Shinawatra scion unveils plan

The company expects a return on investment from the new business of up to 25 per cent a year, said Piroon, who is now the company's president for business development, at a press conference yesterday.

Piroon started building up his stakes in General Engineering last year. He now holds six per cent of the company, which has paid-up capital of Bt471.8 million.

"My GEL holdings average Bt2 per share, at an investment budget of lower than Bt50 million," he said.

Although Piroon holds only six per cent in the company, he is now a major shareholder. Almost all other shareholders hold between one and two per cent.

Piroon said he has expanded his investment in General Engineering because he sees potential to develop the company, especially in finding new business that will generate higher income for the company.

He added that he is looking at expanding into the alternative energy business. However, he declined to disclose the investment budget for the new business, saying the study is an ongoing process.

"Alternative energy will be the first project that we have strong interest in to expand our investment. Other potential for investments includes logistics or the property business," he said.

The company will expand its investment as soon as possible by raising new capital from the market, he said.

The company presently has registered capital of Bt815.21 million, Bt 471.8 million paid-up. The company also plans to issue 100 million shares by private placement this year, expecting to raise new capital of nearly Bt300 million.

"We have to delay raising funds from the market because the capital market is weak now. When it recovers, we will start the private placement process," company CEO Vichaya Chatikavanij said.

Piroon, son of Payap Shinawatra  the younger brother of Thaksin  also owns the alternative energy business GRTech Co Ltd and the property company, Dwell Development Co Ltd, which developed condominium project D65 on Sukhumvit Soi 65.

"GRTech is my own business and is not related to GEL. We don't have any plan to list GRTech through GEL," he said.

General Engineering is one of the leading manufacturers of construction raw materials, including prestressed concrete products such as piles, girders  and posttensioned flat slabs.

The company recorded total revenue of Bt230.3 million and a net profit of Bt3.31 million in the first quarter of this year.

Up to 55 per cent of its revenue comes from the prestressed concrete product business, 20 per cent from posttensioned flat slabs, 10 per cent from architectural precast concrete walls, and the rest from cement and special cement additive products.

General Engineering was weighed down by debt after 1997 but succeeded in restructuring its debt by 2006.

The company's president, Kittichai Raktakanit, said that Piroon becoming the company's major shareholder will help the company because he has relationships with several businesses that will drive growth in the future.

"The nature of the construction business is risky; it follows the country's economy. If the company succeeds in finding new business, that will balance our risk and create longterm income in the future," Kitichai said.

This year the company estimates total revenue of Bt1.2 billion, up 7 per cent from its total sales in 2007.

Kitichai said the company still maintained business growth but in terms of net profit the company hopes to match last year, which recorded a net profit of Bt58.91 million or five per cent of its total revenue in 2007.

"Our construction raw material costs rose 30 per cent in the first half of this year compared with last year but we can increase our production price by only 15 per cent. As a result our net profit this year may be lower than last year," he said.