How is the synthetic sandalwood supply chain evolving in China and who are the key producers?

How is the synthetic sandalwood supply chain evolving in China and who are the key producers?
China's synthetic sandalwood capacity is expanding rapidly, led by players like Xinhua Chemical and Green Biotech. Xinhua Chemical, a long-time partner of Givaudan through its Jiangsu Xinrui joint venture, has grown its fragrance capacity to 16,000 tons annually, with plans exceeding 40,000 tons across Jiangsu and Ningxia bases. Its sandalwood series products, including Sandacanol, are key high-value items. Green Biotech, meanwhile, is investing 420 million RMB in a 6,300-ton advanced fragrance project focused on sandalwood 208 and other high-margin products, addressing capacity utilization that exceeded 110% in 2024. The sector benefits from import substitution tailwinds, as domestic producers offer cost advantages over international suppliers while meeting the quality demands of global fragrance houses. However, feedstock costs, particularly pinene, have surged over 77% in recent quarters, pressuring margins for contract-bound producers.