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Published on January 18, 2008

"Work hard and work smart" is the philosophy of entrepreneur Prateep Tangmatitham, who has built his property firm Supalai from a small company into one of the top five in the industry over nearly two decades.

Prateep, 59, established an architecture office in Bangkok in 1975, after graduating with a master's degree in architecture (housing) from the University of Illinois. But he'd already been working for some years.

"My older brother Chuan, who owns MK Real Estate, took care of my student life and gave me Bt40,000 to study at the University of Illinois in the US. That was enough for air tickets only, so I had to work and study at the same time until I graduated. I had Bt100,000 in savings when I returned to Thailand in 1974," he says.

Prateep spent the money to establish his architecture office. However, one year later he spent another Bt100,000 to buy a 5-per-cent stake in his brother's firm and began work for MK Real Estate.

He worked for MK Real Estate for nearly 12 years, until one day his older brother asked him why he did not establish his own business.

That inspired Prateep to set up his own property firm, with the name Supalai, in mid-1989.

"I spent nearly Bt100 million from my savings to set up my property business," he recalls.

Prateep succeeded in selling his first two projects, worth Bt2.5 billion, in the first year of operations. The projects involved both condominiums and detached houses. He went on to double the value of Supalai's projects in its first five years.

"Our business was different from my older brother's firm. It developed only low-rise residential projects, like detached houses and townhouses. We created integrated property projects by developing condominiums alongside low-rise residential projects such as detached houses and townhouses.

"At the same time, we developed office buildings, hotels and resorts to generate rental income. The company now has one office building on Rama III Road called Supalai Grand Tower and two hotels and resorts in Phuket and Saraburi provinces," he says.

Three years after beginning operations, Supalai was listed on the Stock Exchange of Thailand. The move was made faster than other property firms, which took up to five years to list on the stock exchange.

However, after enjoying business growth of up to 100 per cent per year, the company faced the crunch of the 1997 financial crisis.

Prateep says Supalai's debts increased by up to Bt800 million overnight following the devaluation of the baht, and the closure of several commercial banks and finance companies affected its credit line.

Some customers cancelled their contracts to buy houses when their earnings dropped or they were laid off.

"I tried to solve my problems step by step, by helping both my customers and my company to survive," Prateep says.

His first step was negotiating changes of contracts with Supalai's customers. For those who still had jobs, he suggested reduced housing sizes to minimise down payments and monthly payments. For those who had lost their jobs, the company held their down payments until they found work and were earning enough to once more consider buying a house.

"We did not hold customers' down payments when they lost their contracts, because we knew they did not want to lose their money," he says.

Then the company negotiated with its bank to reschedule loan payments and leave a cash flow sufficient to run its existing projects and deliver to customers on time.

Two years after the crisis, Supalai returned to expand its business again.

From 1989, when its assets totalled Bt100 million, Supalai has risen to claim assets valued at Bt10.3 billion at the end of last year. Over 19 years, the company's residential projects have increased from only three projects worth Bt2.5 billion in 1989 to 35 projects worth nearly Bt30 billion in 2007.

Prateep says that when he started his business he had three strategies in mind: building quality houses with the motto "stand for superiority", building profitability for all related parties including customers, employees, suppliers, shareholders and society, and building longevity into his firm.

He says he enjoys his job, much as anyone might enjoy a hobby, and as a result he has the ability to create new housing concepts as well as building quality products.

"I have the ability to create new designs by using innovative raw materials and I am concerned about my customers' quality of living when they buy my houses or condominium units. I enjoy my work all the time. That is the key to my success in building my business to become one of the top five in the property market," he says.

Prateep explains that when he chose to be an entrepreneur rather than an employee, he knew he would have to work hard. But this was not the only factor that drove his business growth. "I had to work smart. That was the key to averaging growth of 10 to 30 per cent per year when I faced high market competition."

Supalai recorded revenue of Bt3.7 billion and a net profit of Bt626.42 million in the first nine months of last year.

It also made presales amounting to Bt8.8 billion last year, up by 19 per cent over 2006. It expects to achieve presales of Bt10 billion in 2008, an increase of 13 per cent year on year.

"We are now ranked in the top five in terms of net profit and we expect to be in the top three in terms of net profit in 2009," Prateep says.

Somluck Srimalee

The Nation