Despite being one of Thailand's leading contractors and infrastructure developers, Ch Karnchang has no definite plans to become the No-1 player and would prefer to grow slowly.

"CK doesn't want to compete against Italian-Thai Development [ITD] and replace its position. It's not our policy. We emphasise modest growth and believe this make us strong," said Prasert Marittanaporn, executive vice president for accounting and finance.

CK's backlog - the value of construction work it has secured - is valued at about Bt30 billion, while ITD's is about Bt100 billion.

Prasert, right-hand man to CEO Plew Trivisvavet, said the 34-year-old company's policies in selecting projects had several criteria. First, CK must be able to handle those projects. Second, it concentrates on low-risk jobs.

"We must estimate our workforce and staff, in order to ensure there are enough to complete the work in hand. We won't greedily secure all the projects we're interested in just to boost our backlog without enough reason and workforce. It wouldn't benefit us if we did so," said Prasert.

Third, he said, CK would not acquire projects that gave it a low return or presented a risk of losses in the future. If material costs were low, CK would bid for many projects but would be more careful when costs were too high.

This cost management has allowed CK to gain higher gross profit margins than ITD and Sino-Thai Engineering and Construction, the first- and third-largest firms in the contractor business.

CK has been investing in the government's concession projects, in order to expand its operations and generate long-term steady income. Most of its subsidiaries are under the control of the Transport Ministry. Bangkok Expressway (BECL) and Bangkok Metro (BMCL) are concessionaires of the Expressway Rapid Transit Authority of Thailand and the Mass Rapid Transit Authority, respectively.

CK also invested in Thai Tap Water Supply and Pathum Thani Water. The Provincial Waterworks Authority is the regulator of both companies.

Prasert said he had worked with Plew for a long time before CK listed on the Stock Exchange of Thailand in 1995. His mission is to find many financial instruments to repay and decrease the company's debts, such as debenture offerings or seeking long-term debt to refinance short-term debt. This allows CK to repay loans before ending a project.

"Plew gave us a monetary policy that CK must not be a non-performing loan firm, because our business is closely involved with financial institutes. So if we had a weak track record, banks would lose confidence, and we would have a tough time when asking to borrow money," he said.

Plew has emphasised that CK must use local rather than foreign banks. It was Plew who pointed out that so many Thai firms relying on foreign financial institutes had a bad experience in the economic crisis of 1997. Moreover, the Thai construction industry is a complicated model, and local banks understand it better than foreign banks do.

Prasert said CK recently spent nearly Bt1 billion to purchase BMCL shares, in order to maintain its shareholding ratio. Now CK and BECL have a combined 36-per-cent stake in BMCL and want to increase that to 40 per cent.

He said this plan would not affect the company's cash flow, because CK had enough money to buy more BMCL shares.

BMCL is the operator of the first subway in Thailand, and BECL operates the second-stage expressway.

"Plew feels strongly confident that it's worthwhile investing in BMCL. It is a mass transportation that is necessary for Bangkokians nowadays, so it has a chance to grow in the near future," he said.

Like ITD, CK has also recently expanded its business abroad. The first project, awarded this year by South East Asia Energy, is for the construction of a Bt20-billion hydroelectric power plant in Laos.

"It's our policy to increase the number of foreign projects to balance our local work," said Prasert, adding that CK was now looking forward to bidding for the construction of the Nam Nguem 3 hydroelectric power plant in Laos.