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    ITC Today… Bridge-building from South to South


    © International Trade Centre, International Trade Forum - Issue 1/2004 

    Haiti is one of the poorest countries in the world. But with support from ITC, it is helping Burundi to enter the rich global market of perfumes.

    A company in Haiti - one of the world's poorest and most troubled nations - is a major success on the international market. It is the biggest producer on the planet of a key ingredient of perfumes and industrial fragrances. An entrepreneur in Burundi, a central African country just coming out of a civil war, has found a way to build up his country's exports in the toughest conditions.

    They are both success stories from the least developed countries (LDCs), the 49 states facing the hardest challenge to improve the lives of their populations. Today these LDC achievers are working together - brought together and supported in their collaboration by ITC - to expand the benefits to their local communities from international trade.

    Pierre Léger, who took over the Frager essences firm in Haiti from his father, met Stanislas Habonimana, the head of Burundi's Rugofarm, at an ITC business round table held on the occasion of the Conference on the LDCs, organized by the United Nations Conference on Trade and Development (UNCTAD) in Brussels in 2001.

    Patchouli and pepper

    Rugofarm has created jobs for 1,000 people in a rural area by growing patchouli, citronella and bird's-eye chilli on some 1,500 hectares (3,750 acres). The quality of the patchouli is so high that a well-known French firm signed an exclusivity contract with Rugofarm to buy all the patchouli it can produce. All this in two years.

    Léger was impressed by the Burundian's entrepreneurship and offered help to enable the African country boost its agricultural exports. Through Frager, Pierre Léger has long experience in working with local communities to build sustainable economies. Frager's employees are given a chance to participate in the running of the enterprise. The company does not own any of the land that supplies it with vetiver. It gets the roots used for producing perfume essence from local growers. Some 27, 000 families supply Frager with vetiver for processing. This arrangement has allowed Frager to avoid debt from land purchases and has, as a consequence, allowed the company to concentrate on processing the root. But Léger also appreciates the importance of long-term and friendly relations with the people who form the core of his business. He takes part in harvesting and in the celebratory community get-togethers to sing traditional songs. He is also initiating his son into the business.

    South helps South

    In collaboration with ITC's LDC Unit, Rugofarm drew up a proposal.

    "We worked closely with the Burundians and helped them to put together a project to develop essential oil exports by capitalizing on the strong international demand," says ITC Executive Director J. Dénis Bélisle. "The climate was suitable, the terrain excellent, the highly intensive labour low-cost, and there was an existing agricultural base. Frager went to Burundi, shared marketing knowledge and contacts with Rugofarm, and gave them technical advice for setting up farms and factories. It was an admirable example of South-South cooperation."

    The project was being carried out within the Integrated Framework for Trade-Related Assistance to LDCs, with funding from the Agence Intergouvernementale de la Francophonie (Intergovernmental agency for French-speaking countries). The Integrated Framework brings together six leading agencies for trade development: the International Monetary Fund, ITC, UNCTAD, the UN Development Programme, the World Bank and the World Trade Organization.

    Vetiver, which requires 12 months to mature, must be grown in hard, rocky ground with lots of sun, so Frager offers advice to families around Cayes, Haiti, on the proper planting and cultivation of the root, especially the need for vetiver to undergo "stress".

    From an old boiler to a satellite phone

    Frager made its breakthrough when Pierre Léger, after completing studies in agronomy in the Netherlands, approached a Swiss firm, one of the most important perfume companies, using the personal contacts so important in the perfume business. He marketed his vetiver essence as "the true Haitian vetiver, pure, natural and unadulterated". The firm gave him a contract, which paid for the replacement of a charcoal-fired boiler dating from 1880. An oil-fired boiler and sophisticated technology were installed. A satellite phone was purchased for the express purpose of maintaining close contact with his European clients. The combination of direct distribution, new technology and low operating costs helped Frager attain an advantage over competitors in China, Brazil, Indonesia and Réunion - and to sell directly to Europe rather than going through the United States.

    Since 1991, Frager has raised its production of vetiver extract from 20 to 60 tonnes annually, making it the largest producer in the world. With a kilogram of vetiver selling for US$ 69, Frager has built up to a healthy turnover of US$ 4 million.

    Through ITC and the Integrated Framework, Léger passed on the benefits of his hard-earned knowledge and personal networking to Rugofarm in Burundi.

    For more information, contact Francesco Geoffroy, ITC Senior Trade Promotion Officer, at geoffroy@intracen.org