Amata focuses on Vietnam

Amata focuses on Vietnam

Industrial estate developer is confident of success after a 10-year struggle to launch a huge project in Dong Nai province.

Somhatai Panichewa takes pride in being the promotional representative of the first foreign industrial estate established on Vietnamese soil in 1994.

Workers at Amata City (Bien Hoa), one of the largest industrial estates in Ho Chi Minh City.

The sister of billionaire Vikrom Kromadit, the founder of Amata Corporation, faces the daunting task of pushing sales of the industrial estate developer's Vietnamese arm after becoming president of Amata (Vietnam) last year.

Apart from running Amata City (Bien Hoa) in Ho Chi Minh City on an area of 4,375 rai, the company has spent 10 years trying to set up Amata Express City on 7,781 rai in Long Thanh city in Dong Nai province.

Thailand's political strife dampened Amata's land sales last year to only 1,008 rai from an earlier estimate of 3,000 rai, prompting the company to focus more on Vietnam this year.

"Amata Express City is the longest project in the history of Amata," said Mrs Somhatai, 48, at her office building named after her original family name. These days, thanks to technology, she does not have to travel to Vietnam as often as in the past.

After holding talks with Dong Nai authorities in 2001, Amata officially asked for land allocation three years later, but the province's infrastructure plans were behind schedule.

"We wanted to invest in the province on condition that there was adequate infrastructure, so we advised local authorities to bring the international airport there and create a tollway from the airport to Ho Chi Minh,” said Mrs Somhatai. “We wanted to upgrade Dong Nai to a metropolitan area."

The highway is now slated to be finished next year, while the airport will start construction in 2016.

Facing hiccups in expansion, Amata last year put on hold an initial public offering for Amata VN, its holding company in Vietnam in which it holds nearly 90% of shares.

It planned to float 139 million shares at a par value of 50 satang apiece in the fourth quarter of last year to fund Amata Express City. The plan was postponed to the second half of this year.

Dong Nai authorities have promised that land demarcation will be finished by the end of this month, while an investment licence is expected to be issued next year.

Located 19 kilometres from Ho Chi Minh City in southern Vietnam, Amata Express City's industrial area will comprise 40% of the project, with the rest made up of commercial areas and other features such as schools and houses. The estate will target high-tech industries.

Adopting the bold personality of her brother Viboon Kromadit, who looks after operations in Thailand, Mrs Somhatai is somewhat sceptical about Thailand's concept of eco-industrial estates.

Rather than making eco-friendly estates, Amata's industrial estates evolve around the idea of "smart cities", with the development of communication and network systems to monitor waste management and energy efficiency.

Amata Express City will house 200-250 factories and have a population of 500,000 to 800,000 people. Mrs Somhatai said the economy of scale will enable Amata to invest in its own waste incinerator.

As chairwoman of the Thailand-Vietnam Business Council, Mrs Somhatai is optimistic about investment prospects in Vietnam. Countries such as South Korea, Japan, China and Russia are keen to do business there and interested in providing loans for infrastructure, she said.

Thanks to the economic boom in 2000, more than 100 industrial estates were set up in Vietnam.

"You only have to have some connections, sign papers, and the local government will give you a licence. Farmers had to be relocated, but in the end some estates were not set up due to the not-so-ideal locations,” she said.

“Then the government learned that having estates occupy a large amount of area affects the production of agricultural products."

Data from Vietnam's General Statistics Office indicates that foreign direct investment of US$11.5 billion arrived in the country last year, which was a 9.9% increase from 2012.

However, Vietnam's laws change constantly. Amata had to resettle more than 4,000 households on 250 rai in Dong Nai province when a new law required businesses to allocate a proportion of land for resettlement.

"It has significantly slowed down our work," said Mrs Somhatai, adding that stricter laws would deter newcomers from investing in industry.

“Amata's projects aren't rolled out on a red carpet. We've waited for such a long time, but I guarantee that Amata Express City will definitely happen."

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