The company has retained it original sales target for its industrial estates in Chon Buri's Amata Nakorn and Rayong's Amata City, according to Viboon Kromadit, senior vice president of sales and marketing for Amata. The company plans to sell 2,000 rai of land at its industrial estates this year.

He said that if the political impasse did not develop into violence, it should not severely affect the company's sales target.

Industrial land sales in general are expected to fall due to the political turmoil which has discouraged new investment. According to the Board of Investment, the value of applications for investment promotion privileges in the first quarter fell by nearly 50 per cent from the level in the same period last year: to Bt104 billion from Bt183 billion.

However, in the first quarter of the year, Amata bucked the trend, selling 494 rai of industrial land, close to its original target of 500 rai a month. The industrial estates' clientele are the automotive industry and electrical appliance companies that use Thailand as an export base. These companies are acquiring more industrial land to increase productivity. Meanwhile, new clients have bought industrial land to move production here.

"We haven't been affected much by the political turmoil so far because investors believe in the economy," Viboon said. "Moreover, they understand the situation and realise that it is part of the path of democracy. Besides, there has been no violence. And our company has kept our clients informed of what's happening.

"But I hope that the uncertainty won't continue for another six months or lead to any casualties. I believe that our land sales will meet the expected target because a number of existing clients have almost reached their productivity limits and want us to develop more industrial land for their expansions."

Nonetheless, he noted that some investors had delayed making decisions, waiting to see how the situation evolved. "We have to adjust our strategy to ensure that clients won't cancel contracts," he said.

The Amata Nakorn Industrial Estate in Chon Buri province has 7,000 to 8,000 rai available for future development under its ninth phase. Viboon said that most potential new clients were from Japan.

But, according to KGI Securities (Thailand), Amata's 2,000-rai target is too high, given the prolonged political turmoil. The company should be able to sell only 1,600 rai of industrial land this year, it said in a recent report. Of the 494 total rai sold in the first quarter, 300 rai sold China's Holley Group included a buy-back provision. If the Holley Group exercises its right to sell back the land to Amata, the company may miss its target.

Amata has already seen a slowdown in investments from Singapore-based Ascendas where Amata has some interests, according to KGI.

In addition, KGI said Amata's executives this year expected its growth rate in Vietnam to reach only 5.6 per cent to Bt600 million, much lower than its 2005 growth rate of 115 per cent.

Meanwhile, Siam City Securities has predicted that Amata should meet its sales target and that political tensions were expected to only slightly affect the company. Its main clients, especially in the automobile industry, have already planned their investments in advance until next year, Siam City noted.

The securities house estimated that Amata's net profit this year would surge 35 per cent to Bt1.46 billion. 

Watcharapong Thongrung

The Nation