Sembcorp Industries seen to raise China utilities profits by 67%

2013 net profit could reach S$50m.

The research firm said the Sembcorp Industries' (SCI) utilities business in China has seen good growth over the years, with net profit increasing from S$6m in 2009 to S$30m in 2012. This led to a forecast of 67% rise in profits for 2013: "We are expecting net profit of about S$50m this year; 1H13 net profit has already reached S$32.7m."

The higher net profit prediction came as SCI announced two new wastewater projects in China that should expand its water business in China’s Liaoning Province.

The two new wastewater treatment projects will be located in industrial parks in Panjin City.

"We see the initial phases of these projects as incremental expansions in China, adding about 10% to the group’s total industrial water capacity in the country where SCI has about 298,000m3/day of industrial water capacity, and 1,030,000m3/day of municipal water capacity," said OCBC.

OCBC said the 1st phase of first project would add 10,000m3/day capacity, while the 2nd project’s initial capacity will reach about 22,000m3/day.

"The first would involve a JV agreement to build, own and operate a new RMB117.3m (~S$24.3m) industrial wastewater treatment plant to serve industrial customers in Panjin Fine Chemical Industrial Park (PFCIP). SCI will hold 95% share in the JV, with the remaining 5% held by a firm owned by the Panjin Fine Chemical Industrial Park Administrative Commission," said OCBC.

"For the second project, SCI plans to develop an industrial wastewater treatment plant with an initial capacity of 22,000m3/day in the West of Panjin Liaodong Bay New District. The plant will be capable of treating highly concentrated industrial wastewater, and is expected to cost around RMB185m (~S$38.4m). Management believes that the industrial park in which this plant is located has strong growth potential," it added.