Amid intense competition in the production sector, Saha Group, a leading consumer goods conglomerate, is emphasising the service business.
As part of its strategy for this year, the group teamed up with Tokyu Corporation of Japan to develop its first mixed-use complex.
"Thailand's production sector, including textiles and leather goods, has encountered fierce competition from key rivals such as Vietnam and China. Various factors, notably labour costs, have contributed to a loss of competitiveness in these industries," said Vorayos Thongtan, executive director and vice-president of investment and corporate strategy at Saha Pathana Inter-Holding Plc (SPI), a holding firm under Saha Group, during an opportunity day briefing held last Friday.
"In response to these challenges, chairman Boonsithi Chokwatana issued a policy for our subsidiaries, particularly the SET-listed companies, to diversify their portfolios into the service sector. This strategic move aims to generate income from multiple sources and mitigate risks."
Saha Group has gradually expanded into the service business over the past few years, but plans to intensify its efforts this year.
Mr Vorayos said SPI allotted a budget of 2 billion baht this year to invest in various ventures. One is the development of a mixed-use project called King Square Complex situated on a 20-rai plot near King's College International School on Rama III Road.
Construction is planned over two phases. The first phase consists of a condo and community mall, while the second phase focuses on an apartment complex.
The condo development is handled by Kingsquare Development Co, a joint venture between Saha Group's subsidiaries and Tokyu Corporation, which hold 65% and 35% stakes, respectively.
"This marks Saha Group's first significant investment in the development of a mixed-use project, which is worth a combined 10 billion baht. While our group has traditionally maintained a strong presence in the production sector, the service business is poised to become a crucial pillar of our operations," he said.
Mr Vorayos said the new condo is scheduled to launch in the third quarter, with construction starting in the fourth quarter. The project is anticipated to be completed in 2026.
The revenue contribution from the service sector makes up only 5% of the total at SPI. Last year SPI reported revenue of 8.39 billion baht with a net profit of 3.36 billion, primarily derived from investments in 200 companies under the Saha Group umbrella.
Nattapon Dejvitak, executive vice-president of Saha Pathanapibul Plc (SPC), the marketer and distributor of Mama instant noodles, Pao detergent and Shokubutsu shower cream, said SPC is also expanding from trading to the service business.
Over the past two years, SPC has made strategic investments in various ventures, including Truck 360 Co Ltd, a startup focused on backhaul management.
SPC also entered the hospital business by acquiring a 20% stake each in Ruamjairak Hospital, on Sukhumvit Soi 62, and Navavej International Hospital, on Nawamin Road.
"We are actively exploring new opportunities within the service sector and anticipate adding another service product to our portfolio this year," said Mr Nattapon.
