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ITD eyes $2 bn worth of projects in Dawei

ITALIAN-THAI Development (ITD) plans to bid for US$2 billion worth of projects in the first phase of the Dawei project in Myanmar midyear after the company transferred responsibility for the project to the Thai and Myanmar governments early this year.

President and chief executive officer Pleamchai Kannasutra Premchai Kannasut told a shareholders meeting yesterday that the company would enter a joint venture with Rojana Industrial Estate to bid for development of an industrial estate in Dawei. Italian-Thai is also interested in bidding on the second and the third phases of the project next year.

He noted that the company withdrew from overall responsibility for Dawei because of the difficulty of managing its financial aspects.

The company's strategy now is to focus on three businesses: construction, infrastructure projects, and mining.

In Mozambique, Italian-Thai has signed a Bt120-billion contract to develop 537 kilometres of railway from Moatize to Macuse and a deep-sea port. The company will also get the concession to operate the railway's logistics system and the port for 35 years after the project is completed in 2019. The firm targets return on investment from this project to average 18 per cent a year.

Meanwhile, Italian-Thai also has continued to mine potash in Udon Thani province, and bauxite in Laos.

"All of these projects - Dawei, Mozambique, potash and bauxite mining - will generate long-term income for our business," Premchai said.

However, construction continues to be its main source of income, as it now has projects valued at a total of Bt144.29 billion both in Thailand and overseas that will generate revenue until 2020. The company also plans to bid on Bt513 billion worth of domestic infrastructure projects once the political conflict ends and a new government can get going on these.

The company's investment budget will come from internal cash flow and bank loans.

The firm targets revenue growth of 20 per cent this year, up to 70 per cent from domestic projects and the rest from overseas projects, especially those in Mozambique, Premchai said.

At present up to 80 per cent of its revenue is from construction business, and of that, 60.65 per cent is from government projects and the remaining 39.35 per cent from the private sector. Up to 75.83 per cent is from domestic projects and the rest from overseas, especially India.

Last year, the company recorded revenue of Bt43.91 billion, down 4 per cent from 2012, and net profit of Bt992 million. Its debt-to-equity ratio is about 4.3:1, with total debt worth Bt52.7 billion and equity of Bt12.3 billion as of the end of 2013.


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