Ch. Karnchang Plc, Thailand's second-largest construction company, is seeking new opportunities in neighbouring countries
Chim
Ch. Karnchang to grow in region
Looks in Cambodia, Laos and Vietnam
AREERAT WIRIYAPONG
Ch. Karnchang Plc (CK), Thailand's second-largest construction
company, is seeking new opportunities in neighbouring countries as
well as work on the government's programme to expand Thailand's rail
network.
Due to a slump in the local construction business over the past two
years, CK has explored more business opportunities in Laos, Cambodia
and Vietnam, said Prasert Marittanaporn, executive vice-president for
accounting and finance.
The company is currently developing the 20.4-billion-baht Nam Ngum
hydroelectric dam in Laos. Construction is 45% completed and the dam
is scheduled to start generating power to the Electricity Generating
Authority of Thailand in 2011.
CK has also signed a memorandum of understanding with the Laotian
government to construct three more hydroelectric power projects in
Laos, with feasibility studies now under way.
Studies should be completed this year for the The Nam Bag 1 and 2
plants, with a combined value of $400 million and capacity to generate
1,080 megawatts, Mr Prasert said.
Another project involving CK is the $1.8-billion hydroelectric power
plant in Xayaburi province, with capacity of 1,260 MW.
In Cambodia, CK is in the early stages of a road construction project
in Siem Reap.
Meanwhile, the company is close to signing a deal for the construction
of a paper mill in Vietnam for Siam Cement, Thailand's biggest
industrial conglomerate.
''Business opportunities in the neighbouring countries are huge. Lots
of projects are being developed there along with economic developments
such as infrastructure and factories,'' Mr Prasert said.
''To bid for projects around Thailand, we have to compete with other
major Thai contractors and those from China and Korea, and CK has the
capability to do so.''
SET-listed CK, ranked second to Italian-Thai Development (ITD),
expects revenue generated from overseas projects to be equal to that
from local contracts within two years.
The company's revenue was 18 billion baht in 2006, and in the first
nine months of last year it totalled 12 billion, Mr Prasert said.
''Revenue in 2007 is likely to shrink ... as there were no new major
construction projects due to political and economic uncertainties,''
he said, adding that the company had targeted revenue of at least 14
billion baht for all of 2007.
''But this year would be better as the new government is expected to
kick off mass transit projects to drive economic growth,'' said Mr
Prasert.
''And they must do it as construction projects could generate a huge
multiplier effect to the economy, especially employment.''
The government has announced plans to spend 150 billion baht on five
rail projects around Bangkok.
CK plans to join in bidding for two rail projects likely to be
launched this year with a combined value of 80 billion baht, Mr
Prasert said.
Bidding terms for the elevated Purple Line, worth 30 billion baht, are
scheduled to be released for bidding this month, while the 50-billion-
baht Blue Line will follow later this year.
''With our experience of more than 10 years in infrastructure
projects, we have not seen any problem joining the bidding for these
projects,'' Mr Prasert said. ''As oil prices have kept rising, these
rail networks are crucial for the economy and to ease traffic by
transporting people who live in the suburbs to central Bangkok.''
At present, Bangkok has three rail lines _ two elevated and one
underground, carrying 600,000 passengers a day. By expanding the
network, the government hopes to boost traffic to eventually reach one
million people daily.
Mr Prasert said CK had also joined with another Thai contractor in the
bidding for a 5.8-billion-baht dual-track train line running from Laem
Chabang to Chachoengsao province.
The company's shares closed on Friday on the Stock Exchange of
Thailand at 7.80 baht, up 10 satang, in trade worth 4.73 million
baht.