Amid this year's persistently high oil prices, rising raw-material costs, strong baht and murky economic and political scenarios, only a few businessmen could successfully sail their companies out of difficulty.

But Preuksa Real Estate president Thongma Vijitpongpun is among the even fewer who did better than that. Throughout 2006, with many sectors complaining of crises that hit their sales records and gross profit margins, Preuksa Real Estate not only maintained sales, but also increased them sharply.

Under the leadership of easygoing and humble Thongma - who has been voted by The Nation's Business Desk as Businessman of the Year - Preuksa chalked up Bt5.9 billion in sales and a net profit of Bt974.3 million in the first nine months of the year, up 8.8 per cent and 6.1 per cent, respectively, from the same period last year. This is an outstanding performance considering that the property market's growth during those nine months was less than 5 per cent. In 2006, property development suffered greatly from a slip in purchasing power.

Notably, the country's biggest developer, Land and Houses (LH) felt the hardest blow when its luxury housing estates failed to draw buyers who, under pressure from high fuel prices, paid more attention to city condominiums. For the first time since the 1997 crisis, LH witnessed a drop in sales. First-half sales fell 21.15 per cent to Bt8.2 billion, from Bt10.4 billion in the same period last year, while first-half earnings also fell, from Bt2.51 billion last year to Bt1.44 billion this year. As a result, LH had to knock Bt4 billion off its annual sales target, reducing it from Bt24 billion to Bt20 billion.

As well, the second-biggest company, Sansiri, posted a nine-month net profit of only Bt327.21 million, down 53.27 per cent from Bt700.24 million in the same period last year. Lalin Property announced a net profit Bt316.09 million, down 38.72 per cent from Bt515.82 million last year. And Property Perfect reported a net loss of Bt72.28 million, compared with a net profit of Bt497.06 million last year.

Knowing what the others were experiencing, Preuksa managed to stay above the tide with an innovative marketing campaign. The company launched its "Bt2,549 Campaign" to ensure it met its sales target in the face of a drop in purchasing power. It featured down payments of Bt2,549 on new houses, the lowest ever at a time when down payments for a Bt1-million house should be Bt200,000 - 20 per cent - or even higher.

Behind the company's offer of low prices was Thongma's long-sightedness. An engineer by training, he knew it would be possible to offer low-priced houses only with technology that could reduce construction time - which would save greatly on labour and interest costs. Preuksa is one of the few companies so far to have made use of prefabricated technology.

Thongma particularly attributed Preuksa's growth story to the company's right customer target: lower middle-income earners who always need to buy a first house, not high-income earners who usually have accommodations and can delay home purchases.

"We believe that although the cost of living increased following higher oil prices and interest rates, demand for housing priced below Bt1 million a unit will remain stronger than those priced above Bt2 million," he said.

Thus, while other property companies are revising their strategies for next year to ensure sales growth, Thongma feels certain Preuksa's growth rate will be maintained, due to the company's German "precast" technology and the right focus on lower middle-income earners.

Thanks to his success and the company's listing last year on the Stock Exchange of Thailand listing, Thongma has received greater media attention.

Forbes magazine this year named him one of the top 20 richest businessmen in Thailand.

"Spent six years working as a site and project engineer in construction firms before starting his own outfit, Preuksa Real Estate, in 1987. Took the group public last year, catapulting Thongma from relative obscurity and transforming Preuksa into one of Thailand's biggest listed property groups," Forbes reported.

The Nation's Business Desk is of the same opinion. Without Thongma, who proved his ability by turning a small business into one worth billions of baht, Preuksa would not have been spared the difficulties that damaged its peer companies, as well as so many businesses in other fields.

Business Desk

 The Nation