Rhone Ma-Kulim JV appointed to develop Jemaluang Dairy Valley in Johor
06 Apr 2023
Rhone Ma Holdings Bhd said that its joint venture (JV) with Kulim (Malaysia) Bhd had been appointed by the East Coast Economic Region Development Council to develop, operate, and manage the 275.34-hectare Jemaluang Dairy Valley in Mersing, Johor.
The JV entity known as Jemaluang Dairy Valley Sdn Bhd (JDV) was formed with Rhone Ma’s 49%-owned subsidiary A2 Fresh Sdn Bhd (A2FSB).
A2FSB owns 35% of JDV, followed by 35% by Kulim, part of the Johor Corp group. Another 30% stake is held in trust by Kulim for the Johor government, Rhone Ma’s filing showed.
JDV, A2FSB and Kulim will undertake the “investment, operation and management activities” of the project, the end-to-end animal health solutions provider said.
This includes the upstream and downsteam operations of dairy cattle farming, milk processing, and marketing of relevant products, it added. The project is expected to commence in 2024.
The three parties will also be responsible for the operation and maintenance of existing fodder areas, and the development of new fodder areas within the project site for animal feed.
Further, they will develop and manage the training and technology transfer programme for satellite farmers, Rhone Ma added.
Concurrently, the three parties have inked a commercial agreement with ECER Development Council for the project. They also inked a master lease agreement with the Johor state government for the land.
The agreement entails rental payment of RM21.28 million for the 30-year lease, added with 2% of sales revenue to the state government every year, among others.
A portion of the initial investment amounting to RM1.5 million has been funded by A2FSB and Kulim, who plan to fund the remaining balance of RM39.89 million in the initial investment, Rhome Ma said.
“The JV will allow Rhone Ma to expand the footprint of its dairy farming business in the southern region of Peninsular Malaysia while leveraging the financial resources of Kulim,” it said.
The Jemaluang Dairy Valley project, a key agribusiness project under agrofood@ECER, was first announced in 2021. The project is expected to annually produce 5.4 million litres of fresh milk, leading to a 10% increase in the national production of fresh milk over three years.
Source: The Edge Markets