AP (Thailand) aims to be top three residential developer within five years

Construction News
AP (Thailand) CEO Anuphong Assavabhokhin, left, and managing director Pichet Vipavasuphakorn.
AP (Thailand) CEO Anuphong Assavabhokhin, left, and managing director Pichet Vipavasuphakorn.

AP (THAILAND) has targeted becoming one of the country’s top three residential developers by 2021, when it hopes to generate revenue of Bt50 billion, chief executive officer Anuphong Assavabhokhin said recently during a group interview.

To achieve this business goal, the listed company has restructured its management team from a function-based approach – separated into construction, marketing and administration arms – to a business group-based approach, he said.

Four business groups have been established: one each for detached housing and townhouses, and two covering different segments of the condominium market.

Each group will be responsible for its own construction, marketing and administration operations, while the company will also have corporate marketing and corporate administration arms to oversee the whole of its business strategy, he explained.

The new set-up will drive growth in all of AP (Thailand)’s business categories, he added.
The company is also focused on design that differentiates it from its competitors, with the emphasis on functionality and utilisation of space to serve customer demand.

Meanwhile, the developer’s construction system works to the “AP Standard”, which is based on what it has learned from its Japanese partner, Mitsubishi Estate Group.

“When home-buyers want to buy a residence, they have to consider the options and visit many projects. We want to be one of the three top choices for customers, with most of them finally selecting from one of our residential projects because we offer differentiated products that serve their demand, and also offer optimum space utilisation for them,” the CEO said.

Anuphong added that the property market of today was markedly different from what it was 25 years ago.

When the company was established in 1991, there were more small and medium-sized developers, while the leading firms had a combined market share of less than 50 per cent.

Today, however, the major residential developers account for more than 70 per cent of the market value in Bangkok and its suburbs, he said.

Most of them therefore have to continually launch new projects and marketing strategies in a bid to boost sales and take market share from other leading players.

“Ten years ago, the big fish preyed on the small ones for growth. Now, they eye other big companies’ market shares. If we want to survive this intense competition, we have to drive our business so that we rank in the top three in the market within five years in terms of value,” the chief executive stressed.

Currently, AP (Thailand) ranks in the top 10 listed property firms in terms of revenue, generating revenue of Bt4.22 billion and net profit of Bt454.78 million in the first quarter.

The company targets revenue of Bt23.7 billion for the full year.

Sustainable growth

Under the business strategy of becoming a top-three player by 2021, AP (Thailand) targets sustainable growth of between 10 per cent and 15 per cent a year, although it expects to post stronger growth of over 20 per cent in 2017 and 2018 thanks to the initial success of its joint-venture business with Mitsubishi Estate Group over the past three years.

This collaboration has resulted in growth doubling for its condominium products, said the company’s managing director, Pichet Vipavasuphakorn.

The company also plans to launch new low-rise residential projects for both detached housing and townhouses in the provinces next year, following last year’s suspension of two condominium projects in Phisanulok and Udon Thani provinces that were launched three years ago, Pichet said.

While AP (Thailand) will expand via new projects in the provinces in order to boost presales, its main income will still come from business in greater Bangkok.

That said, the provincial market will play an important part in boosting its portfolio for sustainable growth in the long term, he added.

“With 25 years’ experience in the property market, we have learned how to do business, how to survive and how to be a market leader. We are the first property firm to have set up an academy to train human resource to serve our business growth for the long term, and we won an award in the ‘investment in people’ category this year from Enterprise Asia.

“We have also learned how to get our products into the minds of customers under the ‘AP Standard’. Everything we do will drive ‘AP’ to be the top residential brand in our customers’ minds,” Anuphong said.

“AP designs for optimum space utilisation for customers, and that differentiation will drive us into the top three in the residential property market in 2021,” he added.

Source: http://www.nationmultimedia.com/business/AP-(Thailand)-aims-to-be-a-top-3-player-within-fiv-30288361.html