News Column

Warehouse magnate profits from career change

June 9, 2014

By Nuntawun Polkuamdee, Bangkok Post, Thailand

June 09--Somyos Anantaprayoon, president and chief executive of of WHA Corporation Plc, is a new name on the Forbes list of the richest businessmen in Thailand this year. He was ranked 42nd among 50 high-net-worth people.

The doctor-turned-businessman is estimated to be worth US$515 million, wealth that the self-made millionaire built from his warehouse leasing firm in a short period of time.

Just one and a half years after listing on the Stock Exchange of Thailand in mid-2012, the company's net profit rose six-fold to 1.46 billion baht at the end of 2013. Its market capitalisation surged three times to 29.9 billion baht as of March 31, 2014.

Dr Somyos and his wife Jareeporn founded WHA in 2003 and took it public in 2012 to mobilise funds. WHA recently sold some assets to an affiliated property fund, WHA Premium Factory and Warehouse Freehold and Leasehold Property Fund (WHAPF) and is now forming a real estate investment trust (REIT). The company has also diversified into solar energy.

Dr Somyos, 54, obtained his medical degree from Mahidol University in 1984 and worked at Siriraj Hospital for years. But with his family running a warehouse business, love of property courses through his veins. He went on to do an MBA at Thammasat University, finished it in 1990 and spent his spare time learning to be a property developer.

"My family told me that our warehouse business was not very successful. Then I thought perhaps we should change the old way of building warehouses and make them more efficient and competitive both for ourselves and our clients," he says.

He took three to four years to find a new business model. Finally, he found one: instead of just providing an already built warehouse to lease to customers, the company would design and develop built-to-suit warehouses. This means his company would construct the building to the client's exact specifications.

WHA would look for a good location, offer construction modules to fit customer needs and provide infrastructures at a reasonable price. The arrangement seemed to resonate with potential clients, mostly factories.

They could see their logistics cost falling in the long-term, with the advantage of having a customised warehouse built up to world-class standard and in modern design, Dr Somyos explains.

His first built-to-suit warehouse client was Diethelm (Thailand), now known as DKSH (Thailand), a leading market expansion service subsidiary of DKSH from Switzerland. WHA built a warehouse with 53,000 square metres for DKSH Thailand in Bang Na-Trat km 21.

WHA's list of clients soon grew and now includes Primus International, Ducati Motor, Kao Corporation and Japanese vehicle industry majors such as Nissan, Mazda and Honda.

With the concept already a success, the company went on to develop a warehouse farm project in Bang Na-Trat area. Called the Mega Logistics Center, the facility consists of a built-to-suit and general warehouse to serve the overflow demand of anchored clients and potential clients' immediate requirements.

In late 2012, the company set up its WHAPF property fund. Its offering of a higher return than the market with high quality assets attracted many institutional investors. The fund also gained support from the WHA's warehouse leasing business, given the strong interest of many industrialists wanting to have their Asean production bases in Thailand.

Dr Somyos sets his goal for WHA to be the region's No.1 provider of warehouse, factory and distribution centre design and construction within the next five years. Last year, the company had a pre-leased backlog of 500,000 sq m of space.

The company claims it offers the best value in building technology. Its cement formulation, for instance, maximises cement strength and cost-efficiency per square metre.

WHA also focuses on green initiatives that reduce clients' energy consumption. Its warehouse ventilation system cut indoor temperature by 3-4 degrees without air conditioning. It plans to use more than 1 million sq m of its roof area to generate about 100 megawatts of solar electricity.

In line with the government's initiatives to promote renewable energy, WHA hopes to increase its solar energy capacity alongside the yearly expansion of its warehouse area.

It works jointly with Gunkul Engineering Plc, the solar technology specialist, in this solar electricity project and sells electricity to the Provincial Electricity Authority.

"I'm thinking about a triple-forward step. When we build a warehouse, we use strong concrete and prepare for a solar roof installation. When we sign a contract with client, we let them lease only the space inside the building and ground floor, so we have space for solar roof. The client is happy with the lower temperature and energy cost," says Dr Somyos.

WHA also leverages its success to help partners and clients establish themselves in the region.

"Many of our clients often ask us to accompany them into Myanmar or other potential markets in this region. We plan to grow together and be their partner in overseas markets. The first country we could have a pilot project is Indonesia," he says.

WHA welcomes investors to invest in its 4.7-billion-baht REIT, scheduled to be listed in the fourth quarter and will increase its property fund size around 4-5 billion baht every year.

However, it is not all work for him and he leads a healthy lifestyle. Dr Somyos goes jogging, plays tennis and loves to listen to music. He likes fruit and vegetables, does not smoke and avoids alcohol.

"Life should be a balance between work and play. I don't want to work too much. But when I work, I'm serious," he says.


(c)2014 the Bangkok Post (Bangkok, Thailand)

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Source: Bangkok Post (Thailand)

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