KUALA LUMPUR (Nov 6): Direct selling company DXN Holdings Bhd (KL:DXN), which sells health and wellness products, said on Wednesday it plans to charter a Gulfstream G550 corporate jet from its major shareholder that will cost up to US$6.60 million (RM29.06 million) a year to expand its global business.
In a filing on Wednesday, DXN said its subsidiary DXN Aero Nautic Sdn Bhd has entered into an aircraft charter agreement with charter carrier Luxaviation San Marino Srl and charter manager ExecuJet Asia Pte Ltd with a minimum of 300 flight hours for up to 12 months.
The aircraft is owned by LSJ Logistics Ltd, a wholly-owned unit of LSJ Global Sdn Bhd, which is also a major shareholder of DXN, making the deal a related party transaction. LSJ Global, which holds 68.12% in DXN, is controlled by DXN executive chairman and founder Datuk Lim Siow Jin.
DXN said the company was given two pricing options for the lease: US$6.60 million for 12 months, or US$6.15 million in total if the jet is operated by DXN's own pilots.
“The company intends to employ its own pilots to operate the aircraft,” DXN said, adding it currently has two pilots under its employment.
The leasing will be paid in 12 equal monthly installments, which will be satisfied in cash and fully funded by the group's internal funds.
“The corporate jet is dedicated to supporting our key management team and high-performing members who have attained ‘crown ambassador’ status, facilitating frequent travel across key cities in our overseas markets,” DXN said in a statement.
The corporate jet will enable the leadership team to efficiently engage and motivate DXN’s 4.9 million active members worldwide (as of September 2024) through in-person marketing events to drive sales growth. “The corporate jet provides greater oversight of DXN Group’s manufacturing facilities and operations worldwide, strengthening our capacity to drive growth across regions,” it added.
The majority of DXN's sales are generated outside Malaysia, with the Latin America market contributing 57.9% of the group’s total sales of RM1.90 billion for the financial year ended Feb 29, 2024 (FY2024), followed by the Asian market, which contributed 25.8%, mainly driven by India.
The group said it has 13 manufacturing facilities, of which 11 are located outside of Malaysia, with another two being constructed in Bangladesh and Nepal. The new facilities are expected to start operating by end-2024, with the group planning to add more facilities in the future.
“Given the vast distances between key locations, the convenience and flexibility of the corporate jet will streamline travel, enhancing efficiency and time management compared to commercial flights," Lim said in the statement.
Lim also said the company's business outlook in Latin America is highly promising as it prepares for expansion into Brazil. He noted that the company currently has established markets in neighbouring Peru and Bolivia, with a large base of active members.
"This new market, with a population of over 210 million, around five times larger than Peru and Bolivia combined offers significant growth potential for DXN. We have secured approval for eleven products in the Brazilian market to meet the growing demand for nutraceuticals, particularly among its expanding middle class," he added.
DXN shares closed half a sen or 0.88% lower at 56.5 sen on Wednesday, valuing the company at RM2.82 billion. The stock, listed in May last year, is down 18.12% from its initial public offering price of 69 sen.