NNCL upbeat on estates

NNCL upbeat on estates

Outbreak could spur exodus from China

A Nava Nakorn industrial site. The company says clients have been spared much of the impact of the coronavirus pandemic.
A Nava Nakorn industrial site. The company says clients have been spared much of the impact of the coronavirus pandemic.

SET-listed Nava Nakorn Plc (NNCL), an industrial estate developer, expects the Covid-19 outbreak to cause more factories to leave China and relocate to Thailand and Asean, a trend that has accelerated over the past few years because of the US-China trade war.

The multinational company is seeking a new location to diversify its manufacturing and supply chains because of the lockdowns that happened in China.

Chief executive Nipit Arunvongse Na Ayudhya expects Asean and Thailand will benefit from Covid-19 because of their location that can connect with neighbouring countries. Thailand is a major production base in Asean.

"The spread of Covid-19 should speed the flight of manufacturing plants out of China that started with the trade war with the US," he said.

The pandemic has severely affected the economy of China and changed global supply chains.

Navanakorn Industrial Zone has two locations: Pathum Thani has 200-300 factories and Nakhon Ratchasima has 20-24 factories, both for local and foreign companies.

Clients in Navanakorn Industrial Zone have not been hit by the outbreak, as they are in sectors like food and beverage, medicine, electronics and medical devices, Mr Nipit said.

"Those businesses are increasing production capacity following growing demand in the domestic and global market, so our industrial estate has no manufacturing plants shutting down," he said.

NNCL expects revenue will grow by 5% year-on-year thanks to the recurring income such as renewable energy, infrastructure and rental business.

In 2019 NNCL posted revenue of 816 million baht and profit at 255 million.

"NNCL expects to sell 130-140 rai of industrial estate land in 2020, but we aim to develop an energy power plant project with a local partner," Mr Nipit said.

NNCL is focused on a data centre project at its Pathum Thani site worth 2 billion baht with a local partner.

The company expects to conclude the investment and development model of the Thammasat-Nava Nakorn Smart City project within 2020.

"NNCL has no plan to spend its investment budget this year as last year the company spent the budget on the power plant investment," Mr Nipit said.

For the energy business, the company plans to expand capacity of electricity next year. NNCL has joined with local companies Ratch Group Plc and Global Power Synergy Plc to develop a small power producer plant to supply electricity to the customers of its estate.

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