A market study on the Durian Industry

Have you heard of the gold that grows on trees called durian? The
Durian Industry is a highly potential and high yield to invest in. Investing in
this industry has really opened your eyes to its potential because foreign
demand is rising. Durian profits are higher than other agricultural products
and have a longer return on investment. Therefore, you can enjoy peace
of mind with great rewards. In this paper, we present arguments for why
the durian industry is becoming more attractive to investors. The deman of
durian and processed durian product is rising significantly. Moreover, the
new smart method of farming is studying and adopting in the durian
cultivation. The development of the concept of water management
systems for durian farmers to have the most efficiency based on the data
results from the study. According to investor’s view, investing in tangible
asset is very secure even if durian can not sell at high yield. Because
ecological farm also has BBQ area, fishing, etc to meet the entertainment
needs of residents. These places become the ideal place to enjoy the
relaxing life for the whole family on the weekends. We can make the
durian farm very interesting tourist areas. The search methodology we
used is secondary research. In secondary research some important
sources used include industry publications, industry reports, trade
magazines, and other publications from government and trade
associations, among others. In addition, the data is gathered from various
company websites, press releases and several third- party databases.
Contents
1. Introduction ...................................................................................................... 3
2. Market overview on durian ( including capitalization )..................................... 5
3. Malaysia Durian Farm production Rate per year .............................................. 9
4. Current Main export countries and revenue .....................................................11
5. Malaysia Durian Farm Yield per year ..............................................................12
6. Summary .........................................................................................................13
References .................................................................................................................14

2
 1. Introduction
Durian, also known as the "King of Fruits" in Southeast Asia, is an
oblong-shaped fruit with spikes and has an overpowering smell which has
led to the ban of the fruit in public transport in countries such as
Singapore, Thailand, and Japan. The lifespan of a single durian tree is
between 100 and 300 years. Trees begin to bear fruit when they enter the
maturity period in their sixth year. They enter the golden period in their
11th year when they produce the most fruit. During this period, a single
tree can bear close to 200 durians. Up to 204 durian varieties and harvest
period twice per year.
In 2019, the Malaysian Department of Agriculture, along with the
Malaysian Agricultural College, donated 900 durian trees consisting of
grades D99 (Small Coffee), D159 (Manthong), D200 (Ochee), D175 (Red
Shrimp), and D197 (Musang King) to boost the clone production of
durians in the country. The aforementioned factors are further expected to
boost overall production in the region, during the forecast period.

Image 01: Recommended durian clones of Malaysia

When it comes to the delicious and nutritious durian, people often think
of the malaysia musang king. In addition to this name, it is still called

3
Musang King Durian. They are even classified as the most delicious
durian in the world.
In fact, this fruit is native to the state of Sabah Malaysia. And over
time, this fruit has become the best durian variety in this beautiful country.
In 1993, durian musang king Malaysia was registered with the code D197
under the Malaysian seedling protection law.
The Musang King or Mao Shan Wang, 猫 山 王, Raja Kunyit or Cat
Mountain King have a code called D197. Currently, Musang King durian
appears on the market with 2 types: yellow melanus and red intestine. It
can be said that Malaysia is the cradle of cult durians. Here, not only
stands out with the musang line, but also the Malaysian durian red gut.

Image 02: The Musang King

4
Image 03: the Malaysian durian red gut

2. Market overview on durian (including capitalization)

Market on durian: The set of all actual and potential buyers of durian.
These buyers share a particular need or that can be satisfied through
exchange relationships. The durian and proceesed durian product are
aimed at the Aisa paticific market segment.

Market overview: The global fresh durian market is projected to

register a CAGR of 8.8 %, during the forecast period (2019-2024). The
CAGR will increase to 10.6%, during the forecast period (2016-2021). The
year 2020 was found to bring misfortune for the Malaysian exporters due
to COVID-19. Malaysian farmers who export durians to China faced the
consequences of the disruptions to China’s logistics industry, city
lockdowns, and changes in consumer tastes due to the coronavirus
outbreak. The prices of durians in Malaysia dipped as demand from China
fell down drastically initially. However, lately, the Chinese government
permitted the import of frozen whole durians from Malaysia to China, in a
move to accelerate the expansion of durian farms and increase
investment in the industry. In June 2019, the very first batch of frozen,
whole Musang Kings were successfully exported to China. The Ministry of
Agriculture and Agro-based Industry estimates that the price of Musang
King will rise to over RM300 per kilo.

5
 Musang King Price Growth from 2015 to 2053
( unit: RM)
400 373
350
300
Price per kg

250
200
2015
150
2019
100
35 40 2024
50 25
0 2053
1
Linear (2015)
2015 25
2019 35
2024 40
2053 373
Musang King Price Growth

Durian processed foods such as durian paste, snacks and deserts

are also increasing in popularity in overseas markets.
Durian pulps are also used in several food items, including yogurt, ice
cream, and pizza, to add an exotic flavor to the food. For instance, in
March 2017, TH Milk and Joint Stock Company, a dairy products
manufacturer in Vietnam, launched durian-flavored yogurt. Global durian
importers, the figure for china stood at 66 %. Asia-Pacific occupied the
largest share in the market for fresh durian in 2019, with Thailand
contributing to the major chunk in the market share. The rising global
demand coupled with the zero-tariff Free Trade Agreements between
Thailand and 16 countries such as China, Australia, Cambodia, India, and
Singapore, among others, have helped augment the domestic production
of durian in the country. Asia-Pacific was also the fastest-growing region
for fresh durian in 2019. The growing popularity of the Mon Thong variety
in China with an expansion in the offering of Mustang variety from
Malaysia in specialized stores and street markets are expected to drive
the consumption of fresh durian in the region, during the forecast period.

6
 Percentage of durian import - 2019

19

4
66 4

others Vietnam Hong Kong Singapore China

The demand of fresh durian and processed durian products witnessed

a remarkable rise in 2019. The first reason is it often used as meat
substitute. Durian has a lot of vitamins and minerals. Its neutral flavor is
special. Now, many people looking for plant-based alternative to meat.
Vegetarians and vegans found how this fruit could be used as a meat
substitute for pulled pork sandwiches and as a taco meat. It is "durian
king", this is the brand that represents luxury. Many people are interested
in it and want to sample it due to its brand name.
Secondly, unlike other popular durian varieties, Musang King durian is
always taken care of and fixed in all stages, especially in the preservation
stage. Imported directly from Malaysia with top-notch refrigeration
technology, each segment of durian musang d197 always keeps its fresh
and delicious taste like ripe. Therefore, the product cost must include this
part of the technology cost.
The third reason, this is considered the core reason that makes the
price for any product, that is the quality and characteristics of the product.
The most special thing about durian musang is that the durian zone is
quite acacia, not broken. The musang king durian is directly harvested
when the durian fruit is ripe and falls off by itself. Therefore, durian fruit
always keeps the standard of traditional freshness in each durian fruit.

Distribution channel trend:

Supermarkets and hypermarkets were key players on the durian fruit
market in 2018, stood at over 45.0% share of the global revenue. This
segment is estimated continutiously to domain on this market because it
provides the purchaser’ a choice to tangibly verify the product forms

7
before any purchase decision. Moreover, the availability of the fruits in
perishable forms make the buyers to utilize these channels.
There will be estimated a remarkable increase of 9.3% in online
distribution channel CAGR between 2019 and 2025 in terms of revenue.
In 2019, Tmall, an Alibaba Group Holding Limited owned online
marketplace, began selling the product online in China. Alibaba Group is
cooperating with the local suppliers of Malaysia to supply frozen whole
Musang King durians to China. COVID 19 pandemic, the demand for
buying online of frozen food products, fruits & vegetables, eggs, flour, and
whole grains, among others, saw a significant increase.

Products trend: The demand of processed durian is continuing to

increse in various products.
A new-found demand for the creamy texture of the Malaysian Mustang
King variety along with the ever-growing demand for Mon Thong in China
has led Asia-Pacific to become the fastest-growing region for fresh
durians. With an expanding base of health-conscious consumers and
middle-income households, the market for durians is further expected to
get a boost in the country as the fruit is a rich source of nutrients such as
Iron, Vitamin C, and Potassium. The demand for the fruit has reportedly
emerged as an essential topping on pizzas and hotpot broths along with
an increased usage of durian pulps and pastes in the food service
industry. Thus, the market for fresh durians is expected to register a rapid
growth in the region, during the forecast period.
In 2018, frozen pulp and paste were the largest share of over 70.0% in
terms of revenue. The production of the fruit is focuesd in Thailand and
Malaysia, which requires a frozen form of durian to export. As a result,
frozen pulp is considerable popularity globally beacuse of its better shelf
life and less space requirement. Moreover, frozen pulps are more
convenient to consume than the whole fruit.

8
 Rising application of paste form of durian in different food products
which includes dessert, cakes, pastries, ice cream, biscuits jams, chips,
candies, chocolates, and juice is expected to have a positive impact on
the segment growth. The growing demand for durian flavored tea, coffee,
and milk has been speedibg up the demand for the flakes form of the
product in South Asian nations. Therefore, demand for durian has been
increasing in the food service and food processing industries. For
instance, in March 2016, Pizza Hut introduced durian-flavored pizza in
China, considering the increased popularity of the fruit in this nation.

Key manufacturers include Charoen Pokphand Group, Sunshine

International Co., Ltd., Chainoi Food Company Limited, Thai Agri Foods
Public Company Limited, Interfresh Co., Ltd., TRL (South East Asia) Sdn
Bhd, Top Fruits Sdn Bhd, Hernan Corporation, and Grand World
International Co., Ltd. Over the past few years, companies have been
emphasizing on product development to get a competitive advantage in
the industry. Growing product demand in the food processing industry has
been widening the scope for the producers across the globe. The
producers are expanding their product portfolio in several product forms,
including raw durian, frozen pulp, paste, flakes, and powder, in order to
meet the rising demand.

3. Malaysia Durian Farm production Rate per year

In Malaysia, there are 71.1 thousand hectares (various varieties) of
durian crops reported by the Department of Agriculture 2018 with revenue
of 300.47 million metric tons valued at RM 1.40 billion. The crops are
planted by locals, and 89% of the workers are also from Malaysia. In

9
2019, the planted area for durians was approximately 70.3 thousand
hectares, the decrease from the previous year.
There are 28 durian varieties grown in Malaysia from D172- D198.
Currently the durian variety of Kunyit King (D197) or more popularly
promoted as 'Musang King' is the highest demand in Malaysia. Various
types of durians are planted haphazardly throughout Malaysia.

Areas planted with durian crop Malaysia 2013-2019

78
75.7
Planted areas in thousand hectares

76
73.7
74 72.4
72 70.6 71.1
70.3
70
68
66
66
64
62
60
2013 2014 2015 2016 2017 2018 2019
Year

Areas planted with durian crop Malaysia 2013-2019

(Published by R. Hirschmann, Dec 18, 2020)
Production seasonality:
In the north like Kedah, Perlis and Penang. The main season is from
April to July while in the south is in June to September. In the semi-arid
areas where the dry season in the middle of the fruiting season will fall at
the end of the year from November to January.
For harvesting, the durian tree that is grown from seedlings usually
produces yields in the sixth year after planting although sometimes there
is a tree that can produce yield at the age of 4 or 5 years after planting.
Trees from seed seed seed produce after 7 - 10 years of planting.

New smart methods of farming

The new smart method of farming is studying and adopting in the
durian cultivation. Durian garden uses contemporary and efficient planting
methods such as using hypocotyl grafting allowing our experts to connect
Musang King branches to other trees as well as an automatic and
fertilisation system to ensure our trees grow healthy and strong. In

10
addition, environmentally friendly technologies reduce environmental
pollution and maintain ecological balance.
Potential in pooling durian smallholders: DSR Fruits (DSR durian
orchard) believes bringing together smaller durian growers is key to
developing Malaysian industry
Established since 1st of September 2016, Durian Garden is a
systematic, integrated and digitalized durian plantation company in
Malaysia with shareholders (Tan Sri Kong Hon Kong) and professional
planting team (Dr. Gene Goh Seau Boo).

Tourism with a potential ecological farm model, low investment

costs
From the development of an agricultural model linking tourism, new
tours and routes have contributed to make a difference, bringing new
feelings to the tourist, contributing to the effective exploitation of strengths
culture, characteristics of regions and localities.
Eco-farm tourism models attract customers: Resort tourism - services
in the countryside are many people love, Team building tourism - How to
get rich in the countryside attractive thanks to fun activities, Experimental
Agriculture Tourism - A model to get rich from agriculture cannot be
missed.
Growing durian tourism in Malaysia is expected to remain a key factor
driving the market in the near future. This tourism is getting significant
popularity in these countries, which is fueling the demand for the product.
Furthermore, in May 2019, the government of Malaysia announced plans
to encourage the farmers to invest in agro-tourism.

4. Current Main export countries and revenue

Thailand and Malaysia dominate the market for fresh

durian, accounting for a 96.0% share of the total revenue in 2018.
Indonesia, Malaysia, China, Thailand, Vietnam, Hong Kong, Singapore,
and Taiwan are the well-known and important markets. Thailand is the
largest exporter in the world, followed by Malaysia, responsible for around
99% of the total export. In terms of imports, China, Vietnam, Hong Kong,
and Singapore are the key importing nations of this region.
Thailand exported a total volume of 655,346.0 metric ton of fresh
durians in 2019, a significant increase when compared to 496,915.0
metric ton in 2018 and 488,673.0 metric ton in 2017. Thailand has a
greater comparative advantage in terms of transportation cost for
exporting to China, the world's largest importer of fresh durians, which has
helped boost the domestic production in order to meet the surplus
11
requirement for the export market. Moreover, a survey conducted by the
Bank of Thailand (BOT) revealed that the area under durian cultivation
has increased considerably since 2016 with fresh durians accounting for
95.8% of the total share in exports. The Government of Thailand has been
emphasizing on strengthening the distribution channel for stimulating
consumption of durians among the Thai by recording a memorandum of
cooperation with the giant retailers such as Tops Market, The Mall, Big C,
Tesco Lotus, Makro, and Tai Market.

The Free Trade Agreement with Thailand has fueled the import of
China significantly. Initially, the whole fruit was not allowed to import in
China from Malaysia. However, in May 2019, the Chinese customs
department welcomed the frozen whole fruit in the nation. This is expected
to increase the demand for the whole durian in China in the near future.
Over the past few years, demand for the product is witnessing significant
growth in the countries, including U.S., U.K., Italy, Germany, Belgium,
Luxembourg, and Russian Federation, owing to the health benefits
associated with the product.

5. Malaysia Durian Farm Yield per year

Durian exports enjoy higher prices even though an additional 5%
import tax is levied. Wholesalers, private traders and FAMA are able to
penetrate the export market if they can supply in good quality required
from other countries. However, they are required to apply for an exporting
license to enable them for export-import activities. Many are using traders
to export since they can't comply with the government regulations.
Tariff Schedules: General information: Zero Tariff for export of Durian
from Malaysia
Introduction about durian and durian garden project in Malaysia.
In 2014, we acquired more than 400 acres of land in Raub, Pahang
and began researching durian plantations. We established Durian Garden
in 2016, an integrated, systematic and digitalised commercial durian
plantation in Malaysia. Their plantation is located in Raub, Pahang and
consists of 428 acres of fertile land, the equivalent of 200 football fields.
Shareholder: Tan Sri Kong Hon Kong.
Due to its weather, topograph, soil quality and rainfall Raub is famous
for producing high-quality durians. Located near the equator, equatorial
climate, hot and humid.
Durian garden uses contemporary and efficient planting methods such
as using hypocotyl grafting allowing our experts to connect Musang King
branches to other trees as well as an automatic and fertilisation system to
ensure our trees grow healthy and strong. In addition, environmentally
12
friendly technologies reduce environmental pollution and maintain
ecological balance. Dr. Gene Goh Seau Boo
Furthermore, the professional management team at Durian Garden is
composed of around100 agricultural planters and experts. The team often
research tropical agricultural planting management genetics and
ecological organics with each member possessing at least 10 years of
experience.
Golden Harvest Reward:
*Estimated bonus payout is based on 10 units over 30 years (Payout
Period)
*Projections are based on Durian Garden’s estimates and do not
represent an actual bonus payout. All returns are not guaranteed
*There was a considerable increase of 40 % in the price of durian
between 2015 and 2019.
*Compounded Annual Growth Rate: CAGR = 8.8 % over 5 years from
2019 to 2024. price per kg will reach RM 40.
*Nirvana Exclusive Products and Enjoy rewards of up to 400% which will
be managed by RHB Trustee

6. Summary
In this research, we have demontrated why the durian industry is worth
investing in. In general, the demand for durian and its processed product
is signifiacantly rise in china and other contries. Distribution channel and
policies or agreement between contries is fuled the growing industry. We
also mention a new smart method of farming and crop management to
better monitor the crop’s health, maintain the fertility of land and enhance
bottomline. Besides, there is growing tendency of an agricultural model
linking tourism, new tours and routes have contributed to make a
difference, bringing new feelings to the tourist, contributing to the effective
exploitation of strengths culture, characteristics of regions and localities. In
short, investing in durian industry is a wise choice.

13
 References
[1] Global Durian Fruit Market- Apex market research URL:
https://www.apexmarketsresearch.com/report/durian-fruit-market-
931841/#sample (visted on 03/05/2021)
[2] Optimising Thailand's durian trade – by liam o’callaghan URL:
http://www.fruitnet.com/asiafruit/article/182501/optimising-thailands-
durian-trade (visted on 03/05/2021)
[3] Durian in Malaysia –TRIDGE URL:
https://www.tridge.com/guides/durian/MY#:~:text=Durian%20trees%20that
%20reach%20the,year%20according%20to%20weather%20conditions.
(visted on 03/05/2021)
[4] Fresh Durian Market - Growth, Trends, COVID-19 Impact, and
Forecasts (2021 - 2026). Report of rearch and markets the world’s largest
market research strore ( visted on 03/05/2021)
[5] Durian Fruit Market Size, Share & Trends Report By Product (Frozen
Pulp & Paste, Whole Fruit), By Distribution Channel (Supermarkets &
Hypermarkets, Online), By Region, And Segment Forecasts, 2019 –
2025)- Maket analysis report.
[6] Fresh durian market- growth, trends, covid-19 impact, and forecast,
2021-2026) –Modor Intelligence
[7] Global No.1 Business Data Platform – Planted areas for durian crops
in Malaysia from 2013 to 2019 URL:
https://www.statista.com/statistics/1000900/malaysia-planted-areas-for-
durian/ (visited on 03/05/2021)

14