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Market for pre-built homes being tested

Market for pre-built homes being tested

T HE people who want to sell pre-fabricated houses in Cambodia think they have a market

among middle class Cambodians who can pay up to $40,000 to live in clean comfort.

Their banker doesn't agree. He says Cambodians want to live in traditional wooden

houses, but there may be a market for pre-built homes among foreign companies who

need housing for their expat employees.

So far, Royal Building Systems Kampuchea, the offspring of a Canadian company, Royal

Plastics Group, hasn't sold any of its houses.

Tep Rithivit, the representative here, who is also representing the Canadian company

in its dam project near Kampot, said he has a joint venture deal to build 160 homes

about 15 minutes from Phnom Penh on Highway 4. The landowner envisions a modern development

on 11 hectares with security, swimming pools and landscaping, said Rithivit.

"It's a private project. We want to sell one third of the homes before we start

building, but the infrastructure will be done," said Rithivit. He said he has

another deal in the works with a developer to build 300 homes.

Rithivit said Royal's homes have been selling well in China and in South America

and he thinks that Cambodians are ready for their pre-built homes. The homes consist

of cement walls covered by a plastic PVC lining. They take about three days to erect.

Two model homes are on display near Pochentong Airport.

A typical small home of 47 square meters with plumbing, electricity and septic connections,

would cost around $10,000 and up, he said. One of the basic selling points is cleanliness.

"There's no wood, nothing for a bug to eat."

The company's goal is to sell 150 homes in 1996, and sell 500 to 700 homes in 1997.

If business takes off, Royal would set up a factory here to manufacture the pre-fab

parts for export to the rest of Asia.

Rithivit said he also sees a market for the plastic buildings in rural areas where

the Ministry of Rural Development has plans to relocate squatters over time, and

for government health clinics and schools.

But his main market is small homes, provided that Cambodians can afford them. He

is working with Cambodia Farmers Bank to set up a mortgage program, in which the

bank would lend 50 percent on the home.

Tony Juliasto, adviser to Cambodia Farmers Bank, said the bank is interested in offering

mortgages for the houses, but "we have some reservations whether this project

is going to be successful... We are looking into what form of marketing to use."

He said he doubts there would be a market among Cambodians, but there may be potential

to sell the homes to foreign companies that need a place to house their expats. "The

convenience is that each executive would have his own house, instead of sharing a

villa with four or five other people."

He said foreign companies often approach the bank about borrowing money to buy a

$100,000 or $200,000 villa to house their foreign staff.

Royal has a marketing problem because when people think of plastic homes, they think

they will be hot, they will burn easily and might not be very strong, although those

things aren't true, he said. "The one thing we agree on is to not use the word

plastic."

He said the homes would be more salable in Cambodia if the developer mixes them up

with some brick and wood homes. "There's a cultural aspect with the wood house,"

he said.

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