PLS Plantations, Japan’s MyFarm in RM210m deal

KUALA LUMPUR: PLS Plantations Bhd via PLS-LESB Sdn Bhd has entered into a RM210 million joint venture agreement with MyFarm Inc Japan via Millennium Agriculture Technology Sdn Bhd to develop its 1,500-hectare durian plantation and other agricultural and aquaculture crops in Pahang develop.

With Akar Barat Jaya Sdn Bhd as the joint venture company (JVC) for the project, this is the largest Japanese investment in durian plantations to date.

PLS Plantations Chairman Tan Sri Mohamed Nazir Abdul Razak said the company aspires to become Malaysia’s leading agri-food company and is identifying further partnerships to expand into other agricultural and aquaculture activities – part of the initiative to improve the national Food security with the Department of Agriculture and Food Security.

“This joint investment not only facilitates the transfer of Japanese agricultural technology and expertise to our country, but is also a strong endorsement of Japan’s foreign direct investment in Malaysia,” he told reporters at the signing ceremony yesterday.

While PLS is still very much palm oil-driven at the moment and durian accounts for only a small portion of its revenue contribution, it is targeting RM100 million from durian sales this year.

“Our goal is to grow to 10,000 ha alone over the next five years through partnerships as we also get into banana and pineapple cultivation. Our revenue from durian and other crops will also increase, while palm oil, which accounts for 80% of our total revenue, will fall to about 20%,” Nazir said.

With this joint venture, he added, PLS could also realize a significant portion of its current investments in durian plantations.

“As you know, durian planting has a very long maturation period of five to seven years before it generates any cash flow. By bringing in partners, we can monetize some of our early investments and invest in new assets,” he said.

In addition, it has also entered into an offtake agreement with Dulai Fruits Enterprise Sdn Bhd, which has an exclusive distribution agreement with China Oil and Foodstuffs Corporation, China’s largest food processor, manufacturer and distributor.

“While China is also planting its own durian in Hainan, there is no struggle at the moment, although we will never know. But the fruit flavor profile is dependent on the climate and our robbery Musang King is very well known because it is of high quality,” he said.

In addition to China, PLS also exports to Canada, Australia, Japan, Europe and the Middle East, although not on a large scale.