In conversation with
In conversation with Mr. Ben Taechaubol
CEO | Country Group Development
How did the late 90’s crisis change your outlook on business?
Mr. Ben Taechaubol: I think that back then Thailand was experiencing such huge growth, starting with property and continuing to various other industries, and it was down to relatively lax financial self-discipline. At the time I thought that there was clearly a bubble that was brewing and looking back it was clear that was the case. I think that in the life of any economy or any country this is not uncommon – I think you’ve begun to see that in other developing countries. It’s always a speculative property boom and the wealth that is generated from that flowing into other areas and that just builds up. So today, as somebody who’s part of the business community, I’m really quite happy with the way that there’s a lot of fiscal discipline from both the Bank of Thailand as well as all the other banks.
As a Thai national I’m reassured by the fact that the banks are being disciplined in their approach. Bad debts, an unhealthy financial industry, things which can really rock an economy – those concerns are largely not there anymore.
To this day what do you think have been the key ingredients for the successful growth and country development? What have been your companies greatest assets towards that development?
Mr. Ben Taechaubol: I observed my father and people around him. It’s changed the way we look at business, definitely. And I think that some of the things that makes Country Group Development unique is we’ve also chosen a path towards development and how to structure our company in such a way that it focuses a significant portion on international investments as well. We like to think that our business model and approach towards property is unique and much more international; better diversified. It’s not just certain segments of a domestic property market.
You pay close attention to changing trends, the demands of your consumers. What are the new trends that you have identified as being of most interest or being the next step?
Mr. Ben Taechaubol: Our mandate, as opposed to our other affiliates, has always been property and it’s about looking at the various segments within the property. Like we think there are obviously many, many industries, all of which have something to do with property.
Whether it’s education, data centres or other underlying operations, there is a real estate component to all of that. That’s really where our underlying mandate comes from. Our investment strategy is to look at star segments, very specific segments within the larger property industry.
This is where there is really high growth and high demand. And that’s why you see us moving into rehabilitation or data centres. And we are very much hoping to move into a few others, such as education etc.
What do you believe the completion of your project will mean for Thailand’s tourism sector when it comes to high-end hotels and resort building?
Mr. Ben Taechaubol: It’s well known that there is a huge supply in the hospitality industry in Bangkok, so when we first envisioned moving into this space, we felt that you had to be the best or nothing at all. That was the mind-set we took coming in, largely because it’s such a lucrative market.
Thailand is constantly ranked number one or number two in terms of the number of tourists who come, it’s always us and London, so it’s very important for hotel operators to brand their positioning in this market. Given that all the brands are here and there are iconic competitors on the river as well it was very important for us that if we were going to move into the hospitality industry to ensure that we had everything in place to be the market leader.
With the Thai government now investing heavily in mass transit infrastructure in the coming years, how do you see this affecting the real estate market?
Mr. Ben Taechaubol: It’s hugely affecting the real estate market, people ask me, ‘Where is the real estate market moving?î And I’ve always given my honest opinion on this: the Thai real estate market is very much a developer-driven market, unlike other cities. As long as it’s a developer-driven market, developers tend to chose to move in accordance with mass transit with huge repercussions. It’s a good thing in a way because the government can drive development to the areas they want or need it to take place.
I would like to move more towards broader questions about the approach to internationalisation and of course the forthcoming creation of the ASEAN Economic Community. What is your approach to taking business overseas, and what does the future hold, especially for the sub-region? Do you have any plans?
Mr. Ben Taechaubol: You say Thai companies are being criticized for being too inward-looking? Well it depends what industry. Obviously our house is heavily reliant on tourism and exports.
I don’t feel the export markets are inward-looking at all, but as for other industries, yes, I think so. In the sense that they have largely been focused on the domestic market. I’m very proud of the fact that there are certain leaders in charge of companies which are dominating abroad.
You’ve got examples of large Thai conglomerates reaching into China and doing well. You’ve got examples of our energy companies and CMC Thai reaching out into other economies in southeast Asia and beginning to do well, even examples of developers starting to take their business model abroad as well.
At Country Group Development I wouldn’t necessarily say we’re adopting a similar strategy. We’ve positioned our business strategy in such a way that it allows us to move abroad quite easily. We’re a very dynamic, small company. We’ve developed in Sydney for over 20 years, we’re very comfortable with development abroad.
We chose the UK as our first venture as it’s a very open economy; people see it, understand it. The investors in our trust understand that market very well. We’re also about to list what will be the first foreign real estate trust in Thailand. It will be our data center, it has just been approved.
Human capital development is crucial in the development of the country. How do you believe the new educational blueprint will work in terms of heavily encouraging entrepreneurship? Do you believe they have been successful so far in creating that innovative and creative mindset in their graduates? Do you believe that Thai graduates are prepared to satisfy the national demands?
Mr. Ben Taechaubol: You mentioned two things in that question. You mentioned education and then you spoke about creativity and I’d like to separate them. I quite disagree with the quality of the education system in Thailand. I think it’s not anywhere near where I’d like to see it.
Education is such an important part of driving human capital in the future. A lot of the quality is because our students are being sent abroad.
Having said that, I am always amazed at the few individuals who have reached out, I think on their own merit. It’s gotten to a level where they’ve gone abroad and achieved amazing things. That kind of stuff makes me incredibly impressed, because what they had to go through and what they had to overcome to achieve that on a global level, I think it’s absolutely brilliant.
Separately from that statement, the creativity has always been there and I don’t know where it comes from! Thailand has always been recognized as a hub of creativity, and it’s true, it really is. I’m in an industry where we definitely sense that. Everything from marketing to designers and architects and interior designers. We have an amazing talent pool in that respect. I don’t know if I’m going to attach the two and give credit to education as a result of this. But that’s one of the strengths. Out of the sources of human capital that we have.
I think we’ve got a highly talented workforce who can speak English – not necessarily as well as some others within the region, but when you combine everything together; the quality of the people that you have; the cost of human capital; the creativity which you can’t teach, it adds up to something unique.
All in all, I think that is currently a source of competitive advantage, but it’s something that we cannot take for granted. We absolutely need to drive to ensure that it’s sustainable for future generations.
The creation of the AEC this year will lead to various leading nations competing with each other for the multinational companies’ headquarters to be in their country which really puts the property and real estate sector in the spotlight. In your opinion, can Thailand be seen as the investment hotspot?
Mr. Ben Taechaubol: If we have cohesive leadership then I think will be. My personal opinion is we’ve got all the ingredients and the infrastructure with which to act very quickly to change very quickly. The reason why it’s unique compared to other countries is the same reason why we’re quite resilient: a lot of the people, expatriates and people who set up in Asia, they actually prefer to live here. It’s actually a very comfortable city to live in, once you get used to it.
I think this is what makes us stand out in Asia as well. I think within this region you’ve got Singapore, which is what it is. It’s very well-developed, it’s very clean but the cost of living is extremely high and there are geographic limitations to what Singapore can achieve.
Beyond that Thailand has got all the characteristics which make it stand out within ASEAN as a desirable place to live. In that sense, if you combine it all together; the cost of living; the cost of doing business; the infrastructure that we have, be it retail, hotels, residential, both mass as well as the luxury segment and things like that, it makes it a very suitable place for MNC’s to set up their headquarters.
I would certainly like to see very targeted tax-based incentives to draw MNC’s to come here, much like what Singapore had done to successfully draw large companies. Just about every large MNC has moved from Hong Kong to Singapore as its hub. These are initiatives we could easily apply in Thailand to make it the AEC hub.
Do you believe that the political situation in Thailand has caused instability in investors’ confidence looking at Thailand from abroad?
Mr. Ben Taechaubol: For foreign investment what we see is two groups. There are people who are relatively familiar with Thailand and have done a lot of business here and are accustomed to working in this country. These people are far more resilient because they look at things from the longterm perspective and they also look beyond what is heavily publicized in the media at any given time.
There are a lot of foreigners who, even during the height of political tension understood that it’s very much concentrated in a very small area. And you could really live in Thailand and get by without being so much as affected by it.
For that group it impacts them a lot less, but for the general masses outside, it definitely has a negative impact.
What advice would you give to young Thai graduates in terms of management skills, leadership, and entrepreneurship?
Mr. Ben Taechaubol: Given where technology is headed and the ability to actually level the playing field with advances in technology, there is definitely a move toward entrepreneurship amongst young Thai people.
For young start-ups and smaller companies financing and solid financial planning is absolutely the most important thing.
My personal feeling is, I don’t know if it’s qualified advice, but I’d say prudent financial planning is most important. However, never lose sight of your goals because Thai people are incredibly innovative. That’s what got me inspired in the beginning to start something new. And I don’t want young entrepreneurs to ever be detracted, I want them to understand that it’s that innovation which will bring their competitive advantage. That’s how they’re going to differentiate themselves so those are the qualities that they should maintain.
What is your overall message of confidence that you would like to share with international investors?
Mr. Ben Taechaubol: I think that if you looked at ASEAN and it’s 580 million people it’s now a significant block with a population larger than the EU. It’s an interesting hub of development because it’s a very obvious investment in the property segment. The growth engine over the past 10 years has been coming out of China and southeast Asia.
Thailand has all of the right characteristics to become the hub of the AEC, especially for multinational companies; the workforce is going to be far more dynamic, can move around a lot more; cost, all these characteristics. The most important thing, the thing that is sometimes immeasurable is the quality of life.
For multinationals considering where in Asia to set up, Thailand makes for a very, very unique opportunity.