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Renovation market booms in tough times

The Nation November 21, 2008 Homemart Home Solution expects 50% growth in 2009 as home buying slumps. Demand for home renovation has expanded significantly as growth in the country's economy has slowed down. According to Homemart Home Solution, an exclusive dealer of the Siam Cement Group, the value of Thailand's homerenovation market is now about Bt114 billion. Of this, the value of renovations sought by homeowners in Bangkok alone amounts to Bt40 billion. Responding to this demand, Homemart Home Solution was formed early this year with registered capital of Bt30 million, and in April it introduced a new business model offering a onestop service for home renovation. Managing director Preeda Klinted said the business model was created after research found that most homeowners who wanted to renovate faced the problem of finding contractors who were both expert and trustworthy. The survey found that renovation was needed in as many as 3 million residential units around the country, giving the market a total value of about Bt114 billion, with Bt40 billion of this coming from Bangkok. The company has created a onestop renovation service based on four stages: inspiring homeowners to renovate by providing designs; estimating the cost of renฌovations; setting up and performing the renovations; and guaranteeing the quality of the work. Preeda said the company's Home Renovation Centre in Ramkhamhaeng Road was designed to show customers what was involved and what they would get from renovations. The 2,000 square metre showroom covers both indoor and outdoor work, including renovations to specific parts of a house like the roof or the kitchen. After a customer decides to go ahead with renovations, the company calculates an estimated cost based on the customer's concept. Then it finds a highquality conฌtractor to both perform the renovations and guarantee its work. Preeda said that under its total solution concept, the company now offers renovations covering up to 70 items, such as outdoor, indoor, kitchen, bathroom, roof and painting, at prices ranging from Bt10,000 to Bt1.5 million. Eight months after introducing the new service, the company has recordฌed sales amounting to nearly Bt100 million. It expects total revenue of Bt120 million by the end of this year, Preeda said. Moreover, it expects revฌenue to grow by 50 per cent in 2009, to reach Bt180 million. "Although Thailand's economy has slowed significantly and may fall further next year because of global recession, we believe that demand for renovation will increase because homeowners will suspend their plans to buy new residences. Instead of spending between Bt2 million and Bt5 million for a new residence, they will renovate the old one by spending between Bt100,000 and Bt1 million. As a result, we believe our business will record strong growth next year," he said.

 

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