LKE

LKE We are Agriculture Developers of The Future

Agriculture
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  • Equity - RCPS
  • ~ up to 18.00%
  • RM 24,090,909
  • RM 2,000,000
  • RM 5,300,000
  • -
  • LKE TEMBIKAIX SDN. BHD.
  • F­-1-­2, BUKIT JALIL SIGNATURE CITY OFFICE, JALAN PERSIARAN JALIL 1, BUKIT JALIL, 57000 KUALA LUMPUR W.P. KUALA LUMPUR MALAYSIA
  • 202301045091
  • Pre-planted 320 durian trees on 5.9 Acres agriculture land backed by 40 years experienced family corporation prior to new issuance of shares
  • 70:30 Black Thorn & Musang King durian crop composition as key differentiator poised to benefit from global industry demand CAGR of 9% per annum
  • On-site IoT implementation to increase labor & operation efficiencies via predictive farm management to increase crop yield

Summary

LKE Group Sdn Bhd is a reputable agriculture developer based in Manchis, Pahang dedicated to promoting sustainable and ethical agriculture, improving the local economy, and preserving its heritage. LKE TembikaiX Sdn Bhd (LKE TembikaiX) is a recently established entity under the leadership of the founders of LKE Group. LKE TembikaiX is dedicated to revolutionizing and enhancing the farming experience and efficient plantation management via farming technology implementation and predictive management analysis, specifically focused on high-yield cash crops: Black Thorn Durians. With a rich history and a commitment to innovation, LKE has established itself as a leader in the field and a household brand in Manchis, Pahang.

Problem

1. Thai durians dominate the overall global durian market supply.
- Grand View Research (2020)[1] notes that 75.31% of global durian exports originate from Thailand, while Malaysia has a global market share of 0.64%.  

2. Inefficient plantation management due to inconsistent labor-intensive operation & remote positioning of durian plantation.

3. Intensive manual labor care is required due to the delicate nature of the durian fruit as a source of operational cost inefficiencies.

Solution

To solve the problems above, LKE TembikaiX plans to incorporate: 

Diverse Smart Farming Methodologies
Diverse smart farming methodologies for the Internet of Things (IoT) implementation within agricultural activity. This integration aims to establish standardized crop growth management, automate equipment control, and optimize labor efforts to increase production yield. 

LKE TembikaiX is confident that through these efforts, a benchmark for categorizing Black Thorn, Musang King, and other varieties, elevates it to a globally renowned and distinguished Malaysian durian brand. 

Pre-Planting As Investment Goodwill
Another key solution to LKE TembikaiX's approach to the market is the pre-planting of trees before inviting the market to invest in LKE TembikaiX's plantation. This is an inverse strategy against the current norm in the market which is to only start planting trees post solicitation of investment funds. This goodwill approach on the management team's end reduced the operational burn rate and quickened the harvest period. Thus, enabling investors to receive higher assurance and benefit from actual work done as soon as one enters the deal.

Active Community Engagement
A key market differentiation of LKE Group over other competitors lies in the strong community engagements via engagement activities held all year round to commemorate significant local festivals/events (non-nationally recognized festivals, specific to Manchis community observed festives) and to allow the local community to familiarize themselves with LKE Group as an entity and its management via open farm visitations & experiential activities for all ages.

This approach enables LKE Group to be favored and supported by the local community that it serves and enables them to gain strong community traction as compared to other durian plantation operators which adopt a closed-door approach.

Product

Crop Composition
LKE TembikaiX, focuses on the exclusive cultivation of 70% Black Thorn and 30% Musang King durians, creating a distinctive and sought-after blend. This unique plantation composition separates LKE TemibikaiX from the rest of the competition whose focus is on Musang King. 
 

Market Fit Demand
LKE TembikaiX's approach is to meet the trend instead of bucking the trend by meeting the market demand by focusing its crop production to fit the market. Agroworld (2021)[2] records Black Thorn durians demand tops Musang King durians by 2.5 times (250%). LKE TembikaiX is poised to meet the global market demand with its 70:30 ratio of Black Thorn to Musang King crop composition.  

Completed Pre-Planting As A Commitment To Goodwill
LKE TembikaiX's commitment to smart farming begins with the commitment to pre-planting. Advanced technological solutions by incorporating IoT technologies for crop management and equipment control, ensuring operational efficiency, productivity, and sustainability cannot be implemented without actual crops in place. 

In this respect, LKE TembikaiX has already planted the 70:30 Black Thorn & Musang King trees ahead of time before soliciting investment funds for actual technology & operational implementation. 


Exhibit 1: TembikaiX Actual Site (Dated: August 2023)

Exhibit 2: TembikaiX Actual Site (Dated: August 2023)

Traction

  • LKE TembikaiX commenced the planting of 320 durian trees within a 5.9-acre plantation in March 2023.
  • The first fruit-bearing is expected in March 2029 (6th year of the project).
  • Other key traction information:
    • Number of Durians in 6th year: 40 durians per tree
    • Durian Yield - Annual Growth Rate: 10% (maximum cap of 150 durians per tree)
    • Current Farm Price (as of Dec 2023): RM40 per kg
    • Farm Price- Annual Growth Rate: 9% (Source: Mordor Intelligence, 2024)[3]
    • Yearly Harvest Cycle: 2
    • Estimated Weight Per Durian: 1.5KGs

The following table outlines the revenue per durian tree based on the traction data:

Customers

Current Customers

  • Currently, LKE TembikaiX’s durian supply is distributed to closer durian collectors, mostly traders/distributors surrounding Karak, Pahang. This Cash On Delivery (COD) enables a quicker crop distribution to secure a healthier cash flow compared to other industry players.

Targeted Customers

  • Local Distribution: To distribute durians to the 3 biggest durian distributors nationwide.
  • International Distribution: To export Malaysia’s durian worldwide, in particular to China.

with larger farm crops expected to reach the market in 6 years, LKE TembikaiX is actively securing direct purchase contracts with overseas counterparts. With active efforts from the Agriculture Department of Malaysia seeking approval from the General Administration of Customs of China (GACC) to export fresh whole durians to the republic, LKE TembikaiX is expected to benefit from direct foreign market sales by the 1st harvest (The Star, 2023)[4].  

Business Model

Business model

[5 P’s of Marketing Implemented]
Product: Quality
Price: Price matching services & goods
Promotion: Advertising, Media, and Public Relations Activities
Place: Logistic, Location
People: Customer services
 

LKE Business Goals
LKE TembikaiX is dedicated to revolutionizing and enhancing the farming experience, specifically in durians. With a rich history and a commitment to innovation, we have established ourselves as a leader in the field. In addition, we are creating a distinctive and sought-after blend for Malaysian durian brands, especially the Musang King and Black Thorn.

 

Risk Management  
Cost-effective measures implemented by LKE TembikaiX were implemented by planting crops on the private land of LKE Group's founders and leased under a Tenancy Agreement. The durian trees were also planted ahead of time before the new issuance of shares as a commitment to investor's goodwill. This way, the funds raised can be completely dedicated to direct operational implementation & maintenance of the plantation with immediate effect

 

Expansion Plans
On the horizon, the acquisition of a new orchard farm, the adoption of a digitalization transformation plan, and on-site IoT environmental monitoring equipment to enable higher production yield are in consideration for future expansion.

 

Marketing Strategy
LKE TembikaiX has several social media platforms which leverage on the overall LKE Group's reach and resources to enhance LKE TembikaiX's sales revenue & reputation. Other community engagement activities such as the Durian Fun Run, press conference, Durian Fiesta, durian festival’s glamping, and buffet, which are conducted periodically also enhance LKE TembikaiX's performance.

Market

The global market for fresh durians reached a valuation of USD 24.90 billion in 2023 and is projected to experience robust growth, surpassing a value of USD 49.91 billion by the end of 2033. Anticipated industry growth is expected to maintain a Compound Annual Growth Rate (CAGR) of 7.2% throughout the forecast period from 2023 to 2033 (Fact.MR, 2023)[5].

For now, distributions are conducted locally and will soon be exported in the future.

Competition

Industry Competitors 

  • DSR Taiko Berhad
  • Newleaf Malaysia Berhad
  • Durian Capital Berhad

 

Unique Proposition

In LKE TembikaiX, what makes us different is, we adopt: 

  1. Smart farming
  2. Standard durian production management system
  3. On-site IoT environmental monitoring equipment
  4. Digitalization transformation plan
  5. Rich history with a combined 40 years of experience in the durian industry 

to ensure the quality production of durians.

Funding

Total fundraising will be RM 5.3 million. The proposed timeframe for the said fund allocation will be fully utilized within five years. The proceeds after the success of the fund-raising exercise will be utilized for profit-sharing and expansion purposes including but not limited to the digitalization transformation plan, and on-site IoT environmental monitoring Equipment. 

Vision

With a vision of a future where sustainable and efficient farming practices lead to abundant harvests and a healthier planet, LKE TembikaiX aims to be a world-class durian plantation management company

LKE TembikaiX's unwavering focus on stability, transparency, and a simplified operational model drives the business vision of Legacy for Generations.

Founders

Name: Dato' Jackky Lim Kok Eng  
Nationality: Malaysian
Age: 45
Profession: Entrepreneur
Qualification: Diploma

Past Experience:

  • Running agricultural-related businesses and developing many plots of land
  • Contributed to the Manchis economic development

Direct interests held in other companies: Connect Stones Solution Sdn Bhd, LKE Musang Q Sdn Bhd

Name: Jeremy Chin Meng San  
Nationality: Malaysian
Age: 49
Profession: Electronic Engineering
Qualification: Diploma

Past Experience:

  • Involved in many different business industries and models, setting a strong foothold in Southeast Asian countries
  • Experienced in regional business penetration in particular China, Taiwan and Japan markets.

Direct interests held in other companies: Connect Stones Solution Sdn Bhd, LKE Musang Q Sdn Bhd 

Team

Name: Terrence Ong Chee Yee
Position: Finance Director  
Nationality: Malaysian
Age: 43
Profession: Chartered Accountant
Qualification: FCCA

Past Experience:

  • Top 500 Fortune MNCs, Professional Accountancy Firm

Investment Terms

Disclosure

  1. pitchIN and its officers and staff may also be investing in this campaign
  2. Under ECF Guidelines, valuation is determined and set by the Issuer. Investors are advised to carefully peruse all investment offers and documents before making investment decisions.

 

[References]

  1. Grand View Research (2020), “Durian Fruit Market Size, Share & Trends Report by Product, By Region, And Segment Forecasts, 2019-2025.” Retrieved on 20th December 2023, Link: https://www.grandviewresearch.com/industry-analysis/durian-fruit-market#:~:text=Thailand%20is%20the%20largest%20exporter,the%20import%20of%20China%20significantly.
  2. Agroworld Dunia Pertanian (2021), “Black Thorn Demand Soars”. Retrieved on 31st December 2023, Link: https://www.agroworld.my/cn/article-details/331-article-02.
  3. Morder Intelligence (2024), “Durian Market Size & Share Analysis - Growth Trends & Forecasts (2024 -2029)”. Retrieved on 31st Jan 2024, Link: https://www.mordorintelligence.com/industry-reports/fresh-durian-market.
  4. The Star (2023), ”Agri Dept Seeking Approval To Export Durians To China". Retrieved on 10th January 2024, Link: https://www.thestar.com.my/news/nation/2023/10/08/agri-dept-seeking-approval-to-export-durians-to-china.
  5. Fact. MR (2023), “Durian Market Outlook (2023 to 2033)”. Retrieved on 2nd January 2024, Link: https://www.factmr.com/report/1127/durian-market.
  • Equity - RCPS
  • ~ up to 18.00%
  • RM 24,090,909
  • RM 2,000,000
  • RM 5,300,000
  • -
  • LKE TEMBIKAIX SDN. BHD.
  • F­-1-­2, BUKIT JALIL SIGNATURE CITY OFFICE, JALAN PERSIARAN JALIL 1, BUKIT JALIL, 57000 KUALA LUMPUR W.P. KUALA LUMPUR MALAYSIA
  • 202301045091
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