Hemaraj boosts full-year sales target after Q1

“This prompted us once again to increase the 2012 land sales target to 2,000 rai from 1,500 rai budgeted and 1,700 rai increased earlier this year,” David Nardone, president and chief executive officer, said yesterday.
The company is interested in expanding its core business to Indonesia to cash in on trade liberalisation under the Asean Economic Community (AEC) in 2015, thanks to the huge population and attractive automobile market there.
Myanmar, however, is at an early stage of industrial development.
Many investors have established an industrial base in Thailand to sell their products in the seamless AEC market. However, they are looking beyond Asean to other countries in the Asia-Pacific region such as China and India that have free-trade agreements with Asean members. Many multinational companies, especially in the automobile industry, have moved their manufacturing facilities to Thailand as a good location for cost competitiveness and market access.
Hemaraj sees 2012 hitting another record level with increases of 40-50 per cent in operating revenue, 60 per cent in ready-built factories and warehouses for rent, and 20 per cent in industrial estate utilities.
The company’s annual shareholders’ meeting approved the payment of a final dividend of Bt0.03 per share, bring the total dividend for 2011 to Bt0.055.
Last year, the company posted strong results in all areas of business, broadened product and revenue sources and continued investments that will strengthen its future.
In 2011, customer investment from the auto and industrial-equipment industries and notably from Japan resulted in industrial-estate sales of 1,670 rai (267 hectares), with Hemaraj in the leading position in the market. Sale contracts in 2011 totalled 74, comprising 49 new customers and 25 project expansions from existing customers – all record levels.
Ready-built factories in 2011 grew by 52,594 square metres or 49 |per cent from the 2010 cumulative balance.
In the first quarter of this year, the company boosted land sales with 39 contracts, 32 new customers and seven project expansions from existing customers. More than 60 per cent of the customers were Japanese and more than 33 per cent were automotive.
Also in the first quarter, ready-built factories grew by 13,694sqm or 9 per cent from last year’s balance. About 14,000sqm were also pre-leased or pre-sold.
Hemaraj Logistics Park 1, located on new Highway 331, has two units completed, while seven buildings will be completed by midyear.
The development of Hemaraj Logistics Park 2 in Hemaraj Eastern Seaboard Industrial Estate will start this month and will be ready for rental by November. The company forecasts ready-built factory and logistics park rentals to reach 100,000sqm for this year, up 60 per cent from last year’s balance.
The Gheco-One 660-megawatt IPP (independent power producer) plant, in which Hemaraj holds 35 per cent, will start operating this month. Hemaraj is pursuing participation in up to eight SPP (small power producer) plants with a 25-per-cent stake in each project. Hemaraj will invest Bt2.6 billion to Bt2.9 billion in the eight power projects, which will be processed within three years.
In March, Hemaraj Energy, a subsidiary of Hemaraj Land And Develop-ment, entered a shareholder agreement with GJP Holding to invest jointly in Gulf JP NLL Co (GNLL), with Hemaraj holding 25.01 per cent. GNLL is investing a total of Bt5.5 billion to develop a 126MW SPP project now under construction at Hemaraj Rayong Industrial Land to supply power to the Electricity Generating Authority of Thailand and industrial estate customers.
“While foreseeing broad growth in 2012, the investment policy of Hemaraj will continue in core business areas – industrial estates, utilities, power and properties,” Nardone said. “We see an accelerated demand for ready-built factories for rent, new logistics parks and an increase in utility capacity.
“Thailand is attractive to investors in automotive and other industries due to cost, currency and market access, resulting in increased industrial estate demand.”
The government’s hike of the minimum daily wage to Bt300 will have an impact on small and medium-sized enterprises rather than big multinationals, he said.
Because of the increase in labour costs, many companies have decided to move out to other low-labour-cost countries. However, many of those countries still lack readiness in terms of basic infrastructure, transport, skilled labour and supporting infrastructure such as suppliers of parts and materials, he added.