News

- Plans to invest up to RMB326.6 million to provide on-site logistics and water for industrial use

Sembcorp Industries (Sembcorp) has marked a significant milestone in the expansion of its centralised utilities business in China with its latest project in the Fushun Petrochemical and Fine Chemical Park, a 43-square kilometre park located within the Fushun Hi-tech Industrial Zone in Liaoning province.

Sembcorp will be investing a total of RMB326.6 million (equivalent to approximately S$64.2 million) to develop centralised utilities facilities to serve existing and new customers in the Fushun Petrochemical and Fine Chemical Park. The centralised utilities facilities will comprise a service corridor network as well as facilities for industrial water treatment and industrial water and firewater supply.

A concession agreement has been signed between Sembcorp’s wholly-owned subsidiary, Sembcorp (China) Holding Co, and the Fushun Government, which grants Sembcorp exclusivity as the provider of the service corridor network in the Fushun Petrochemical and Fine Chemical Park. For the first phase, Sembcorp will be investing RMB76.0 million (approximately S$14.9 million) to develop a three-kilometre service corridor network, with completion expected in the first quarter of 2013.

At the same time, Sembcorp will embark on a water project in the Fushun Petrochemical and Fine Chemical Park. The company will acquire a portfolio of existing water assets from the local government and develop a new industrial water treatment plant and a 3.6-kilometre water pipeline at a total investment of RMB250.6 million (approximately S$49.2 million). The new industrial water treatment plant will have an initial capacity of 22,500 cubic metres per day and is expected to be completed by 2013. Sembcorp will also be granted exclusivity to supply water to customers in the Fushun Petrochemical and Fine Chemical Park.

These facilities in the Fushun Petrochemical and Fine Chemical Park will complement the Group’s existing utilities operations in Liaoning province, where Sembcorp will now have a presence in three locations, including Shenyang and Xinmin.

Tang Kin Fei, Group President & CEO of Sembcorp, said, “We are pleased to offer our expertise in providing centralised utilities to customers in the Fushun Petrochemical and Fine Chemical Park. As a global leader in the provision of energy, water and on-site logistics to multiple companies in petrochemical and chemical hubs, we believe Sembcorp has the capabilities to support the growth of the Park, which is targeted to be the largest integrated refining and petrochemical base in northeastern China. We are honoured to be selected by the Fushun Government to be part of this development.”

Sembcorp has incorporated two subsidiaries, Sembcorp (Fushun) On-site Logistics Co and Sembcorp (Fushun) Water Co, in China to undertake the service corridor and water projects respectively. Both subsidiaries are wholly-owned by Sembcorp (China) Holding Co. Sembcorp (Fushun) On-site Logistics Co will have an initial share capital of RMB32.0 million (approximately S$6.3 million) while Sembcorp (Fushun) Water Co will have an initial share capital of RMB84.0 million (approximately S$16.5 million), both of which will be funded through internal resources.

With these projects, Sembcorp’s utilities business has an established presence in 19 cities across 11 provinces in China, serving both industrial and municipal customers. Recently, Sembcorp also successfully completed its acquisition of a portfolio of power assets in China, comprising four wind power assets in Inner Mongolia and Hebei and a coal-fired power plant in Shanxi.

The above transactions are not expected to have a material impact on the earnings per share and net asset value per share of Sembcorp Industries for the current financial year.

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