NWR continues shift away from construction

NWR continues shift away from construction

Firm allots B500m for hotel, factory upgrade

Polpat Karnasuta, president at Nawarat Patanakarn Plc, expects precast concrete to play a larger role in construction because it costs less.
Polpat Karnasuta, president at Nawarat Patanakarn Plc, expects precast concrete to play a larger role in construction because it costs less.

SET-listed construction firm Nawarat Patanakarn Plc (NWR) will continue to expand its non-construction business with plans to invest 800 million baht this year on a hotel and precast factory expansion in Myanmar and land purchases in Greater Bangkok.

Of the total investment, 500 million baht will be used for the Myanmar projects and 300 million for residential development plots in Greater Bangkok, said president Polpat Karnasuta.

The company has focused more on non-construction business as its yields a higher margin, up to 30% in property development. The construction business only sees a 6-8% margin, he said.

In Myanmar the company is in talks with a local partner to invest in a hotel. NWR also wants to invest in a manufacturing business. Both deals are expected to be finalised this year.

If successful the ventures would be NWR's second and third investments in Myanmar, following its joint venture precast concrete factory in which it owns a 70% stake.

NWR set a 500-million-baht investment budget for Myanmar, which includes capacity expansion of its precast factory to 1,000 cubic metres per month, he said. The uptick is to support its construction business in Myanmar.

Advance Prefab Co, a subsidiary of NWR, operates precast concrete factories in Thailand with a total production capacity of 15,000 cubic metres per month. Mr Polpat expects precast to play a larger role in construction as it reduces costs.

He said the company would expand its residential development business this year through both its own investment and joint ventures with SET-listed Charn Issara Development Plc.

C.I.N. Estate Co, a 60:40 joint venture with Charn Issara, will unveil a luxury single house project on a 30-rai plot on Bang Na-Trat Road worth 2 billion baht.

Mana Patanakarn Co, one of its subsidiaries, plans to launch two new projects worth a combined 1.58 billion baht: a single house project in Rangsit Khlong 3 and a new condo phase on Soi Lasalle.

NWR aims to boost its revenue contribution from residential development to 10-20% in two years from 6%. It also targets 10% revenue growth this year from 7.67 billion baht last year. NWR's backlog as of March was 13.6 billion baht, of which 45-50% is to be realised this year.

NWR is awaiting the bidding results for a motorway connecting Nakhon Ratchasima to Kanchanaburi province, phase two of Suvarnabhumi airport and several power plants. It expects to win 10% of the 40 billion baht in construction bids for these projects.

NWR shares closed yesterday on the SET at 1.26 baht, up one satang, in trade worth 18.2 million baht.

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