The Company
Amata Corporation (Amata) is one of the leading industrial estate developers and managers in Thailand. Amata has built a strong regional platform that serves a portfolio of over 1000 clients from around the globe. Inside its projects, the company is responsible for road systems, security systems, reliable utilities and waste disposal facilities. It also offers ready-built factories in its industrial estates. The company’s three estates have good strategic locations. Amata Nakorn and Amata City are situated in Thailand’s eastern seaboard and Amata City Bien Hoa Industrial Park is linked to Highway No. 1, which connects the north and south of Vietnam.
Development Strategy
Amata Nakorn and Amata City are located close to the eastern seaboard, which is considered an automotive hub of Asia. Amata had a total land bank of 11,300 rai (1808 ha) in Thailand at the end of the 4th quarter 2015. This was composed of 3200 rai (512 ha) of land available for sales, 2100 rai (336 ha) of land in the EIA process and 6000 rai (960 ha) of land being developed. Together, this is sufficient for sales for the next three to five years. Thailand remains an excellent strategic location for exporters, especially along the eastern seaboard, which is the most popular area for foreign investors.
Many investors are still interested in Thailand, especially Japanese investors and newcomers like Chinese investors, who submitted the largest amount of investment applications in 2015. According to the Board of Investment (BoI) of Thailand, China has been the country’s second-largest foreign investor after Japan for the past eight years (2008-15). Chinese investors still plan to use Thailand as a platform to expand their businesses globally, especially in the auto industry. There will be an opportunity for Amata to tap more Chinese customers in the long term.
Amata’s land pre-sales may fluctuate due to a slowdown of investment from the automotive sector in the short term. However, the company is attempting to add more recurring income such as utilities, rental facilities and maintenance services.
With Thailand likely to change to high-technology manufacturing due to higher labour costs compared to other countries in the region, Vietnam is the next choice for foreign investors to expand their businesses. Vietnam’s lower operational costs and plentiful labour supply make it a top location for manufacturers shifting production capacity. Its labour force is young and inexpensive. Therefore, manufacturers in the garment and footwear sectors consider Vietnam as a great option to relocate from China due to its geographical proximity. Investors commonly cite Vietnam’s geographical proximity to global supply chains, relative political and economic stability, and the expected benefits from the completion of the Trans-Pacific Partnership trade agreement.
Amata has provided a full-service industrial estate concept in Vietnam for 20 years through Amata VN Joint Stock Company (JSC). Amata launched the initial public offering (IPO) of Amata VN (88.7% held by Amata & subsidiary) in the fourth quarter of 2015. After the IPO, the stake of Amata declined to 72.9%, with 17.8% of the 935m shares are in the hands of the public. Amata VN holds 7% in the JSC, which operates an industrial estate on 4375 rai (700 ha) in Amata City in Bien Hoa, Vietnam. Note that Amata VN is unlikely to report a large profit at this time because it needs to wait for extensions of its new industrial estate, i.e., Amata City (Long Thanh). Amata VN is likely to start booking land pre-sales for the first phase in late 2016, but revenue from land transfers will be realised in 2018. Meanwhile, the company submitted a proposal in May 2015 to develop the first phase of the Amata City (Ha Long) project in the province of Quang Ninh in Vietnam, which will require an investment of $60m. This industrial estate is scheduled to open in 2016. These new industrial estates will contribute more income to Amata VN over the next three years.
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