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Builder Mika misses target

Saturday, 09 August 2008

source: Bkk Post Aug 7 2008 The home builder Mika Group missed its sales target in the first seven months of this year due to the impact of a slowing economy and rising material costs. However, the company is confident that its 2008 projection of 100 million baht will be achieved as it will add three new branches in Bangkok by year-end, said president Thongchat Thumpramoth. For the year to July 31, Mika posted 50 million baht in sales from the construction of eight houses. ''Our market segment is the middle- to high-end price range, in which customers use their savings or cash to build a house,'' he said. ''But the political problems and the economic slowdown have delayed some customers decisions.'' Mr Thongchat said some customers were investors in the stock market who were sensitive to the uncertain economy and political situation. Some had failed to sell their stocks to earn cash, so they postponed signing contracts to build houses. However, Mika expects that rising inflation, increasing costs of construction materials and higher oil prices will encourage customers to make faster decisions. ''If they delay their decisions, they might have to pay more,'' he added. The company has adjusted its strategy to approach more customers in the second half. Next week, it will open the first branch in the Sena Nikom area and will have two more branches in Srinakarin and Asok. The company has a headquarters building on Chaeng Watthana Road. The company targeted 50 million baht in sales for each branch next year, expecting to have the total sales of 200 million baht in 2009, he said. Over the past three months, the company raised unit prices by 5-7% as construction costs soared by 20-30%. It will lift prices another 3-5% after the Home Builder 2008 fair from Aug 20-24 at the Queen Sirikit National Conventional Center. Fair organisers have set a sales target of 1.5 billion baht for home building companies participating in the event.

 

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