Author Topic: Grand-Flo on the horns of a Thai dilemma  (Read 418 times)

0 Members and 1 Guest are viewing this topic.

Offline thaiga

Grand-Flo on the horns of a Thai dilemma
« on: March 18, 2014, 12:33:22 PM »
PETALING JAYA: Enterprise data collection and collation systems solutions provider Grand-Flo Bhd, which has invested 650 million baht (RM66 million) in fibre optic cable business in Thailand, will continue to closely monitor the Bangkok-based political unrest and market turmoil, before deciding whether to stick it out, scale down its operation, or leave the market, said its group president and managing director Derrick Tan Bak Hong

"To exit (Thailand) or not, I'm not sure. We are monitoring the situation now," Tan told SunBiz in an interview.

Grand-Flo's 20.9%-owned associate company, Simat Technologies Public Co Ltd, is a Thai-listed company that started as a tracking solutions provider before venturing into fibre optic high-speed internet services in Thailand, focusing on the Nakhorn Ratchasima (Korat City) and Chiangmai provinces.

On the question of paring down further Grand-Flo's stakes in Simat as well as to exit entirely, Tan is still keeping his options open, despite being cautiously optimistic on the internet demand in Thailand.

"For us, we hope to make this a successful business. But if the opportunity arises, we do not rule out the possibility of paring down our stakes in Simat," he said.

Grand-Flo disposed a total of 19.1 million Simat shares at THB8 (81 sen) per Simat share in April and May last year, receiving total gross proceeds of RM15.9 million.

"I also cannot say that we have no intention at all to exit Thailand. It is all depends on the political condition as well as whether or not there is a good offer that we should sit down and seriously consider," he said.

Tan said Grand-Flo is still comfortable with its internet services business in Thailand, but the group has prepared itself not to expect any earning contribution from Simat in the next two to three years.

Simat, with a market capitalisation of about 1.3 billion baht, was appointed the main contractor to build internet infrastructure and lease it to the Thai government for five years, in return for monthly rental payments. The Thai government, however, could not receive delivery of the project, which was completed last year, due to the political uncertainties in the country. This led Simat to go directly to the consumer, becoming a telecommunications company, said Tan.

"We will not go back to the government as we do not want to work with them anymore. We have to change the strategy and become a telco," he said.

Simat is suing the Thai government for almost 650 million baht, the amount invested into the fibre optic cable business.
"We are very confident of getting our money back. But looking at the current scenario, this will take us at least two to three years. We need to be patient and cannot be too pushy, because a legal case usually takes time," said Tan.

Simat, the first and only readily available fibre optic player in Thailand, has secured some 1,000 subscribers. This year alone, Simat is targeting at least 10,000 new subscribers, Tan said, adding that it has the capacity to serve up to 30,000 to 40,000 subscribers.

"The infrastructure for WiFi and 3G in Thailand is easily 10 years behind us. They have just started 3G and they are still using copper cable instead of fibre optic," Tan said.The current arrangement also allows for Simat to lease the fibre optic cable to other telco companies, he added.

"Simat is just like a Telekom Malaysia in Thailand. We are now talking with a few big players who might need our infrastructure there," he said.

Formerly known as Grand-Flo Solution Bhd, Grand-Flo migrated from ACE Market to Main Market in September 2012.

Last year, the group acquired a 52% stake in Jalur Bina Sdn Bhd, a property player based in Penang, to kick-start its maiden property project in June this year. Located in Alma, Bukit Mertaam, the 76 units semi-detached houses with gross development value (GDV) worth RM65 million, is expected to generate pre-tax profit of RM13 million.

"The property business is expected to contribute positively to us from the second half of 2014 onwards, but the majority of it will be reflected in 2015," said Tan.

He said Grand-Flo is not ready to become a full-fledged property developer, but will look out for opportunities to acquire new land.

"A good start is very important. We will make the next move only when our first property project is fully sold, then it will give us confidence to launch the second project. There is no point for us to be in a hurry and make mistake," said Tan.
Grand-Flo's share price closed unchanged at 27.5 sen yesterday.

thesundaily.my
Anyone who goes to a psychiatrist should have his head examined.
 

 



Thailand
Statistics