MG maker seals Hemaraj deal
SAIC Motor-CP to site factory on 438-rai plot
SET-listed Hemaraj Land and Development Plc has sold its biggest land plot yet this year to the Chinese-Thai joint venture SAIC Motor-CP Co.
Hemaraj’s vice-chairman of the board of directors, Jareeporn Jarukornsakul, said her company signed an agreement to sell 438 rai to SAIC Motor-CP, which makes MG cars.
The site will be a manufacturing plant. Construction is to begin in early 2016 for the first phase at Hemaraj Eastern Seaboard Industrial Estate 2 in Chon Buri province.
SAIC Motor-CP is a joint venture set up in 2013 by China’s Shanghai Automotive Industry Corporation and Thai conglomerate Charoen Pokphand Group.
“It’s a good sign, showing that Thai industries, especially automotive and auto parts, have started to recover,” Ms Jareeporn said. “And that should be a good sign for Hemaraj as well, as we also expect to have another better year next year.”
Hemaraj is confident that land sales for all of 2015 will reach the target of 1,100 rai after 600 rai in sales so far.
The company has set a target of 1,400 rai in land sales next year.
Hemaraj has 45,000 rai of land in hand. Of the total, 3,000 is fully developed and ready for sale and 10,000 is to be gradually developed.
Some 40% of Hemaraj’s customers are in the automotive industry, with 15% in petrochemicals, 12% in consumer goods and 11% in steel.
Of Hemaraj’s clients, traditional investors make up 40% and new investors 60%.
“The company believes that SAIC MotorCP’s suppliers from China will also move to invest here in Thailand,” Ms Jareeporn said. “Most suppliers and auto parts makers are small and medium-sized enterprises, which normally follow major automakers in investing and are normally located adjacent to each other.”
Hemaraj expects total revenue to reach 11 billion baht this year and 20 billion baht next year.
Wu Huan, a board member and the president of SAIC Motor-CP, said the company is looking for a long-term investment in Thailand, a major automotive hub, as the venture aims to make cars and export them to several destinations in the region.
Thanakorn Seriburi, the chairman of SAIC Motor-CP, said the factory would have the capacity to make 200,000 vehicles a year.
“We will have a board meeting soon to discuss our business plan and investment budget in Thailand,” he said. “We cannot provide further details at this stage.”
SAIC Motor-CP plans to use Thai suppliers and some imports from China for its parts.
“In the future, SAIC Motor-CP will invite more auto parts suppliers to invest in Thailand,” Mr Thanakorn said.
“We expect them to capitalise on a lot of incentives offered by the new government, as we are investing in the targeted clusters that the government is promoting.”
HEMRAJ shares closed yesterday on the SET at 4.34 baht, unchanged, in trade worth 2.9 million baht.