News Archive
Thai home-building innovator targets India, Vietnam
Released on 06/02/2010
Pruksa Real Estate, Thailand’s biggest property developer and manufacturer of prefab homes, is targeting affordable housing markets in India and Vietnam.
In an interview with Forbes magazine, the founder of the innovative company, engineer Thongma Vijitpongpun, said he plans to launch projects in Vietnam, India and the Maldives this year, which could contribute US$42 million in revenue. He said he is also studying the Philippines, Indonesia and China.
Pruksa sold more than 11,000 houses and apartments last year in Thailand (example pictured here), more than any other Thai company. Pruksa estimates that 2009 revenues reached $569 million, a 46% jump over 2008.
Pruksa’s quick rise has been attributed to its modern methods. It is actually three companies in one: developer, manufacturer and builder. Pruksa’s factories turn out precast concrete wall panels that are assembled, plumbed, wired and finished on site. Rivals struggle to match its speed of construction – 45 days for a housing unit.
The company opened its first factory in 2005 and now has three hangar-sized factories operating around the clock, with plans for more. Thongma says Pruksa’s approach lets it offer homes at prices 15% cheaper than rivals.
Asia has a vast need for low-cost housing. UN Habitat figures show a shortfall of nearly 4 million units in the Philippines and almost 12 million in Indonesia. Vietnam needs 4.5 million homes, according to FMO, a Netherlands development bank. China is in the midst of a three-year program to build more than 7 million low-cost homes.
India has a housing shortfall estimated at 24 million units, Forbes reported. The government is likely to welcome a developer such as Pruksa, says Samantak Das, head of India research at Knight Frank, a property consultancy in Mumbai. It wants competition and technology to boost its drive for low-cost housing priced between $16,000 and $100,000. Pruksa has four projects in Mumbai, Chennai and Bangalore.
Pruksa board member Kanchit Bunajinda told Forbes that Pruksa buys in business expertise from around the world. It recently paid Boston Consulting Group US$720,000 for an eight-year growth plan targeting US$3 billion sales a year by 2017. Kanchit adds, “Pruksa has used outside consultants to improve operations over a broad spectrum – management structure, human resources, engineering, production techniques, information technology. The goal is to trim risks while growing quickly.”
Company founder Thongma was born into poverty in a coastal province but went on to study civil engineering on a scholarship at Bangkok’s Chulalongkorn University. Before founding his company in 1993 he worked for a construction company bidding for projects.
