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Published on February 8, 2008

Twenty-seven years ago, Pramote Thirakul changed his life as an employee to become an entrepreneur by founding the home-building firm Four Pattana.

At the time, he and three friends who were co-founders scratched together Bt200,000 from their savings to set up a firm that nowadays builds Bt500 million worth of homes each year.

"Our business vision was to build quality houses for our customers. That was the key to our success, driving our firm to become a builder of quality homes," says Pramote, who is also Four Pattana's managing director.

"We did not set out to be millionaires. Our business had to generate enough profit to build up our staff's quality of life while not taking advantage of our customers. That is why we were able to maintain strong growth despite the financial crisis in 1997," he says.

In the year before the economic crisis, there were up to 140 home-builders in the market. When the crisis hit, 120 were caught up in the financial chaos and disappeared. Four Pattana was one of only 20 home-builders to survive.

And the ability to survive was learned the hard way.

Pramote, now 62, recalls that he and three friends named Suwat Shinveroj, Kokiat Yammesri and Apai Norpayak resigned from a company called Stramit Board in 1981 after foreign investors bought a major stake and changed its name to Star Block.

After working for Stramit Board for 12 years, Pramote's savings amounted to only Bt100,000, but he decided to spend half of that to join with the others and set up Four Pattana with registered capital of Bt200,000.

In its first year, the company received small jobs like renovating houses for less than Bt100,000 per job. But in 1982, it signed its first contract to build a Bt400,000 single-detached house.

Pramote says that first house created a strong impression for the customer when he saw the quality of the workmanship.

At that time, most Thai home-buyers purchased their homes from property developers. If they preferred to build a house on their own, they would hire an architect to draw up the plans and then find a small contractor to build it.

Pramote recalls the difficulty Four Pattana had in convincing people it offered a one-stop service, from design to a customer's requirements to building the house.

"It was difficult for them to change their minds and use a home-building company," he says. "They believed they would have to pay more than they would hiring a small contractor to build a house according to their plans.

"But they learned that with a home-building firm, they would receive a quality house to match their ideas. There would be no more work left unfinished because a small contractor faced a financial crunch."

For these reasons, Pramote explains, Four Pattana took time to break into the home-building market. However, after finishing their first house, Pramote and his friends began to draw standard houses from which customers could select a design close to their needs. The company also prepared plans for houses costing more than Bt10 million, with customer demand in mind.

When Thailand faced the 1997 economic crisis, most home-building firms were forced out of business. But Four Pattana recorded strong growth.

"Most of our customers believed that when they decided to build a home with our firm, they would receive a quality home delivered on time. Our suppliers, who sold us construction materials, continued to provide a credit line for us, because they knew they would get paid on time. As a result, our business survived the crisis and continued to record strong growth when most home-builders were forced out of the market," he says.

Pramote says that over the past 27 years, land-owners have accepted home-building firms as a successful way of constructing the homes they want. Home-builders have created a market in Bangkok and its suburbs worth about Bt8 billion a year, or 26 per cent of the total home-building market.

Four Pattana's construction portfolio was worth Bt458 million last year, and Pramote expects it to reach Bt500 million this year.

He says the margin in the home-building business, which averages 10-15 per cent, is enough to take care of Four Pattana's staff, which is now 600-strong, and give them a good quality of life.

"In our work, we must be concerned about our partners, including customers, staff and shareholders. They must enjoy benefits from our business. These are our business goals, not higher profit margins. As a result, we have more staff for building quality houses for our customers. We don't hire subcontractors to build houses, because we cannot control the quality when we hire subcontractors. This business philosophy proves our honesty. This is the key to our successful business growth in a highly competitive market," Pramote says.

Somluck Srimalee

 The Nation