Amata Vietnam slowed by wary investors

Amata Corp chief business development officer Somhatai Panichewa said the weakened dong would not affect the company seriously because both revenue and expenses were mostly paid in the Vietnamese currency. It earlier targeted a net profit of US$10 million (Bt331 million) in Vietnam this year.

She said the company predicted the dong would fall by around 20 per cent this year. Therefore, she is worried that inflation will boost labour wages by at least 10 to 15 per cent from the current minimum rate, which is around US$50 (Bt1,658) per month.

"Foreign investors have to consider more carefully their higher costs. If they cannot take advantage of cheap labour wages, they may put off their investment plans for a while," she said.

However, she believed that the situation should not be as serious as the "Tom Yum Kung" economic crisis of 1997 because Vietnam's government has the sole authority to rapidly launch financial measures to control the situation.

She said her company would concentrate more on residential and commercial rentals as well as providing utility services rather than land sales for factories. It forecast that revenue from factories in Vietnam would drop by 20 per cent this year, she added.

Amata Vietnam will target land rentals as property prices are rising continually, she said.

She said that the company would follow through with its proposal to the Vietnam government to develop 2,000 hectares of land in the southern region despite the country's cloudy economic climate.

 "It should be our opportunity to continue with our plan and benefit in the long run, while other real-estate developers seem to hesitate to move on with their investments due to negative economic factors," she said. "I believe the government will probably offer some privileges to encourage investors to continue with their plans."

Amata Vietnam accounts for approximately 7 per cent of Amata Corp's total revenue, which was Bt4.398 billion in 2007, according to the Stock Exchange of Thailand.