MAINBOARD-LISTED HLH Group's wholly owned subsidiary, HLH Agriculture (Cambodia) Co, has inked an agreement with Tidecom Technology Co, a China-based manufacturer of specialist equipment for food and agriculture products, to buy US$2.23 million worth of equipment to process cassava starch in Cambodia.
The equipment will be used to set up a new production line to produce up to 120 tonnes of cassava starch per day for the export market.
"The setting up of the cassava production line is part of our overall strategy to extend our agricultural production chain from farming to harvesting and processing," said HLH Group deputy chairman and chief executive Johnny Ong in a statement.
"This will help us open new revenue streams. We believe that there is a ready market for high-quality cassava flour for both domestic and industrial uses," he said, adding that the firm expects to recoup its investment in less than five years.
The production line, to be located in HLH's plantation in Cambodia, is scheduled to be operational by the next quarter.
HLH's current joint-operation partner, Zhong Fu International Investment (Cambodia), will operate the new production line.