May 19--Improving prospects of the electronics sector could drive demand for industrial properties, causing it to recover in the last quarter of the year after hitting bottom in the third quarter, says Ticon Industrial Connection Plc.

"We have seen the trend of electronics firms closing their manufacturing facilities in high-cost locations such as Japan and the US, and shifting the production to Thailand," said managing director Virapan Pulges.

"We expect our business to begin realising the growth in the fourth quarter and so do other industrial land developers," he noted.

Mr Virapan said US-based Seagate Technology, the world's top hard disk drive maker, had ramped up its production in Thailand to 80 percent of the maximum capacity, while the factories of second-ranked Western Digital had also raised production.

Japan's Fujitsu has shifted production from Japan to Thailand, while Nikon has projected its business in the next quarter to rebound to the same level as last year.

Such trends would attract electronic-parts suppliers to Thailand, which benefits Ticon, which develops factories and warehouses for rent, he acknowledged.

"Thailand is among the top four potential locations of those companies alongside China, Vietnam and India," he said. "This group of operators already have production sites in Thailand as export-oriented bases but maintained the presence in China to remain cost-competitive in that market."

A US-based company is going to award a 500-million-baht contract to Ticon for a custom-built factory in Thailand with total space of 15,000 square metres.

Mr Virapan, however, declined to reveal its name but said a final decision would be made by July for the construction to start in September.

SET-listed Ticon posted total revenue of 232.5 million baht in the first three months of this year, slightly up from 225.9 million baht in the same period of 2009, with rental income rising to 193.9 million baht from 178 million.

Net profit, meanwhile, grew 48.5 percent year-on-year to 76.6 million baht.

Mr Virapan said Ticon anticipates its revenue for the whole 2009 to significant drop to about 2.5 billion baht this year from 3.4 billion baht posted last year, adding profitability would also see a decline.

The company has also halved its capital expenditure to 1.2 billion from 2.3 billion baht this year. Its investment involves 10 factories totalling 25,000 sq m under construction, together with up to 80,000 sq m of warehouse space.

Ticon shares closed yesterday on the Stock Exchange of Thailand at 6.15 baht, up 10 satang, in trade worth 7.19 million baht.

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