Eastern Seaboard Report February 2016 – Prepared by Mark Bowling, Chairman BCCT Eastern Seaboard
The government expects to sign contracts for all 20 big-ticket infrastructure projects worth a combined 1.79 trillion baht this year. Of the contracts, 10 signed will be signed in the first half and 10 in the second half, Finance Minister Apisak Tantivorawong said after chairing a committee meeting tasked with pushing measures to stimulate the economy and investment. Budget disbursement for the second 10 projects will be next year, he said without mentioning these projects. The big-ticket infrastructure projects with contracts already signed where building has begun are the 185-kilometre one-metre-gauge doubletrack rail network linking the Jira junction in Nakhon Ratchasima to Khon Kaen, the Pattaya-Map Ta Phut motorway, the Bang Pa-in-Saraburi-Nakhon Ratchasima motorway, development of Laem Chabang deep-sea port and container terminal development at Laem Chabang. SET-listed developer Supalai Plc (SPALI) plans to launch 14 new projects in 10 provinces this year worth a combined 9 billion baht. Confident about housing demand in provinces, the company aims to boost provincial presales to 25% of the total from 22% last year. Of the total it plans to launch in the provinces this year, only one will be a condominium project, which will be located in Chon Buri's Muang district, where demand is mainly from people working nearby. Japanese car maker Mazda Sales (Thailand) remains upbeat about the sales prospects of the sport-utility vehicle (SUV) market despite higher retail prices caused by the new excise tax. President Hidesuke Takesue said the overall SUV market was expected to grow by 5% to 60,000 units this year and Mazda aimed to capture about 20-22% of market share or 13,000 units. The projected surge will be driven by the Thai-made CX-3, with sales estimated to reach 8,000 vehicles this year, Mr Takesue said. Its CX-5 model is also expected to sell well. SET-listed Amata Corporation Plc expects growth of 20% in developed land sales this year after missing last year's target of 800 rai. Revenue from land sales in 2015 was 6.2 billion baht, down 18.4% from 2014. However, Amata believes the global economy will start to recover this year, while the government's investment projects will stimulate investment, Mr Viboon said. He expects revenue from land sales this year will come in higher, as the company has increased its land prices at the Amata City Industrial Estate in Chon Buri province to between 3.6 and 3.7 million baht a rai from 3.2 million. Land prices at another industrial estate, Amata Nakorn in Rayong province, have also risen to about 6 million baht a rai from 4 million. "The company has increased its land prices in line with the prices evaluated by the Interior Ministry's Lands Department," Mr Viboon said. With Thailand's greying population set to rise rapidly over the next decade, property developers are now poised to launch more high-rise and low-rise residential projects with designs and facilities aimed at supporting elderly care as well as the health-conscious. SET-listed Nusasiri Plc is one such developer. It introduced its health-promotion concept th
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two years ago in two residential projects in Khao Yai and Pattaya. This year it plans to expand two more on Rama II Road in Bangkok and in tambon Pa Khlok, located in Phuket’s Thalang district. “The project is aimed not only at health-conscious buyers but also investors who see this coming trend,” says Mrs Siriya. It offers a rental guarantee programme with three return rates – 5%, 6% and 6.5% with differing conditions. The rental programme was introduced at Nusa Chivani Pattaya, located on a 185-rai plot in Na Jomtien, as well as in the Sattaheep district of Chon Buri, where 45 out of 85 units were sold in the first phase. Riviera Group’s multi-billion baht project breathes life into Pattaya real estate sector Riviera Group celebrated the approval of the environmental impact assessment for its Riviera Jomtien project with a party for customers, one of whom won a Mercedes-Benz SLK 200. More than 1,400 people attended the Feb. 27 party, the logistics for which were immense. Local police were brought in to deal with the traffic, courtesy golf carts ferried guests, and an entire car park was turned into a glamorous set, replete with lights, sound system and two stages. The party was held within the grounds of Riviera Jomtien and although the official start time was scheduled for 6:30 p.m., people turned up early in anticipation of the huge turnout. The evening got off to a start with a band called Gravity 7. The group is regarded as one of the best live acts in Thailand and, within minutes, had set the vibe for the evening. Riviera Jomtien was launched in January 2015 and, in the past 13 months, has seen 66% of the units sold.
The following news items reproduced with kind permission of SATCC
Chon Buri motorway contracts awarded. The Transport Ministry has awarded contracts to three companies to build a motorway between Pattaya and Map Ta Phut for Bt14.2 billion. The 31.5-kilometre section will connect the 51km Chon Buri-Pattaya motorway, which is now under construction, from the Pattaya-Rayong Intersection through Bang Lamung district in Chon Buri to Highway No 3 or Sukhumvit Road at tambon Ban Chang. Transport Minister Arkhom Termpittayapaisit said the five contracts inked yesterday were part of the 13 contracts earmarked for the project. The remaining eight contracts are in the process of th
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selecting and negotiating with contractors. "We expect to sign all contracts by next month. Construction will commence this year and will be completed in 2019." Savills has expanded in Thailand by appointing a new associate and claims the alliance is the first of its kind between two leading real estate advisors in Thailand. The connection with Bangkok-based Nexus Property Consultants Co. Ltd. increases Savills’ presence in South East Asia to 59 operations across 17 countries in the region and boosts its services to international investors. The integration of the firms’ services combines international standards with local knowledge, allowing both companies to provide clients with a full range of real estate services and advice Amata, one of the country's biggest industrial estate developers sold only 617 rai due largely to the global economic slowdown, which cut domestic investment, chief marketing officer Viboon Kromadit said. However, Amata believes the global economy will start to recover this year, while the government's investment projects will stimulate investment, Mr Viboon said. CP LAND, the property arm of Charoen Pokphand Group, is looking to go international by expanding throughout Asean, Europe and Australia. CP Land president and chief executive officer Sunthorn Arunanonchai said the company's overseas investment focus was on office buildings and hospitality. In Asean, he said Yangon in Myanmar and Ho Chi Minh City and Ha Noi in Vietnam were potential expansion options within the next two to three years, while the UK and Australia were the next focus. The cost of each investment will range from Bt1 billion and Bt3 billion, he added. He said the company would buy land and acquire existing hospitality and office building assets. In Thailand this year, CP Land set aside an investment budget of Bt12.1 billion. Up to Bt2 billion will be spent on the CP Industrial Estate in Rayong province, which has a total investment value of Bt7 billion. Construction is due to start this year for completion next year. Another Bt3.6 billion will be spent on developing 16 condominium projects in eight provinces - Chonburi, Nakhon Ratchasima, Khon Kaen, Surat Thani, Chiang Rai, Kanchanaburi and Trang. And Bt4 billion will be invested in 10 new hotels at Nakhon Phanom, Nakhon Si Thammarat, Chiang Rai, Mae Sod, Nakhon Ratchasima, Buri Rum, Loei, Khao Yai and Bangkok. Sunthorn said the investment budget would come from initial cash and a plan to raise capital by listing the company on the Stock Exchange of Thailand. PADAENG Industry (PDI), the only zinc smelter in Southeast Asia, yesterday announced it would cease its zinc operations and let go of more than half of its 826 workers by the end of next year. Managing director Francis Vanbellen said that since its Mae Sot zinc mine in Tak province - after 32 years of operation - would be fully depleted by the end of this year, and PDI had failed to obtain permits for new mine deposits in Thailand and neighbouring countries, the company's board of directors resolved on Thursday to cease its zinc operations by the end of 2017. Vanbellen said he could not provide exact figures on the number of people who would have to go, since the company wanted to communicate with its staff first, but more than half of its 826-strong workforce would have to leave by the end of next year. Most of the 460 employees who are currently working at PDI's zinc smelter in th
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Tak, as well as most of the 200 workers at the Mae Sot mine, as well as some of the 100 staff at its roaster plant in Rayong and smaller numbers of staff at its Bangkok headquarters, will have their employment contracts terminated. Five new toll booths on the Bangkok-Chonburi Motorway will be completed by August and could open after the start of next year. Speaking to the Pattaya Business & Tourism Association at its Feb. 11 meeting at the Pattaya's Grand Sole Hotel, Somnuk Wangamornmith, deputy director of the Office of Intercity Motorway Maintenance District 2, said the toll booths will be located in Ban Bung, Bangpra, Nongkham, Pong, and Pattaya. Dacon recently held a "Long Range Ultrasonic Testing Grand Opening" event to showcase its latest inspection technology. The Grand Opening was attended by about 100 of Dacon's clients and representatives of Thailand's major refining and petrochemical companies such as IRPC, PTT GC, PTT PLS, PTT PLC, PTT GSP, PTT PLC, PTT MCC, PTT ME, Map Ta Phut Tank Terminal, Map Ta Phut Olefins Company, SCG Dow, BLCP Power Station, TPT Petrochemicals and SNU Supply & Service. Kan Air has announced that six routes are to be launched this year as the two aircraft are phased into Kan Air's fleet, with the first aircraft due around April and the second a few months later, said Somphong Sooksanguan, president of Kannithi Aviation. Four of the six routes will be relaunched services from the navy-operated U-tapao airport in Rayong, while the other two are from Bangkok's Don Mueang airport. U-tapao flights will be to Udon Thani, Hat Yai, Krabi and Phuket. While Phuket will be served with one daily flight, the other services will be every other day. The Securities and Exchange Commission encourages listed |companies to undertake corporate social responsibility (CSR). SEC secretary-general Rapee Sucharitakul says such practices contribute to the sustainable growth of their businesses while gaining support from the communities around their plants. The Securities and Exchange Commission encourages listed |companies to undertake corporate social responsibility (CSR). SEC secretary-general Rapee Sucharitakul says such practices contribute to the sustainable growth of their businesses while gaining support from the communities around their plants. In one such project, the SEC is collaborating with SCG Chemical Co to build fish habitats in Rayong province on January 23. "We started a programme to build fish habitats in 2012 on the Eastern Seaboard, including Rayong and Chon Buri provinces. To date, we have built 400 fish homes," an SCG Chemical staff member said. The fish habitats, which are designed to replace coral reefs that have deteriorated or been destroyed, are built with waste material from the manufacture of polyethylene black compound 100 (PE100). Prachaya Unpetchworakorn, mayor of Koh Chan sub-district, and Samart Cheunwongsa, director of the Chonburi Agricultural Office, were welcomed Feb. 4 by Kongrith Boontham, village chief for Tha Boonme, who showed them how former rice farmers are now growing mung beans with success. Prachaya said Chonburi has about 1.1 million rai of farmland and the province has requested a 12-million-baht budget for 27 non-rice agriculturaldemonstration projects, and three non-farming projects to generate income for drought-hit farmers. th
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Fabrinet has begun construction on its newest facility, on the company's new campus outside of Bangkok. The EMS company expects the new 550,000 sq. ft. building in Chonburi Province to be complete in about a year, said CEO Tom Mitchell. Fabrinet closed on the purchase of the land for the new campus last December, and expects to begin occupying the new building in late fall of 2016. CFO Toh-Seng Ng said the company was about 90% full in terms of the plant's physical space at its existing facility in Thailand, but in the interim will continue to add additional equipment lines within the existing building. The current site is more than one million sq. ft. in area. "On the basis of equipment, we believe we are currently at approximately 75% capacity. Therefore, we believe we have significant room to continue to grow and meet customer demand even while our new facility outside Bangkok is being completed. "While we have ample capacity to meet increasingly customer demand," Mitchell said, "we expect this new building ... will help us meet our growing demand." Fabrinet has budgeted $40 million in the current fiscal year for land purchase and construction of the new manufacturing facility. The new space is on a 48acre site in an industrial park about 123 meters above sea-level, in the South Eastern Thailand province of Chonburi.
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British Chamber of Commerce Thailand, 7 Floor 208 Wireless Road, Lumpini, Pathumwan, Bangkok 10330, Thailand Tel: 085 2828 120 Email: mwbowling@savills.co.th www.bccthai.com