SembCorp Industries Enters Waste Management Business

Singapore, Sep 24, 1999

Newly-formed business unit joins forces with SITA, the world's third largest environmental services company, to bid for Singapore's fifth incineration plant.

SembCorp Industries, Singapore's leading engineering services conglomerate, has set up a new business unit to provide turnkey waste management services in Singapore and the region.

The formation of this new unit, SembCorp Waste Management (SembWM), underscores the Group's efforts to strengthen those core capabilities within its infrastructure business.

SembWM, a wholly-owned subsidiary of SembCorp Industries, will have six business areas comprising:
a) incineration with energy recovery
b) industrial cleaning
c) landfilling
d) waste collection and transportation
e) consultancy and engineering
f) recycling and reuse.

Mr Wong Kok Siew, President and CEO of SembCorp Industries said: "There are several environmental-related service companies within our Group now. The scope of their businesses ranges from industrial waste management and recycling to the provision of consultancy services in the various fields of environmental management as well as industrial cleaning services to oil and gas companies.

We are currently working towards consolidating all these companies under SembWM within the next 12 months. We want to build a strong environmental service company capable of becoming a leader in the Asian waste management market.

Opportunities abound in this market but there are only a handful of companies offering waste management services in Singapore and the region."

Citing figures from the 1999 World Bank Report, Mr Wong added: "It has been projected that Asian economies including Hong Kong, Taiwan, Singapore, Malaysia and Thailand are likely to spend US$15.9 billion on environmental projects by the year 2000. The sheer size and structure of this market makes waste management a lucrative business for us."

Mr Wong has been appointed Chairman of SembWM while SembCorp Industries' Executive Director, Mr Cheong Quee Wah, is appointed President of the new company.

Alliance with SITA

To strengthen its expertise in the field of waste management, SembWM has entered into a long-term strategic alliance with SITA, the world's third largest waste management company and the biggest environmental services company in Europe (see appendix).

A 60/40 joint venture company called SembCorp SITA (SembSITA) has been formed, with SembWM holding the majority stake.

Both SembWM and SITA will collaborate on an exclusive basis to pursue waste management businesses covering the 10 Asean countries. They will also tie up on a project-by-project basis in places such as China, Macau, Hong Kong and Taiwan.

SembSITA's first undertaking is to bid for the Singapore Ministry of the Environment's (ENV) fifth refuse incineration plant in Tuas South. The ENV has recently announced its intention to privatise this plant and will be inviting tenders from companies.

If successful, SembSITA will design, build, own and operate this plant, which is expected to start operating in 2004. In addition, SembCorp Construction and SembCorp Engineering will likely benefit from engineering, procurement and construction contracts awarded by SembSITA for the fifth incineration plant.

Meanwhile, SembSITA is also exploring other projects spanning the entire waste management value chain (from collection, treatment and disposal to recycling and composting) in Singapore and other Asean countries such as Malaysia and Thailand.

Mr Jacques Petry, SITA's Chairman and CEO said: ""Protecting the environment is a global responsibility. Together with SembCorp Industries, we are committed to working with governments, regulatory authorities and clients in the furtherance and development of appropriate public policies that support environmental quality and sustainability.""

Mr Wong said: "We are very excited about the prospects of the waste management industry in Asia, particularly in Singapore. We expect competition to build up in this region, with more foreign heavyweights vying for a slice of this market.

SembWM needs to build up its capability to provide a full spectrum of waste management services. To this end, our alliance with SITA is perfectly timed. SITA, a global leader in integrated waste management, is an ideal partner for us. We believe the potential synergy in undertaking waste management projects jointly with SITA is tremendous."

SembWM and SITA signed a joint venture agreement today at the Westin Hotel.

Jointly released by SembCorp Industries and SITA on September 24, 1999.

For more information, please call:

Sandy Leng
Assistant Manager
Group Corporate Relations
SembCorp Industries Ltd
Tel: 7311 799
Fax: 738 4904

APPENDIX

About SITA

Established in 1919, SITA is Europe's largest environmental services company with annual sales of over Ffr 17 billion. The Company is part of the Suez Lyonnais Des Eaux Group which is the third biggest corporation in France.

Operating in 21 countries with over 45,000 employees worldwide, SITA is present at all points in the value chain of integrated waste management. Its scope of services covers waste minimisation and collection, urban and industrial cleaning, maintenance of sewer and drainage systems, biological and physico-chemical treatment, incineration with energy recovery, landfilling as well as resource recycling and recovery.

The Company is strongly committed to protecting the natural environment and promoting sustainable development. It provides waste-related services to over 40 million people annually; supplies waste management services to more than 30,000 manufacturing plants a year; processes and disposes approximately 30 million tonnes of municipal and industrial waste annually; and operates 86 incineration plants worldwide, 270 landfills and several recycling and value recovery centres.

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