Amata Vn PCL (SET:AMATAV) Director and Chief Executive Officer, Mrs. Somhatai Panichewa discusses the company’s strategy and outlook in The Executive Talk (TET) by ShareInvestor.com.
TET: Please explain the history and business of AMATAV.
Amata in Thailand was established 40 years ago and 20 years later, we started to explore more opportunities for expansion into Vietnam. At that time, not only in Vietnam, but we have been surveyed China and India as well. Each country presented had their own pros and cons whether they be population size, ease of doing business, as well as the country’s transparency. We decided on expanding to Vietnam as we saw the opportunity to develop a world class industrial estate there, together with enthusiasm of the Vietnamese government in supporting the development of industrial estates and their clear investment policies. During those days, foreign investment was not allowed 100% ownership and we were able to secure a strong local partner, Sonadezi, who assisted in managing land acquisition and local legal requirements. We started our first development in the South of Vietnam where we have established our presence for more than 20 years in city of Bien Hoa, Dong Nai province. We are opening three more projects in this province as well: Amata City Long Thanh, Amata Township Long Thanh and Amata Service City Long Thanh. Our next stage of development is to the North in Halong City, Quang Ninh Province. The reason that we decided to expand to the Northern part of Vietnam is because we see the global market trend gearing towards the North. This is proven from the increase in ODA for economically strong countries like Japan, Korea and Singapore in developing Vietnam’s infrastructure. Especially in Haiphong, Japan government has helped funded Vietnam’s first deep sea port, Cat Bi International Airport, Hanoi-Haiphong highway, etc. Since our existence in Vietnam, we had never increased our capital, however, as we are expanding vastly, we decided to seek additional funding through listing on the Stock Exchange of Thailand.
TET: Please provide more detail on the projects that AMATAV has today.
Amata has a long existing estate in Bien Hoa, Dong Nai province since 1994 and is almost fully sold out. We have recently received permission for 3 more estates which are located within 20-30kms distance from Ho Chi Minh City. Amata City Long Thanh is a 2,564 rai project focusing on manufacturing industries with advanced technologies. Amata Service City Long Thanh is about 670 rai which focuses on the integrated services such as worker housing and business logistics to support the customers and people at Amata City Long Thanh. Finally, Amata Township Long Thanh is 4,706 rai and is geared towards recreational services, hospitals, educational institutions, and residential area with facilities such as shopping centers, rest areas and food corners. In Northern Vietnam, we have Amata City Halong in a location that we feel is very attractive with the total project size of about 36,000 rai.
TET: Why is Vietnam an attractive destination for Foreign Direct Investment (FDI)?
FDI typically flows to locations where costs are cheaper whether it be the workforce, infrastructure, tax benefits, and accessibility to raw materials. If you look at this region, you have Myanmar, Laos, Cambodia and Vietnam as options. Vietnam itself has been very aggressive at creating an environment that is attractive to FDI through their multiple free trade agreements with major economic players of the world. Its openness to accommodate foreign investment needs is why companies such as Samsung, which invested USD 20 billion in Vietnam, LG, Panasonic, Formosa and Foxconn all already have established entities in Vietnam today.
TET: What differentiates AMATAV from its competitors?
There are some major factors that differentiate AMATAV from its competitors which all concerns the ability to meet with the needs and requirements of customers. We assured that the location we select for development is attractive for customers; whether it be near main highways, accessible to workforces, near sea port and airport. Finding and obtaining locations with such requirements are very limited and scarce, therefore, it is one of our strong differentiation. In addition, to obtain economies of scale, the size of the estates typically is no less than 500 hectares, thus will help reduce the cost of investment for our customers as well. Providing ease for businesses by servicing our customer well during their presence with us is one of our company’s policy. This has given us new customer by positive word of mouth introductions from existing customers.
TET: What are the biggest risks facing your business?
Every business has risks. In Vietnam, although there are many opportunities, there are also many risks. The main risks are the land acquisition processes and the fast change of laws and regulation. With one central government, laws are implemented very fast, if we compared with that of Thailand, the time of implementation is much longer. The land acquisition processes are a big challenge for us in terms of minimizing our initial capital expenditures as our proposal has been publicized by the government.
TET: Where do you see AMATAV in five years from now?
We must retain flexibility in the organization to cope with the changes in the world market. For Vietnam, if the country’s economy grows as we anticipated, we shall look for nice stable growth, reduction in risks, and look for further expansion without putting much burden to our business. Our philosophy is the same as our name, Amata, which means Eternity.
English Source: Bloomberg
Thai Source: SETTRADE