Australia's blue mallee eucalyptus oil industry is investing millions of dollars in new distilleries, mechanised harvesting and high-yielding trees to compete with cheaper imported oil and fraudulent substitutes, the ABC's Landline programme reported. Australia now produces only about 5% of the world's eucalyptus oil.

At West Wyalong in south-central New South Wales, the Davis family's business GR Davis has spent more than $6 million on a new, ultra-efficient distillery and harvesting equipment. Its fine-grade oil, distilled from blue mallee (Eucalyptus polybractea), is shipped to more than 20 countries for pharmaceutical, disinfectant and confectionery products. "It's the fragrance of the Australian bush," Annabelle Davis said.

The competition comes from plantations of fast-growing blue gum (Eucalyptus globulus) grown overseas, chiefly in China, mainly for timber; oil from their leaves is more pungent and lower in grade, and cheaper imported oil is sometimes fraudulently substituted with camphor oil. Richard Davis said the answer is to get Australian oil to market at a price that makes buying a synthetic product not worthwhile.

In central Victoria, where blue mallee grows naturally, FGB Natural Products has invested $10 million in a similar upgrade. The brand dates from the 1850s, but consumers have grown used to cheaper imports in recent decades. Managing director Tegan Abbott said China is the leading producer of eucalyptus oil, so the investment is about future-proofing Australian supply and keeping the industry local and sustainable; demand rose during the COVID-19 pandemic and consumers still want a natural, effective product.

The bigger change is in the trees. The Davis family has planted five million elite blue mallee trees on more than 7,000 hectares, and the Abbotts a similar number near Wedderburn, all the product of decades of genetic selection. University of Melbourne plant scientist Jason Goodger, who helped develop the trees for the Abbotts, said the average blue mallee has less than 1% oil while the companies calculated they needed at least 4% to cover land and plantation costs; the latest trees yield closer to 7%, and breeding continues. The Davis distillery has already tripled production and efficiency, with output set to rise further as the new trees mature.

The mechanisation goes back to the late Geoff Davis, described by the family as the father of the modern Australian eucalyptus industry, who designed the first mobile eucalyptus harvester in the world on the view that the business could not compete internationally without machines. "I think the business is well positioned for the next generation," Annabelle Davis said.

Reported by Tim Lee for ABC Landline.

Source: ABC Rural