construction companies doing more business abroad
Investing more overseas is the trend for Thailand’s construction and property firms as they have seen business opportunities and a need to balance their portfolios.
"We have been expanding our investment abroad since 2010 as part of our aim to boost annual revenue to Bt100 billion by 2020. This is also a way to learn how to do business overseas to balance our portfolio," said Thongma Vijitpongpun, president and chief executive of Pruksa Real Estate.
Pruksa began investing in India, Vietnam and Maldives in 2010, though it has since pulled out of Maldives and suspended its investment in Vietnam but is still doing business in India.
"This is a good learning experience on how to do business overseas – what we can do and when we have to withdraw from the market. However, if we see a business opportunity, we will still expand our investment overseas, especially in Asean countries," he said.
Land & Houses, Sansiri, Supalai, TCC Land Co, CP Land and Singha Estate have also been investing outside Thailand, in the residential, hospitality, and office segments. For example, Singha Estate has taken over a hotel in Britain in a deal worth Bt2.25 billion.
This activity outside Thailand is not confined to real-estate firms; construction and industrial-estate companies are also investing abroad, especially in Asean countries.
Italian-Thai Development and Ch Karnchang were the first two construction firms to foray into Asean nations.
ITD has been constructing infrastructure in Myanmar and Laos.
Ch Karnchang is also working in Laos, on hydropower-dam construction, and is also studying planning to do business in Myanmar in the new year.
Amata Corporation and Rojana Industrial Park were the first two Thai industrial-estate companies to expand into Asean. The former has established an estate in Vietnam, while Rojana is in a joint venture with ITD for a project in Dawei, Myanmar.
"Demand for construction of infrastructure projects in neighbouring countries will grow strongly when the Asean Economic Community becomes effective," said the chairman of Ch Karnchang’s executive board, Plew Trivisvavet. "This is a business opportunity for Thailand’s construction firms to expand their investment in Asean."
After its initial success in Laos, Ch Karnchang will explore opportunities in Myanmar next year, and then will study doing business in other countries in Asean, he said.
Investing abroad can be a way for Thailand’s largest property, construction and industrial-estate companies to increase their returns.
"When we invest overseas, the investment has to generate a higher return than a similar venture in Thailand, because we have to consider the business risk," Land & Houses managing director Adisorn Thananun-Narapool said after the company invested in a project in the United States early this year.
