"The EEC is a big picture that the government aims to attract investors to. Entrepreneurs need to look around again to see which areas are most suitable. If it's petrochemicals, they will likely consider the EEC, but for others, they might choose areas on the outskirts or locations within Samut Prakan. Of course, the government will help draw people in, but our location should give us an advantage. We can already see some benefits from the EEC, so we believe that Bangna-Trad remains a vibrant area, and being close to Bangkok makes hiring easier," said Ms. Rachanee Mahatdechakul, Managing Director of Prospek Development Co., Ltd.

EEC Benefits Boost Business Boom

      The push for the Eastern Economic Corridor (EEC) project is a large-scale initiative that will generate economic circulation for Thailand. Many businesses have been preparing themselves to accommodate the growth expected in the three provinces of Chonburi, Rayong, and Chachoengsao, whether they are real estate developers for residential areas or investing in hotels to cater to tourism and conferences, as well as related businesses such as transportation and logistics. If investors come to operate in the EEC, they will certainly look for partners in the logistics industry to transport their goods to their destinations.

        For Prospek Development Co., Ltd. (PD), which is part of the Munkong Housing Public Company Limited (MK), the developer and manager of the Bangkok Free Trade Zone (BFTZ), it is a project with high growth potential, located on Bangna-Trad Road, Km 23, covering over 1,000 rai, consisting of 700 rai of leasable area and 300 rai for public utilities such as public roads, wastewater treatment plants, and security within the project.

        This is a strategic logistics point and an important industrial hub that can connect production bases for transporting goods by land, air, and sea. It has advantages in terms of travel and transport due to its proximity to Bangkok and several industrial estates, including Bangplee and Bangpu Industrial Estates, which consist of warehouses and factory buildings.

        Importantly, this project is located in a purple zone or industrial and warehouse land, with an occupancy rate of over 90%. The main tenants are Japanese, accounting for about 34%. In 2019, there are plans to expand to 200,000 square meters and to develop to full capacity of 285,000 square meters. Initially, it is expected that in 2021, the company will see revenue growth of another 70%, amounting to 580 million baht, with the main tenants being foreigners: 27% Japanese, 24% European, 21% Thai, 19% from Asia excluding Thailand and Japan, and finally 9% from Oceania-America.

Strategic Location Creates Competitive Advantage

(Rachanee Mahatdechakul)

         Ms. Rachanee Mahatdechakul stated that the EEC is another project that allows the company to benefit indirectly. As more investors, both Thai and foreign, come in, they may be interested in using the company's services due to its advantageous location, especially for businesses not in heavy industries, which often look for areas not far from Bangkok. Considering the company's location, it is indeed a strategic point and a factor that creates an advantage.

         "The EEC is a big picture that the government wants to attract investors to. Entrepreneurs need to look around again to see which areas are most suitable. If it's petrochemicals, they will likely consider the EEC, but for others, they might choose areas on the outskirts or locations within Samut Prakan. Of course, the government will help draw people in, but our location should give us an advantage. We can already see some benefits from the EEC, so we believe that Bangna-Trad remains a vibrant area, and being close to Bangkok makes hiring easier," Ms. Rachanee said.

Looking to Expand EEC Area

        Regarding the company's investment in the EEC, it is also seen as an interesting location. However, it must be acknowledged that there are quite a few large companies interested in investing. The company's approach will align with its customers and will not require a large area, initially around 30-50 rai, due to high land prices. It is believed that the government should promote or provide tax incentives to investors to create more interest. It has been observed that many operators have entered Vietnam due to better incentives. The government should have support for operators, while Thailand may focus on expertise in creating added value for products. The company believes that after 2021, there may be expansions into the EEC area, and it is currently studying to ensure that investments can be effectively operational.

        The competition in the logistics business is quite fierce, with most operators using price reduction strategies. However, the company will not focus on promotional price reductions but will emphasize the one-stop service as a selling point, making foreign clients feel like they have a partner to work with. They will not engage in price wars, but other operators may have different strategies since there are only a few investors, and anything that attracts them to become customers must be done.

Seeking New Locations to Boost Revenue

        Ms. Rachanee stated that at the beginning of the year, the rental area was 125,000 square meters, and the company aims to increase the area by another 75,000, resulting in a total area of 200,000 square meters by the end of the year, with over 90% occupancy and a rental rate of approximately 175 baht per square meter per month, which is higher than others compared to nearby areas, where it usually ranges from 150-160 baht. The company has advantages due to being a large project with a relatively tight security system, understanding customer needs, orderly traffic management, and green spaces.

        The business plan for 2020 aims to increase the rental area to 285,000 square meters, which would be the full capacity of the area, while maintaining an occupancy rate of no less than 90%. During construction, pre-sales must also be conducted. The target industries for the company are light industries such as tissue paper, paper, automotive, and electronics, with no more than 20% from each industry to diversify risk, including clients from Asia, mostly Japan, as well as operators from Thailand, covering Europe and America.

        "The company plans to increase the area by 10-15% after 2020 and will need to expand into areas near Bangna-Trad. Currently, we are looking for additional land, initially considering two plots totaling 130-170 rai in the Bangna-Trad area as well. Once the current project is nearing completion, we must expand to ensure continuous growth. Starting from mid-next year, we will begin infrastructure development and seek customers in the new location," she said.

Roadshow to Attract Foreign Investors

Ms. Somjin Piluk, Governor of the Industrial Estate Authority of Thailand (IEAT) stated that from November 18-21, 2019, the IEAT, in collaboration with the Board of Investment (BOI), organized a roadshow to attract investors from Germany at Compamed 2019 to provide opportunities for investors to meet and exchange business information to build business relationships, as well as to showcase the readiness of industrial estate areas to support the government's economic and investment strategies in the future. During this event, the IEAT received interest from medical device manufacturers and medical equipment producers who inquired about details to consider investing in the industrial estate in the Eastern Economic Corridor (EEC).

        "The main reason for the roadshow in Germany, besides promoting investment at the Thailand Pavilion, was that the IEAT met clients producing medical-related equipment who expressed interest in visiting the rubber industrial estate (Rubber City) in Songkhla, which is a leading company in medical device manufacturing that utilizes technology and innovation in the production process. This aligns with the target customers for the new target industry (New S-Curve)," Ms. Somjin said.

        However, the comprehensive medical industry is one of the five industries ready to expand investment into Thailand, along with the IEAT's readiness in terms of space to support such investments, especially in the EEC area, such as the Smart Park industrial estate, which is currently preparing to present to the IEAT board, with expectations to present to the Cabinet (Cabinet) by March 2020 to seek approval for project implementation. At the same time, the IEAT has discussed with the Investment Promotion Office in Frankfurt about ways to attract German investors, focusing on providing comprehensive one-stop services, approvals, permits, and other facilities in the industrial estate for investors beyond just offering various incentives.

        Additionally, the IEAT has visited the Innovation City Management in Bottrop, Germany, with the objective of enhancing city development through innovation leading to sustainability by holistic management across various dimensions, such as economic, environmental, geographical, and social dimensions. The insights gained from this study visit will be adapted to suit the development and management of industrial estates, with expectations that in the future, energy and resource management will align with demand in a balanced manner. This concept will help reduce unnecessary resource use and maintain environmental balance in the industrial estate and surrounding communities in the long term.

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