Flushed with success, WHA plans ambitious digital transformation

Jareeporn Jarukornsakul, chairman and group CEO of WHA Corporation, said the company had chalked up 28 per cent revenue growth in 2021 despite the challenging environment.

“Last year, WHA's revenue and share of profits amounted to 12 billion baht, with total assets reaching 83 billion billion, and credit rating maintained at A-,” she said.

“Of the total revenue and share of profit in 2021, 48 per cent came from the logistics business, 26 per cent from the industrial estate business, 25 per cent from utilities and power business and 1 per cent from the digital business."

She expected normalised total revenue and share of profits to hit 21 billion baht in 2026, 1.75 times higher than in 2021.

The company is expected to maintain high earnings before interest, tax, depreciation, and amortisation (EBITDA) margin of over 40 per cent, and interest-bearing debt (IBD) to equity ratio at lower than 1.2 times, she added.

“Despite another year marked by a challenging environment, with the pandemic restricting travel possibilities for our customers and international investors, we were able to achieve remarkable growth while maintaining our strong financial position and financing capability,” she said.

“To further sharpen WHA’s competitive edge, we are implementing a digital transformation with a two-fold objective: Firstly, we aim to deliver better customer experience. Secondly, through digitalisation, we are fast forwarding to high levels of operational excellence.”

Outlook for 2022 and beyond

With digital transformation at the core of WHA’s businesses, Jareeporn said 33 digital projects were launched in 2021, spanning all areas of the company’s businesses. WHA aims to utilise digital technologies to further enhance the reliability and efficiency of its operations and differentiate its offering.

“In fact, WHA Smart Eco-Industrial Estates are already raising the bar in terms of digitalisation, with digital technologies functioning in virtually all activities, ranging from communications, mobility, security and safety, environment control, and water production and waste treatment,” she said.

“The next step of WHA’s Digital Transformation will consist of using technology to introduce new income streams from innovative products and services and use data as a source of competitive advantage. As part of its road map, WHA targets to be a tech company by 2024.”

Jareeporn said the strategy of WHA's four core businesses are:

1. WHA Logistics will pursue its expansion in Thailand while seeking new opportunities in Vietnam.

WHA Logistics aims to further grow its geographical footprint and capture new demand in strategic locations in the Eastern Economic Corridor (EEC) provinces (Chachoengsao, Chonburi, and Rayong), in addition to its established and strong foothold in the Bangna-Trad area.

WHA Logistics product portfolio will be enlarged from built-to-suit facilities and general warehouses to include smaller-scale facilities to cater to the needs of smaller enterprises and SMEs and capture this growing segment. Internationally, opportunities will be prioritised to capitalise on the robust demand and to leverage on existing WHA capabilities in Vietnam.

Existing and new strategic long-term partnerships will be developed with regional and global players, focusing on high-growth industries such as e-Commerce, healthcare, and consumer products.

To further enhance the competitiveness of its products and services, smart technologies and innovations based on AI, IoT, Big Data, automated systems and robotics will be favoured, while opportunities in Metaverse, quantum computing and green transportation will be actively explored.

WHA Logistics will pursue its expansion of WHA Office Solutions. Equipped with six prime office locations with full facilities and superior design in Bangkok and Samut Prakan provinces, WHA will target tenants ranging from early-stage startups to established corporations.

2. WHA Industrial Development (WHAID) will cement its leadership in Thailand, enlarge its product offering and widen its presence in Vietnam.

WHAID has more industrial estates in its pipeline over the next five years.

In 2022, the plan includes the expansion of WHA Eastern Seaboard Industrial Estate 4 (+580 rai) with construction that started in the fourth quarter of last year, as well as the construction of the first phase of WHA Industrial Estate Rayong (1,100 rai), in a joint venture with IRPC, scheduled to start end-2022.

WHAID will pursue its efforts to enlarge its product offering to increase recurring revenue and reduce reliance on land sales. The supply of nitrogen gas by BIG WHA, a joint venture with Bangkok Industrial Gas, already operational at Eastern Seaboard Industrial Estate (Rayong), will expand its product offering to include other gases, as well as its geographical coverage to other industrial estates.

WHAID will leverage on its experience developing TusPark WHA, an incubation and innovation centre for startups, which is already in operation near Chulalongkorn University, to move towards higher value estates or properties.

WHAID will also explore business opportunities in line with net zero and sustainability trends.

In Vietnam, WHAID will build on its initial success of the Nghe An project to broaden its presence on a national basis. Due to increasing customer demand, WHAID plans to accelerate the development of its next phases, including the construction of phase 2 (2,200 rai, or 352 hectares) scheduled to start in the first quarter of this year. When fully completed, including phases 1, 2 and subsequent expansions, WHA Industrial Zone - Nghe An will comprise a total of 11,550 rai (1,848 hectares).

Following the signing of a memorandum of understanding in December 2020 with Thanh Hoa Provincial People’s Committee, WHAID will start the development of the two new industrial zones. “WHA Smart Technology Industrial Zone – Thanh Hoa”, with its proximity to the province’s main city, is poised to capture demand from high-value technology investors, while “WHA Northern Industrial Zone – Thanh Hoa" strategically located near the existing Nghi Son petrochemical complex, will target intermediate and downstream industries.

Land relocation and construction are expected to commence in 2023 and 2024, respectively.

3. WHA Utilities and Power (WHAUP) will continue to grow its utilities business inside and outside the group’s industrial estates, both in Thailand and Vietnam. Innovative renewable energy solutions, in particular solar energy, will be developed and initiated.

For utilities, WHAUP will leverage its expertise to offer value-added water products such as wastewater reclamation and demineralised water to industrial customers both inside and outside WHA industrial estates, such as other industrial land developers, municipalities, and communities.

It also plans to grow vertically by exploring alternative raw water sources to enhance water reliability and reduce raw water purchase cost. It also operates a ‘Smart Utilities Services Platform and Innovative Solution’ for customers in WHA industrial estates.

In Vietnam, where it owns equity stakes in two water companies, WHAUP will continue to explore new projects as well as merger and acquisitions opportunities. This year, utilities sales and managed volume is expected to reach 128 million cubic meters in Thailand and 25 million in Vietnam.

For power, WHAUP will continue to develop renewable energy solutions and increase its capacity, from solar rooftop and waste-to-energy projects, with a cumulative target of signed Power Purchase Agreements (PPA) of 150MW by the end of 2022.

It will continue to introduce innovative technologies such as a peer-to-peer (P2P) energy trading system and a Smart Microgrid in industrial estates. WHAUP’s 2022 total signed PPA is expected to reach 700 equity MW.

4. WHA Digital Platform will empower WHA Group’s digitisation by continuing to lay digital infrastructure and spearheading the implementation of digital technologies across all business hubs.

WHA Digital Platform will broaden its product range to cover telecommunication towers inside WHA’s industrial estates. This will include the construction of telecommunication towers and base stations as well as renting spaces on these towers to telecom operators to install necessary devices for receiving and broadcasting network frequencies including 3G, 4G and 5G. Data centres are being monetised.

WHA Digital has been set up as a new company to lead the group in digital transformation and implementation of digital innovations and technologies across business hubs. WHA Digital is looking at startups, especially homegrown companies, as key technology partners.

In line with this strategy, Jareeporn said the group planned to invest 50 billion baht over the next five years from 2022 to 2026.

She explained that the target investment budgets for both WHA Logistics and WHAID amount to 18 billion baht each. In addition, WHAUP will invest 10 billion baht. Finally, 4 billion baht has been budgeted for WHA Digital to invest in startups and new technologies and propel the group to become a tech company.

“We look forward to 2022 with confidence and optimism, as we expect the restrictions due to the pandemic to be lifted, while experiencing rapid economic recovery,” she said.

“For the next five years, we will continue the digital transformation across all our businesses, by utilising smart technologies and innovations to boost our operations further.

“Our digital readiness and ability to adopt new technologies, as manifested in our investments, will have a strong impact on our company’s ability to welcome investors, and therefore to transform the socio-economic status of the country, and drive the government’s Industry 4.0 policy,” she said.