Pruksa goes for restructuring

Leading property firm Pruksa Real Estate has restructured its business from a functional system to a cross-function system to reduce business losses and speed up the business process to maintain sustainable growth following disruption from floods last year, CEO Thongma Vijitpongpun told The Nation in an interview early this week. 

The company also will focus on re-branding its corporate and product branding with quality and design to match customer demand.

“When home-buyers think about a Pruksa residence that will be like buying a Toyota or Honda that has functionality and reasonable price,” he said. 

He added that the company had started to restructure its business after last year’s flood because its financial results were impacted. 

“Our goal is how to drive our business towards sustainable growth rather than unstable growth when faced with a crisis,” he said. 

Following its new business goal, Thongma said that he had started to restructure the management system from a functional system in which each unit confined itself to its own responsibility and focused merely on its assignment. The new system, however, will be cross-function where each unit has to cooperate according to the supply-chain system. This will speed up the process of resolving problems. The project delivery to the customer also will be on time. 

Earlier, the company had 11 business units under three chief business officers – Prasert Taedullayasatit, Metha Chanchamcharat, and Piya Prayong. They focused on developing residential projects. 

The company has three supporting systems: manufacturing procurement, corporate marketing and construction; accounting and financial; corporate service officers who focus on human resource. They are under the CEO and the next two top tiers in the management. 

The company has now restructured by maintain 11 business units under three chief business officers but revised the supporting system by recruiting a new executive vice president, Dr Tirachai Pipitsupaphol, for the supporting business unit such as corporate marketing, procurement, and supply chain system. 

Thongma said that under the new structure, the working system has to incorporate all of business units together in solving business issues.

“We will start to use the new system this month and will be fully implemented this year but it will be a step-by-step change. This will help us to reduce problems in developing residential units for sale and create sustainable growth,” he said. 

After restructuring its business management process, Thongma said the company will focus on building a brand that would be synonymous with quality and design in the minds of buyers.

“We accept that we got many complaints when the floods hit the country last year. We tried to quickly respond to our customers’ demands and that challenged us to revise our corporate and products brand,” he said. 

Following the mission to build a strong corporate and product brand, Thongma said the first step is restructuring of its construction process, beginning in 2010, by using the Real Estate Manufacturing system (REM). For example, labourers who have expertise in laying floor tiles have to lay floor tiles only, from unit to unit. This will reduce the error from the construction process. 

“We started to study this system two years ago, and started to use it in about 10 per cent of our construction process. We found that it showed less error when compared with the older system,” he said.

He added that the company targets to use the REM system for about 50 per cent of its total construction process this year. This will reduce the error from construction and also speed up the building process so as to be able to deliver the residences to its customer on time. 

Meanwhile, the company will focus on design by using both in-house architects and also outsource to architect firms to redesign its residential projects to match with customer demand. 

“We will have a variety of designs to match with the different demand in the market,” he said. The company has also revised its aftersales service to respond quickly to customer complaints.

“We accept that we cannot build all residences free of any problem, but we promise that we will respond quickly to complaints and fix the problem as soon as possible,” he said.

Meanwhile, the company has continued to maintain its sales target of Bt100 billion in the future but it will be delayed from its earlier target of 2017.

This year, the company targets total revenue of Bt26 billion and pre-sales of Bt29 billion. The company showed revenue of Bt23.4 billion and pre-sales of Bt25.5 billion last year.

The company’s investment plan overseas, which was suspended early this year, will be continued in the second half of this year. Destinations including Vietnam and India, while, it has withdrawn its investment in Maldives after a loss of nearly Bt100 million.

Thongma added that the company was also interested in expanding investment in Asean countries such as Indonesia, the Philippines and Malaysia. 

“The Asean Economic Community is a business opportunity for our business expansion and also a challenge as investors from AEC will expand their investment in Thailand,” he said.