 
Staff Writer
Since listing on the Stock Exchange of Thailand (SET)’s Market for Alternative Investment in 2005, TRC Construction (TRC) has been generating some impressive earnings.
With a relatively low authorized capital of 256.6 million baht (US$8.1 million), TRC focuses on the construction of plants for the petrochemical and biotech industries, pipeline systems, as well as the installation of engineering systems. The company has managed to find a so-called “blue ocean” of opportunity since competition between Thai construction companies is relatively low.
TRC has tended to be closely involved with the petrochemical industry, which has experienced an upward trend over recent years, and so the company has enjoyed a continuous stream of work. Indeed, it has managed to increase its competitiveness by establishing alliances on being awarded large-scale projects.
In the past, TRC has worked in tandem with the China Petroleum Pipeline Bureau (CPP), a subsidiary of China National Petroleum Corporation (CNPC),
China ’s largest energy group.
Sound advice and management
Another interesting aspect of TRC’s business is its role as a middleman between local landowners and foreign investors in property development projects. The company’s Project Development and Investment Department works as an adviser and provides construction management services for foreign investors throughout the life of a project. The department was established after TRC carried out a share-swap with Sahakarn Wisavakorn, one of
Thailand ’s leading civil engineering contractors.
One of the department’s first tasks was to oversee the construction of a 50-storey office and hotel building located on six rai (about 1 hectare) of land along
Ratchadamri Roadunder a 30-year land lease concession from the Crown Property Bureau.
The Royal Ratchadamri project belongs to a company called Ratchaploen. The majority of this company’s shares (about 60%) are held by TRC and Malaysian company Zelan, while the remainder (about 30%) is held by the Maneeya Group. The remainder is held by Sahakarn Zelan (
Thailand ), and the majority of this stake belongs to Sahakarn Wisavakorn. Ratchaploen is reportedly currently in negotiations with a large foreign property fund, which is interested in buying the whole project outright.
 Samai Lisakun, CEO and chairman of TRC’s executive board, said the property business usually generates about 30% in profits, which is better than the construction business can generate. TRC’s property business, he said, ensures that the company can enjoy continuous growth over the long-term. Samai said the company is now on the lookout for other sites through which they can utilize the same model as this project.
While Sahakarn Wisavakorn is a specialist in construction work, TRC has firmly positioned itself as a project manager and so it tends to outsource a good deal of construction work to larger companies with greater experience. Samai says this can add credibility to a project.
|
|
Since TRC unit Sahakarn Wisavakorn is relatively inexperienced, Samai said it is not the right time for it to enter the highly competitive market. TRC therefore isn’t planning to expand Sahakarn Wisavakorn, and it doesn’t plan to assign the unit to oversee any of its property development projects for now. Samai said TRC expected its construction arm to earn a relatively modest 200 million baht (US$6.3 million) over the next three years.
However, overall, TRC is aiming to generate income of 2.4 billion baht in 2008, which would represent a 55% jump from last year. Samai said TRC would focus on projects in which the company could manage all the costs, as well as operating alliances with overseas partners in
Africa ,
Asia (
Cambodia ,
Laos , and
Myanmar ), and the
Middle East .
Over the longer term, the company would attempt to get more involved in construction, which requires a high level of technology, but has relatively low competition, Samai said. - Translated into English and republished with the kind permission of Manager Weekly.
|
|
Biz Spotlight 
Biz Spotlight
Thailand offers plenty of business and investment opportunities. Whether you’re an entrepreneurial individual, a growing small- and medium enterprise, or a cash-rich corporation looking to establish or expand your presence in the kingdom, Biz Spotlight provides up-to-date insights into the country’s business and financial sectors.
contact 
sitemap
advertise with us