FDI boom to help offset slow local sales
Amata Corporation, a major industrial-estate developer, will shift its focus to industrial-land development in Vietnam since the outlook for foreign investment in Thailand remains dim. President Viboon Kromadit said the company was conservative in setting its sales target this year after its performance last year fell short of expectations.
The SET-listed company posted a net profit of 780 million last year, well below the 1.05 billion it earned in 2005.
Net profit fell due to a slowdown in the real-estate business although gross profit margin rose to 53.87% last year from 48.13% in 2005 due to better controls on land-development costs.
The company has sold 160 rai of developed land so far this year but has to work harder to lure investors.
''I hope a general election will be held as soon as possible to boost investors' confidence,'' he said.
Commenting on a recent survey by the Hong Kong-based Political and Economic Risk Consultancy which ranked corruption in Thailand a notch worse than in Vietnam, he said the ranking was unacceptable, considering his experience in Vietnam over the past 10 years.
''But this point should not matter much to investors. There are many other emerging countries in which corruption is a more serious problem [than in Thailand] yet they attract higher foreign direct investment (FDI),'' he said.
He hopes that the FDI boom in Vietnam will help Amata achieve the sales target of 60 hectares, or 375 rai, this year.
The company plans a roadshow for 93 Thai investors, Vietnam's prime minister and cabinet members in order to present its project.
''We plan to develop the project using the same model as in Thailand. Currently, we run three businesses _ industrial land for sale, factories for rent and facilities. We plan to start with developing factories for rent in Vietnam this year instead of relying on industrial land leases only,'' Mr Viboon said.
Amata Bien Hoa Vietnam operates an industrial estate on 700 hectares, 200 hectares of which are unoccupied. He hopes all developed land would be sold out over the next few years.
The company has also submitted a proposal to Vietnamese authorities to expand the existing project by another 20 hectares or 120 rai to include residential projects and commercial areas.
As well, a feasibility study for another massive project in Vietnam will be conducted with a total land area of 20,000 rai.
Mr Viboon declined to talk about the target for domestic sales. Amata has revised its investment budget policy for the second time. Earlier the company revised down the budget to one billion baht from two billion baht set originally. However, the company now decided to raise the budget to two billion baht again for developing ready-built factories for rent, residential and commercial projects.
Shares of Amata closed yesterday on the Stock Exchange of Thailand at 11.10 baht, unchanged, in trade worth 8.72 million baht.
Source: Bangkok Post by Busrin Treerapongpichit
Thursday March 15, 2007