Industrial land in East set for steep rise
The prices of land banks in the Eastern part of the country are likely to rise from Bt2 million-Bt3 million per rai last year as flooding that hit the manufacturing base in the Central part are forcing some factories to relocate to new destinations, said
Industrial-estate operator 304 Industrial Park, located in Prachin Buri province, expects to sell more land in 2012, tripling its land sale target from 2011 to 1,800 rai this year. Eight Japanese companies yesterday agreed to purchase land in this industrial park, four of whom signed land purchase contracts with 304 Industrial Park yesterday at the BOI Fair 2011.
Atchaka said the severe flooding in the second half of last year had pushed a number of investors that want to remain in Thailand to relocate to the eastern part of the country. This trend has influenced land-sale prices both inside and outside the industrial estate in this part of Thailand. The average land sale price of Bt2 million-Bt3 million per rai currently, which is now more expensive than those in the Central, is likely to further soar.
Although the demand for industrial land in the eastern part of Thailand is increasing, vacant land space in that region is limited and more expensive. The BOI, however, wants the investors to remain in their existing manufacturing bases.
Watcharain Nisagornsen, chairman of the board of 304 Industrial Park, said the company targeted tripling its land sale this year to 1,800 rai with a combined value of Bt3.6 billion. It is confident that Thailand remains attractive to foreign investors, and its industrial park is located in a suitable location – near Suvarnabhumi Airport and Laem Chabang Port, and Bangkok. The advantage of 304 Industrial Park is that it is located in an area safe from flooding, and the company sees this as the main factor in boosting its land sales this year.
304 Industrial Park has 17,000 rai of land, of which 9,333 rai has already been developed, while 7,667 rai is under development. It has sold 5,774 rai of land so far, accounting for 62 per cent of developed land.
The company yesterday signed land-purchase contracts with eight Japanese companies with combined land of nearly 300 rai, worth Bt5 billion. The Japanese clients are Canon Prachin Buri (Thailand), Nicco Machine, Northland, Sanwa Metal, Sato Press, Kyowa GMB, Tago, and Y-Tec.
Kenji Koito, chairman of Siam Taga Precision, said the company had relocated from the Rojana Industrial Park, Ayutthaya province, as it fears the location could be flooded again. It had invested in Thailand in 2011 by leasing a factory in Rojana Industrial Park and planned to commence operations in October, 2011. The flood waters that hit Ayutthaya province last year inflicted a Bt36-million loss on the company. The parent company of Siam Taga Precision decided to relocate to another province and invest in its own factory. The company has invested roughly Bt800 million at the new manufacturing facility in Prachin Buri province, covering 11 rai of land. It will use one-fourth of this area to set up its first plant to produce parts supplied for brakes in the automotive industry. The new factory is expected to start operations in September this year.
“We decided to remain in Thailand as we have to supply parts to our clients, which are in this country. To have the production here will help us reduce the transportation cost from Japan to our clients. Our products are used to produce brakes supplied to almost all carmakers in Thailand. We also believe that Thailand will maintain its position as the automotive hub of the region. In the future, Thailand will be the second manufacturing base for our company with a capacity of 50-60 per cent of that in Japan,” he said.
