Nepalese, together with GIZ, took responsi­bility for the financial investment, Nateva provided technical and analytical expertise. Naturex, a French group dealing with natural ingredients for the food, health and cosmetic industries, committed, through their foundation, to support the education of 50 girls from the poorest families involved in the collection of Chiuri fruits. The stakeholders did their part, each according to their own capabilities and ultimately their efforts converged to complete the first step of an ambitious development program which benefits them all.


Reaching the Foreign Market

Timur (Zanthoxyllum armatum) and Wintergreen (Gaultheria fragrant­issima) are the main essential oils from the hills. Timur grows wild at an altitude of 2,000-2,200m and the best quality comes from the western mid-hills of Nepal (Surkhet, Salyan, Rolpa and Jajarkot). From the same family as Szechuan pepper, the primary use of Timur berries is in the global spice market and consumption is developing into tons. With a yield of 3% and a price just below US$ 200/kg, the oil has a unique fragrance with a fresh top note like Styrax, giving way to a floral mellow linalool body note, wrapping up a sweet spicy lingering heart. It is used in both the flavor and the fragrance industries.

Wintergreen is collected by women in the mid-hills of central and eastern Nepal. The oil sells by tons primarily to the US and struggles to meet the growing demand.

It is interesting to briefly describe the system originally established by ANSAB in the district of Dolakha. The poorest villagers who collect medicinal and aromatic plants (MAP), are also members of the cooperatives where the distillation takes place as well as shareholders of HBTL, the company in Kathmandu, which handles the marketing and sales part. The perfect example of a short supply chain.


A Customized Business Environment

With a lack of exposure and credibility, the main challenge for Nepalese products is indeed to reach foreign markets. Coordinating between the villages and the customer abroad implies a lot of time, patience and dedication, as well as permanent follow-up and regular field trips to build a trusting relationship. It is equally important to have a reliable local partner, a seasoned professional with the right connections and strong ethics, who will initiate the contacts and monitor logistics.

This close teamwork is necessary to succeed in a customized business environment. Flexibility and cross-functional knowledge in a variety of fields are needed to meet the expectations of the locals. Issues range from technical expertise regarding equipment to designing an improved and consistent olfactory profile for an essential oil. Meanwhile on customer’s side, securing a sustainable supply chain is of course their main concern but conforming to the Nagoya Protocol is currently a hot topic, which they all wish to discuss.

Customers and communities mutually engage with one another: the former commits to purchasing yearly quantities ahead of the crop in order for the latter to prepare for harvest and collection. With a storage facility in Kathmandu, goods are then shipped according to pre-agreed dates. Collaboration and communication are key.

Natural constraints due to the region’s topography and cultural differences can be overcome with a benevolent disposition. The Nepalese really mean to collaborate but the concept of Time is flexible in Nepal. Westerners should make provision at this level or else they might become very frustrated. They should try to understand the reality of Nepal but above all, agree that communication works both ways!

Few industry professionals ever travel to Kathmandu and even fewer go beyond—but in their defense, it takes time. David Hircock, natural resource advisor, Estée Lauder, is a regular visitor. A member of ANSAB, David has been involved in the implemen­tation of several social projects in Nepal like the Jiri Drinking water and Sanitation project and the relief efforts to rebuild villages after the 2015 earthquakes, while directly involved in Aveda’s active support of handmade Lokta paper, which are used to wrap the company’s gift sets all year. A great example of sustaina­bility since Aveda’s contractual orders have increased by more than 15 times over eight years!

At a time when corporate social responsi­bility (CSR) has become so important, Nepal provides great opportun­ities. Besides, the marketing aspect cannot be denied, with a unique story behind each and every plant.

Nepal has signed the Convention on Biological Diversity but not the Nagoya Protocol on Access and Benefit-Sharing. This does not prevent initiatives. Prior informed consents (PICs) and Mutually Agreed Terms (MAT) pave the way for the future of a sustainable supply chain and while conforming to the spirit of the official texts, these documents truly reflect the customer’s commitment to abide by the rules of Nagoya Protocol on fair and equitable sharing.

The picture would not be complete without mentioning the cultivation of medicinal and aromatic plants in the tropical low lands. These plants account for 90% of the essential oils exported from Nepal, mainly for aromatherapy and natural perfumes, due to the appeal of their organic status. These oils include citronella, Mentha arvensis, blue chamomile or basil, with the challenge of maintaining the right balance between primary needs and the pressure of international demand. For example, the government’s decision in 2015 to restrict new plantations to food crops only created a shortage for chamomile oil, resulting in a 40% price increase.


Where Science and Tradition Meet

Aside from their potential nutritional value, plants in this region are used for their healing properties. Some places are so remote in that neither doctors can reach them nor modern medicine can effectively be supplied; thus, the alternative is to keep the Amchi’sb knowledge alive, and to pass it to a new generation of healers. Despite the lack of support from the government, the initiative set by the Himalayan Amchi Association (HAA) is committed to the preservation of this oral tradition, which otherwise will be lost.

Focusing on endemic and native plants, I came across ethnobot­anical documents while studying the biodiversity of Nepal and the Himalayas. Further research on the phytochemical profiles of these plants and the academic identifi­cation of their molecules assess whether and how tradition and science meet.

Cosmetic brands and ingredients companies have discrimi­natory access to this data base where plants are then selected according to their area of research and specific criteria, like the critical China list. Fresh samples from well-identified locations are supplied on an exclusive basis for preliminary screening. Plots of land are available for trial cultivation, when the need arises, with a close monitoring of crops. It takes quite a few years before releasing new active ingredients. Several projects are currently under development but it is still confidential information.



With Korea in the forefront for innovation and consumers’ growing demand for naturals, Asia might well be the next sourcing trend and Nepal, will then stand in its own right.

The country offers a wealth of unique naturals and its people are fighting hard their way out of poverty. Nepal is already walking the path of sustaina­bility and several global brands and fragrance and cosmetic ingredients groups are successfully developing business relationships with the village communities, whom they have entrusted. There are ambitious plans to bring added value to the basic resources through partnerships, which will generate benefits for both parties. Beyond the obvious marketing appeal of the Himalayas, potential customers will find in Nepal ample opportunity to fuel their corporate social responsi­bility program.

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