Prinsiptek sees higher contribution from abroad

By The Star

SUBANG: Prinsiptek Corp Bhd expects more significant contribution from its overseas ventures in the year ending Dec 31, 2008, said managing director Datuk C. J. Foo.

At present, overseas contribution to sales is about 10%, which is derived from its projects in Bangkok, Thailand.

Following its success in Thailand, the property developer planned to venture into India, Laos, Cambodia and Vietnam, Foo told StarBiz in an interview yesterday.

Datuk C.J. Foo showing an artist’s impression of the company’s service apartment project in Jalan Pahang, Kuala Lumpur

“We’re looking at Bangalore and Bombay, which have a big middle-income group. We hope to secure at least one agreement (with landowners) by year-end,” he said, adding that profit margins in these two cities were attractive.

Prinsiptek intends to build a niche in offering affordable, medium-cost homes to the locals, Foo said, noting that India shared similar laws as Malaysia as both were previously British colonies.

Meanwhile, Indochina, which is rich with natural resources like oil and minerals, is attracting an increasing number of foreign investors, thanks to incentives offered by the respective governments.

The influx of foreign capital would eventually raise the standard of living of locals and property would then become an attractive investment, Foo said.

To minimise risk, Prinsiptek looks for land that is close to a city with a sizeable population and has ready infrastructure.

In Malaysia, the company has also been a beneficiary of the Ninth Malaysia Plan. It recently secured two projects – one each in Putrajaya and Langkawi.

Foo said Klang Valley still had a lot of potential while Penang was an up and coming market. One of the company’s projects in the pipeline is Maiden Heights in Penang, which has a gross development value (GDV) of RM13.7mil.

The project involving semi-detached homes and bungalows was likely to be launched next year, he said.

Prinsiptek also plans to launch a serviced apartment and retail development in Kuala Lumpur in the first quarter of next year. The project has a GDV of RM85mil.

The company’s unbilled order book of RM442.4mil of both local and overseas projects will keep it busy for the next two to three years. “We will strive to keep a balance between local and overseas contribution to revenue,” Foo said.

Prinsiptek also intends to eventually set up a manufacturing facility for precast systems to enhance operational efficiency and reduce costs.