DRI sold more than 36 hectares of cashew orchard land in Laos for from 142 million VND to get capital to grow durian with a profit margin of nearly 70%.
Dak Lak Rubber Investment Joint Stock Company (DRI) has just agreed on a policy for its subsidiary Daklaoruco to sell cashew orchards in Laos. The total area is 36.12 hectares with a starting price of more than 122.7 million kip, or about 142 million VND. The proceeds will be used to invest in a durian growing project in 2025.
Previously, DRI had planted durian since 2018 on an area of more than 69 hectares in Dak Lak. They first recorded revenue in the fourth quarter of 2023 with more than 2 billion VND and a gross profit of more than 1.7 billion VND.
The leadership plans to establish an investment project to grow durian in Champasak province (Laos) with an area of nearly 239 hectares for next year, then gradually plant more than 100 hectares each year for the period 2026-2027. About 40-50% of the investment capital is self-funded, the rest will be borrowed from commercial banks. The company’s orientation is to establish a farm to specialize in managing and organizing production according to mechanization and automation, reducing dependence on manual farming.
Growing durian is bringing positive signals to this business. In the third quarter, durian brought nearly 17.7 billion VND to DRI. Minus the cost price, the new segment contributes about 12.2 billion VND in gross profit. So durian has a gross profit margin of around 69%, which means making 10 dong a profit of nearly 7 dong. Although only accounting for 12% of net revenue, this segment contributes up to 20% of DRI gross profit.
According to the original plan, DRI will harvest 300 tons of durian this year with an average selling price of 50 million VND per ton. Estimated annual revenue is 15 billion VND, minus the cost price, it can bring in more than 4.5 billion gross profit. However, at the annual meeting in May, the board of directors said durian selling prices were higher.
In fact, durian has become a prominent agricultural product this year when prices continuously peaked. During the off-season in November, traders come to the garden to buy durians at prices ranging from 100,000-170,000 VND per kg depending on the type. In the first 11 months of this year, fruit and vegetable exports are estimated to reach more than 6.6 billion USD, of which durian accounts for about 40-45%. China is the main export market for this fruit with about 3 billion USD.
The consumption demand of a country of billions of people is the main driving force for durian. According to data from China’s General Administration of Customs, the import value of fresh durian has surpassed all other fruits since 2019. Last year, China’s durian imports exceeded 1.4 million tons, Value also increased 70% to 6.7 billion USD.