EMC to expand to general construction
A small listed construction company, EMC, is to undergo a change of management and will diversify its business from laying and constructing foundation systems to general construction.
Chairman Chanachai Leena-banchong said that having obtained a larger shareholding in EMC, his Leenabanchong group and its allies planned not only to give it a new management team but also to adjust its business plan, leading to a change in future revenue structure. EMC's stock closed yesterday at Bt3.18, down by 3.05 per cent. Chanachai said the business of constructing foundation systems had less growth potential than general construction, in which EMC will have the chance to engage in various businesses, including office building. About 70 per cent of EMC's revenue is generated from laying and constructing foundation systems. However, Chanachai expects that next year the company's revenue will be generated on a 50:50 ratio between foundation systems and general construction. In 2009, the ratio is expected to change to 40:60. Recently, Chanachai bought 5.25 per cent of EMC shares from Bangkok Bank, resulting in the shareholding of the Leenaban-chong group rising to 15 per cent. Bangkok Bank's shareholding in EMC declined from 15.76 per cent to 10 per cent, but it is likely to be a long-term shareholder as the bank is currently lending around Bt2 billion to EMC by letter of credit. Chanachai said the shareholding of his group, together with that of Bangkok Bank and his allies Komol Wongpornp-enpap and Suthisak Lohsawat, amounted to 48 per cent, or enough to control the company's management. Chanachai said he would like to boost his personal shareholding in EMC to 25 per cent by gradually buying up shares from the market. He said EMC expected to generate more revenue than its earlier target of Bt2.8 billion this year. In the first quarter, it recorded income of around Bt800 million and is expecting an additional Bt4 billion from its backlog. The company is planning to bid for projects worth at least Bt1 billion this year, 70 per cent of which is general construction work. EMC also has a memorandum of understanding worth around Bt300 million to do business in Qatar. Chanachai said that in future EMC would negotiate to become an ally of Power Line Engineering, which is in a similar business. EMC is currently in the process of changing its image to reflect its quality and security, with a changed logo.
Siriporn Chanjindamanee
The Nation
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