SembCorp inks Waste-to-Resource JV with China's largest lead recycler, Jiangsu Chunxing

March 18, 2006

- 50/50 joint venture is poised to become a leader in Asia Pacific’s lead recycling
industry with 315,000 tonne output capacity by end 2006

SembCorp Industries’ 100% owned subsidiary, SembCorp Environmental Management (SembEnviro) today announced that it has entered into a partnership with China’s largest lead recycler, Jiangsu Chunxing Alloy (Group) Co. Ltd (Chunxing) to set up a 50/50 joint venture company, Jiangsu SembCorp Chunxing Alloy. The investment is SembEnviro’s most significant to-date in China and it is in line with SembEnviro’s aim to focus on recycling and converting waste to resource.

SembEnviro’s investment in the new JV, Jiangsu SembCorp Chunxing Alloy is expected to be RMB400 million ($80 million) injected progressively with the setting up of new facilities by end 2006. The investment will cover the facilities in seven locations - Guangzhou, Xiamen, Chongqing, Xuzhou, Tianjin, Wuxi and Anhui. These plants will be equipped to produce 315,000 tonnes of lead and lead alloy per year, making the JV company the largest lead recycling company in the Asia Pacific region.

The waste-to-resource partnership encompasses the recovery and sales of processed lead from used lead acid batteries (ULABs) to battery manufacturers and will cater to China’s rapidly rising demand for lead to support its growing automotive and electric bicycle industries.

Headquartered in Xuzhou, Chunxing currently commands close to 30% market share with recovery facilities located in Guangzhou, Xiamen, Chongqing and Xuzhou. Equipped with a production capacity of approximately 130,000 tonnes per annum, Chunxing is the foremost lead recycler in China. Having transformed from a small operation in the 1970s, the company is now ranked as one of China’s top 500 enterprises with revenues in excess of RMB 700 million and staff strength of 800.

Commenting on the JV, Mr Tang Kin Fei SembCorp Industries Group President & CEO, and also SembEnviro’ Chairman remarked, “We are pleased to collaborate with our partner Chunxing and its Chairman Mr Yang Chun Ming. Mr Yang is a visionary entrepreneur in lead recycling, who is backed by more than thirty years of experience and expertise in this industry. This waste-to-resource business is also in line with SembCorp’s focus on businesses that provide stable and recurring income.

Mr Heng Chiang Gnee, President & CEO of SembEnviro added, “Going forward, SembEnviro plans to further concentrate on businesses that leverage on technologies and process know-how as in this waste-to-resource investment. Complementing our current collection businesses, this JV will strengthen our footprint and extend our geographical reach to more cities in China.”

“We foresee the demand for lead to be accelerated by China's fast growing economy. As a result, we estimate that the ULAB recycling market size will reach RMB 15 billion within the next two years. With the vision to grow the business to match the demand, this partnership will allow us to tap SembEnviro's expertise in managing large scale businesses through its established management track record and proven systems,’’ commented, Chunxing’s Chairman, Mr Yang Chun Ming.

Financial Impact and Directors’ Interest

This investment is not expected to have a material impact on SembCorp Industries’ EPS and NTA per share for the financial year ending December 31, 2006.

None of the directors and substantial shareholders of SembCorp Industries and SembEnviro have any interest, direct or indirect, in the investment.