Some win, some lose from crisis

INDUSTRIAL PARKS
Seven industrial estates in the Central provinces of Ayutthaya and Pathum Thani were seriously damaged by the worst flood in a generation. Even the country’s first such project – Nava Nakorn Industrial Estate – could not avoid the natural disaster.
But the massive inundation in the Central region proved to be a blessing in disguise for industrial estates in the East, which was safe from flooding.
Viboon Kromdit, chief operating officer of Amata Corporation, the operator of Amata City and Amata Nakorn industrial estates, recently said the company had adjusted its land-sales target for next year to more than 2,000 rai (320 hectares) from 1,800 rai thanks to manufacturers relocating from the Central region to the East.
Its main customers remain manufacturers in the automobile, agriculture and chemical industries.
Not only new customers, but also those already in its estates are in an expansion mode. Amata Corp now eyes Bt5 billion in revenue next year, up from Bt4 billion expected this year.
The company is in talks with a carmaker that is considering purchasing a site in its estate.
Hemaraj Land and Development is another industrial-estate developer in the East that is likely to benefit from the relocation trend. The company has reiterated its land-sales target of 1,700 rai this year. Auto-makers are its main customers.
The company has 7,300 rai up for sale over the next five years and is increasing land available for lease to 60,000 square metres next year from 55,000sqm originally planned in response to the movement of factories in the floodplain to the Eastern Seaboard.

AUTOMOBILES
By escaping the severest flood in 70 years, Nissan and Mazda could benefit from the crisis after the seven industrial estates, some housing major auto and parts makers, were submerged.
Nissan scored the highest number of orders during the 28th Thailand International Motor Expo this year, at 4,600 units. Last year it ranked fourth. Mazda rose from fifth to second with 4,500 units.
Nissan’s assembly plant is in Bangkok’s Bang Na districe, while Mazda’s plant is in Rayong province.
With competent crisis management, Nissan, although its plant was not swamped, was able to resume operations after resolving parts-supply problems. It also premiered a new eco-car called Almera.
Mazda at the expo launched a campaign guaranteeing that it could deliver all orders.
This year, Toyota, the market leader, and Honda did not take orders at the show. Toyota just resumed operations on November 21 and has to clear its back orders. Honda does not know when its plants in Ayutthaya can reopen.
Mazda Sales (Thailand) Co sold 4,523 vehicles at the Motor Expo, its best result since it joined the annual year-end sales event.
Of the orders, 3,797 were for the Mazda2. Orders for the all-new BT-50 pickup, which will be unveiled next month, totalled 318 units.
Choichi Yuki, president of Mazda Sales (Thailand), said the figures reflected the company’s brand-building strategy. Its order book nearly doubled its target, particularly for the sporty city car Mazda2.
The company will also boost production capacity next month.
 
FOOD AND BEVERAGES
The industry took a big hit, as many factories had to be temporarily shut down in flooded areas.
More than 1,300 manufacturers, accounting for 15 per cent of all food plants in the country, were trounced by the run-off.
The food industry is expected to lose Bt50 billion because of the flooding. The major problems are disruptions to logistics and shortages of raw materials and packaging.
However, many local manufacturers have adjusted their strategy to cope with the crisis and have turned it into new opportunities.
Some manufacturers have enjoyed higher sales, despite the floods, as consumers were left with little selection of brands and products to choose from.
Thai Beverage, brewer of Chang beer, whose major breweries in Bang Ban and Wang Noi in Ayutthaya were running at reduced capacity, has seen a great opportunity to outsource its beer and other beverages to manufacturers in the region.
Oishi Group, a subsidiary of ThaiBev, has subcontracted companies in Japan, Taiwan and Singapore to produce its green tea to prevent any product shortages in the local market, as its own factory in Ayutthaya was incapacitated by the flood.
 
HOTELS
Four- and five-star hotels in Bangkok as well as those in the provinces welcomed more business in October and November.
The Thai Hotels Association (THA) reported that average occupancy rates at mid-market hotels in the capital jumped more than 30 percentage points during the inundation as many residents evacuated from flooded homes.
Hotels such as the Grand Four Wings, Asia, Twin Towers, Novotel on Siam Square and Golden Tulip Sovereign Bangkok had few rooms to spare.
But business at luxury and business hotels dropped because of fewer visitors.
Hotels and properties in major cities outside Bangkok, particularly Pattaya, Hua Hin, Cha-am, Kanchanaburi and Chon Buri, as well as in Nakhon Ratchasima’s Khao Yai area, also gained a lot more long-stay guests, mostly locals.
However, the whole hotel industry experienced a decline of about 15-20 per cent during the flooding. International arrivals to Bangkok alone plunged by 30 per cent from November to mid-December.
Despite many operators receiving more business, income subsided to the off-season level because THA members were asked to reduce rates to assist residents.
Some hotels are looking forward to a return of leisure visitors and business travellers next year.

ENERGY
Compared with other industries, energy seemed to suffer less from the floods, but companies did not remain complacent.
PTT has assigned businesses in its group to work out measures to deal with possible natural disasters in the future. All of its business units also signed a deal to provide support to the other units in case of an emergency.
About 100 of PTT’s auto-fuel stations suspended sales after the flood, which caused property damage of about Bt100 million. Its sales of natural gas to industrial parks also sagged after seven industrial zones were submerged.
Sarun Rungkasiri, senior executive vice president for the oil business, said the petrol stations that PTT will set up in the future would be designed with anti-flood measures.

PROPERTY
Most developers have had to lower their financial forecasts as residential demand has disappeared this quarter.
However, LPN Development remains confident in its growth projections thanks to the new interest in condominiums.
LPN is the leader in developing condos priced lower than Bt2 million.
While most firms delayed project launches this quarter, LPN still plans to start selling three condo projects worth Bt2.2 billion this month.

RETAIL
Many local companies had stores and warehouses in the flooded areas. Even big shopping malls in central Bangkok, which was not reached by the flood, reported a big decline in visitors due to sodden shopping sentiment. Foreign tourists were also warned by their governments not to visit Thailand at the time of flooding.
However, many hypermarkets as well as shopping malls upcountry and out of the floodplain, such as Hua Hin, Chon Buri and Pattaya, saw sales skyrocket during the crisis. This is because flood victims had to evacuate to drier locations, especially tourist destinations.
The recent floods prompted major retailers to adjust their preventive measures, especially in the area of logistics and distribution, to cope with such national calamities, which may strike again in the future.Tesco Lotus’ distribution centres were affected, however, all of them are now up and running. It has also established temporary distribution hubs throughout the country.