NutryFarm International Limited (“NutryFarm” or the “Company”, and together with its subsidiaries, the “Group”), is pleased to announce that the Company’s wholly owned subsidiary, Global Agricapital Holdings Pte. Ltd. (“GAH”), has entered into two binding purchase agreements with Royal Farm Group Co., Ltd (“RFG”) and Thung Thang Thong Co., Ltd. (“TTT”).Under the agreements, GAH has entrusted RFG and TTT to purchase an estimated volume of 270 and 300 containers of fresh durians in Thailand respectively.
The price will be based on market price which is acceptable to GAH and the orders will be placed by GAH in batches. GAH shall made a pre-payment of not more than 30% of the order amount upon confirmation of each batch order with the remainder to be paid within thirty days after delivery.
It is also agreed that RFG and TTT shall guarantee the quantity of goods shipped from Thailand and exercise strict quality control based on the requirement of the logistics partner as well as during transportation and warehousing.
Led by the Group’s CEO, Mr. Cheng Meng, an industry veteran in the durian industry, the Group has entered into various agreements to sell over 1,480 containers of fresh durians from Thailand to major Chinese fruit importers since December 2020. The total contract value of these agreements is estimated at approximately RMB 962.0 million as announced on 13 February 2021.
Together with these latest two purchase contracts, the Group has entered into purchase agreements to collectively purchase 870 containers of fresh durians from various sources in Thailand to fulfil the sales orders. Shipments of the fresh durians have already started since 20 February 2021 and will continue throughout 2021.
In 2019, Thailand exported US$1.46 billion worth of durians to overseas markets, a rise of 54.6% from the previous year, with China, Hong Kong and ASEAN nations accounting for 98% of export volume.(1)
According to data from China Customs, China’s imports of fresh and frozen durians in the first half of 2020 reached US$1.62 billion, corresponding to a 73.5% year-on-year increase and almost reaching the US$1.82 billion imported during the whole of 2019. In the first half of 2020, China’s imports of fresh durians reached US$1.52 billion, corresponding to a 75.7% year-on-year increase.(2)
Mr. Cheng Meng, Executive Director and Chief Executive Officer of NutryFarm, commented, “China’s demand for durians has remained strong despite the COVID-19 pandemic and Thailand is the only country that can export fresh durians to China.
Specialised knowledge, industry experience and network are required in the durian trade, particularly when it comes to the cross-border trade of fresh produce, hence there are significant barriers of entry in this industry.
With China’s durian supply relying almost entirely on imports, we believe that the growing demand from the Chinese market can provide us with significant opportunities.”
This document is to be read in conjunction with NutryFarm’s exchange filings on 17 March 2021, which can be downloaded via www.sgx.com.