Published on June 24, 2005

Three major players aim to cut costs, enhance competitiveness via cooperation

Three major home-building companies have formed an alliance to reduce construction costs, strengthen competitiveness and encourage expansion.

Patum Design Develop Ltd, Heritage House Ltd and Home Standard Development Co Ltd formed the Home Networks business alliance with the aim of sharing jobs and cutting construction costs by between 5 and 10 per cent.

Sitiporn Suwansut, president of Patum Design Develop, said projects would be shared and each partner would contribute according to their strengths.

He said Patum Design, for example, would mainly manage and construct housing projects outside Bangkok in places like Saraburi, Nakhon Pathom, Chon Buri, Rayong, and Nakhon Ratchasima, because it has branches outside the capital.

Clients can choose to use the construction services of each Home Networks partner if the construction is in Bangkok and the suburbs.

He said each company was strong in building concepts, construction material selection, pricing, design and standards.

Sitiporn said construction raw materials for luxury residences had tended to be 3 to 5 per cent cheaper this year than last year, because demand in the luxury housing sector has dropped.

He said Home Networks would focus on projects with homes that cost less than Bt3 million per unit.

This segment accounts for 60 per cent of the total home-building market, which totalled Bt6 billion in value last year.

The company also expects the value of the overall market to reach Bt7 billion this year.

The three companies in the Home Networks alliance had combined revenue of Bt490 million last year. Patum Design accounted for Bt270 million, Heritage House handled Bt140 million, and Home Standard Development generated Bt80 million.

The partners’ combined revenue is projected to be Bt700 million this year, with Bt300 million coming from Patum Design, Bt180 million from Heritage House, Bt120 million from Home Standard Development, and Bt100 million from the alliance.

Suwit Vitsawanan, managing director of Heritage House, said the company would contribute to the alliance by creating 20 new designs for housing models that will help its partners reduce their design costs.

Boonlue Wongpornpenparb, managing director of Home Standard Development, said the alliance had given the company an opportunity to work closely with Patum Design and Heritage House and get good market exposure in the process.

Somluck Srimalee

The Nation

Post your comment to this story here