Amata shifts business strategy to land leasing

The SET-listed Amata Corporation is changing its business strategy to land leasing from land sales in order to stabilise revenue in the long term.

Managing director Viboon Kromadit said the new strategy will enable the company to earn additional revenue such as water management charges.

He said the new strategy will kick off next year starting with the industrial asset of Amata Nakorn in Chon Buri province.

Amata Nakorn currently has 10,000 rai, 1,000 of which have been developed as industrial zones and residential areas.

Mr Viboon said the company is looking to sign land-lease contracts for as long as 30-50 years.

He projects that over the long run, land-lease contracts will amount to 70% of revenue, with the rest from land and other sales.

Currently, land sales account for 70% of company revenue.

Mr Viboon said Amata Corporation is upbeat about selling 3,000 rai of land this year, which represents a doubling of last year's figure.

The company has sold more than 2,000 rai, 40% of which belonged to Amata Nakorn, worth 6 billion baht, he said.

The remaining 60%, from Amata City in Rayong province, is worth 9 billion baht.

Japanese are still the main customers.

"The growth momentum from Japanese investors, particularly in the automotive sector is strong," said Mr Viboon.

"It's largely because we're located far away from the flood-hit areas. So a lot of companies have been moving to industrial zones that are located in the East."

Mr Viboon said in general, land sales growth is projected at 15-20% per year based on Thailand's fundamental growth.

"But that's only if we have no political strife or unrest, which is now taken as Thailand's riskiest factor for the investment environment," he said.

Amata Corporation reported net profit of 192 million baht for the second quarter and and 390 million for the first half, up from 168 million and 280 million, respectively, in the same period last year.

AMATA shares closed yesterday on the SET at 16.70 baht, up 10 satang, in trade worth 37 million baht.

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Writer: Nuntawun Polkuamdee
Position: Business Reporter