Sawasdi: Going step by step

"Now we have three business units in Hemaraj, but we want to create a value-added business and a clear business strategy for the company that would focus on industrial estates alone. Our other businesses, especially property development, water management and waste-treatment services, have the potential to operate by themselves," he said.

Sawasdi said the restructuring plan stipulated that Hemaraj would own 100 per cent of all three new subsidiaries. "At present, we're allocating assets for each business. We expect to submit this plan to our board of directors within the next two months," he said.

Once the restructuring plan is ready this year, Hemaraj will operate only the industrial-estate business. He said it would give an obvious image to each company and should make business administration easier.

He said Hemaraj presently provided water-management and waste-treatment services only in its own estate. However, when these two business units are set up as companies, they will generate revenues by extending such services to other estates, too.

Sawasdi said once the restructuring was completed, he planned to develop an empty 4,000 rai of land the company owned near its industrial estate in Rayong close to Chon Buri province into a new community complex. The project will include a campus, a community shopping centre and residential projects, all of which will be developed by its new property subsidiary.

"We have 200,000 people in our estate. This project, providing all necessary amenities, a school and markets, will help reduce their daily expenses, particularly transportation costs."

The company expected to spend more than Bt10 billion and complete the project over several years, he added.

Sawasdi, who is also chairman of Sri Racha Harbour, said the harbour had just passed an environmental-impact assessment for the port's expansion last month. It will expand the port's capacity to accommodate vessels from 6 million to 10 million tonnes.

"We are in talks with three global logistic firms that are interested in expanding their presence in Thailand about joining this project," he said.

He said expanding port capacity would cost Bt300 million to Bt400 million but that Sri Racha Harbour could not raise the funds by itself, because the company was undergoing debt rehabilitation. Any investment proposal by the company would need the approval of its creditors.

He said if the company was successful in negotiating with a new foreign investor to be its strategic partner and buy out loans worth Bt1.2 billion from its creditors, then that would pull the company out of its debt-rehabilitation plan.

"We'll propose the plan to our creditors in the second half of the year, when our deal with our strategic partner will be complete. However, if the deal doesn't go through, we'll propose our business plan to our creditors. If the creditors give it the go-ahead, half of our investment will come from our cash reserves, while the rest could be borrowed from a bank," he said.

He said many plants had strong demand for logistics, because ports in Map Ta Phut could not be expanded any further. The company's business expansion would be supported by strong market demand.

Last year, Sri Racha Harbour generated revenues of Bt600 million.

This is the first time Sawasdi has embarked on expanding his business since the 1997 financial crisis, during which he lost control over two of his businesses: NTS Steel, since taken over by Indian steel giant Tata Steel; and Nakornthai Strip Mill, after debt rehabilitation worth nearly Bt100 billion was completed.

"I lost two steel businesses, but I've continued to steer Hemaraj out of crisis. Now my business is strong, and I'm ready to expand our investments again. But I've learned my lessons from the crisis. Now, I study the risks before making an investment," he said.

Chalida Ekvitthayavechnukul,

Somluck Srimalee

The Nation