KUALA LUMPUR: Durian Capital Bhd aims to raise RM56 million in capital via the Durian Capital Investment Scheme to expedite the planting of 5,600 Musang King trees.
Managing director Dr Vijay Pillai said the company expects to fully raise the capital by October 2022 to fund the project's first phase.
"The proceeds are mainly to utilise for the operational cost of the durian estate comprising to maintain trees and buy fertilisers and pesticides," he said at a press conference after launching Malaysia's first licensed Durian Investment Scheme (DIS) here today.
The scheme is licensed under the Interest Scheme Act 2016 regulated by Suruhanjaya Syarikat Malaysia.
The homegrown modern agriculture management company has 81ha of sublease land in Jempol, Negri Sembilan, to plant 8,000 trees for the overall project.
Vijay said the overall project would cost around RM80 million, involving 8,000 trees for an investment period of 15 years with a buy-back option from year six onwards.
"Of the total, 70 per cent or 5,600 trees would be planted under the DIS, while 30 per cent or 2,400 trees would be kept as reserve/moratorium to buffer any contingency," he said.
The company is expected to generate between RM8 million and RM12 million revenue by 2026 for the initial harvesting season.
"Subsequently, the revenue could grow more beyond the first-five year period as we expect our trees to bear more fruits, thus increasing our yields for investors," he said," adding that the revenue would be based on the local wholesale selling prices averaged between RM45 and RM55 per kg.
However, Vijay said the potential revenue could catapult if the company exports its durians to overseas markets due to exponential demand, mainly to China and Singapore.
Durian Capital chief executive officer Afiq Johar said durian could be another form of commodity for Malaysia complementing palm oil in the future.
"We see increased demand for durians, but there is a supply shortage currently. However, we believe we could capture the market as we have the right remedies to supply Musang King durians," he said.
Afiq said there could be a potential market for durians in the food and beverage sector, mainly in the downstream food process with various products offering such as ice cream, mochi and mooncakes.
"We hope our DIS can democratise agriculture investing and offer an inclusive and attractive product that will help Malaysians prepare for a better future," he added.
To date, Durian Capital has raised RM3.6 million from retail investors, providing investors with an accessible entry into the lucrative landscape of agricultural investment.
Global demand for durians is projected to remain robust in the near term, with estimated global market size of US$18.72 billion in 2019 and expected to reach US$30 billion by 2025.
This growth would be driven by strong market demand in China, as the fruit has only recently gained traction.
Thus far, about 10 per cent of the Chinese population have consumed Malaysian durians.
Current trends in this region are already showing a projected 1.11 kg consumption per capita by 2030.
In 2019, durians replaced cherries as the top fruit category imported by China in terms of value.
Durian Capital said Malaysia's Musang King variety is expected to continue being the premier durian product in customer preference as it becomes more accessible in key international markets.
Durian Capital has an expert agriculture team with decades of combined experience and the latest best practices in durian cultivation, supported by technical advisors from Universiti
Putra Malaysia (UPM) covers crop science and plant protection areas.
The company leverages modern agri-technologies such as smart irrigation systems, drone surveillance, data analytics, and a proprietary soil nutrition regime.
This aims to optimise the growth and yield of the Musang King produce while delivering secure, reliable investing via an easy-to-use platform on its website, both on desktop and mobile.
Investors can start investing with a minimum amount of RM10,000 per unit.