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Thai developer bets on digitization and China's 'Belt and Road'

Amata stays focused on Southeast Asia as it aims to cure COVID-related ills

Amata's chief marketing officer, Viboon Kromadit: "COVID-19 is a key factor, driving us onto the digital platform." (Photo courtesy of Amata)

BANGKOK -- Thailand's largest industrial estate developer is restructuring its investments to align with the country's rapidly changing business landscape amid the coronavirus pandemic.

Amata has decided to revise its business plan to invest 5 billion baht ($160 million) over five years to 2023 in Thailand and Vietnam, while gearing up for a post-COVID rebound in the economy.

The developer hopes to beat the gloomy sentiment caused by COVID-19 at home and political instability in other parts of the region, said an analyst from KTB Securities. In particular, Amata senses opportunity in digitization, a trend that continues to grow in the business sector.

"COVID-19 is a key factor, driving us onto the digital platform to increase the productivity and efficiency of our clients," said Viboon Kromadit, Amata's chief marketing officer, in an interview with Nikkei Asia.

Under Amata's revised plan, most of its investment money will target development of 5G network infrastructure and general modernization at its industrial estates. Ultimately, the company wants to transform these properties into "smart cities" equipped with digital platforms, renewable power and advanced medical centers.

Thailand's population is ageing, sending labor costs uncomfortably high and threatening the nation's competitiveness. Hence, Amata needs to rely more on digital and advanced technology to move all industrial estates toward next-generation industries, said Viboon.

Amata has developed more than 7,000 acres in Chonburi and Rayong provinces that 1,100 factories now call home. To help its foray into digitization, Amata is partnering with AIS, the country's biggest mobile operator, to install 5G networks at its industrial estates. It is also working with B Grim, a leading power company, to develop a 133-megawatt cogeneration power plant for its power-hungry tenants.

Despite its moves, Amata faces headwinds caused by COVID-19. Amata posted a net profit of 1.1 billion baht ($35 million) in 2020, down 36% from the previous year when it had a net profit of 1.7 billion baht.

Normally the company sets a real estate sale target at around 395 acres per year. However, COVID-19 has disrupted business and forced the company to lower its goal this year to 355 acres.

Amata halted a $1 billion "smart city" project outside Yangon, Myanmar due to the coup. (Source photos by Reuters and Shinya Sawai) 

Adding to headwinds has been the coup in Myanmar, which has forced Amata to delay a $1 billion smart city project in the country. "We have around a dozen staff working there. However, all of them are now back in Thailand and we just have to wait and see whether the situation will return to normal," Viboon said.

The Yangon Amata Smart and Eco City is spread out over 2,000 acres in Yangon. The smart city would have started generating revenue this year were it not for the coup, which has spooked foreign investors.

Beyond its move into digitization, Amata sees Vietnam as a potential panacea to headwinds elsewhere. The company has been investing there for more than two decades. Investment in the country from 2015 through 2020 reached $108 million. Over the next five years, Amata plans to invest at a much faster rate.

Amata does not have any near- to medium-term plans to expand outside of Southeast Asia. "What we are trying to do is to develop industrial estates within [the Association of Southeast Asian Nations bloc] to link further to China's Belt and Road initiative," Viboon said.

He added that Belt and Road projects will bring in a great deal of Chinese money.

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