Hemaraj to spend Bt20 billion on development

Hemaraj Land And Development

Hemaraj Land And Development

Thailand’s largest industrial-estate developer, Hemaraj Land and Development, plans to spend Bt20 billion over the next five years on industrial-estate development, property projects and utilities investments.

The company currently has six industrial estates in Chon Buri, Rayong and Saraburi provinces and recently entered the property-development business by launching The Park, a luxury-condominium project in Bangkok’s Chidlom area.

In celebration of the company’s 20th anniversary yesterday, president and CEO David Nardone said Hemaraj had lately formed a joint venture with Glow Energy called Gheco-One to build a 660-megawatt power plant in Rayong province.

“We have now completed financing arrangements for US$450 million (Bt15.71 billion) to build the power plant,” he said. “It’s scheduled for completion in late 2011. Moreover, we’re also planning to invest in two small power plants.”

When the large plant begins operations in 2012, he expects 35-40 per cent of Hemaraj’s revenue to come from the utilities business. About 33 per cent will be generated by industrial-estate development, and the rest will come from the property business.

He said the developments would be financed by working capital, cash from sales, a small amount of loan money and bond issues.

“We are interested in issuing bonds in 2009. However, it depends on the state of the market at that time,” he said.

Hemaraj believes that in the short-term, there will be an investment slowdown in Thailand, reflecting uncertainty in demand and caution in global markets. However, the strong fundamentals of both the country and the company have not changed, so the long-term economic outlook remains robust, he said.

“Thailand and Asia will continue to be long-term growth engines for the automotive and petrochemical industries and consumer demand over the next few decades. We expect to be in a forefront position to meet this demand,” he said.

Despite the country’s murky economic climate and political turmoil, Hemaraj expects to achieve sales of 1,600-1,700 rai of industrial land this year, 30-per-cent higher than its projection at the start of the year.

It expects more than 30 new customers and 65 contracts this year, when the average for the past three years is 25 new customers and 50 contracts.

“In industrial estates, petrochemical customers are facing increasing long-term demand to improve their value added downstream products. These projects take years to bring on stream and this investment is continuing,” he said.

As well, Hemaraj’s Eastern Seaboard Industrial Estate has shown its potential to support the expansion of automotive industries to make Thailand into the “Detroit of the East”.

The ongoing demand for growth will result in the need for more industrial-estate utilities, which will double the company’s revenue over the next four years, Nardone said.

Although it is already the country’s largest private supplier of clarified and treated potable water to industrial users, with a capacity of 150,000 cubic metres per day, Hemaraj expects this capacity to double within four years.

About the author

Somluck Srimalee Somluck Srimalee
Somluck Srimalee is a journalist with The Nation, Bangkok's independent English language newspaper and specialises in the property and real estate sectors.
Other posts by Somluck Srimalee ( 39 )
Website: http://www.nationmultimedia.com

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