The purchase is part of Hanil Forging's Bt1-billion investment to set up a manufacturing plant for axle shafts and spindles in Thailand.

Hanil Forging chief executive Sang-Kyu Lee said the company was quite confident about investing in Thailand's manufacturing environment, especially at Hemaraj's industrial estate. He said that the ESIE location had the ideal land, industrial-estate facilities and utility conditions for an integrated automotive environment.

"Our choice of ESIE allows us to supply our main automotive customer, DANA Spicer (Thailand), with a supply line and logistics-cost advantages in the same industrial estate," said Lee, adding that almost 70 per cent of output would be exported. He said that the company would allocate Bt1-billion investment capital in the production facility over the next three years.

David R Nardone, president and chief executive of Hemaraj Land and Development, said that Thailand still provided a "safe, open" environment, even for 100-per-cent foreign-owned manufacturers, to participate in one of the region's most dynamic automotive growth market.

"Foreign investors continue to put their trust in Hemaraj industrial estates, especially automotive parts manufacturers - including Hanil Forging Industrial, which is the company's 114th automotive customer," he said.

"Despite small disruptions in Bangkok, the pipeline of businesses in Thailand remains strong. Manufacturing companies have continuously increased their production capacity. The manufacturing firms have not been impacted by the change in the Foreign Business Act," said Nardone. "We are quite optimistic in the great potential of businesses in Thailand. However we are financially cautious. We currently have almost Bt2 billion free cash for running our organisation and investing in any new projects."

Hemaraj Land and Development operates six industrial estates: Eastern Seaboard Industrial Estate (Rayong), Hemaraj Eastern Seaboard Industrial Estate and Hemaraj Eastern Industrial Estate (Map Ta Phut), Hemaraj Chon Buri Industrial Estate, Rayong Industrial Land and SIL Industrial Land (Saraburi).

These represent 32,000 rai (13,000 acres) under development or up and running in industrial clusters for the petrochemical, automotive and other industries. They comprise about 335 customers - including 114 automotive producers - providing direct employment for 50,000 people, and a total customer investment estimated at US$11 billion (Bt396 billion).

Nardone said that Hemaraj Land and Development expected to reach total revenue of Bt5 billion this year, of which about Bt2 billion would come from land sales in its industrial estates and between 40 per cent and 50 per cent from the sales of luxury condominiums in the Silom are. The company expects to sign about 52 purchase contracts with 725 rai of land to be sold this year. About half of those contracts are expected to be with repeat purchasers, the rest from new customers.

Nardone also said that the company, in partnership with Suez Energy, would enter a bid for the government's independent power producer project. The power plant will have a capacity of 700 megawatts and require an investment of Bt15 billion.

Kwanchai Rungfapaisarn

The Nation