Growing durian in Laos brings high profits to Dak Lak Rubber

The durian business has become a superior investment for Dak Lak Rubber Investment Joint Stock Company (UPCoM: DRI), compared to other crops such as rubber or cashew.

Farmers in Dak Lak harvest durian - Photo: THE THE

Dak Lak Rubber Joint Stock Company (Dakruco), the enterprise that owns more than 60% of DRI's capital, has just announced its business plan for 2025.

In 2025, DRI expects to harvest 640 tons of durian, with an average yield of about 62 kg per tree. The company owns approximately 30 hectares of land belonging to Dak Lak Rubber Company Limited in Laos (Daklaoruco).

Dakruco's management predicts that the cost of durian per kilogram next year will be 30,596 VND, and each ton of this fruit could sell for more than 50 million VND.

DRI's durian sales revenue in 2025 is projected to exceed 32 billion VND, while total costs will only be around 19.6 billion VND.

Laos is currently the largest overseas investment market for Vietnamese businesses.

According to the Lao Ministry of Planning and Investment , there are approximately 417 investment projects from Vietnam in Laos, with a total approved value of over 4.9 billion USD.

Of that amount, approximately $680 million was invested in agricultural projects.

According to the 2023 annual report, DRI's durian orchard is planted with the Dona variety and will begin harvesting in 2024, with an estimated annual yield of approximately 300 tons.

Although durian is the "youngest" product contributing to the company's overall business results, it has already become a highly profitable product for DRI.

In the third quarter of 2024, this fruit accounted for approximately 12.4% of net revenue but contributed up to 20% of the company's gross profit.

In the last quarter, durian brought in nearly 17.7 billion VND in revenue for the company, while the cost of goods sold was only about 5.5 billion VND; meaning that for every 100 VND earned from durian, the company made a profit of nearly 70 VND.

Furthermore, rubber latex revenue during the period reached 125 billion VND, while the cost of goods sold was nearly 78.8 billion VND. This means that for every 100 VND earned from rubber, the company made a profit of nearly 37 VND, significantly lower than the durian segment.

Meanwhile, the banana farming segment was not profitable. The company incurred a loss of 43 million VND from banana sales in the third quarter of 2024, with revenue reaching 472.6 million VND, while the cost of goods sold was 9% higher.

According to its 2023 annual report, DRI's management stated that the company had removed more than 10,000 banana trees to create space for durian orchards.

Revenue and total cost plan (rounded) for DRI's crops in 2025 - Source: DAKRUCO

According to data from the General Department of Customs, in the first 11 months of this year, Vietnam's durian exports reached approximately 3.1 billion USD, an increase of 44% compared to the same period last year.

This type of fruit is predicted to account for nearly half of the country's total fruit and vegetable exports this year.

In 2025, DRI's total revenue is expected to reach nearly VND 613 billion (primarily from the rubber segment) and after-tax profit of nearly VND 110 billion.

The company's rubber plantation area for exploitation next year is expected to exceed 8,200 hectares, with an average yield of approximately 1.65 tons per hectare.

Dakruco's management estimates the cost of goods sold per ton of finished rubber for DRI next year to be $1,350 and the average price of latex to be around $1,695 per ton.

Dakruco continues to implement its plan to reduce its ownership stake in DRI.

Most recently, Dakruco issued a resolution to sell over 18.1 million DRI shares through order matching and/or negotiated transactions on the stock exchange, with a starting price of VND 14,300 per share.

This transaction is expected to take place from December 19, 2024 to January 17, 2025. If the transaction is completed as planned, Dakruco will only own approximately 36% of DRI's capital.

Source: https://tuoitre.vn/trong-sau-rieng-o-lao-mang-ve-lai-cao-cho-cao-su-dak-lak-20241228123601731.htm