Make sure everyone is on the same page
Frasers Property Thailand (FPT), a SET-listed real estate division owned by the Sirivadhanabhakdi family, continues to build a “one platform” team following the recent merger of industrial, commercial and residential property development companies last year.
Running an organization through three mergers in nine years is no brainer. The key is people management, said Thanapol Sirithanachai, country chief executive, who has been involved since the initial integration.
Mr. Thanapol says that after a merger, an organization must eliminate “us” and “them”.
“In the beginning it was easy because we built from the ground up and developed our own corporate culture,” he said. “The recent merger was challenging as we needed to adopt a policy from Singapore-based parent company Frasers Property Limited [FPL]. “
In 2012, SET-listed Univentures (UV) acquired Golden Land Property Development Plc, which was founded in 1978 by real estate veteran Khunying Sasima Srivikorn and listed in 1994.
UV is controlled by Thapana and Panote Sirivadhanabhakdi, the two sons of billionaire Charoen, through a share purchase in 2007 by one of their investment lines, Adelfos Co.
Mr. Thanapol, former UV managing director who joined UV in 2003, was appointed to lead Golden Land in 2012 to refresh the portfolio and realign the business to make a profit for several years in a row after losses.
Golden Land at the time was a mix of pre-acquisition, UV and newly hired employees. Top executives in the early stages were poached by other publicly traded developers, mostly Quality Houses.
“We have improved our workforce and leadership teams through many integration activities, particularly team building and employee relationships, to give them a clear, similar goal,” said Thanapol, also a past president of Golden Land.
In 2014, Golden Land sold non-core assets valued at more than 2 billion baht. Most were land bank lots in Krabi provinces, Prachuap Khiri Khan’s Thap Sakae, Ban Chang in Rayong, and Chiang Khong and Muang counties in Chiang Rai.
After all, the core businesses were only residential and commercial real estate including offices, retail and hotels.
The first quarter of 2014 marked the first time in six years that Golden Land made a profit again.
By the end of 2014, it acquired upscale developer Krungthep Land (KLand) with an investment of 3.56 billion baht, improving total sales from 1.6 billion baht to 4.4 billion and total assets from 12 billion to 21 billion growth.
“The merger with KLand has expanded our workforce, along with assets and interesting projects,” he said. “The integration was both the people and the business. It wasn’t difficult because the nature of the business was similar.”
However, it took nearly two years for employees at the three companies to believe in the company’s core values and move in the same direction by integrating existing and new employees, middle managers and C-suite executives, Thanapol said.
From just 80 employees in 2012, Golden Land was converted to over 800 employees before the merger with FPT in mid-2020.
In 2012-19, sales increased an average of 25-30% per year, from 400-500 million Baht in 2012 to more than 17 billion Baht in 2019.
Since August last year, after the merger with Golden Land, the integration into a platform has been implemented at FPT.
FPT was renamed from Ticon Industrial Connection in early 2019 after Frasers Property Holdings (Thailand) became the majority shareholder in 2017.
Together with the major shareholders Charoen and Khunying Wanna, FPT is managed by their youngest son Panot, who is also Group Chief Executive of FPL in Singapore.
FPT has three entities: Residential Construction under Frasers Property Home, Commercial Real Estate under Frasers Property Commercial, and Industrial Companies under Frasers Property Industrial. The balance sheet total has more than doubled from 43 billion to 92 billion baht.
The total number of employees rose to 1,309, including 569 in the Home, 215 in the Commercial and 258 in the Industrial, with 267 shared services employees as of August 31.
Under one platform, back office systems such as accounting, human resources and IT, which must follow the policy of the Singaporean parent company, have been improved and fully integrated, said Mr Thanapol.
TURN OFF US AND YOU
“There can be cultural differences between the individual organizations. There shouldn’t be ‘us’ and ‘they’. We built from the root and mixed them together, ”he said. “Some of FPL’s policies cannot be changed, but we can locate them to blend in with Thai culture.”
The hardest part was figuring out how to make former Golden Land and FPT employees feel like a team, said Mr Thanapol. Some Golden Land workers worked there for eight years and had attachments. You had to get involved with those at FPT, he said.
“Communication is the most important factor in building a team. Knowing more is better than knowing less because there are no more secrets. Communication should be clear, precise and transparent,” said Thanapol.
In a quarterly town hall meeting held early last month, the company worked to build confidence among employees as they were concerned about how the pandemic was affecting the company and their jobs, he said.
“We told employees that our housing and industrial businesses were healthy. Commercial properties like offices, retail stores, and hotels could have an impact, but the company remained profitable and stable. We haven’t cut salaries, offered layoffs, or left anyone behind, ”said Mr Thanapol.
However, staff should always be ready for a move as the pandemic affects businesses, he said. Employees should adapt and be ready to learn new skills, said Mr Thanapol.
“Fortunately, the one-platform integration comes at the right time as our businesses are diversifying under one roof. Home sales remain good, while warehouse and industrial companies are doing well despite a slowdown in offices, retail and hotels, ”he said.
The company needs to keep employees because if business resumes in the future it could be difficult to recruit qualified staff to return, Thanapol said.
“It is not easy to do team building from home, but we need to continue with online methods,” he said.
During the pandemic, FPT’s strategies vary by business area: realigning locations and products for home ownership, retaining tenants and customers for commercial real estate, and exploring a Purple Ocean strategy to open up both new and current markets for industry.
“Cooperation, respect, progressive and real are our new core ideals that will lead us to the same goal,” said Thanapol.