KUALA LUMPUR: PLS Plantations Bhd’s unit, Brighthill Synergy Sdn Bhd is venturing into durian businesses by taking a majority stake of 70% in Dulai Fruits Enterprise Sdn Bhd for RM21 million, to be paid with new shares in PLS and a cash payment of RM3 million.
The shares are to be issued at 75 sen a piece.
PLS is 23.42% owned by tycoon Tan Sri Lim Kang Hoo.
Dulai Fruits is one of the pioneers in exporting durians, with a 10-year track record. To date, Dulai Fruits has successfully penetrated close to 10 countries around the world including China, Hong Kong, Australia and US.
“Acquisition of Dulai Fruits is part of the key diversification business strategies of PLS group which will provide a new
viable stream of revenue to the group. Taking into account the strong growth prospects of the durian business in Malaysia as well as China huge potential market, we are optimistic that this strategic acquisition will bring forth positive earnings contribution to the group in the long run,” said executive director Lee Hun Kheng.
Soaring demand for Malaysia durians especially in the Chinese market has led to increased interest in large-scale durian farming in the country. The Malaysia king of fruits selling price can go up to US$73 (RM300) per kilogram in China.
According to Mintel’s The Chinese Consumer 2017 report, over half of all consumers are willing to pay a higher price for better product performance (e.g. better taste), and this translates to durian as well.
Both PLS and Dulai Fruits are working towards enhancing and improving durian plantation for upstream capabilities to meet the growing trend of durian demand which consistently outstrip supply.
The stock was untraded today.