Sembenviro inks first local waste-to-resource JV With Singapore's largest waste plastics recycler

July 6, 2006

SembCorp Industries (SembCorp) wishes to announce that its wholly owned subsidiary, SembCorp Environmental Management (SembEnviro), has entered into a joint venture with Singapore’s largest waste plastics recycling company, K K Asia Pte Ltd, to take up a 90% stake in a new JV company, SembEnviro KK Asia (the JV).

SembEnviro’s S$3.4 million investment in the JV marks the company’s first waste-to-resource investment in Singapore. The JV is involved in the recovery of recycled plastic resins from waste plastics and the sale of these resin pellets to manufacturers throughout the region. The recycled resins can be used in the production of pipes, garbage bags, milk crates and other products.

This JV presents a win-win platform for both SembEnviro and K K Asia. SembEnviro will leverage on KK Asia’s plastic treatment capabilities. K K Asia on the other hand, will have more used plastics to recycle, as SembEnviro will channel used plastics collected through its recycling operations to the new JV.

With a strong network of suppliers and customers from Singapore, China, Sweden, Australia and Germany, K K Asia’s integrated plant in Tampines is equipped to recycle up to 50,000 tonnes of plastic waste per annum.

Last year, K K Asia was recognised as one of Singapore’s 50 most enterprising companies. It garnered eighth place in the Enterprise 50 awards, accorded by the Economic Development Board and IE Singapore in conjunction with Andersen Consulting and the Business Times.

Mr Heng Chiang Gnee, President & CEO of SembEnviro said, “This JV is our first waste-to-resource partnership in Singapore, following our recent recycling collaboration in China on used lead acid batteries. Complementing our waste collection business, this project is in line with our new direction towards pre-disposal and waste-to-resource projects to fuel our future growth.

“This collaboration also demonstrates SembEnviro’s commitment towards sustainable waste management practices, diverting plastics from landfilling and incineration and converting them into resources.”

K K Asia's founder Mr Loh Yin Kuan, commented, “We look forward to leveraging on SembEnviro’s management expertise and proven applications in information technologies and systems, to extend our reach locally and expand into regional markets such as China and India, where SembEnviro operates.”

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

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