We are Singapore’s largest environmental management services company and the second largest in Australia. We offer a complete integrated suite of solutions for waste treatment and environmental project management, catering to the municipal, industrial, commercial and healthcare sectors.

STRATEGY
To be Asia’s leading provider of total integrated environmental management solutions, we will:

Expand our business base in Singapore even further
We see opportunities opening up for us in the near future. In 2003, two municipal sectors will be put up for bid in Singapore and the Singapore government is expected to increase its push towards making recycling an integral part of life. This represents huge opportunities for us to consolidate our position as the leading local waste management player.

Continue to explore opportunities in Asia to enhance our regional presence
We are exploring opportunities in China, India, and Sri Lanka where we can provide solutions to increasing environmental issues as a result of rapid urbanisation in these emerging economies.

Utilise advanced technology to provide innovative solutions
We are committed to harnessing technology to offer innovative environmental management systems, improve operational efficiency and protect the environment. We have introduced systems such as pneumatic waste systems and industrial biologics.

OPERATIONS REVIEW
We achieved a 14 per cent increase in Profit After Tax and Minority Interests (PATMI) in 2002, which is attributed to our on-going cost-cutting and restructuring measures.

In Singapore, we maintained our position as the country’s top environmental management services company, retaining a 55 per cent market share in the municipal sector, a 20 per cent in the industrial and commercial (ICW) sector, and dominating the medical sector. Our Australian associate, SITA Environmental Solutions (formerly Pacific Waste Management), continued to remain the country’s second largest environmental management company.

In 2002, we continued to rationalise our operations and introduced innovative technological systems to keep us well ahead of other players in the market.

In November, we renamed our holding company SembCorp Environmental Management (SembEnviro), and realigned our companies under this single brand. Semac was renamed SembWaste, and our business units structured under eight different brands for the different market segments:

• SembWaste Municipal
• SembWaste Industrial
• SembWaste Medical
• SembWaste Cleansing
• SembWaste Consultancy & Technology
• SembVISY Recycling
• SembVISY Recycling Materials Recovery Facility
• SembEnviro Conversion Technologies

During the year, we made significant progress towards our goal of closing the recycling loop in Singapore. In the municipal sector, we launched a pilot household recycling project, giving out free, user-friendly, recycled storage crates to several housing estates. These crates eliminate the need for residents to sort their recyclables into separate bags and have been well received. The rates of participation and the volume of materials recovered continue to be on the rise. The success of this pilot project and our experience with it puts us well ahead of the Singapore government’s push to have every one in two households recycling materials by end-2003.

We also officially opened Asia’s first automated materials recovery facility (MRF) in Tuas. This is a 60/40 joint venture between SembEnviro and VISY Recycling of Australia. This facility automatically sorts and recovers paper, plastics, glass and metals and presently recovers some 25 tonnes of recyclables a shift. SembVISY Recycling expects to increase the MRF’s capacity four-fold to 100 tonnes per shift by end-2003.

In early 2003, we formed a 30/70 joint venture with Consolidated Plantations to design, build, own and operate a S$20 million Biomass Waste-to-Energy plant in Tennamaram, Malaysia. This new facility will convert empty fruit bunches from oil palm into energy. The plant is expected to be completed in end-2004.

In Australia, our associate, SITA Environmental Solutions, won Australia’s single biggest waste contract worth S$142 million. We hold a strategic 40 per cent shareholding stake in SITA Environmental Solutions.

OUTLOOK
Discounting any deterioration in Singapore’s economic conditions, the outlook for 2003 is expected to be favourable, with profit growth expected through organic growth of our businesses and improvement in market share.

In the coming year, we are well-positioned to compete for two local municipal sectors which will be up for bid, and at least one municipal sector in Asia as well.

We will also leverage the Singapore government’s push towards a 60 per cent household recycling target by 2012. With recycling programmes and facilities in place, we can build on the recycling business to reduce our waste disposal costs, create a second income stream, and build a critical mass for the SembVISY Recycling MRF.

On the innovation front, we have secured a S$2.2 million contract together with our partner Shinmaywa (Asia) to install a proprietary mobile pneumatic waste collection system in three new condominium projects which will be launched in 2003. Called the Singmatic System, this waste collection system differs from conventional waste collection methods because refuse from housing estates is drawn into trucks via a vacuum pipe at collection points. The collection points at the housing estates are linked to the various households by underground conveyance pipes and waste is stored temporarily in underground tanks before being collected by the trucks. Fully automated, the system requires minimal manpower, is faster than conventional waste collection methods and eliminates hygiene problems commonly faced by manual waste collection.

We expect contributions from our regional operations to be favourable as we continue to expand our revenue base, improve our efficiency and raise service standards.

NEW SEMBENVIRO BRANDS

•	SembWaste Municipal		Municipal waste collection and post-collection
•	SembWaste Industrial		Industrial and commercial waste collection
•	SembWaste Medical		Medical waste collection
•	SembWaste Cleansing		Industrial and street cleansing
•	SembWaste Consultancy & Technology		Provision of environmental engineering expertise
•	SembVISY Recycling		Recycling collection for both municipal and industrial sectors
•	SembVISY Recycling Materials Recovery Facility		Materials recovery from municipal and industrial sectors
•	SembEnviro Conversion Technologies		Recovery of energy from waste including biomass, incineration and industrial biologics