Ticon Industrial Connection Plc is the country’s largest provider of industrial properties for rent and also a major provider of warehouses to serve companies’ logistics needs. Managing director Virapan Pulges discusses the company’s strategy and outlook.
What are your views on the region and Ticon’s ability to expand to neighbouring countries?
We have begun an expansion into Indonesia with two partners, the Indonesian property developer PT Suraya Semesta Internusa Tbk and Mitsui & Co. Indonesia is an attractive location because of its population, demographics, and the current and potential expansion of businesses. The population is over 240 million people, there is high domestic consumption, 10 million motorcycles are sold per year and 1 million cars; it is a vibrant economy.
With our two partners we feel very confident that our business will succeed and together we have developed the first phase of 34,560 square metres and aim to complete the second phase of 51,000 sq m within this year. What is interesting is that even though it is a “new” country, our customer base is similar because multinationals have a presence in every major developing economy. Thus, from the customers that we service here in Thailand, we can service them as well in Indonesia and other countries in Asean.
Beyond Indonesia, we are looking at Vietnam because of its large population of 90 million, but we do not have a firm timeline.
Do you feel that Thailand has lost its attractiveness as a destination for companies to invest in?
No, Thailand is still very attractive for companies investing in the region. However, the types of customers we have and their nationalities are slightly different today compared with a decade ago. You will recall reports that companies such as Samsung are choosing to invest in Vietnam rather than Thailand, and yes, that is correct, because for low-cost, labour-intensive assembly work Vietnam is indeed more attractive than Thailand. However, the final product is still transported to Thailand and shipped via the Laem Chabang port.
So we see that Thailand is attractive because of its location and logistics strengths for businesses with perhaps more capital intensive manufacturing utilising Thailand’s infrastructure as a distribution hub. Also, with the government focusing on new railway tracks throughout the country, this positioning of Thailand will only become stronger.
How has your customer base shifted over the past decade?
In the past, more than half of our customers were from the electronics industry and from Japan. In the past five years we have witnessed a seismic shift in technology. Several electronic products such as hard-disk drives, fax machines, cameras and so forth, which were a huge component of Thailand’s electronics cluster, have since become marginalised.
Therefore, today we have more automotive customers and while the Japanese customers are still the largest proportion, there has been an increase in companies from China with industries such as renewable energy, mobile phone parts and so on. For the warehouse business, because the locations are ideal as distribution hubs, we serve industries such as consumer products, modern trade, e-commerce and logistics service companies. Continue reading Interview: Ticon Industrial Connection Plc (Ticon)