PLS (9695) PLS Plantation - A Potential Boast in Earnings from Durian Theme supported by Chinese Firms?

27 April 2019 - PLS Plantation, which has recently acquired durian plantations from its controling shareholder Tan Sri Lim Kang Ho, today signed a heads of agreement (HoA) with FGV and three China-based companies -- namely Shanghai Greenland Group, ZTE Corp, and Shanghai PTSKY. The HoA will enable the four to work with PLS to venture into durian plantations and to export the fruits to China.
Through this collaboration, PLS believes that agricultural development in Malaysia will advance to another level and contribute to Malaysia's economy.


Source: New Straits Times
The signing of the HoA was witnessed by Prime Minister Tun Dr Mahathir Mohamad, as well as Agriculture and Agro-Based Industry Minister Datuk Salahuddin Ayub.

Last month, PLS Plantation signed a strategic partnership agreement with Greenland to form the Greenland-PLS Joint Venture to import, sell and market durian products in China.

“Since then, Greenland-PLS Joint Venture has successfully imported products made from the fruits of many popular durian species from Malaysia, including the D197 Musang King and D24 Sultan King, consisting mainly of frozen products,” said PLS Plantaion.

PLS Plantation is confident that durians from Malaysia will be in demand. It wants to distribute to various cities in China, and expects this to contribute revenue to its durian business division.

According to trade data compiled by the United Nations, durian exports to China have been increasing by an average of 35% annually, and was estimated to be worth US$1.1 billion in 2017, versus US$243 million a decade ago.

Source: https://www.theedgemarkets.com/article/fgv-collaborates-pls-plantation-and-three-chinese-companies-venture-durian-plantations

 

 

“In PLS Plantations, we already have a palm oil-producing business, in its best timing whereby trees are mature. They are about six to seven years old, so that is an area where our profit may be coming from,” Lim told the press after PLS Plantations’ extraordinary general meeting (EGM) yesterday.

Shareholders at yesterday’s EGM granted approval for PLS Plantations to venture into durian plantations. The company will be buying a 70% stake in Dulai Fruits Enterprise Sdn Bhd, a downstream durian-based product exporter.
 

Lim said the group’s new durian plantation venture will see substantial growth. “From Dulai Fruits Enterprise, we already got RM3 million based on a profit guarantee [for FY20], so we expect that business to grow very fast. It is not concentrating at just one place; we are looking at the regional market to grow the business.

“On one hand, we will grow the downstream durian business in Dulai Fruits Enterprise. For the long term, we have the durian plantations to support the supply of the downstream business,” he added.
 

After acquiring Dulai, we aim to command a substantial market share for the export of downstream durian-based products. Now, we intend to vertically expand this business by focusing on enhancing the durian plantations for upstream capabilities to meet growing demand for durians, which has consistently outstripped supply.

“We intend to go into large-scale and systematic plantations for this expansion. We are also in discussions with strategic investors who can co-invest with us in this durian plantation business.”

Source: https://www.theedgemarkets.com/article/lim-explains-ekovests-investment-his-lossmaking-plantation-ops

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