As the chief executive officer (CEO) of the Thailand-based industrial construction firm, TRC Construction PLC, one of the leading construction contractors in the country, Smai Leesakul, has negotiated some challenging times for the company, while laying a strong foundation for it’s future growth.
In an exclusive interaction with DEALSTREETASIA, the veterans of Thailand’s real estate and construction industry, talks about his experience at the helm of a successful construction firm, his new responsibility at the Asean Potash Mining Co, the synergies between the two firms and the road ahead.
Excerpts from the interaction:
You have been at the helm of TRC for more than a decade. How has the journey been?Where does the company stand now?
Smai: The company has grown step by step. I learnt an expensive lesson from the financial crisis in 1997, so I have paid a lot attention to the fact that the business should have strong foundation and sustainable growth rather than an aggressive one.
TRC has come quite far. From being contractor catering to just the oil and gas industry, we have expanded into turnkey processing, infrastructure development and co-investment in large-sized projects.
After I move to ASEAN Potash Mining Co (APMC), the picture of the last three will become clearer and we will participate more of the government’s bidding for infrastructural development projects including, the railways.
We have formed a 51:49 joint venture firm with China Railway Corporation in order to bid for Thailand’s rail development project.
This year, we are targeting a revenue growth of 20 per cent, mainly due to the revenue recognition from a 75-billion-baht backlog.
Currently, almost all revenue is generated from the private sector but in the future around 20 per cent of revenue will come from the government’s project.
Why are you moving to APMC?
Smai: I’ve been working at TRC for more than 10 years and I think it’s time to hand over the running of it to my son. However, I was asked to help manage APMC, which has recently got license approval for potash mining in Chaiyaphum province for 25 years.
As you know, this [potash mining] project was prolonged for decades because of local resistance and political issues. We [TRC] have been working hard over the past three years to get this project approved because we know that it will give a huge benefit not only to TRC, as a shareholder, but also to the local community and the country.
Will APMC become a significant part to drive TRC’s growth?
Smai: We hope so. Currently, APMC has three main groups of shareholder; the first is the government holding through the Finance Ministry at 20 per cent, five other ASEAN countries have 10 per cent each, and other companies in the private sector such as Charoen Phokphand, Asahi, Padaeng and TRC have 3-5 per cent each.
However, the shareholding structure will change, as the company plans to raise fund in the Stock Market of Thailand. Through this TRC has a chance of increasing its share capital by up to 47 per cent. This also depends on the amount of money TRC, has at that moment.
However, the main objective for TRC is to get a construction project of potash production plant (worth around 35 billion baht), and gain the benefit from the shareholding in the long term.
What you expect from TRC in the next five years?
Smai: I would like to see it become one of top construction firms in Thailand and achieve an annual revenue of 10 billion baht by 2020.