The new government's pledge to increase the daily minimum wage to 600 baht as well as the Ashton Asoke case should help the already robust precast concrete industry, according to MAI-listed precast concrete producer CPanel.
Chief executive Chakrit Theepakornsukasame said residential market growth might remain flat based on various negative factors, such as high interest rates and the high level of household debt, but the precast concrete market is poised for growth, driven by multiple factors.
"The Ashton Asoke case is an issue condo developers should take into account as it will lead to a longer approval process for environmental impact assessment reports for condo projects," he said.
The Ashton Asoke condominium, which had already been completed and transferred, had its construction permit revoked on July 27, 2023, by the Supreme Administrative Court due to non-compliance with the Building Control Act regarding its entrance and exit.
"Normally obtaining EIA approval for condo projects is quite challenging," Mr Chakrit said. "This EIA-related risk will extend the development timeline. To mitigate this risk, construction needs to be faster and precast concrete will emerge as a viable option."
In addition to the EIA risk, the new government's policy of raising the minimum daily wage to 600 baht by 2027 will also act as another favourable factor for the precast concrete industry in the medium- to long-term, he said.
"Precast concrete is a solution to labour shortages. When labour costs rise, conventional construction costs will be much higher, prompting developers to increasingly turn to the use of precast concrete," Mr Chakrit said.
Several factors are increasing precast concrete demand, including high interest rates, which require developers to maintain their cash flow by reducing stock and speeding up construction.
Mr Chakrit said precast concrete had become more commonly used in low-rise houses with units priced between 10-50 million baht, as precast concrete producers offer specialised designs for such structures.
"We have been approached by developers who asked us to provide cost estimates for precast concrete in single detached houses priced at 80 million baht and above. This indicates that precast concrete is gaining acceptance in the luxury segment," said Mr Chakrit.
CPanel, based in Chon Buri, has an annual production capacity of 792,000 square metres, with 68% of it being utilised.
It is investing over 500 million baht to raise its output to 792,000 sq m, starting in early 2024.