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Moroccan Argan Oil:

How can Japanese companies answer the market demand for Argan oil cosmetic products and at the same time benefit the Moroccan local population?

By Sanaa Ouahidi, February 2019



The Sustainable Development Goals are the blueprint to achieve a better and more sustainable future for all. They address the global challenges we face, including those related to poverty, inequality, climate, environmental degradation, prosperity, and peace and justice.


How can I as a Moroccan woman, enrolled in the Global MBA at Doshisha Business school in Kyoto Japan, help my country and my community make a step forward towards achieving the goals and be a better place to live for everyone.


Before digging into the SDGs that I want to address, let me first introduce my country, with some economic figures,


Morocco has a strategic location, between Europe, Africa, the Arab world and the Maghreb region, it was mixed through time with different cultures and nations, Romans, Arabs, French, Spanish, and many others. This is why today; the country has a very rich cultural and historical heritage.


Concerning the practiced religions in the Kingdom of Morocco: 95% of the population are Muslims, 3% Christians, and 2% Jewish. The official languages are Arabic and Amazigh (Berber), French is the second official language, it is the language of business and spoken almost everywhere around the country, Spanish is the second spoken language in the northern region and English is the third language.


The 2018 GDP was 109 billion $, ranking the country as the fifth largest African economy by GDP. The yearly average economic growth is between 4% and 5%.


50% of the economy is based on the services sector, that employs 39% of the population, 30% is based on the industrial sector, employing 21% of the population, and 14% of the economy relies on the primary sector fishing and agriculture, where 40% of the population are employed.


Although Morocco benefited from his strategic location being the gateway to Africa and only 8 miles away from Europe, the country still has to deal with some social and economical issues, that both the government and the civil society are working on. Like the poverty rate which is equal to 4,8%, or the unemployment rate that is equal to 10%, or the illiteracy rate that is unfortunately quite high, 32%.


In my attempt to help addressing some of the SDGs in my country, I would like to focus on SDG number 1: NO POVERTY, SDG number 5 GENDER EQUALITY, and SDG number 17 PARTNERSHIPS FOR THE GOALS.


My issue is particularly related to Women empowerment, because I have a personal interest in the topic. As a woman from a developing country, Women empowerment is a daily struggle for many of us, a continuous fight, so it’s not only a personal matter but rather a society matter.


I would like more specifically to address the issue of empowering women from the rural area of southern region of Morocco working in the Argan Oil Industry and living in poverty and illiteracy for the most.


Why this interest in this particular industry and particular population? Because Argan Oil industry is growing and the demand is growing all over the world knowing the health benefits of this product, the problem is: the local population are not really taking advantage of that.


Also, because I believe that empowering these women, will help addressing both SD Goals (for this region), No poverty and Gender Equality.


But before talking about the issue related to this population of women, I will first introduce the Argan Oil industry and explain why this product is so famous around the world.



Argan Oil industry


Argan oil is produced from the Argan tree, that means in Amazigh the tree of life. It is a wild vegetation, a naturally occurring plant that is endemic to Morocco. It is a symbol of the country and makes it famous worldwide.


Argan tree – scientifically recognized as Argania Spinosa – is an extremely rare little tree, that grows exclusively in the Souss Valley, in the south western region of Morocco, It is considered one of the miraculous resources of Morocco thanks to its extraordinary characteristics, ranging from forestry and food to medicine and cosmetic. The tree has an amazing ability to survive drought, heat, poor soil, and harsh conditions. It was first discovered by Muslim scientist pharmacist and physician Ibn Al Baytar. The tree can reach a height of 10 meters and can live as long as 200 years.


The Argan trees forest is covering 870 000 hectares, which is equal to 17% of the total Moroccan forest area. In 1998, the Argan forest was declared an international Biosphere Reserve by UNESCO.



How is Argan Oil made?


Nowadays the process of extracting the oil became mainly automated, but here are the steps used and still by the women to produce it manually:


First, the women harvest the Argan fruit or the nuts (almost as the size of a green olive) from the argan trees. Next, they keep the nuts in the sun until they dry. The color of the fruit changes from green to brown after the drying process, then they use two stones to break apart the dried flesh of the nut, and then to break away the hull.


After that, the women grind the nuts by hand in order to preserve the healthy nutrients, better than the machine pressing, until they have a paste similar to natural peanut butter. Finally, they squeeze the paste by hand in order to extract the oil. Then the oil is bottled and the remaining solid left is fed to the goats.

It is important to stress the fact that to produce 1L of Argan Oil, it needs 25 to 35 Kg of Argan fruits, which means 2 to 2,5 Kg of Argan nuts. And it requires the work of one woman during a full day, 10 to 12 hours.



Argan Oil production


The annual production of Argan Oil is around 5000 tons per year, 42% of which is used for cosmetic purposes. The annual turnover is 300 Million Moroccan dirhams, the sector employs 3 million people, 90% of whom are women.


Argan oil has been a culinary staple in Morocco for centuries, and today it is used all over the globe for a variety of culinary, cosmetic and medicinal applications.



Why is Argan Oil so famous around the world? What are the characteristics it has?


Argan oil is primarily composed of fatty acids and a variety of phenolic compounds. The big part of the fat comes from oleic and linoleic acid, Approximately 29–36% of the fatty acid content comes from linoleic acid, which is omega-6. Up to 43–49% is oleic acid and is also a very healthy fat, renowned for its positive impact on heart health.


Additionally, argan oil is a rich source of vitamin E, required for healthy skin, hair and eyes. and has powerful antioxidant properties.



Organic Argan Oil cooperatives


The women working in the Argan Oil industry are most likely structured into cooperatives, which are a form of a social and organizational association, that guarantee them to have an income source, based on fair- trade- which empowers them and makes them feel more independent, gives them access to health -care, and afford basic education for their kids, and generally enables them to have a better life conditions, so they feel valuable and value creating for themselves, their families and their community.



Argan Oil exportation


The total exportations of the Moroccan Argan oil are around 1500 tons per year, the first importers are the European countries, France, Germany and Switzerland, then the US, followed by the Middle East then Japan.



The Japanese market…


After a quick tour in some drug stores and the cosmetic floors of some malls around Shijo area in Kyoto, I noticed that the offer of products using Argan Oil as the principal components is huge, shampoos, body lotions, body oils, creams…


In my quest of understanding more the Japanese market of Argan Oil, I was fortunate to find the contact of Koike Sangyo, Inc, and to talk to Nathan Hirsch and his colleagues from the cosmetic department, Nathan who works in the business development division, is also my Senpai, having been graduated from the DBS GMBA few years earlier.


Koike Sangyo was founded in 1911 as a Kansai-based trading company specializing in chemicals, split into battery materials, plastics and resins, electronic chemical division, and functional materials.


Since 2016, they created a new department called Cosmetics under the chemical products development division, and they started to import and trade the Moroccan Argan Oil in Japan.


Based on my conversation with M. Nathan Hirsch, Ms. Noritake Yoko and Ms. Hondo Tamaki who are the stuff of the cosmetics department, here are some interesting insights about the Japanese market and their activity,


The Argan Oil Market in Japan is composed of two types of companies: The first group is Japanese companies that import Argan Oil products or related products. The second group is non-Japanese and non-Moroccan companies, that first import Argan Oil from Morocco to European or American countries, and then from there, sell it in Japan.


The estimate of the market of the Japanese companies is around 45 – 50 tons, and Koike Sangyo is responsible of 30% of this quantity imported directly from Morocco, ranking as the biggest of one of the biggest importers, their monthly import quantity is 2 tons. Currently, they bring the oil to Japan and sell it to their clients in Japan, mainly Textile companies, that use it as a softener. Because of the good quality oil that has good properties, it makes the synthetic textile softer and shinier.


They are now exploring other uses of Argan oil like the possibility to include it in the production of high-quality tissues as a softer.


But the Argan Oil in Japan is mostly used for cosmetic products, as Japanese women like its characteristics and benefits.


Besides that, Nathan San thinks there is a potential for Argan oil in Japan, as in Japanese market in interesting, with a lot of industries and a lot of know-how, so potentially there are other possibilities to explore.


What makes Koike Sangyo special, is the fact that they import directly from the coops in Morocco, their value chain is as direct as you can get. And they have a great partnership with one of the co-ops based in the city of Agadir. Therefore, their Argan Oil is as fresh and pure as possible, coming directly from the source.


As a 100 years’ experience company, and a socially responsible one, Koike Sangyo is working now on a project to help and support this coop improve their business, by trying to help them introduce some Japanese technology to use in the extraction process, instead of the European machine that they are currently using. By using this Japanese technology, specially for the cold press extraction with low temperature, all the nutrients and the ingredients inside the oil will be protected.


I was very happy with all the insights and feedbacks I got from Koike Sangyo cosmetic department stuff, and really impressed by the good relationship they have developed with Ajeddig Ntarganin the Moroccan coop. But most importantly about the fact that they made a step forward into helping the coop improve their production process and thus the women working in there to improve their lives and increase the value for everyone. This is exactly what SDG number 17 is about, Partnerships for the goals.



As the demand of the Argan Oil in the Japanese market is growing specially for cosmetic use. It is sold for high prices, allowing the distributors to have high margins and not really benefiting the local population.


My objective is to give the opportunity to Japanese men and women to test the real bio and hand made Argan Oil, once imported from the source. And at the same time, benefit the local population from the trade margins. And therefore empower this work force, and help these women have a better life and secure a better future for their children.




References:


http://www.koikesangyo.co.jp/en/company/organization.php


https://www.arganfarm.com/argan-tree-history/


https://www.un.org/sustainabledevelopment/sustainable-development-goals/


Alexandra Samuel, 2012, Behind-The-Scenes: How Argan Oil Is Made, https://www.self.com/story/how-argan-oil-is-made, accessed to on February 2019.


12 Benefits and Uses of Argan Oil, https://www.healthline.com/nutrition/argan-oil, accessed to on February 2019.



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