Estate developers' outlook unclear
The Nation 07 January 2010 | Nalin Viboonchart
Despite the global economic recovery, industrial-estate developers are unable to forecast their 2010 business outlook because of the unclear Map Ta Phut situation.
Some foreign investors are likely to consider Vietnam as an alternative destination for their investment, because of the weakening dong.
Viboon Kromdit, chief operating officer of Amata Corp, the operator of Amata Industrial Estate and Amata City Industrial Estate, said he could not project land sales at the two estates because both Thai and foreign investors were waiting for the Map Ta Phut impasse to be resolved.
Amata's industrial estates are located in Chon Buri and Rayong, close to the Map Ta Phut area, which is in the latter province.
Sixty-four petrochemical and energy projects in Map Ta Phut have been suspended as all parties await a solution from the four-party panel headed by former prime minister Anand Panyarachun. The panel is tasked with clearing the legal and administrative hurdles standing in the way of further industrial development in Map Ta Phut.
Following Siam Yamato's success in winning the administrative court's permission to proceed, others are elated to win a similar endorsement. PTT Group last week submitted the requests to the Central Administrative Court for a similar relaxation.
"The panel will have a clear picture for those 65 projects' investment within three months. So, Amata will wait for the clearer situation in the first quarter of 2010 before projecting the company's revenue and land sales target," Viboon said.
He added that if the committee were able to provide a good solution, Amata could possibly generate higher revenue than in 2009 because the world economy is improving and foreign investors are more confident about investing overseas.
Industrial-estate operators last year were affected by the fallout from the Bangkok airport closures in November 2008, which caused investors' confidence in Thailand to plummet. The political rioting in April was another key negative factor hitting the level of foreign direct investment during the year.
Amata Corp generated revenue of Bt1.464 billion and posted net profit of Bt183 million in the first nine months of 2009, while it enjoyed revenue of Bt4.061 billion and net profit of Bt1.192 billion for the whole of 2008.
Hemaraj Land and Development - another industrial-estate developer - booked revenue of Bt5.011 billion in 2008, but the figure declined sharply to Bt1.795 billion in the first nine months of 2009.
Industrial-estate developer Navanakorn's revenue in the first nine months of last year decreased to Bt436 million. It generated Bt736 million throughout 2008.
Viboon said Amata had been in talks with several investors, who were planning to expand their petrochemical businesses and purchase more land in industrial estates, but he realised they were waiting for a clear solution for the Map Ta Phut problem.
However, other industries such as food, automobiles, logistics, services and agricultural machinery are planning to expand their businesses this year, he added.
Nipit Arunvongse na Ayudhya, managing director of Navanakorn, said the dong's devaluation had made Vietnam more attractive for foreign investors.
Meanwhile, there are three risk factors investors will take into account before making a decision to invest in Thailand: political stability, the Map Ta Phut problem and the global economy. Investors still have to keep an eye on the US and European economies in 2010, he said.
Nipit said that although Navanakorn had been less impacted by the Map Ta Phut crisis than other industrial estates located near the area, the company was unable to come up with a target for 2010 land sales and revenue.
"We've got letters of intent from some clients, both existing ones in the automobile industry, who plan to expand their plant areas in Navanakorn's industrial estates in Nakhon Ratchasima and Pathum Thani provinces, and new customers.
"But we cannot project the company's revenue in 2010 until those clients sign contracts with Navanakorn," he said.
Nipit added that if the company could conclude the deals, first-quarter revenue was likely to be higher than its full-year 2009 income.
www.nationmultimedia.com/homeEstate-developers-outlook-unclear-30119839.html
