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ASIA FOCUS
Thai companies in Vietnam need to reassess their exposure, writes Umesh Pandey
The most sought-after destination for regional investors just a few months ago, Vietnam today is looking for shelter as the economy dives and analysts, economists, investment bankers, investors and even rating agencies downgrade their plans for the country.
Thai companies having presence in the country remain confident about their investment prospects but with a pending crisis, according to what most economists believe, they are already looking for shelter as well.
One of the first companies to announce that it was holding off its planned investments was Preuksa Real Estate Plc (PS), which said that it would now focus its investment plan on India rather than Vietnam. Thailand's second-biggest residential developer said land prices in Vietnam were becoming too high, among other things.
Although short of saying that the company was taking a wait-and-see approach, Thongma Wichitpongpan, the PS chairman and managing director, said the company had not invested in properties in Vietnam, as it was still studying the market, land, products and housing demand of the country.
He said that land prices in the central business district (CBD) of Ho Chi Minh City were about one million baht per square wah, higher than the 600,000 to 700,000 baht for prime sites in Bangkok's CBD, while suburban plots were twice as expensive as their Thai counterparts that trade at between two million and three million baht per rai.
Mr Thongma also said that Vietnam was a relatively new consumer market for houses and condominiums and that forecasting demand was a challenge.
"We are not rushing to invest in Vietnam as we want to spend time to study the market, the products and demands of the consumers first. We might wait for a while for an appropriate timing and we will give India the priority."
But as some companies take a step back, others are forging ahead, among them Amata Corp Plc.
Thailand's leading industrial estate developer has invested heavily in Vietnam for a decade, and says that it will continue to do business as usual in the country, even as it faces a scenario that could rival the 1997 events in Thailand.
"The issues with Vietnam are more like what Thailand went through years ago and we are not moving backward on our plans there," Vikrom Kromadit, an executive and founder of Amata said.
Amata, which at one point was looking to list its local subsidiary in Vietnam, suspended that plan earlier this year amid gloom in the equity markets.
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