Customers delay projects, expansion
Amata Corporation Plc expects negative sales growth this year as the growing security problems have caused foreign investors to delay purchasing land. Viboon Kromadit, Amata's president, said the deadly New Year's Eve bombings would seriously hurt foreign direct investment, as many investors have delayed putting money into projects, including industrial land purchases.
''After the bombing, we have already lost one big customer, First Solar, to Kuala Lumpur,'' he said. ''And now we have 10 deals indefinitely postponed. The security issue is the big question mark among potential foreign investors.''
First Solar, a joint venture between American and European investors, had planned to buy 200 rai of land from Amata.
Although newcomers may be expected to pull out in the face of rising political instability, Mr Viboon said that existing clients were also putting off expansion plans.
He said the government should quickly address the security problem or the investment situation will worsen.
''I would like to persuade those who are behind the incident to stop this political game as the country as a whole is getting hurt,'' he said.
Holley Industry Group, the company's Chinese partner, also announced that it would delay plans to develop a factory-for-rent project in Amata's industrial estates.
Amata initially forecast that land sales this year would grow to nearly 1,500 rai from about 500 rai last year. However, Mr Viboon said, the target would not be reached in light of the security problems that have arisen.
In 2006, Amata's revenue was initially expected at about two billion baht. Of the total, 30% would come from services and the majority from land sales. Formal results will be announced to the Stock Exchange of Thailand next month.
However, as the projection is not steady, the company will focus more on service income this year. Subsidiaries such as Amata Water and Amata Facilities will try to launch more product lines to generate additional income this year.
Amata shares closed yesterday at 9.90 baht, down 1.50 baht.
Source: Bangkok Post by Krissana Parnsoonthorn & Busrin Treerapongpichit.
Wednesday January 10, 2007