How businesses can overcome crises and boost their profits

Thai-language Krungthep Turakij newspaper organised a seminar titled "Investment Forum 2024: Exploring Investment Opportunities in a Heated Global Environment" on Thursday at the Renaissance Bangkok Ratchaprasong Hotel, where top corporations shared their perspectives on "Business Strategies to Overcome Crises and Increase Profits".

Jareeporn Jarukornsakul, chairwoman of the executive committee and Group CEO of WHA Corporation Pcl, said that the company's business operations had been growing steadily, with a focus on global mega-trends. These include significant trends such as technology, sustainability, and geopolitics, and viewing various crises as opportunities to expand their business.

WHA operates in four business segments: Logistics; industrial estates; utilities and energy; and digital businesses, all of which are growing steadily.

“We have over 70 subsidiaries with a combined market cap of over 200 billion baht. We are extending our operations in the largest industrial estate in Thailand and expanding into industrial estates in Vietnam. We are also incorporating technology, especially during trade wars, which prompts investments to relocate from China. Vietnam is our key target, and we are preparing our digital capabilities for incoming investments,” she said.

Showcasing sustainable technology

In the latter half of the year, WHA would highlight technology with a focus on sustainability, including new products and services, green logistics, digital health technology, and AI, marking a transformation, Jareeporn said.  If the organisation does not transform ahead of time and lacks new solutions, it cannot effectively utilise AI. The company has achieved carbon neutrality and aims for net zero by 2050, she added.

Additionally, the company is involved in electric vehicle (EV) businesses, particularly in transportation, to save energy costs significantly for long-distance travel. This year, they aim to lease out 1,000 vehicles. Their water management technology will reduce new water usage and recycling, saving over 90 million baht annually, she revealed.

WHA offers the Mobilix application for logistics management, reducing costs for clients and focusing on green solutions and managing the entire ecosystem, she said. The prominent industries relocating to Thailand include the EV sector, making it an EV hub, and attracting the battery industry. Currently, the focus is on technology and data centres, which will see further development and income generation, she added.

“Many people ask if land sales are currently strong. We are growing well, comparable to Vietnam. Thailand’s growth may have lagged behind Vietnam in the past, but it is catching up now. WHA Group aims to become a full-fledged tech company this year with a power generation capacity of 1,000 megawatts, half of which is clean energy,” Jareeporn said.

Ensuring energy security

Pannalin Mahawongtikul, the chief financial officer of PTT Pcl, highlighted that the world is continually changing. PTT's global challenges include: global energy transition; net zero; carbon tax; ESG; geopolitical conflicts causing energy price volatility, and increasing use of AI across industries.

National challenges include: 1. Maintaining energy security, 2. National policies promoting cleaner energy, and 3. Government policies emphasising energy price control, full liberalisation of natural gas, EV measures, and promoting investments in new businesses.

“PTT has turned crises into opportunities, ensuring stability and growth for over 45 years. Since its listing on the stock exchange in 2001, PTT has consistently increased its revenue and net profit, averaging 7% annual net profit growth, with considerable expansion through group companies.”

Strengthening partnerships to create opportunities 

PTT's vision includes: 1. Sustainable business management across all dimensions by balancing ESG to fit the organisational context; 2. Investments that benefit both the organisation and the country, with agility to respond to the rapidly changing global landscape, 3. Building confidence across all sectors through transparent business and management practices, and 4. Creating collaborative power, utilising skilled personnel to drive business.

From this vision, PTT has outlined five business strategies to focus on energy security: 1. Enhancing competitiveness in current businesses by partnering with potential business allies, leveraging PTT’s expertise with the strengths of its partners to foster growth; 2. Seeking opportunities in new businesses; 3. Integrating sustainability into business practices; 4. Achieving operational excellence, reducing costs by over 10 billion baht last year, and strengthening from within using digital and AI technologies; and 5. Managing the organisation with transparency, governance, and financial excellence.

Reducing carbon emissions

Phakphon Liophairat, the deputy managing director of TPI Polene Power Pcl (TPIPP), said that the clean energy investment trend aligns with global mega-trends, focusing on climate change amid rising global temperatures and increasing waste. This underscores the future trend towards cleaner and greener energy, in line with Thailand’s commitment on the COP platform to reduce oil-based power plants by 2025 and transition to renewable energy. By 2065, Thailand aims to become a carbon-neutral society.

However, challenges for clean energy in Thailand include the absence of a carbon credit market and carbon taxation, making local companies less aware of integrating environment, social, governance (ESG) into their production processes. It is believed that the enforcement of the Climate Change Act will raise awareness and lead to a serious transition towards a carbon-neutral and renewable energy society in Thailand.

“In Europe, carbon credits sell for around 90 euros per ton of carbon, and in China for 7 dollars per ton, but Thailand has no carbon market. TPIPP aims to be a leader in waste-to-energy solutions, becoming a net zero company with ESG, and building a zero-waste ecosystem within the company for sustainability,” Phakphon said.

Aiming for zero coal energy by 2026

TPIPP has been in the power generation business since 2009, initially producing 60 megawatts from waste heat from the parent company. By 2022, production capacity increased to 440MW, with 40MW from waste heat, 180MW from waste energy, and 220MW from coal.

By 2024, the waste heat capacity remained at 40MW, while waste energy increased to 250MW, with 37MW from solar, and 150MW still from coal.

The goal after 2026 is to increase power generation to 540MW, with 40MW still from waste heat, 79MW from solar, and 420MW from waste energy, with coal energy eliminated, he said.

Singha’s ‘rethink’ strategy

Thitima Rungkwansiriroj, the CEO of Singha Estate Pcl, said that the post-Covid-19 crisis in 2019 marked a significant turning point as it was the first time businesses worldwide halted operations for 2-3 years, compelling the company to "rethink”. Previously focused on joint ventures in residential project development, the company shifted to independently developing residential projects, focusing on the luxury segment under Singha Estate's DNA.

Simultaneously, they expanded hotel investments in the UK and the Maldives, anticipating the tourism industry's recovery. Singha Estate’s hotels in the Maldives cater to year-round travel, with customers from different countries visiting at various times, ensuring steady income.

To mitigate risks, the company diversified into industrial estates, offering unique value propositions compared to competitors, focusing on medium-sized industrial estates. The "S Ang Thong" project, an industrial estate in Ang Thong province, supports the food business in a strategic location central to raw material sources and transportation routes and features infrastructure to support data centres with its own power plant. For office buildings, the company has adapted its services to be more flexible with ready-to-move options and shorter lease terms, catering to startups, Thitima said.

The adaptation strategy of Singha Estate, currently driven by four main business groups, connects to new opportunities and business extensions to strengthen its portfolio, meeting market demands and better handling uncertainties, Thitima said. This resulted in record-breaking profits in 2021, growing by 31%, with sales of houses priced between 60-120 million baht reaching 95%, and rental rates exceeding pre-Covid levels by 50%.

“As someone who has experienced multiple crises, each crisis creates new opportunities, allowing us to reset and rethink. Without crises, there would be no opportunity to learn anew. Every crisis requires learning anew because doing business means always having a new chapter. Crises force everyone to rethink,” Thitima said.