Construction boom spills over as Bangkok revs up spending
BANGKOK — Suvarnabhumi Airport pulsed with millions of feet: tourists headed for central Bangkok and some men in suits probably en route to the emerging business district in Nonthaburi province.
About 46 kilometers northwest of the city capital, Nonthaburi could be reached in 45 minutes from the Suvarnabhumi Airport, according to Google map. But taxi driver Pramual Pidtalapho negotiated his way for one hour and 30 minutes through the congested expressway to ferry executives to the IMPACT business convention complex in that suburb.
“Traffic heavy morning and evening. One car for every Thai,” Pramual said in broken English, referring to the population in Bangkok alone that’s roughly 9 million.
Handling almost 56 million in foot traffic last year, the young Suvarnabhumi airport — which opened in 2006 and whose name was given by Thailand’s most loved King Bhumibol Adulyadej – is the world’s 20th busiest airport by passenger number, according to the March edition of the International Airport Review. But Thailand’s 11- kilometer rapid transit system with four lines that snake thru 60 stations leaves those people with very few options to travel to its city capital and suburbs. Take the taxi and you’re trapped in traffic.
So the Thai government, financed by both public funds and private investments, is building more high- speed rail projects, train systems and expressways and is expanding its airports. That’s a total investment of 1.8 trillion baht ($53 billion) for 20 infrastructure projects, the Thai Ministry of Transport told an audience of builders and equipment makers attending the Intermat ASEAN 2017 trade show.
Indeed, tall cranes and backhoes now dominate Bangkok’s skyline — their noise beat with the city’s beat.
Construction investments in Thailand logged an annual $2023 billion from 2007 to 2011, ASEAN Constructors Federation Chairman Nattaphorn Bhromsuthi said in an interview in Bangkok on June 9. Those investments have grown since to an expected $30 billion this year, he said.
The metro’s rapid transit system, for instance, will be stretched exponentially to 241 kilometers from 11 kilometers now, to have 11 lines and 148 stations in the next 10 years.
“We do see increasing investments for the government and that will drive construction activity here in the next three to five years,” Sajid Huseni, assistant director for trade exhibition business of IMPACT Muang Thong Thani — the company behind the business convention complex in Nonthaburi, told a press briefing on Friday.
“3.5% to 7% growth is a very optimistic level in the next three to five years,” he added.
Against that backdrop, organizers of the Intermat — an international exhibition of equipment and machinery for the construction industry that’s usually held in Paris — chose Thailand for the show’s venue this year. Intermat is organized by S.E. Intermat, a joint subsidiary of Comexposium and French trade organizations from the construction industry.
The increased government spending is good for business, organizers, builders and equipment makers said.
“Equipment manufacturers and contractors work closely together to build, perfect a machine. This is true when we talk to contractors,” Isabelle Alfano, construction business unit director for Comexposium, told a media briefing.
FROM JAKARTA TO BANGKOK TO MANILA
China’s no. 1 construction machinery manufacturer XCMG ( Xuzhou Construction Machinery Group Co., Ltd.), one of the over 300 exhibitors at the event, is bullish about its growth prospects in Southeast Asia “in the next 10 or 20 years,” its president for Asia Pacific said.
The Chinese company generates 70% of its revenues from China, while the rest from overseas.
“Southeast Asia is a main market — 40% of our 30% sales is Southeast Asia,” XCMG Asia Pacific President Hu Xiangyang told BusinessWorld in a June 8 interview in Bangkok.
From Jakarta to Bangkok to Manila, XCMG sees opportunities, Mr. Hu said, noting the JakartaBandung high-speed railway China is building for Indonesia, the expansion of Bangkok’s Don Muang international airport and Philippine President’s Rodrigo R. Duterte’s massive infrastructure plan.
XCMG’s sales in the Philippines was $30 million in 2016, he said. This year, Philippine sales could reach $40 million.
“The Philippines is a good market. You need more roads, more bridges to resolve the traffic jam,” said Mr. Hu, who lived in Manila from 1996 to 1999 as XCMG chief representative.
It’s an outlook shared by British construction equipment manufacturer JCB. The company began its business in the Philippines in 2013 after winning a public tender for over 40 different machines for disaster relief in the wake of Typhoon Haiyan, the worst natural disaster to hit the country.
“Today, the Philippines is the third largest construction equipment market in Southeast Asia,” Tom Cornell, JCB Managing Director for Southeast Asia, said in a June 8 interview.
“The market is bigger. It is growing. The government is investing in infrastructure.”