Big move by the big boys in tea tree

“This industry is a professional sport now,” states John Seccombe, who with his wife Michelle, have made a living from tea tree oil since production came out of the swamp and into plantations more than 20 years ago.

These days the Seccombes are in partnership with Main Camp, backed by Chinese investment, which produces oil on 2000 hectares from the Hastings to the Richmond.

They are taking a big risk by developing a further 500 hectares of flood-irrigated tea tree country, 200ha of those at Greenridge on the Richmond River east of Casino – a joint venture between Main Camp and the Seccombe family. There are other growers in the area taking a similar big punt on a future that will require high yielding irrigated crops.

This current project emulates the ideal system for efficiency and incorporates bankless channel irrigation more akin to western cotton than coastal tea tree.

Water is pumped from the Richmond River and stored in a turkey nest dam before entering the channel where it backs up behind a level sill, creating pressure. From there it drops down a very slight  0.02 per cent grade to the recovery channel, from which left-over water is pumped back to the dam. There is even soil saturation with this method and Mr Secombe says the convenience of “pulling a pin” on a drop gate to irrigate a 10ha block of tea tree is worth the price of admission.

That price is very high indeed, with tea tree plantings typically running to $25,000/ha. The Greenridge project will cost around $8m with the majority of cost up front before the first oil is distilled. Following this there will be harvest and distillation costs to consider.

“Main Camp has about tens of millions in assets so when we look at it in that context this is just another add-on,” Mr Seccombe said. “With Chinese backing we have no debt and that allows us to look at this industry long term. We’re prepared for some short term pain for long term gain.

“If all our ducks line up this year that will put pressure on price. All of a sudden we are getting to the point where a normal season will over supply the market.

“If it costs a grower $20/kg to grow tea tree, how long will producers be able to hold out?

“If the price drops that low it will be hard for many people to make a living,” he said. “How long a downturn might last is hard to say.”

Tea tree producers still relying on “heritage” varieties, only a generation out of the swamps of Bungawalbyn, may find themselves on the back foot following a surge in oil production.

“Today we have 20 years of breeding expertise and we have selected for high yields,” explains chief of the Australian Tea Tree Industry Association Tony Larkman. “Some growers will be left behind and I tell them smart growers need to move with the times or sell to a niche market, where the value adding is done on farm.

For those willing to expand the move comes with substantial risk.

“It’s an expensive game to get into and the investment is for 15 to 20 years, being a permanent tree crop,” he says.

The flip side is that there is room in the existing market for more pure Australian oil and Asian consumption is almost non-existant, but their interest is growing.

“If only one of our trial batches fires in the Chinese marketplace, we very well could have trouble supplying that demand,” predicted Mr Larkman .

Since 2006 Australian tea tree oil production has increased 300 per cent. Market demand has kept pace and chiral carbon testing, a process initiated by ATTIA is providing clear evidence that Australian oil is the purest.

Of the 300 tonnes going into Europe, half of that is used in cosmetics where fake oil, from pine and eucalypt, causes a skin rash.

Mr Larkman said it was now critical that the society identify fake oil in products like shampoo, which are the last places the rubbish can hide. If they are successful he estimates another 100,000 kg of product each year could come back to Australian growers, provided they can continue to provide a consistently pure, high quality product.