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Why killing Otago pines is an environmental business success

Driven by millions of unwanted pine trees, some of the best quality pine oil in the world, and a pressing need to raise $1.5 million to buy commercial scale distilling equipment to handle a massive boost in demand, three Queenstown entrepreneurs have taken their social enterprise idea to the international South by South West (SXSW) Eco pitch competition – and have reached the final eight in the world.

Q: What do you do with huge areas of invasive, self-seeding pine trees threatening to overwhelm the Central Otago tussock land?

A: You develop a process to chop them down, distill them into some of the world’s best oil and sell that to the biggest supplier of essential oils in the world. Which is what a group of Queenstown entrepreneurs have done with their business Wilding & Co.

Michael Sly, Mathurin Molgat and Dave Turnbull have developed a process to turn the 800,000 or so hectares of unwanted trees (called wilding pines) into high quality oil for the perfume, essential oil and anti-bacterial cleaning products industries.

Mathurin Molgat and Michael Sly

It involves chopping down the trees, chipping the branches and then steam-distilling the biomass in a vacuum to turn it into oil. In the process they hope to do for wilding pines what the makers of possum fur nipple warmers are attempting to do for populations of the furry Aussie pest – eradicate them.

Pine trees thrive in New Zealand, says co-founder Mathurin Molgat. In fact they grow 20 times faster here than in the harsher climates of their native Canada, and able to self-seed as far as 15km away. Natural vegetation doesn’t grow under the invading trees.

“There are very few places in the world where when you harvest a tree you aren’t destroying something valuable. But in our case we get an environmental pat on the back when we destroy the pine trees.”

At the moment Wilding & Co is a niche operation, producing around a litre of the pine oil a day, says Molgat. Not bad, when a 5ml bottle can sell for $15-30; but not big business.

However, earlier this year the high quality of the oil (one US essential oil scientist told them it was the best he had ever seen) and the environmental story behind its production, caught the attention of d?TERRA, a $5 billion-a-year essential oils company based in Utah in the US.

Wilding & Co is now negotiating a deal with d?TERRA which could see production boosted from 1 litre a day to 20 – with possibly an equity stake involved, or a pre-sale agreement, Molgat says.

“We have an open letter of discussion with them, and we are going over 16-18 September to sit down with them.”

However, increasing your production twenty-fold isn’t easy – or cheap, Molgat says. Until now the founders, plus a couple of colleagues brought into the operation, have self-funded the purchase of the test stills and trials.

But to boost production to match expected 6,000-8,000 kg/year demand, Molgat says the company needs a further $1.5 million.This will be used to grow Wilding’s infrastructure to meet the scale of the problem and the required supply demands, and get gangs of pine essence extractors into the wilderness to extract the oil.

Enter SXSW Eco, a rapid-fire pitch competition spotlighting early-stage companies in the areas of greentech, clean web and social impact. This year SXSW will take place in Austin, Texas October 6-8.

Described by Bloomberg News as “one of the more eclectic mixes of start-ups, tree huggers and policy wonks the world has yet dreamed up”, SXSW Eco involves eight finalists, selected from hundreds of applicants from around the world, who compete in front of a live audience and a panel of international judges.

Although there’s no prize money on the table, in two years that the competition has been running, finalists have gone on to raise over $US27 million.

Reaching the last eight in the world is a huge coup for his company, Molgat says.

“You get to pitch in front of an auditorium of more than 1000 people – investors, selectors and eight companies from around the world. You have four minutes to pitch and four minutes for questions.

“It’s a platform to throw forth your ideas – and your company. Companies come and listen to your pitch, and then you catch up with people afterwards and you talk.

“You could lose the completion and still come up with an investor. Or you could leave without investment but you would have learned so much.

“Just the fact you have been picked is great for your credibility. It means your ideas have enough credibility to be considered.”

Meanwhile, Wilding & Co is this week setting up a Kickstarter campaign to raise $50,000 for its first still with the capability of producing commercial volumes of oil.

It is also waiting to hear from New Zealand’s social enterprise funding agency, the Akina Foundation, if it will receive support and mentoring to help it get investor-ready by early next year. 

The long-term plan

Listening to Molgat, it’s hard not to think about the obvious flaw in the long-term masterplan. Isn’t Wilding & Co worried about running out of raw materials for its oil?

Molgat says there are enough wilding pines in New Zealand to keep the company going virtually indefinitely – and the pests are self-seeding all the time.

Anyway, if they ever chopped down the last New Zealand feral pine tree, Wilding & Co founders would be ecstatic, he says.

“Although the Wilding company side is about producing oil, the philosophy behind it is about getting rid of an invading pest.

“It’s a weird exit strategy. If we ran out of trees and therefore ran out of business, it would be a huge environmental success.”

Chief editor at Idealog, Nikki's a veteran in the journalism industry. A former lecturer at AUT University, she was the chief reporter at NZ weekly business publication The Independent and was deputy editor of Canadian publication Unlimited magazine.

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