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PF plans prefab joint venture

Bangkok Post May 21, 2009

The listed developer Property Perfect Plc (PF) plans a joint venture with Siam Cement Group and Sekisui Chemical, the Japanese leader in prefabricated technology, for a prefabrication factory with a production capacity of 1,000 units a year.

"The investment budget is not set yet but should not be more than 100 million baht, not a large one like Preuksa Real Estate's [500-million-baht] venture," said PF chief executive Chainid N. Sirimanee.

"We are in talks on the joint venture and will finalise them by the second half of the year."

Siam Cement would supply cement, Sekisui Chemical would invest in prefabrication technology and PF would be the user. The arrival of the Japanese partner for talks yesterday also showed confidence in the economy and the Thai political situation, he said.

The factory would be on a land plot smaller than 100 rai that is owned by the developer. Enhanced prefabrication is expected to cut low-rise construction time from six to five months.

This year the company plans to spend a further 1 billion baht on land plots after investing 500 million in the first five months of the year. It currently has a sales backlog of 2 billion baht, 1.8 billion to be realised this year.

During the first quarter, PF recorded sales of 1.6 billion baht. By year-end it targets 8 billion baht from housing sales and 1 billion baht from selling land to educational institutions.

To enhance liquidity PF in the second quarter will also issue a three-year, 1-billion-baht bond with 6% annual interest. The financial advisers will be CIMB and another two commercial banks.

With the proceeds of land sales and bond issuance, PF aims to reduce its debt-to-equity ratio to less than 0.8 times and to maintain cash of 1 billon baht. It has around 5 billion baht as a credit line from financial institutions.

"Consumer confidence has resumed as politics has returned from the street to parliament while signs of an Asian recovery have appeared," Mr Chainid said yesterday at the opening of a tunnel under the railway and the Airport Rail Link at the company's "Perfect Masterpiece near Motorway" project.

PF shares closed yesterday on the Stock Exchange of Thailand at 2.80 baht, up six satang, in trade worth 29.34 million baht.