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Strategic Alliance for Malaysian Durian Sales in China
An export and exclusive distribution agreement signed in Shanghai earlier this month between a Malaysian durian exporter and a Chinese state-owned food distributor aims to significantly boost exports of Malaysian durian products to China in coming years.
The Malaysian enterprise, Dulai Fruits Enterprise Sdn Bhd, is a subsidiary of agro-food holding company PLS Plantations Bhd. Dulai specializes in growing and processing frozen durian products for export. It signed the agreement with COFCO Food Import Co. Ltd, the import and distribution subsidiary of state-owned food giant China Oil and Foodstuffs Corporation (COFCO).
China is the world’s largest export market for fresh durians and durians are China’s top fresh fruit import by value—hitting a record high of $4.2 billion worth of imports in 2021. At present, Malaysia is largely locked out of China’s fresh durian market because Malaysian fresh durians have not been approved for import by China’s phytosanitary authorities. The overwhelming majority of fresh durian exports to China come from Thailand, though Vietnam was also granted market access for fresh durians earlier this year and may grab a slice of market share in the future.
While Malaysian fresh durians are generally not available to consumers within China, they nevertheless have a very strong brand in China, where the Musang King variety has been dubbed the “Hermès of durians” and many durian aficionados are able to rattle off the names of other Malaysian varieties such as Red Prawn and D24.
The Malaysian industry has capitalized on this strong reputation by supplying frozen durian products to China. Originally, these consisted of frozen pulp and puree. Then, in 2018, the country received permission to export whole frozen durians to China.
Through the agreement with COFCO, Malaysia targets selling its durians in China’s most populous cities and provinces, reaching more consumers in Beijing, Shanghai, Guangzhou, and Shenzhen. This partnership is expected to ramp up the sales of Malaysian durians in China. According to a joint news release, the companies “aim to achieve an annual growth rate of 30% or 200 million yuan” (about $28 million) in all types of durians imported from Malaysia over the next three years.
PLS Plantations CEO Lee Hun Kheng noted, “We are pleased to be certified under China’s rigorous quality and food safety requirements. China’s emphasis on food security sets a high bar in terms of quality from its suppliers globally.” The exclusive distribution agreement was formalized after months of extensive negotiations and evaluation by COFCO, according to the Malaysian side.
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