Thais Feather Real-Estate Nests - Copyright The Wall Street Journal

January 22, 2003

FOR THE BIRDS

FROM THE ARCHIVES: January 22, 2003

Doubling as Birdhouses Boosts Thai Real Estate

By BARRY WAIN
Staff Reporter of THE WALL STREET JOURNAL

PATTANI, Thailand -- In southern Thailand these days, real estate is for the birds.

That's why Somchai Sakulwarul, 39 years old, is moving his wife and three young sons out of their luxury three-story house and giving the place a radical makeover. Most of the interior walls will be demolished, the doors and windows will be sealed and covered so that the inside is darkened, and banks of pipes will be installed as air vents, with each set poking out five or six inches from the wall.

The renovations are designed to attract a high-flying tenant: a swallowlike bird known as the swiftlet, which builds a very profitable nest.

Ethnic Chinese around the world have a seemingly insatiable appetite for the delicate nests, which are used in bird's nest soup and tonic and are believed to improve digestion, cure dysentery and rejuvenate the elderly. The annual export trade is estimated at $500 million. A pound of the nests can fetch about $1,000 in this part of Thailand. In the U.S., they go for about $250 an ounce wholesale.

Spun from the glutinous saliva of birds that feed on flies, mosquitoes and other insects, the nests are often served in restaurants with chicken broth or ginseng. The nests, which are cleaned and refined before being exported, usually contain some twigs, leaves and feathers, although the best have little debris.

To Mr. Somchai, whose business selling nets and bait to professional fishermen has been pummeled by a poor economy, the nests seem a sound bet. "With bird nests, the investment is only one time, but the reward is for generations," says Mr. Somchai, who is building a new house for his family next door.

Flocking Together

Mr. Somchai is one of many people in this corner of Thailand who are using the swiftlets to feather their nests. Thais are adapting their homes and office buildings to offer shelter to the lucrative birds, in some cases adding floors or, as Mr. Somchai did, hollowing out existing structures. In other cases, eager entrepreneurs are putting up entire condominium blocks strictly for the birds.

The Swiftlet

Thais are being squeezed by the stubborn, lingering effects of 1997's financial crisis and the flow of investment dollars into China. And there's a huge supply of swiftlets available, as development drives them from their preferred habitat of cool, dank coastal caves. Nests can be harvested every three to four months, given the birds' nesting cycles.

Thai bird-nest production is thought to be doubling every year, with about 90% of the nests exported -- a lot smuggled out of the country to avoid taxes, bird men say. Still, demand is outstripping supply -- especially in booming coastal China, where a new monied class is acquiring expensive tastes.

The idea of creating big, open buildings as birdhouses came about decades ago, when swiftlets were found nesting in temples and deserted buildings in Southeast Asia. The style caught on mostly in Indonesia, the leading nest exporter.

In Pattani, an otherwise sleepy provincial capital with a population of 45,000, the idea has spread beyond professionals in the bird-nest trade and taken hold among people with spare cash or space that's hard to rent. Pongsak Jongjisiri, a physician, originally planned to invest in real estate and put up apartments for rent-paying humans. But he opted to build housing for freeloading swiftlets, putting up blocky structure about 65 feet high, protected by a razor-wire-topped fence, to discourage thieves, in an open field.

"Birds are easier to manage than people," says his wife, Saowanee. They chose the location after she scoured the Internet for information and habitually rose before dawn to track the birds' flight paths. After four months, 10 birds are regular visitors and one is nesting.

Nest fever is ruffling feathers across town at the Ford dealership, where the rooftop tennis court was enclosed to create one of the town's most successful bird habitats. A six-story birdhouse being erected next door is seen as a blatant attempt to poach nesting swiftlets. The dealership, in response, is expanding its facilities in hopes of retaining the allegiance of its swiftlets -- and providing a nice sideline business.

Pattani Mayor Pitak Korkiatpitak, who owns a company that cans and exports fish, frets that some of the makeshift birdhouses may be unlicensed (municipal approval is needed to modify a building) and unsafe, but his concerns fade at the prospect of profits to be made. He's looking for a piece of the action himself, having built an "experimental" birdhouse next to his palatial residence. He says: "I saw all the birds circling around my home and thought, 'Why not?' "

Attracting permanent occupants is the hard part, especially now that the birds have such a big choice of accommodations. Enter Sophon Wannaprapan, 37, a building contractor who is fast becoming the local expert on bird hospitality. An easygoing man with a weather-beaten face, Mr. Sophon concedes there is an element of luck in his task. But he insists there is an art to creating the proper ambiance for swiftlets to breed and craft perfect, cup-shaped nests that command premium prices from Hong Kong to San Francisco.

He lists such innovations as adding double walls to protect the birds from heat, as well as avoiding strong-smelling paint and cement, which he says they dislike. But the real secret of a successful birdhouse, he says, lies in "the technique": the installation in the darkened, cavernous interior of imported sound systems and recorded swiftlet chatter.

Mr. Sophon stumbled into the role of "bird nest engineer," as he is known here, when swiftlets swarmed, uninvited, into the unfinished basement of the new C.S. Pattani Hotel, on whose foundations he worked several years ago. It's unusual for swiftlets to nest below ground level, and many locals assumed he had found a magic formula to summon the birds.

In reality, he admits, he didn't have a clue as to why they favored the site, but in studying and building birdhouses he has developed some strong opinions to match his reputation. He dismisses Mayor Pitak's birdhouse as "ugly, a waste of money" and likely to fail because it's smelly, too small and ignores the wind direction. "Bats will love it," he sniffs.

Potential investors seeking clues to the birdhouse business flock to the C.S. Pattani to watch an estimated 10,000 swiftlets dart and swoop through one small opening into the basement at dusk and emerge again at daybreak. Every three months, a hotel executive, fitted with a gas mask to protect him from the dust and stench, uses a paint scraper to harvest up to 10 pounds of top-quality nests -- a haul valued at some $10,000 locally.

Some prospective rivals figure it might be easier to divert the hotel's swiftlets than try to crack the mystery of the building's appeal to feathery guests. Vacant land nearby is being snapped up. Two birdhouses have appeared behind the hotel, and more are planned. "Everybody is circling us," jokes Anusart "Pong" Suwanmongkol, whose family owns the hotel. "They want to steal our birds."

Write to Barry Wain at barry.wain@wsj.com

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Updated January 22, 2003

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