SINGAPORE (Jan 3): Sembcorp Industries is acquiring a 100% stake in Veolia ES Singapore (VESS) and its public cleaning business for $28 million.
The sale & purchase agreement of Veolia ES Singapore Industrial (VESSI) was signed between Sembcorp's wholly owned subsidiary SembWaste and Veolia Environmental Services Asia.
VESSI holds contracts for public and commercial waste and recyclable collections covering recovery and recycling, public and commercial cleaning services, as well as associated properties which include a materials recovery facility.
Sembcorp says the acquisition is in line with the group's strategy of deepening its presence as an integrated energy and urban solutions player providing green and more efficient solutions to enable sustainable development in its key markets.
"The acquisition will further strengthen Sembcorp’s waste management and recycling business as the nation’s premier integrated environmental services provider," says Sembcorp.
Neo Hong Keat, senior vice-president (waste management), Sembcorp, says sustainability in the environmental business also needed scale.
"SembWaste’s fleet of vehicles would have doubled to close to 400. Such scale will enable the business to invest in a more efficient trucking fleet using cleaner fuels. In addition, we would also be better placed to move towards automation as well as skills upgrading for a fast-changing industry that is critical to the sustainability ecosystem in Singapore," says Neo.
Year to date, shares in Sembcorp are down 2 cents at $2.29, giving it a market cap of $4.08 billion.