Singha focuses on diversifying
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Singha focuses on diversifying

Brewery allots B10bn for non-alcohol sector

A digital rendition of the Hard Rock Resort in the Maldives, one of many projects Boon Rawd Brewery is investing in as the firm moves to increase revenue sources.
A digital rendition of the Hard Rock Resort in the Maldives, one of many projects Boon Rawd Brewery is investing in as the firm moves to increase revenue sources.

Boon Rawd Brewery Co, Thailand's oldest beer maker, plans to invest 10 billion baht annually in the property and hotels sector as it aims to boost revenue contribution from non-alcohol segments to 50% of the total from 35%.

Santi Bhirombhakdi, chief executive of Boon Rawd Brewery, said the company has set a budget of 10 billion baht per year to invest in property and hotels through various vehicles, which cover their own developments, mergers and acquisitions, and joint ventures.

"We are expanding investment into the property business as it is now our group's growth engine to boost revenue from non-alcohol segments," he said. "Tourism is also promising."

The company has around 100 billion baht in sales per year, 65% of which comes from alcohol products.

Methee Vinichbutr, chief financial officer at SET-listed developer Singha Estate Plc, owned by Boon Rawd and Mr Santi, said the company will spend a total US$310 million (10.6 billion baht) during 2017-19 to develop tourist facilities and hotels in the Maldives.

The investment will be injected into the first phase of Emboodhoo Falhu, one of the largest lagoons in the Maldives, where Boon Rawd received a 50-year concession with the option to renew for an additional 49 years from the Maldives government.

Phase one of Emboodhoo Falhu will cover three islands and phase two will have six islands. Each of the total nine islands will have individual themes under the concept of "One Island, One Theme, One Hotel".

In phase one, the largest development will be on Island 1, which will be mixed-use township including a transit resort with 200 rooms, retail and entertainment, duty-free shopping, cultural and marine life centre, a multipurpose hall, a 50-berth marina and beach club.

Island 2 will be a Hard Rock Resort with 201 rooms targeted at families, and Island 3 will have an upscale lifestyle resort with 120 rooms. Island 1 and 2 will start operations in July next year and Island 3 will commence in July 2020.

Mr Methee said Singha Estate's will begin investment in the project with $83 million paid in the third quarter to Boon Rawd.

The source of funds will include project finance, $200 million in convertible bonds and a private placement of 500 million baht, likely to institutional investors.

"The Maldives project will be our largest-ever investment," Mr Methee said. "We are scaling and building up the hotel portfolio. We plan to spend 1-2 billion baht per hotel to acquire a few hotels in Thailand's key tourist destinations this year."

Singha Estate also plans to launch two new residential projects worth a combined 11 billion baht in Bangkok in the second half.

One will be The Esse at Sukhumvit 36, a 45-storey luxury condo project with 353 units worth 6 billion baht, in which it has a 51:49 joint venture with Hong Kong Land, a property investment and development group in Hong Kong.

"We partnered with Hong Kong Land because it is well-known in Hong Kong and Singapore," Mr Methee said.

The project will be located on a 2.5-rai plot on Sukhumvit Road near Sukhumvit Soi 36, with units priced 300,000 baht per square metre on average.

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