Keppel's S$74.2 million solution goes to waste

One man’s waste is another man’s wages, as the people at Keppel Seghers are finding out.

The company has announced that it has secured 2 waste-to-energy contracts worth S$74.2 million, to be located in China.

The first contract, awarded by Shenzhen Energy Environmental Engineering Company Ltd, is for the expansion of an existing WTE plant in Shenzhen, Guangdong. When completed in 2011, the WTE plant will be the largest in China with an eventual capacity to treat 4,200 tonnes of municipal waste per day.

Keppel Seghers’ technology for the furnace, boiler and flue gas cleaning components will enable the facility to treat an additional 3,000 tonnes to the existing 1,200 tonnes of municipal waste per day.

Besides the contract, a Memorandum of Understanding (MOU) was signed between Keppel Corporation Limited and Shenzhen Energy Group Co., Ltd to explore areas of strategic partnerships related to environmental protection, including WTE projects.

The second contract, awarded by China Energy Conservation Investment Corporation (CECIC), is for the supply of technology for the furnace, boiler and flue gas cleaning components for a WTE plant in Chengdu. When completed in 2011, the plant will be able to treat 1,800 tonnes of municipal waste per day. CECIC, like Shenzhen Energy Environmental Engineering Company, is a repeat customer.

Keppel Integrated Engineering is currently the market leader for imported WTE solutions in China, with 60% of the market share.

Last year, Keppel Seghers secured two WTE technology projects in China. In July 2009, Keppel Seghers secured an €11 million (approximately S$22.3 million) contract from Tianjin Binhai Environmental Industry Development Ltd to provide technology to a WTE plant in Hangu, Tianjin.

The above-mentioned contracts and MOU are not expected to have material impact on the net tangible assets or earnings per share of Keppel Corporation Limited for the current financial year.