The Sweden/USAID FARMA II project supports producers of medicinal and aromatic plants. It helped Soldo Mont from Posušje to double their production when the immortelle market was expanding, and it helped them to diversify production when the immortelle market became saturated.
Still an undergraduate student in 2014, Martin Soldo, from Posušje, came across a calculation for the production of immortelle. The international market opened up while the price of one kilo of fresh immortelle jumped from BAM 1 to 5.
“I dropped from the faculty and went off to work the land. That business opportunity was not going to wait for me to finish my studies,” Martin begins his story. He was 23 in 2014, when he established his company, Soldo Mont, and entered the world of medicinal and aromatic plants production and processing.
From 2014 to 2016, Martin gave his best to produce as much immortelle as he could. He started with only a half and ended up planting six hectares of land. "The sales were good. We could sell as much as we would produce. We were not the most efficient and were not using our land to its maximum, but the business was going well,” he says.
The next opportunity he saw was the production of added-value products. In 2016 he established a distillery with three 600-liter distillation units. Being the man of action, he offered his services to other producers of immortelle and also started buying herbs from them. "In the first year, we processed four to five tons of our immortelle and another forty-five to fifty tons produced by other farmers with whom we signed contracts." In 2016, the Soldo Monts’ network of contractual farmers grew to 60 people.
Expanding to survive
The golden years of immortelle production passed swiftly. In 2017 the price per one kilo of the immortelle essential oil plummeted from EUR 2,200 to EUR 450, where it still stands. Many people turned their backs to immortelle, but not Martin. “We did our calculations, and having in mind the needs of the buyers we had in Belgium and France, we decided to increase our production to compensate for the drop in the price. It meant more work, but it also meant having a paying job."
Soldo Mont began increasing the number of contractual farmers, but their herb processing capacities were not large enough. In 2018, they applied for and received a grant from the Sweden/USAID FARMA II project that helped them more than double the capacity of distilling units, from 1,800 to 4,000 liters.
"In 2018, we processed some 1,000 tons of immortelle and produced about 1,100 kilograms of oil," says Martin. "That was a big success and we managed to sell almost 70 percent of the oil that year."
The necessity to diversify
As Martin explains, in 2019, the immortelle oil market got saturated, and a lot of their bulk buyers had their warehouses full. Naturally, Soldo Mont reduced production to some 250 kilograms of essential oil but started looking for other business opportunities and market niches.
"The quality of plants is important in this business. Distilling one ton of fresh immortelle, one can get anywhere between 1 and 2.5 kilos of oil, and this all depends on the quality of the plant," continues Martin. "Also, with the immortelle not being in high demand at the moment, we started to diversify production."
Soldo Mont reached out to the Sweden/USAID FARMA II project and asked for assistance in delivering training to a core group of 50 contracted farmers in the production of high-quality seedlings and the cultivation of sweet wormwood, angelica, laurel, and hyssop. FARMA II assisted and one main group of Soldo Mont’s contracted farmers had their hands full of work.
Martin notes that perseverance is very important. “We always have to look for things we can do.” While his company is branching into other areas, medicinal and aromatic herbs remain its priority.
"2020 was a slow year for many things, including immortelle, but I expect that this will start changing in 2021. Many people abandoned the immortelle production, and the supply will diminish. So I would say that the price of one kilo of oil will go from EUR 450 to 650, where it will stay. Meanwhile, I am starting to explore a new plant processing technique called butane extraction. It uses gas under pressure to more efficiently extract oil that contains more of the beneficial ingredients from plants,” says Martin.
According to him, the butane extraction can increase yields from plants by ten times, and the final product is not oil but more like an extract cream. “If we manage to start doing this, we will be the first ones with such a product in the region, and that will again give us the market advantage that we are happy to share with our group of contracted farmers. This intense extract attracts a higher price that will allow us to pay for higher quality plants,” he concludes.