Contractor Teka Construction Plc is switching its focus to non-condo projects, housing development and construction materials to reduce its reliance on high-rise residential projects.
Suphon Chongchintaraksa, the chief financial officer, said the company would expand its scope and customer base to include various construction projects, such as international schools, warehouses, shopping malls and the government sector.
"Construction jobs from the private sector are expanding, particularly non-condo projects," he said. "We are bidding for the construction of international schools and warehouses with a total value of 2-3 billion baht."
According to the Office of the National Economic and Social Development Council, spending on construction from the private sector last year grew 1.6% to 569 billion baht from 560 billion in 2021.
The key driver was the construction of other properties such as factories, warehouses, hotels, and other buildings, which accounted for one-third, with a 14.8% increase in spending from 160 billion baht in 2021 to 184 billion last year.
Construction of residential projects comprised 53%, a rise of 5.6% to 297 billion baht last year from 282 billion the previous year.
The construction of commercial properties, which accounted for 16%, saw a significant drop of 26% to 87.4 billion baht last year from 118 billion in 2021.
By shifting its focus away from condo projects to other sectors, Teka aims to increase its revenue proportion from warehouses and other projects, such as international schools as well as government infrastructure.
The company expects these sectors to account for 10% and 5% of its revenue, respectively, by 2024-25, compared to zero this year.
The proportion of revenue from condo projects and hotels and mixed-use projects is projected to decrease to 70% and 15%, respectively, from 74.8% and 23% this year, said Mr Suphon.
By 2026-27, Teka anticipates a further decline in revenue contribution from condo projects and hotels and mixed-use projects to 60% and 10%, respectively.
The proportion from government infrastructure projects is expected to rise to 10%, while the housing development business will account for 10% of the company's revenue.
Teka expects to have 2.2 billion baht in revenue by the end of 2023, up 13% from 1.94 billion baht last year.
"If the minimum daily labour wage is increased to 450 baht, it will have a short-term impact on our revenue as it will affect our existing jobs," he said. "For new jobs, the new wage will be pushed into the cost."