The state is partnering with a Big Island company to establish a Hawaiian sandalwood seed orchard on 2.5 acres in South Kona as part of an effort to restore native forest lands across the islands.

The orchard site is on 2,878 acres owned by Haloa Aina LLC, which calls itself “a reforestation company” dedicated to restoring native dryland forests. The family-operated company harvests dead and dying trees, grinding the wood and using a steam-distillation process to extract essential oils for use in cosmetics, perfumes and aromatherapy products.

Haloa Aina Manager Wade Lee said 100% of proceeds from sales of its Royal Hawaiian Sandalwood products are used to support its reforestation and education programs.

The Haloa Aina seed orchard is the first planted under a plan by the state Department of Land and Natural Resources’ Division of Forestry and Wildlife to establish a network of Hawaiian sandalwood seed orchards on public and private land across the state through a Landscape Scale Restoration program agreement with the U.S. Department of Agriculture’s Forest Service.

The project aims to produce “high-quality, eco- region-specific” seeds for reforestation of priority watershed lands and other restoration efforts while providing research opportunities.

Other seed orchards will be set up on state land in Kokee on Kauai and Helemano on Oahu, and on private land in Ulupalakua, Maui, and the Kealakekua Mountain Reserve on Hawaii island, according to the forestry and wildlife division. Establishing the orchards across the islands ensures genetic diversity and is a safeguard should a wildfire or other disaster wipe out any one of the sites.

A memorandum of agreement between the state and Haloa Aina allowing the project to go forward was approved last month by the Board of Land and Natural Resources. The only compensation granted to the company is a share of the seeds that are collected and processed.

Sandalwood, or iliahi in Hawaiian, has long been prized for its fragrant wood and oil. Its edible nuts were traditionally used as a food source, and the tree provided oil and wood for waterproofing, treating skin ailments and making tools and crafts.

Hawaii enjoyed a booming sandalwood trade with China in the early 19th century until the forestry resource dwindled. Then, in the early part of the 20th century, many Big Island forest lands were razed to make way for sprawling cattle ranches. It’s those lands Haloa Aina is working to restore.

Hawaii is home to six endemic species of sandalwood, a hemiparasitic plant that derives some of its water and nutrients from the roots of nearby “host” trees. For every one sandalwood seedling, Lee said he plants seven host trees nearby, including koa, ohia, mamane and naio.

In addition to its own land, Haloa Aina so far has enlisted 82 other landowners to restore former sandalwood forests for future income. Altogether some 30,000 acres on the western slopes of Mauna Loa are involved; the largest tract is 8,000 acres and the smallest 100 acres, Lee said.

“When we started we had 3,900 sandalwoods on our 3,000 acres and we now have over 150,000,” he said, adding that Haloa Aina has orders for 160,000 seedlings this year for planting along the west side of the island from Kohala to Kau.