Through its wholly-owned subsidiary, Sembcorp (China) Holding Co, the company has entered into an agreement to set up an 80-20 joint venture with Tangshan Caofeidian Yongtai Industry Co, a wholly-owned entity of the Caofeidian Industrial Zone Administrative Committee. The joint venture company, Sembcorp Caofeidian Water Co, will build, own and operate an industrial wastewater treatment plant to serve customers in the chemical industrial park. Targeted to begin operations in late 2015, this wastewater treatment facility will have an initial capacity of 10,000 cubic metres per day and have advanced capabilities to treat high concentration industrial wastewater and high oil content industrial wastewater.
The Caofeidian Chemical Industrial Park is a petrochemical and coal-to-chemicals industrial park that is part of an industrial zone enjoying strong support from the central government. Strategically located along the coast of Hebei province, it is also at the centre of the Bohai Bay Economic Rim, widely considered one of China’s three centres of economic growth alongside the Pearl River and Yangtze River Deltas. The chemical industrial park has close proximity to Tangshan City, which is rich in coal and oil, as well as to a deep water port for the transport of crude oil, coal, iron ore and bulk cargo.
Sembcorp’s joint venture has secured a 30-year exclusive concession agreement to provide wastewater treatment services within a 32-square kilometre area in the chemical industrial park. In addition, it has already secured binding letters of intent from two key customers. This project leverages on Sembcorp's experience and track record in serving the specialised wastewater treatment needs of companies on industrial sites. In China alone, Sembcorp's industrial wastewater business is currently present in six key industrial sites.
Alan Yau, CEO of Sembcorp China, said, “We are honoured that once again, Sembcorp has been recognised as a vital partner in providing water and wastewater solutions to support China’s industrial expansion plans. We look forward to serving the Caofeidian Chemical Industrial Park’s demand for advanced, effective water and wastewater treatment solutions, and to supporting the growth of the site into a thriving petrochemical and coal-to-chemicals centre.
“With the central government’s growing emphasis on greater environmental protection, Sembcorp's solutions can also contribute to greater sustainability in the Beijing, Tianjin and Hebei region. Our centralised treatment model, strong technical strength and impeccable operating track record would enable the region to pursue development, but not at the expense of the environment.”
The joint venture’s total investment in the project of around RMB 108.3 million (approximately S$22.4 million) will be funded through a mixture of internal sources and external borrowings. Sembcorp’s equity investment in the project of approximately RMB 35 million (S$7.2 million) will be funded through internal sources.
This project is 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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