United Engineers Inks Deal With WB Unit

Source : The Business Times, October 24, 2007

Property group will build 21 medical waste treatment plants in China

PROPERTY and engineering group United Engineers (UE) has inked a deal with a World Bank unit to construct and operate 21 new medical waste treatment plants in China as it seeks to boost its presence in the country, the company said yesterday.

'This is the start of our China strategy. It is one small step in a big journey. In 3 years' time, we will see the fruits of our labour.' - United Engineers CEO Jackson Yap

Under its agreement with the International Finance Corporation (IFC) - a member of the World Bank group - UE will invest some US$46.5 million to build the plants over the next four years. IFC will invest the balance of US$3.5 million required for the US$50 million project.

UE already has six up-and-running medical waste treatment plants in China, and another five are on the way.

Together, the 11 plants can service a region of over 44 million people. But the figure will increase to over 110 million once all 32 plants are also operational.

The company is looking to grow in China by building and operating medical waste and water treatment plants to offer some balance to its Singapore-heavy asset base, chief executive Jackson Yap told BT.

'This is the start of our China strategy,' Mr Yap said. 'It is one small step in a big journey. In three years' time, we will see the fruits of our labour.' The company is looking at second and third-tier cities in China for growth, he said.

UE also inked a deal with China's National Development and Reform Commission yesterday. The agreement will see it being appointed as a member of a network of foreign companies which will collaborate with the Chinese government.

UE is also looking to grow its medical waste and water treatment business outside China to balance its property-heavy portfolio - in anticipation of any future downturn in the property market here. In Singapore, UE is looking 'very closely' at the public tender for Singapore's fifth NEWater plant, which will be built in Changi by 2010, Mr Yap said. The tender for the plant will close on Nov 22.

In addition, UE is on the lookout for waste and water treatment project opportunities in the Middle East, Vietnam and Indonesia in addition to those in Singapore and China, Mr Yap added.

UE's shares closed four cents up at $3.92 yesterday. The company's shares have climbed some 58.7 per cent since the start of the year.