KUALA LUMPUR: PLS Plantations Bhd via PLS-LESB Sdn Bhd has entered into a joint venture agreement worth RM210 million with MyFarm Inc Japan via Millennium Agriculture Technology Sdn Bhd, to develop its 1,500ha durian plantation, and other agricultural and aquaculture cultivations located in Pahang.
With Akar Barat Jaya Sdn Bhd as the joint venture company (JVC) for the project, this is the largest Japanese investment in durian plantations to date.
PLS Plantations chairman Tan Sri Mohamed Nazir Abdul Razak said it aims to become Malaysia’s top agrifood company and is identifying more partnerships to expand into other agricultural and aquacultural activities – part of the National Food Security Enhancement initiative with the Ministry of Agriculture and Food Security.
“This joint investment not only facilitates the transfer of Japanese agriculture technology and expertise to our country, but it is also a strong endorsement of Japan’s foreign direct investment in Malaysia,” he told reporters at the agreement signing ceremony today.
While PLS is still very much palm oil-driven at the moment, with durian remaining a small part of its revenue contribution, it is targeting RM100 million from durian sales this year.
“Our ambition is to go to 10,000ha through partnership and on our own in the next five years as we are also going into banana and pineapple crops. Our revenue from durian and other crops will also get larger, while palm oil which accounts for 80% of our total revenue, will go down to about 20%,” said Nazir.
With this joint venture, he added PLS could also realise a significant portion of its current investment in durian plantations.
“As you know, durian planting has a very long gestation period of five to seven years before generating any cash flow. By bringing in partners, we can monetise some of our early investment and invest in new plant-ups,” he said.
In addition, it has also entered into an offtake agreement with Dulai Fruits Enterprise Sdn Bhd, which has an exclusive distribution agreement with China Oil and Foodstuffs Corporation, China’s largest food processor, manufacturer, and trader.
“While China is also planting its own durian in Hainan, at the moment there is no fight although we never know. But fruit taste profile is depending on the climate, and our Raub’s Musang King is very well known as it is of high quality,” he said.
Besides China, PLS is also exporting to Canada, Australia, Japan, European and Middle Eastern markets, although not on a large scale.
