Jareeporn Jarukornsakul, group chief executive officer of WHA Corp, said the joint venture, WHA Daiwa Logistics Property, would pursue two large logistics centres in the Laem Chabang and Bangna-Trat (Chonlaharn) areas for a total investment cost of Bt2.3515 billion. WHA will hold 51 per cent of the JV and Daiwa the remaining balance,

“Daiwa has prepared a budget of several billions of baht to join us in several other projects,” she said.

“It is our strategy not to focus on competing, but rather on having strategic partnerships with people doing similar businesses that will make us No 1 and growing larger.”

She said WHA was discussing with Daiwa the possibility of forming joint ventures to pursue new logistic projects in neighbouring countries, especially Indonesia and Vietnam, where both companies already have some projects.

Daiwa managing executive officer Tatsuya Urakawa said the company had earmarked 700 billion yen (Bt235 billion) for investments over the next three years, of which 360 billion yen would go for logistics. Of the total logistics investment budget, 10-20 per cent is expected to be for Asean, including Thailand.

The WHA joint venture marks Daiwa’s first entry to the Thai market, after its inroads to Vietnam’s logistics market in 2011 and Indonesia’s in 2012. The company has also entered the housing-prefabrication business in Malaysia.

Daiwa expects its Thai business to generate similar revenue as its Indonesian and Vietnamese businesses, each of which currently generates between 3 billion and 4 billion yen annually. It is also considering entering the elderly-care and healthcare businesses in Thailand in the future.

Jareeporn said the JV planned to add the Laem Chabang and Chonlaharn assets to the WHA Real Estate Investment Trust by 2018-19 and thus quickly earn a return from their investments.

Honda Logistics is the sole customer for the Laem Chabang project. Its first phase of about 22,500 square metres was handed over in the third quarter of last year, and the second phase of 23,000sqm is expected for completion in mid-2017.

The Chonlaharn project has already found customers for 60 per cent of its total leasable area of 74,000sqm and is expected to sold out by the end of this year, she said.

The two projects are expected to book total annual income of more than Bt200 million.

Meanwhile, to capitalise on the government’s planned Eastern Economic Corridor, Jareeporn said WHA had reserved a 500-rai (80-hectare) plot of land 18 kilometres from U-tapao Airport for development of an aerospace cluster, and another 100 rai adjacent to that for a robotics cluster.

WHA will submit a filing document to the securities authorities by the end of this month to list its power and utilities subsidiary on the Stock Exchange of Thailand, either by the fourth quarter of this year or the first quarter of 2017.

WHA currently controls about 2 million square metres of various logistics facilities in Thailand, including built-to-suit facilities for specific tenants, multi-tenant warehouse farms, ready-built factories, and warehouses.

In Japan, Daiwa counts 222 logistics facilities representing a total area of about 6.4 million square metres.

“Under our new milestone for this year, we are shifting our core business to special-grade steel to meet rising demand in the automotive industry. By 2020, the [Thai] auto industry expects to produce 3.3 million vehicles, a huge increase from last year’s 1.91 million. In addition, the establishment of this new JV, named Kobelco Millcon Steel, is our key cornerstone,” said Sittichai Leeswadtrakul, president and chief executive officer of Millcon Steel.

Referring to a forecast by the Federation of Thai Industries, he said other Asean countries such as Indonesia and Malaysia were also expected to experience strong growth in auto production in the near future. Formed in 1905, Kobe Steel is one of the biggest steelmakers.

The Japanese steel producer also aims to capture growing demand for wire rods in Southeast Asia by enhancing the local supply chain, from wire rods to secondary processing, and supplying high-quality steel products, the CEO added.

Jiruss Rianchaiwanich, executive vice president for business development at Millcon Steel, said three key factors had helped persuade Kobe Steel to create this collaboration with his company: the Japanese steelmaker wanted to expand its production base in the region, enhance its cost management, and improve its inventory management and logistics. The JV will produce and sell wire-rod steel and special steel with a total production capacity of 480,000 tonnes per annum.

The production of special-steel wire rods is scheduled to commence in May next year, while production of ordinary-steel wire rods has in fact been up and running at Millcon Steel since last September.

The overall investment will be Bt6.79 billion, including the assets of Thai Special Steel Industry, which was acquired last year by Millcon Steel. Sittichai described the JV as a game-changer for his business, as its new partner had a strong relationship with major automotive companies.

Apart from the tie-up with Kobe Steel, Millcon Steel is also putting more emphasis on downstream steel or advanced and high value-added products, such as industrial wire, CO2 wire, bead wire, automotive fasteners, and coil springs for sofas.