Company News
Hemaraj Confident in its Growth Prospects for 2014 and Beyond
23/01/2014
Industrial Estates, Utilities, Power and Property Businesses expected to grow further, generating more recurring revenues
Bangkok, 23 January 2014 – Following excellent performance in 2013, Hemaraj Land And Development Public Company Limited (Hemaraj) has revealed its outlook for 2014, with healthy growth prospects in its four business lines: Industrial Estates, Utilities, Power and Property.
Out of its 5-year investment plan of 40 billion Baht that was announced in early 2012, Hemaraj already spent Baht 18 billion, or 45%. With additional investments of Baht 6 billion planned for 2014, the company will have spent over 60% of its total investment plan within 3 years, a sign of its confidence in its business plan as well as the country’s economic prospects.
Hemaraj Industrial Property and Leasehold Fund (HPF), which was launched late December, is starting its trading operations today at The Stock Exchange of Thailand (SET). The fund’s total value of THB 4.7 billion comprises THB 3.22 billion investments in freehold assets, plus THB 1.48 billion from leasehold property, including land and Ready Built Factory for rent.
Industrial Estates: Launching the company’s 7th Industrial Estate
Hemaraj’s Industrial Estates are set to continue their development and contribution to the company’s income and performance.
Representing a combined land area of 39,109 rai (15,600 acres or 6,300 hectares), Hemaraj’s seven industrial estates provide facilities and services to 615 distinct customers and 933 land or factory contracts, including 215 automotive customers with 329 automotive contracts, and 58 customers in the chemical/petrochemical industries.
Over the past 25 years, it is estimated that the total consolidated investments generated by Hemaraj customers is approximately USD 26 billion, contributing extensively to Thailand’s development and growth.
At the core of its business strategy, Hemaraj’s Industrial Estates facilitated the development of several industrial clusters in Automotive, Petrochemical, Steel & Metal, Power and Electronics.
In particular, the company has been instrumental in the continuing development of Thailand’s automotive industry. Five original equipment manufacturers (OEMs) representing seven automotive brands – Chevrolet, Ford, Mazda, GMC, Holden, Suzuki and MG - are part of its key customers, – accounting for 25% to 30% of Thailand’s automotive production with 800,000 vehicles in 2015.
Credited for 45% of the company’s operating revenue, Industrial Estates still present a high potential for growth, thanks to several factors such as the Free Trade Agreements (FTAs) with Japan, China, Australia, India and AFTA trade liberalization.
Another key reason for expansion is the overall attractiveness of Thailand in terms of costs, currency, infrastructure and market access, leading to the relocation of industries from Japan, China, Australia and the USA. As shown by statistics from the Board of Investment, the number of BOI-approved projects in 2013 was 2,016 projects, representing over Baht 1,027 billion in investment.
David Nardone, President & CEO of Hemaraj, said: “The Eastern Seaboard, where most of our industrial sites and logistics parks are located, are not affected by the political difficulties, and we are confident in our ability to grow further. As a leader in this market, we have a competitive advantage that creates opportunities to leverage our industrial relationships with additional services and through joint ventures.
Hemaraj Chonburi Industrial Estate 2 (HCIE 2), its 7th industrial estate covering a land area of 632 rai (250 acres or 101 hectares), is scheduled to be available in quarter 4, 2014.
This year, Hemaraj projects 1,600 rai (640 acres or 256 hectares) in Industrial Estate Land Sales, involving 45 new customers and 70 contracts.
Utilities: 14% Growth per annum over next 5 years
Hemaraj Utilities provide raw water, potable water, clarified water, wastewater treatment and industrial estate maintenance services to company’s customers such as power plants, steel mills, automotive and petrochemical industries.
With a forecast demand of 270,000 cubic meters per day in 2014, this expertise enables Hemaraj to leverage further and beyond the company’s own industrial estates. Utilities value is expected to increase by 14% per annum until 2018, representing projected revenue of Baht 2 Billion in 2015 and 2.5 Billion in 2018.
Mr. Vivat Jiratikarnsakul, Hemaraj’s Executive Vice President explained: “The growth of Industrial Estates leads to greater demand for Utilities among our customers. As a business line, Utilities is a natural complement of Industrial Estates. Over the last years, we have accumulated significant expertise in environmental, water treatment and wastewater technologies. We plan to continue to leverage on the competence we have acquired in this field.”
Power: Increasing SPP Power Co-Generation projects
Hemaraj has a total of 12 Power projects – 4 under operation and 8 under development or planning – that represent a total of 2,659 megawatts, with 22% average Hemaraj shareholding.
Hemaraj invested Baht 5.4 billion in GHECO-One, a 35/65 joint-venture with Glow (GDF Suez Energy International). In operation since August 2012 and now at full production capacity, the 660-megawatt plant is expected to generate average earnings of Baht 1.2 billion per annum for Hemaraj until 2016.
In addition to a 12.75% stake in Houay Ho Hydro Power in Laos and a 5% minority share in another Glow IPP project, Hemaraj holds 25.01% shareholding equity of its first SPP project (126 MW) with Gulf-J-Power Japan (GJP NLL). Further growth is expected from another 8 potential co-generation SPP projects of 126 MW each.
“In this sector, I believe we have two factors for further growth. The first one is the significant market represented by our existing Industrial Estates. The second one is our current partnership and enriching experience with international players such as Glow GDF Suez and Gulf-J-Power Japan.” added David Nardone.
From an average of 5% over the past 5-year period (2009-2013), Hemaraj’s operating revenue being dividend flow generated from Power is expected to almost triple within the next five years.
Property: Significant Increase of Ready Built Factories and Logistics Parks for Rent
Launched last December and starting trading today in the SET, Hemaraj Industrial Property and Leasehold Fund (HPF) will facilitate the development of Hemaraj Ready Built Factories which represent an area of 150,117 square meters, from totaling 657,663 sq.m. of Hemaraj Ready Built Factories.
Projected rental of Ready Built Factories are expected to increase by 25% to 30% this year (80,000 to 90,000 sq.m. more compared to 2013) from rental space of 297,368 sq.m.
Hemaraj Logistics Parks, warehouse for rent is also expected to see an increase in rental space between 40,000 to 50,000 sq.m. this year.
Both rental-based, these two products offer the advantage of answering the needs of Hemaraj’s customers while providing recurring income to the company.
“Having enjoyed 25 successful years here, Hemaraj remains a firm believer in Thailand as a destination for industrial investment,” concluded Mr. Nardone. “With revenue streams across four key business lines that can supplement each other, we are well-placed to build upon what we have achieved and reach new heights.
Bangkok, 23 January 2014 – Following excellent performance in 2013, Hemaraj Land And Development Public Company Limited (Hemaraj) has revealed its outlook for 2014, with healthy growth prospects in its four business lines: Industrial Estates, Utilities, Power and Property.
Out of its 5-year investment plan of 40 billion Baht that was announced in early 2012, Hemaraj already spent Baht 18 billion, or 45%. With additional investments of Baht 6 billion planned for 2014, the company will have spent over 60% of its total investment plan within 3 years, a sign of its confidence in its business plan as well as the country’s economic prospects.
Hemaraj Industrial Property and Leasehold Fund (HPF), which was launched late December, is starting its trading operations today at The Stock Exchange of Thailand (SET). The fund’s total value of THB 4.7 billion comprises THB 3.22 billion investments in freehold assets, plus THB 1.48 billion from leasehold property, including land and Ready Built Factory for rent.
Industrial Estates: Launching the company’s 7th Industrial Estate
Hemaraj’s Industrial Estates are set to continue their development and contribution to the company’s income and performance.
Representing a combined land area of 39,109 rai (15,600 acres or 6,300 hectares), Hemaraj’s seven industrial estates provide facilities and services to 615 distinct customers and 933 land or factory contracts, including 215 automotive customers with 329 automotive contracts, and 58 customers in the chemical/petrochemical industries.
Over the past 25 years, it is estimated that the total consolidated investments generated by Hemaraj customers is approximately USD 26 billion, contributing extensively to Thailand’s development and growth.
At the core of its business strategy, Hemaraj’s Industrial Estates facilitated the development of several industrial clusters in Automotive, Petrochemical, Steel & Metal, Power and Electronics.
In particular, the company has been instrumental in the continuing development of Thailand’s automotive industry. Five original equipment manufacturers (OEMs) representing seven automotive brands – Chevrolet, Ford, Mazda, GMC, Holden, Suzuki and MG - are part of its key customers, – accounting for 25% to 30% of Thailand’s automotive production with 800,000 vehicles in 2015.
Credited for 45% of the company’s operating revenue, Industrial Estates still present a high potential for growth, thanks to several factors such as the Free Trade Agreements (FTAs) with Japan, China, Australia, India and AFTA trade liberalization.
Another key reason for expansion is the overall attractiveness of Thailand in terms of costs, currency, infrastructure and market access, leading to the relocation of industries from Japan, China, Australia and the USA. As shown by statistics from the Board of Investment, the number of BOI-approved projects in 2013 was 2,016 projects, representing over Baht 1,027 billion in investment.
David Nardone, President & CEO of Hemaraj, said: “The Eastern Seaboard, where most of our industrial sites and logistics parks are located, are not affected by the political difficulties, and we are confident in our ability to grow further. As a leader in this market, we have a competitive advantage that creates opportunities to leverage our industrial relationships with additional services and through joint ventures.
Hemaraj Chonburi Industrial Estate 2 (HCIE 2), its 7th industrial estate covering a land area of 632 rai (250 acres or 101 hectares), is scheduled to be available in quarter 4, 2014.
This year, Hemaraj projects 1,600 rai (640 acres or 256 hectares) in Industrial Estate Land Sales, involving 45 new customers and 70 contracts.
Utilities: 14% Growth per annum over next 5 years
Hemaraj Utilities provide raw water, potable water, clarified water, wastewater treatment and industrial estate maintenance services to company’s customers such as power plants, steel mills, automotive and petrochemical industries.
With a forecast demand of 270,000 cubic meters per day in 2014, this expertise enables Hemaraj to leverage further and beyond the company’s own industrial estates. Utilities value is expected to increase by 14% per annum until 2018, representing projected revenue of Baht 2 Billion in 2015 and 2.5 Billion in 2018.
Mr. Vivat Jiratikarnsakul, Hemaraj’s Executive Vice President explained: “The growth of Industrial Estates leads to greater demand for Utilities among our customers. As a business line, Utilities is a natural complement of Industrial Estates. Over the last years, we have accumulated significant expertise in environmental, water treatment and wastewater technologies. We plan to continue to leverage on the competence we have acquired in this field.”
Power: Increasing SPP Power Co-Generation projects
Hemaraj has a total of 12 Power projects – 4 under operation and 8 under development or planning – that represent a total of 2,659 megawatts, with 22% average Hemaraj shareholding.
Hemaraj invested Baht 5.4 billion in GHECO-One, a 35/65 joint-venture with Glow (GDF Suez Energy International). In operation since August 2012 and now at full production capacity, the 660-megawatt plant is expected to generate average earnings of Baht 1.2 billion per annum for Hemaraj until 2016.
In addition to a 12.75% stake in Houay Ho Hydro Power in Laos and a 5% minority share in another Glow IPP project, Hemaraj holds 25.01% shareholding equity of its first SPP project (126 MW) with Gulf-J-Power Japan (GJP NLL). Further growth is expected from another 8 potential co-generation SPP projects of 126 MW each.
“In this sector, I believe we have two factors for further growth. The first one is the significant market represented by our existing Industrial Estates. The second one is our current partnership and enriching experience with international players such as Glow GDF Suez and Gulf-J-Power Japan.” added David Nardone.
From an average of 5% over the past 5-year period (2009-2013), Hemaraj’s operating revenue being dividend flow generated from Power is expected to almost triple within the next five years.
Property: Significant Increase of Ready Built Factories and Logistics Parks for Rent
Launched last December and starting trading today in the SET, Hemaraj Industrial Property and Leasehold Fund (HPF) will facilitate the development of Hemaraj Ready Built Factories which represent an area of 150,117 square meters, from totaling 657,663 sq.m. of Hemaraj Ready Built Factories.
Projected rental of Ready Built Factories are expected to increase by 25% to 30% this year (80,000 to 90,000 sq.m. more compared to 2013) from rental space of 297,368 sq.m.
Hemaraj Logistics Parks, warehouse for rent is also expected to see an increase in rental space between 40,000 to 50,000 sq.m. this year.
Both rental-based, these two products offer the advantage of answering the needs of Hemaraj’s customers while providing recurring income to the company.
“Having enjoyed 25 successful years here, Hemaraj remains a firm believer in Thailand as a destination for industrial investment,” concluded Mr. Nardone. “With revenue streams across four key business lines that can supplement each other, we are well-placed to build upon what we have achieved and reach new heights.