Steady as she goes for Tanayong

Executive chairman Keeree Kanjanapas last week said Tanayong's business-expansion policy continued to rest on residential and hospitality developments, but with a focus on hospitality business because of its creation of long-term income.

Tanayong plans to launch two or three new projects this year, but is not sure when because it is waiting to gauge the capacity of the national economy for recovery.

"We don't believe the global and domestic economies will recover now. We have to wait and see what happens in the final quarter of this year," he said.

Keeree said prior to the 1997 financial crisis, Tanayong had expanded its investments beyond its ability to shoulder the burden of debt that followed the crisis and the related baht devaluation. The company has now been rehabilitated after indebtedness amounting to Bt77 billion in 2007, and has adopted a conservative expansion policy based on the hospitality business.

Its first investment project after emerging from rehabilitation was the Bt300-million U Hotel in Chiang Mai.

Keeree said Tanayong owned Bt6 billion worth of undeveloped land around the country, especially in tourist destinations like Chiang Mai, Phuket and Bangkok.

This will be enough for new residential and hospitality developments to be launched when the company believes the country's economy is recovering.

Until then, the company will prepare by employing new staff and completing a business plan.

"We may launch two or three new projects in the fourth quarter if we see business recovering," he said, adding that the projects would be both residential and hospitality developments.

Investment funding would come from the company's cash and from bank loans.

Upon emerging from rehabilitation, Tanayong had total debts of only Bt3.09 billion, representing a debt-to-equity ratio of 0.8. In the fiscal year ending March 31, it recorded revenue of Bt1.07 billion for a net profit of Bt20.26 million.

Last year, managing director Kavin Kanjanapas said within five years, the company planned to open new hotels on Koh Samui and in Chiang Rai, Kanchanaburi, Phuket, Krabi, Khao Yai National Park, Rayong and Bangkok, as well as three locations outside of Thailand: Luang Prabang in Laos; and Phnom Penh and Siem Reap in Cambodia.

"We believe within eight years, we'll be back as a market leader in the property industry," Kavin said.

To help meet its target, the company has established a construction firm called Hip Hing Construction (Thailand), with registered capital of Bt100 million. Tanayong owns 51 per cent and Hip Hing Construction (Hong Kong) the rest. The firm will support Tanayong's long-term business expansion, he said.

Last week, the company's board approved an increase in Tanayong's registered capital, from Bt5.81 billion to Bt7.7 billion. It will allocate 1.03 billion new ordinary shares with a par value of Bt1 each to Winnington Capital.

Payment for the shares will be used to buy shares in Kamala Beach Resort and Hotel Management. The remaining shares will be allocated to Thai NVDR.