CONSTRUCTION / BUSINESS PLANS

General Engineering to shed property arm

YUTHANA PRAIWAN

SET-listed General Engineering Plc, a leading supplier of pre-stressed concrete piles and other construction materials, plans to gradually reduce the non-core businesses it invested in a few years ago and refocus on its core business. President Kittichai Raktakanit said the company would no longer pursue ventures in the property businesses, such as construction services, commercial building construction and shopping malls for rent, since they are not profitable and create conflicts of interest with its own clients.

''We would be better to go back to our original business and try to nurture it for growth, even though it is a bit slow, but it will grow constantly,'' he said.

The company's decision to focus on its core business was also partly driven by the recent management restructuring for business flexibility.

Mr Kittichai said that if the company made an effort to raise revenue and profits through the products from its core business, it would be better than investing in other non-core activities.

The company will no longer develop any new shopping malls. However, it still earns three million baht per year from renting out Pattaya Plaza.

In addition, the company also has a backlog of 175 million baht in construction contracts. Once these contracts expire, this service will end.

The company recently acquired a contract worth about 70 million baht to supply concrete piles to the Bang Pakong power plant, and another contract worth 20 million baht to supply the same product to the new government centre on Chaeng Watthana Road.

The company has set a goal to raise its revenue this year by 10-12% from 990 million baht it gained last year.

GEN shares closed yesterday on the Stock Exchange of Thailand at 0.93 baht, up seven satang, in trade worth 43.37 million baht.

Bangkok Post
Wednesday January 31, 2007