FGV locates durian land

In agreement: The HoA is officially exchanged between FGV’s chief investment officer Fakhrunniam Othman (third from right) and PLS managing director Tan Sri Lim Kang Yew after the launch of Malaysia Durian Festival 2019.

KUALA LUMPUR: Diversified plantation group FGV Holdings Bhd (FGV) has identified 1,398 ha of land that is potentially suitable for the large scale commercial planting of durian, said its group CEO Datuk Haris Fadzilah Hassan.

However, to determine the best areas for durian planting, further investigation into several factors, including the suitability of the soil, terrain and the availability of water sources for irrigation, is necessary.

Other potential cash crops for cultivation include rubber, Meranti wood, Teak and Eucalyptus, Haris added.

On Saturday, FGV signed a heads of agreement (HoA) with PLS Plantation Bhd (PLS) at the Belt & Road Forum in Beijing to form a potential joint venture in the development of cash crop plantations, primarily in durians.Haris said in a statement that the collaboration was part of the group’s strategy to make productive use of unplanted areas that were not suitable for oil palm, and to explore additional revenue streams by increasing the percentage of cash crops.

He pointed out that durian is the most profit-making cash crop from a value per hectare perspective and FGV aims to capitalise on China’s demand for the King of Fruits.

“We believe that this venture will contribute positively to FGV’s financial performance, which will in turn improve shareholders’ value,” Haris said

PLS, through its subsidiary Dulai Fruits, has successfully penetrated markets in ten countries, of which China accounts for the largest segment.

In addition, FGV’s logistics and support businesses will also benefit from the partnership as “it is able to offer a reliable logistical network to create a regional logistic gateway through strategic collaborations.”

Haris said “with this HoA, FGV hopes to explore the opportunity for both parties to form a JV, in line with the proposed National Durian Plantation Programme initiated by PLS.”

In August 2018, Malaysia’s Agriculture and Agro-based Industry Ministry signed an export protocol with China’s General Administration of Customs for fresh and frozen durians.

“There is huge potential for the Malaysian durian industry as China is currently the world’s largest durian consumer,” he added.

Dulai Fruits has 30 years of experience in durian planting and exporting.

Haris Fadzilah said FGV would also be able to leverage on PLS’s market intelligence and networks to further strengthen its products and brand positioning in China.

Durian is the most widely planted and harvested fruit in Malaysia.

In 2017, a total of 72,391 ha and 35,179 ha of land were planted and harvested respectively. Total production during the year amounted to 210,874 tonnes, valued at RM2.79bil.

The price of durian has also been steadily increasing with the growing demand for the fruit.

The average retail price for durian was less than RM9 per kg in 2013, but had escalated to an average of RM24.80 per kg in 2017, an increase of more than 100%.