TTW eyes Yangon for its maiden foray overseas
Thai Tap Water Supply (TTW) is eyeing a project in Myanmar as part of its strategy to look for opportunities abroad in light of slowing demand in Thailand.
"This will be our first overseas tap-water project," managing director Sompodh Sripoom said yesterday.
The company has surveyed target areas in Yangon and local partners are being sought. This follows surveys in other cities in Myanmar such as Mandalay and Nay Pyi Taw.
"With a 7.5-million population, Yangon is the most promising. In other cities, they are now demanding infrastructure like roads and electricity. But in Yangon, the city has witnessed fast expansion in tourism and construction.
"All new businesses need water. This tap-water project has indeed drawn attention from many bidders, but we're confident that TTW - with more than 10 years of experience - stands a chance to win."
The investment plan for Yangon is expected to be submitted next quarter, he told a press conference in Yangon.
Last year, the company bought a stake in CK Power (Laos), a hydropower-related unit of Ch Karnchang Group, which now is the majority shareholder in TTW.
TTW might only operate the plant or might also get involved with distribution in the project, which would not require a big investment, as the service will cover only parts of the big city. However, it is important to get the right local partner to take charge of operations, Sompodh said.
"We won't bring in our men here, because of the [big] wage differential and other factors."
The overseas investment plan was actually launched last year, aimed first at Laos and Vietnam, but because TTW acted too slowly, some other companies made the first moves into those countries. The firm is still interested in entering them, but now through acquisitions.
Expansion is a must to maintain 15-per-cent annual revenue growth, which is the goal of its Bt23.8-billion five-year plan (2013-17).
This year, about Bt5 billion is set aside for the acquisition of a tap-water business in Thailand and also for the expansion of its Pathum Thani plant from 380,000 cubic metres a day to 480,000.
It also plans to invest Bt2 billion to add capacity to the Samut Sakhon plant. TTW will celebrate the milestone production of 10 million cubic metres this year.
In 2017, revenue should hit Bt10 billion, with 93 per cent derived from the water business, while 7 per cent will come from other businesses including clean energy. The company still wants to invest in a 10-megawatt solar farm, pending approvals.
Last year, TTW's earnings climbed 14.6 per cent to Bt2.21 billion, but revenue increased only 8.4 per cent to Bt5.3 billion. Operating costs were driven by higher electricity and chemical bills. The tax exemption granted by the Board of Investment also ended last July and the lower corporate-income-tax rate could not fully compensate for it.