SembCorp Utilities expands presence to Tianjin in North China with a wastewater treatment joint venture

May 18, 2007

SembCorp Utilities (SembUtilities), a wholly-owned subsidiary of SembCorp Industries, announces today that it has signed a joint venture contract to build, own and operate an industrial wastewater treatment plant in Tianjin Lingang Industrial Area (TLIA) in Tianjin, China.

Under the joint venture contract, SembCorp Utilities will take a majority 90% stake in the joint venture company, SembCorp TLIA Wastewater Treatment Company. The remaining 10% stake will be held by TLIA Construction & Development Company (TLIA DC), a subsidiary of the TLIA Administrative Committee (TLIA AC).

With an initial investment of RMB 70 million (S$13.8 million), the facility will treat industrial wastewater from chemical industries in TLIA and have a capacity of 10,000 cubic metres per day. Upon completion early 2008, the facility will undergo an expansion of a further 20,000 cubic metres per day, in tandem with the projected increase in the number of customers. The expansion is expected to be completed by end 2008 at a cost of RMB 84 million (S$16.6 million). This additional capacity would bring SembUtilities’ total industrial wastewater treatment capacity to over 100,000 cubic metres per day.

Together with its facilities in Shanghai, Nanjing and Zhangjiagang, SembUtilities now has a strategic presence in four key industrial sites in China.

Said Dr Jeffrey Chen, CEO of SembCorp Utilities’ China headquarters: “SembUtilities has a solid track record in industrial water and wastewater management in Singapore, China and the UK. Together with TLIA DC, we are confident that the joint venture company is well positioned to provide competitive wastewater treatment services to the chemical customers in TLIA.”

Tang Kin Fei, SembCorp Industries Group President & CEO, said: “The establishment of this new beachhead in Tianjin further expands our water and wastewater management capabilities. SembCorp currently manages more than three million cubic metres of water per day throughout our operations worldwide. The investment is significant as it provides us a further platform to grow our Utilities business where we provide centralised utilities in chemical and petrochemical
industrial parks.”

This investment does not have a material impact on the earnings per share and net tangible asset per share of SembCorp Industries for the financial year ending December 31, 2007.