Thailand
Thailand: Alibaba in talks for WHA EEC land
Chinese e-commerce giant Alibaba Group is vying to build up its footprint in Thailand by negotiating with WHA Corporation for the latter’s industrial estate land in Chachoengsao.
The move would be Alibaba’s second major investment in Thailand and would leverage its supply chain in Asean. Last year Alibaba invested 11 billion baht in the government’s flagship Eastern Economic Corridor (EEC) scheme for the first phase of the Smart Digital Hub.
Alibaba wants to use the investment to drive its core e-commerce business by supporting the group’s online payment platform Alipay, marketing technology platform Alimama, cloud computing firm Aliyun, and logistics firm China Smart Logistics Network.
“WHA Corporation is in negotiations with Alibaba Group and we expect to settle a deal with them soon,” said Jareeporn Jarukornsakul, chairman and chief executive of WHA.
“The talks are about new investment in WHA’s industrial estate land and we expect our logistics business will see more benefits from the deal,” she said.
Alibaba expects to construct a Smart Digital Hub in the EEC this year that will include a digital platform, distribution and logistics centre, IT system and automated robotics system to serve trade from Thailand to neighbouring countries.
WHA declined to give more details about the investment.
Ms Jareeporn said WHA has already prepared the land for Alibaba’s first investment in a Smart Digital Hub located in Chachoengsao. WHA will deliver the first phase of built-to-suit land for Alibaba’s logistics business, with 130,000 square metres of land, in September 2019.
“Alibaba has no fear or concern about Thailand’s political situation because it considers Thailand much more stable than neighbouring countries, so Alibaba plans to expand investment in the country,” she said.
For the first quarter, WHA reported its industrial estate business achieved domestic land sales of 106 rai, with a remaining backlog of 667 rai as of March thanks to seven new contracts for land sales in industries such as automotive and electronics, mainly from companies from China, Taiwan and Thailand.
WHA’s industrial estates in the EEC area have been designated as targeted industry promotion zones by the government, totalling 34,434 rai.
In the first quarter this year, WHA reported sales revenues rising 10.3% year-on-year to 3.8 billion baht thanks to demand growth in industrial estates to serve EEC projects and other recurring income.
Profit decreased 47.9% year-on-year to 407 million baht because of a planned shutdown of WHA’s Gheco-One power plant for major maintenance over 39 days during the first quarter this year, which significantly affected profits from its power business, in addition to currency volatility.
WHA set an ambitious growth target of 70% year-on-year for 2019 for revenue and profit-sharing, with capital expenditure from 2018-22 allotted at 45 billion baht.
For industrial development, which accounts for 29% of WHA’s revenue, the group aims to sell industrial land spanning 1,600 rai, developing 2,650 rai this year.
For 2018, WHA expects to post revenue of 11 billion baht, well below 12.4 billion logged in 2017.
Sourcel: https://www.bangkokpost.com/business/news/1684868/alibaba-in-talks-for-wha-eec-land