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Total Investment of 8 Billion Yen for Full-Scale Advancement of the Housing Business in Thailand
Jul 12, 2011
SEKISUI CHEMICAL CO., LTD
- New Plant for Mass Production of Detached Houses with an Annual Production Capacity of 1,000 Houses Established for 5 Billion Yen -

• Verifying expectation of housing business in Thailand
• Quality and performance highly-regarded by local developers

In October 2009, Housing Company (President: Teiji Kouge) of SEKISUI CHEMICAL CO., LTD. (President: Naofumi Negishi) launched a housing business in Bangkok, and the surrounding area in Thailand, and implemented test marketing, and having been able to verify its expectation, will start on the construction of a mass-production plant (expected annual production capacity: 1,000 houses) for single housing residences (product name: SCG-HEIM). The plant will be completed by December 2012, and we will launch full-fledged operations in 2013.

Overseas business by Sekisui's Housing Company is developing housing business rooted in the country itself, with local procurement and local manufacturing. This method of housing business is characterized by being configured in Japan, from building plants to distribution, construction, and after-sale services, and then developed as joint management with local firms.
In the housing business in Thailand, we established the house manufacturing company SEKISUI-SCG INDUSTRY CO., LTD. and the distributor company SCG-SEKISUI SALES CO., LTD. in joint partnership with SCG Building Materials Co., Ltd., which is a subsidiary of Siam Cement Group, one of the largest conglomerates in Thailand. Within these two years, they have examined the construction system, sales methods, and costs, etc.

The land for the construction of the new plant has been freshly acquired within Saraburi industrial estate, approximately 80km north of Bangkok. The plant building (32,400m2), cafeteria, and offices will be built on 150,000m2 of land. 5 billion yen will be invested in the plant and 3 billion yen will be invested as the operating capital and the funds to reinforce the system of manufacturing and distributor joint venture companies. Sekisui Chemical Co., Ltd. and SCG Building Materials Co., Ltd. will invest according to their respective shareholding ratio in the joint venture companies.

Site
Outline of Mass-Production Plant

Site:Approximately 80km north of Bangkok
Land:150,000m2
Plant Buildings:32,400m2 (assembly plant and external walls plant)
Launch:July 2011
Completion of Construction:December 2012
Production Capacity:1,000 houses annually
Personnel:500 (TBD)

<Test Marketing Results>

1. Highly-Regarded Quality and Performance

Satisfaction among customers who bought SCG-HEIM in Thailand has been very high to date, and in particular, the quality and performance in the thermal environment have been highly regarded. Further, the quality and performance have also been highly regarded by local developers.

2. Sale Prices

Houses have been sold for between 250 thousand and 300 thousand yen per tsubo (1 tsubo = approximately 3.3m2) to date, but there is the prospect of being able to sell houses in the price bands for which there is greater demand by improving plant productivity and limiting the house layout and specifications.

3. Construction Management

The important issue is to reduce the on-site construction period. Until now, installing facilities such as bathrooms have been built on-site due to local customs, so the construction period has been lengthy, but the aim now is for 60 days construction by taking interior furnishings into the plant, such as plumbing facilities, and storage and fittings, and by augmenting turnkey contractor.

<Strategies for Getting Mass Production Plants on Track>

1. Cooperation with Developers

Cooperating with developers assures orders of 70% or more, with the aim of expanding the amounts. The advantage of developers is the possibility of shortening the time taken for the recovery of moneys by supplying high-quality and high-performance housing in a short space of time.

2. Reduced Costs due to Production Standardization, and Limiting Layout and Specifications

The aim is to reduce costs by promoting production standardization while improving production efficiency in the plant by accepting orders in units of 30 houses per project. Further, we are responding to calls for cost reductions by limiting the layout and specifications of the houses for construction and sale. In future, the plan is to develop products across the band of prices for which there is much demand.

3. Production of High-Quality Products at Low Cost

Assuring high quality by automating the processes requiring skills such as welding steel structures. Meanwhile, high-quality products are manufactured at low cost by maximizing the use of local labor in the finishing processes, such as partitioning and the installation of facilities.

<Business Plans>

600 houses are planned for 2013 fiscal year, and 1,000 houses for 2014 fiscal year, and we aim to manufacture and sell 1,000 houses annually in Thailand as soon as possible.

Example of SCG-HEIM housing project

Example of SCG-HEIM housing project

Rendering of the completed plant

Rendering of the completed plant

References

(Manufacturing Joint Venture Company)
 Outline of SEKISUI-SCG INDUSTRY CO., LTD.
Business Content:Manufacture of modular house
Investment Ratio:51% by Sekisui Chemical, 49% by SCGM
Headquarters:Bangkok, Thailand

(Distributor Joint Venture Company)
 Outline of SCG-SEKISUI SALES CO., LTD.
Business Content:Modular house distribution and construction, and after-sale services
Investment Ratio:49% by Sekisui Chemical, 51% by SCGM
Headquarters:Bangkok, Thailand
Outline of Siam Cement Group (SCG)
Business Content:SCG's five main businesses are chemicals, paper, cement, building materials, and distribution
Headquarters:Bangkok, Thailand
Net Sales:301,323MTHB (million Baht) in 2010 fiscal year = 798.5 billion yen (Note: Calculated using 1 Baht = 2.65 JPY)
Outline of SCG Building Materials Co., Ltd. (SCGM)
Business Content:Building materials including roofing materials, ceiling materials, wall materials, flooring materials, tile, and sanitary ware
Headquarters:Bangkok, Thailand
Net Sales:30,719MTHB (million Baht) in 2010 fiscal year = 81.4 billion yen (Note: Calculated using 1 Baht= 2.65 JPY)


Press Contact

Sekisui Chemical Co., Ltd.
Corporate Communication Department, Public Relations Group
Fax: +81-3-5521-0510

Disclaimer

This press release may contain forward-looking statements. Such forward-looking statements are based on current expectations and beliefs and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements due to changes in global economic, business, competitive market and regulatory factors.
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