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APF, a Japanese Investment Fund,  Acquiring the 48 unit Zeavola Resort for
 Approximately US$ 21 million; Planning Expansion for the Luxury Resort
 Located  on Thailand's Phi Phi Island
By Chadamas Chinmaneevong, Bangkok Post, ThailandMcClatchy-Tribune Regional News

Mar. 15, 2008 - Asia Partnership Fund Group (APF) yesterday announced the 630-million-baht acquisition of the luxury Zeavola Resort.

APF, a Japanese investment fund with holdings in United Securities, Bangkok Station Network, Group Lease and other ventures, will acquire Zeavola from HTR Corp, a subsidiary of SET-listed Sino-Thai Engineering and Construction (STEC), and Ban Pong Sugar.

The 48-unit resort is located on 25 rai on the north of Phi Phi island. APF also plans to invest 26 million baht to expand four pool villas by the end of the year.

Mitsuji Konoshita, the APF president and CEO, said the resort was the first to be purchased by the fund.

"It paves the way for our entry into the hospitality industry," he said, adding that Zeavola would focus on high net-worth Japanese tourists.

"Phi Phi Island is not well-known among the Japanese, compared with tourists from the UK and Europe. I think this is a good opportunity to open the door to introduce Phi Phi to the Japanese."

Average stays at the resort are from seven to 15 nights. The occupancy rate is expected at 70 percent for the first year of operations. Sino-Thai plans to book a net profit of 40 million baht from the sale in the first quarter.

According to STEC president Vallop Rungkijvorasathien, the company expected to generate revenue of at least 16 billion baht this year, compared with 17.47 billion last year.

Mr Vallop said gross profit of this year would be better than the 3 percent gross margin on average last year.

STEC reported a 2007 profit of 21.67 million baht, a sharp improvement from losses of 1.77 billion on revenues of 14.81 billion the previous year.

The company had a backlog worth 20 billion baht last year and plans to bid on new projects worth 15 billion baht. "In 2006, we had lost on some projects such as the Airport Link and government service centre due mainly to steel and oil price increases," said Mr Vallop.

This year, he said, STEC would avoid competing for projects that would require it to stockpile large inventories of materials. It also aims to bid on petrochemical projects because they offer higher gross margins than other projects, according to Mr Vallop.

As well, he said, the company aimed to adjust the revenue proportion between government and private-sector work from 70:30 to 60:40 this year.

With small margins because of high raw material prices, the company plans to expand its business to abroad, possibly to India.

"We are studying business on infrastructure projects in India such as electricity plants because the legal system in India is better than in other countries such as Vietnam," said Woraphant Chontong, a STEC senior executive vice-president.

STEC shares closed yesterday on the Stock Exchange of Thailand at 5.35 baht, unchanged, in trade worth 23.94 million baht.

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Copyright (c) 2008, Bangkok Post, Thailand

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