Madagascar Aromatic and Medicinal Plants Value - Microlinks

4. WHOLESALERS AND EXPORTERS
Marketing channels consist essentially of three types of distributors of local natural products:
• exporters who retail or wholesale traditional Malagasy AMP products through established importer networks
• sellers of traditional AMP products for local consumption—these are generally small-scale actors who sell in local
marketplaces; they do not export directly
• integrated firms that have established a presence in the rural sourcing regions to oversee wildcrafting, cultivation
and processing into their wholesale/export or retail
operation 20
The more formal firms in the AMP sector are integrated
processors and wholesalers who supply the local and
export markets. Once they begin exporting to international
markets, firms are obliged to develop capabilities to engage
in activities that favor improved resource and land
management practices in response to consumer demand.
Wholesalers to the local market usually begin as
manufacturers of local medicinal products that source their
dry or fresh plant material from small producers through
direct contracts. They also source processed material from
small distilleries on an as-needed and as-available basis.
The more aggressive companies have established
plantations and their own distillation/processing facilities
capable of producing diverse and large quantities of
products on a regular basis. This also allowed these firms
to enter the export markets and become integrated, more
efficient value chain participants.
Among the largest local market wholesalers is
HOMEOPHARMA, a firm that produces about 200
different products and distributes them through a network
that includes 21 franchised retail stores throughout the
country, the national pharmacy distribution system and
supermarket chains. The firm has become a major exporter
of essential oils, and, after joining an international
consortium of AMP producers, has expanded its
capabilities to develop new products and condition them
to conform to international standards.
Another organization, IMRA (a foundation that operates
as a private business and an applied research institute) uses
small retailers, traditional healers, physical
therapist/masseuses and street sellers to reach out to the
TEXT BOX 6: THE LABEL CBD APPROACH
Label CBD was created in 1999 through the initiative
of Oliver Behra as the for-profit arm of the NGO
“Man and Environment.” It promotes rural
development and biodiversity conservation through
the commercialization of AMP. The Label CBD
approach has several key features:
• environmental impact studies to evaluate whether
production potential is sustainable and adequate
for anticipated markets
• installation of distilleries in communities to process
community-sourced material, and training of local
producers to assure quality and traceability
• a commitment to paying producers fair prices and
reinvesting a portion of its revenues in social
services (health clinic, nurse or teacher) in
producers’/partner communities
• calculating prices paid to producers based on (a)
livable wage, (b) amortization of distillery, (c)
distillery function, and (d) operation of social
services
Label CBD supplies essential oils to a number of
major European cosmetic firms (e.g., Channel, Yves
Rocher) and continuously searches for new products
to expand into new markets. Several products form
the core of its business: Ylang ylang (Cananga odorata),
cinnamon (Cinnamomum zeylanicum), “saro” (a newly
discovered plant with anti-bacterial properties),
Calophyllum, Iary (Psiadia altissima), and Niaouli
(Melaleuca viridoflora).
20 As shown in the value chain map, there are opportunistic firms at this level that come and go as demand markets rise and fall.
This ad hoc group is seasonal, difficult to define and quantify, and could not be treated in the present survey.
MADAGASCAR AROMATIC AND MEDICINAL PLANT VALUE CHAIN ANALYSIS 34