Chinese agricultural company Dongfang Modern Agriculture has made a significant addition to its citrus portfolio through the purchase of a 544ha navel orange plantation in Xingguo County.
The site is near the company's existing plantations in the Ganzhou City district of Jiangxi Province, one of China's premier fruit growing regions.
The purchase also included a 380ha camellia plantation, with the total cost coming in at approximately RMB486m (US$71m).
Dongfang Modern’s chairman, Hongwei Cai, said the acquisition of mature, fruit bearing plantations would strengthen Dongfang’s position as a market-leading fruit producer in China.
“The acquisition of the new navel orange plantation more than doubles our operations in this market,” said Cai.
“The Gannan navel oranges produced by Dongfang are sweet and pipless with high juice content, and attract a premium price. We operate in high-growth markets and seek to benefit from the increasing demand for high-quality oranges by consumers in China's tier-1 cities.”
Dongfang Modern listed on the Australian Securities Exchange (ASX) in 2015 and has publically expressed its desire to explore investments in Australia that are complementary to its business strategy.
Last year the company purchased tangerine and camellia plantations in China's Xunwu County and attracted fresh investment from Hong Kong-based tycoon Hung Cheung.
Cai said the company’s strategy is to purchase more fruit-yielding trees to increase market share, which in turn will deliver more profit.
“We acquire under-performing fragmented plantations, and intend to apply modern cultivation and tree husbandry methods in order to optimise yields ahead of the harvest season commencing in September 2017,” Cai explained.
“We expect these new acquisitions will increase gross profit by over RMB46m (US$6.7m) for 2017 with further increases expected in following years. The acquisitions put us in a strong position to exceed our record 2016 crop.”