KUALA LUMPUR: FGV Holdings Bhd is venturing into durian business for export to China particular, with the potential of planting the “King of Fruits” on nearly 1,400 hectares of its landbank.
FGV said it had signed a heads of agreement (HoA) with PLS Plantations Bhd (PLS) at the Belt & Road Forum in Beijing on April 27, 2019, for a joint venture (JV) to develop cash crop plantations, primarily durian.
Group chief executive officer Datuk Haris Fadzilah Hassan said the pact was part of FGV’s strategy to make productive use of marginal land not suitable for oil palm.
“FGV has identified 1,398ha that is potentially suitable for large scale commercial planting of durian.
“However, to determine the best areas for durian planting, further assessment into several factors including the suitability of the soil and terrain and availability of water sources for irrigation is necessary.
“Other potential cash crops for cultivation include rubber, Meranti wood, Teak and Eucalyptus,” he said in a statement.
Haris Fadzilah said durian is the most profit-making cash crop from a value per hectare perspective and FGV aims to capitalise on China’s demand for it.
Last August, the 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 said.
In 2017, a total of 72,391 ha and 35,179 ha of land were planted with durian and harvested respectively in Malaysia.
Total production during the year amounted to 210,874 tonnes, valued at RM2.79 billion.
The price of durian has also been steadily increasing with the growing demand for the fruit.
The average retail price 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 per cent.
According to the United Nations’ trade data, durian exports to China have been increasing by 35 per cent on average a year, and was worth US$1.1 billion in 2017, which was significantly higher than US$243 million a decade ago.
Although Thailand dominates the market, Malaysia is targeting a 50 per cent increase in exports by 2030, as the local industry is reshaping itself for the global marketplace.
PLS, through its subsidiary Dulai Fruits, has penetrated markets in 10 countries and has 30 years of experience in durian planting an exporting.
As of now, China accounts for the largest segment for the company.