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| In the four years since our
inception, SembCorp Environmental Management (SembEnviro)
has grown to be Southeast Asia’s largest Asian
environmental management services company. We offer
a complete and integrated suite of solutions for
waste treatment and environmental project management,
catering to the municipal, industrial, commercial
and healthcare sectors. |
| Operations
Review | Outlook
| The SembEnviro
Brands
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Operations Review
Our Environmental Engineering business performed
well in 2003. Turnover increased 41% to S$192.2
million while our Profit After Tax and Minority
Interests (PATMI) improved 36% to S$12.5 million.
This improvement was driven by the performance of
our total integrated services contracts and by enhanced
earnings from our acquisitions of Tay Paper Resources
and Cleantech Services during the year. |
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| In March 2003, we took a 60% stake in Tay Paper
Resources, a local paper recycling company, with
the aim of regionalising its paper recycling operations.
SembEnviro Tay Paper (formerly Tay Paper) commands
over 30% of the waste paper recycling market in
Singapore and offers a complete range of recycling
services from collection, sorting and baling to
trading. To add a comprehensive cleansing business
to our environmental services portfolio, we also
acquired Cleantech Services, a wholly-owned subsidiary
of the Housing Development Board, in April 2003
for S$8.1 million. Successfully re-engineering the
operations of SembWaste Cleantech, the company secured
new cleaning contracts valued at S$60 million during
the year. SembWaste Cleantech is a market leader
in the provision of conservancy services in housing
estates managed by town councils. |
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| Throughout 2003, the Environmental Engineering
business continued to achieve key milestones as
it enhanced its capacity to offer a fully integrated
range of environmental services. |
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| In February 2003, SembEnviro entered into a 30/70
joint venture with Consolidated Plantations, a wholly-owned
subsidiary of Sime Darby, to design, build, own
and operate a biomass waste-to-energy plant in Tennamaram,
Malaysia. The 500-tonnes per day plant, which will
convert agricultural waste from palm fruits into
energy for internal consumption, as well as for
sale to the national grid, is expected to be completed
in the third quarter of 2004. |
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| We also acquired a 60% stake in the waste collection
business of Shanghai Sincere Environmental Services
Company, a leading waste management and environmental
services company in Shanghai, China. This acquisition
makes us the first foreign waste collection company
to enter Shanghai. The new joint venture –
Shanghai SembEnviro Reliance Company – fast-tracks
SembEnviro’s entry into the Chinese economy
and gives us an immediate foothold in the growing
Shanghai waste management market. |
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| In September 2003, we opened Southeast Asia’s
first integrated construction and demolition waste
materials recovery facility in Sarimbun Recycling
Park in Singapore. A 75/25 joint venture between
SembEnviro and the Alex Fraser group of Australia,
the SembEnviro Alex Fraser facility is Singapore’s
first trommel-based recovery facility. By recovering
specific construction aggregates such as sand, the
facility will play a pivotal role in reducing non-incinerable
waste going to landfill, and in reducing Singapore’s
dependence on virgin materials. |
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| During the year, we also continued to develop
and introduce innovative technological systems to
the market; for example through our strategic alliances
with technology companies such as ShinMaywa (Asia)
and Novozymes Biologicals (Novozymes). The partnership
comprising wholly-owned subsidiary SembWaste and
ShinMaywa (Asia) secured a S$2.2 million contract
to install its proprietary mobile pneumatic waste
collection systems in three new property projects
by City Developments. The mobile pneumatic waste
conveyance system is marketed by the SembWaste-ShinMaywa
partnership under the trade name Singmatic System.
In addition, we also embarked on a strategic alliance
with Novozymes for joint research in biological
treatment services. Employing alternative applications
of microbial biotechnology for the treatment of
waste and wastewater, SembEnviro and Novozymes will
engage in extensive research and development to
create unique solutions to treat waste by biological
means such as using enzymes and micro-organisms. |
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| In 2003, we continued to maintain our position
as Singapore’s top waste management solutions
provider, retaining a 55% market share in the municipal
sector, a 20% share in the industrial and commercial
sector, and having a major share in the medical
sector. Our Australian associate company, SITA Environmental
Solutions, also remained the country’s second
largest environmental management company. |
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Outlook
We expect our Environmental Engineering business
to achieve double-digit PATMI growth in 2004. This
growth will be underpinned by its healthy orderbook
which stood at S$348 million at the end of December
2003. |
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| With the increasing opportunities provided by
the privatisation of environmental state-owned enterprises
and the robust growth of demand for environmental
services in the region, we will continue to focus
our efforts on providing total integrated environmental
services in China and India. |
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| In Singapore, the improved outlook of the economy
augurs well for SembEnviro’s business, especially
in the industrial and commercial sector. We will
also continue to leverage the government’s
drive towards zero landfill and increased recycling
participation rates to build up our recycling business. |
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The
SembEnviro Brands
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| SembWaste Municipal |
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Municipal waste collection and post-collection |
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| SembWaste Industrial |
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Industrial and commercial waste
collection |
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| SembWaste Medical |
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Medical waste collection |
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| SembWaste Cleantech |
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Conservancy cleaning, commercial
cleaning, horticultural maintenance and carpark
operation and management |
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| SembWaste Consultancy & Technology
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Provision of environmental engineering
technology |
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| SembVISY Recycling |
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Recycling collection for both municipal
and industrial sectors |
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| SembVISY Recycling MRF |
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Materials recovery from municipal
and industrial sectors |
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| SembEnviro Conversion Technologies
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Recovery of energy from waste including
biomass, incineration and industrial biologics |
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| SembEnviro Alex Fraser |
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Construction and demolition waste materials recovery |
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| SembEnviro Tay Paper |
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Paper recycling |
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| SemBiologics |
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Biological treatment |
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| Shanghai SembEnviro Reliance |
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Industrial and commercial waste
collection. Provision of mobile toilet services |
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2003 |
2002 |
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S$m |
S$m |
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Revenue |
192.2 |
136.5 |
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PATMI |
12.5 |
9.2 |
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| Note:
Figures are taken at SembCorp Environmental Management’s
Group Level |
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| Key Facts |
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Market presence in Australia, China,
Malaysia and Singapore |
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Largest Asian environmental management services
company in Southeast Asia |
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First foreign waste collection company operating
in Shanghai, China |
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Serving 55% of Singapore’s municipal waste
market |
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Commanding a 20% share of Singapore’s industrial
and commercial waste sectors |
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Singapore’s leading medical waste service
provider |
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Operates Asia’s first automated materials
recovery facility and Southeast Asia’s first
integrated construction and demolition waste materials
recovery facility |
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| Competitive
Edge |
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Our Asian market knowledge and solid
track record |
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Our reach – we have a presence
in all significant market segments in Singapore |
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Our comprehensive ability to offer
integrated services in the municipal, industrial,
commercial and healthcare sectors |
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Our approach to innovation - we quickly
adopt and adapt advanced technologies and breakthrough
concepts such as pneumatic waste conveyancing and
automated materials recovery for recycling in a
continuous search for innovative solutions |
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