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Corporate Presentation - CITIC Envirotech...

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Corporate Presentation
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Corporate Presentation

Company Profile

• Membrane technology based water and wastewater solution provider

• Asia’s pioneer and leader in Membrane Bioreactor (MBR) wastewater treatment

technology for industrial and municipal sectors

• Established track record with prominent clients such as Sinopec, CNOOC, CNPC,

municipalities and major industrial parks etc.

• Owns more than 30 water treatment assets with daily design capacity over 1.5 million

m3/day (municipal wastewater equivalent)

• Listed on the Mainboard of Singapore in 2004 and Taiwan Stock Exchange in 2010

• Strength in technology and EPC capability positions the company to capture the

industrial wastewater upgrading market --- the future

• Well positioned to ride on the growing trend of using membrane based technology for

drinking water treatment

Leading the Pack

• First Asian water player to focus on developing MBR technology

• First mover advantage allowed company to establish market leadership position

within 10 years

• First water treatment company that KKR, a global leading investment firm, have

chosen to take a substantial stake in

• First company to design and build several largest industrial and municipal

wastewater treatment plants in Asia using MBR technology:

o World’s largest underground municipal MBR plant: Guangzhou Jing Xi MBR Waste Water Treatment

Plant

o Largest industrial MBR wastewater treatment plant: Taixing Industrial Park

o CNOOC’s first oil refinery wastewater treatment plant and first MBR plant: CNOOC Refinery

Wastewater MBR at Huizhou

Business segments:

� EPC – Provision of turnkey services for the design, construction, installation and commissioning using membrane technology such as membrane bioreactor (MBR) and continuous membrane filtration (CMF) processes in microfiltration, ultrafiltration and reverse osmosis

� Water Investment projects (TOT/BOT/BOO) – Investment, design, construction, installation and operation of water or wastewater treatment facilities that are typically backed by off-take agreements from the Chinese Government

� Operation and Maintenance services – Operation and maintenance of existing water or wastewater treatment facilities for an agreed period and monthly fee, which provides a stable recurring cash flow.

Engineering, Procurement and

Construction (EPC)

Water Investment Projects

(TOT/BOT/BOO)

Operation and Maintenance

services (O&M)

Core Business

Milestones

2003

2004

2005

2006

20082009

2010

2011

•Incorporation of United Envirotech Ltd•Completed Wastewater Reclamation Project for Sinopec – first double membrane industrial “Newater” project, first of its kind in Sinopec Group•Awarded MBR project from Sinopec, first MBR for petrochemical industry and the largest petrochemical wastewater MBR plant in China upon completion

•Listed on Singapore Exchange•Awarded MBR project at Huizhou Daya Bay Petrochemical Hub, one of the largest industrial MBR in Asia

• Acquired a 200,000 m3/day wastewater treatment plant in Liaoyang , a milestone TOT investment project in municipal wastewater treatment plant

•Won Group’s first BOO investment project in industrial wastewater treatment plant in Guangzhou Nansha•Set up Malaysia operation, the Group’s fully owned subsidiary outside of China

•UEL’s Taiwan Depository Receipt (TDR) listed on the Mainboard of Taiwan Stock Exchange

•UEL formed JV company to acquire the industrial park wastewater treatment plant in Dafeng, Jiangsu

• Won EPC Contract to build Guangzhou Jingxiwastewater treatment plant. The 100,000 m3/day underground MBR is the largest MBR of this kind in the world.

•KKR announced additional investment of US$40 million into UEL in Jan 2013

2012

•Won EPC project to construct 100,000 m3/day drinking water project using double membrane technology• Invested in 7 wastewater treatment plants

•UEL acquired 13.18% of issued and paid-up share capital of Memstar

2013

•Subscription by KKR of US$ 113.8 million convertible bonds where proceeds were used for investment in water plants.

2007

•Won EPC contract to upgrade a 30,000 + 40,000 m3/day industrial wastewater treatment plant into MBR in Taixing, Jiangsu

Growing Chinese Market for “Water” Technology

• China’s Looming Water Crisis:

o Identified as 1 of the 13 countries with extreme water shortages by United Nations1

o Home to 20% of the world population but holds only 6% of the world’s water resources1

o 2/3 of the Chinese cities suffer from insufficient water supply

Per Capita Water Resources (Ton)

2,1343,3656,511

9,344

23,348

28,49830,352

ChinaJapanWorld Average

USAustraliaBrazilRussia

Source: World Bank

• Significant growth in China’s water market:

o Water pollution is also worsening, with all seven major river basins in China classified as having top grade pollution by the government, and more than 300 million population inaccessible to safe drinking water

o The government is planning a total of $300 billion invested into water treatment over the next 10 years, with favorable policies to attract private sector investors, creating significant market opportunities

Market Size of China Waste Water Treatment Sector(US$ billion)

7.0

6.1

5.0

4.03.3

CAGR: +20%

2011E2010200920082007

Source: E&Y

Growing Chinese Market for “Water” Technology

Strong Policy Support for Wastewater Treatment

o Earmarked wastewater treatment as the No. 1 priority for environmental protection development in the 12th Five-Year Plan (FYP) from 2011-20152

o Plans to spend RMB1 trillion on water and wastewater infrastructure during the 12th FYP3

o 12th Five-Year Plan requires all counties and cities to achieve wastewater treatment ratio of 80% and 85% respectively, from the current 50% and 75%4

o Strict discharge guidelines established in recent policies5

o Based on the target to increase urban wastewater treatment rate from 78% in 2010 to 85% in 2015, 23-37 mn tons/day, valued at CNY 66 bn worth of new WWTP is to be added.

o 8% reduction target in COD, 10% reduction target in Nitrate and ammonia nitrogen emission over 2010 level by 2015, points to upgrading opportunity to meet more stringent discharge limits.

o Urban recycled water rate of 20% by 2015 implying a 28% CARGR on water recycle capacity during 2011 to 2015. Estimated CNY 28 bn to be spent on recycled-water development.

o Non-traditional water source such as desalinated seawater, recycled wastewater will favor the use of membrane technology

The MBR Potential

• MBR has been identified by the

Chinese Government as a key solution

for the water shortage/pollution 1

• MBR is becoming the preferred water

treatment of choice2

o Account for around 3% of the total water

treatment market in China, vs >20% in

Korea and Singapore.

o With cost gradually declining, market

share of MBR vs conventional

technologies particularly in industrial and

municipal waste water treatment and

recycling projects, is expected to increase

o MBR market size in China have grown at a

CAGR of +113% from 2004-2010 and is

expected to grow at a CAGR of >50% over

the next 5 years from 2011-2015.

(1) Report by Emerging Markets Private Equity Association released on October 2012(2) China Water Net Consulting

MBR Market Size in China(US$ million)

554

369246

13669426

2015E

4,203

…2010E2009E20082007200620052004

Water Treatment Processes Used by United Envirotech:

Technology Key Functions Applications

Membrane Bioreactor (MBR) Combines membrane separation

with biological wastewater

treatment for direct recycling

• Biological wastewater treatment

• Wastewater recycling

• Wastewater treatment plant

upgrade

Continuous Membrane Filtration

(CMF)

Utilises microfiltration or

ultrafiltration membrane to

achieve removal of submicron

contaminants in water

• Drinking water production

• Pretreatment to reverse osmosis

• Wastewater reclamation

Reverse Osmosis (RO) Reverses the flow of water in the

natural process of osmosis

• Water purification & deionization

• Desalination of seawater

• Wastewater reclamation

Continuous Membrane Filtration &

Reverse Osmosis (CMF + RO)

Integration of CMF and RO

technologies into one system

• Seawater desalination

• Wastewater reclamation (NEWater

application)

• Deionized water production

MBR- The Water Treatment Technology of Tomorrow

Best Available Technology by China Membrane Technology

MBR technology Traditional Biological Technology

Process Biochemical treatment + Membrane

separation

Biochemical treatment + clarfication

Land Requirement Compact facilities

Occupies only 20% - 50% land area of

traditional plants

Complex and bulky facilities

Occupies large area

Investment Slightly higher equipment investment

offset by significantly less land and

construction costs.

Highly advantageous when land

resources are scarce

Slightly lower equipment investment but

significantly higher land and construction

costs

Operating Cost Low operating cost High operating cost

Water Quality High output quality suitable for highly

polluted water and recycling

Low output quality in comparison

MBR- The Water Treatment Technology of Tomorrow

Demand for Membrane Based Drinking water Treatment Technology

• Increasing Water Tariffs:

o China’s wholesale water price has risen by 10%

CAGR over the past 10 years to reach an

average of Rmb3.68/ton as of Jul 20111

o Water tariff increase is expected to continue to

outpace inflation in the next few years at an

average rate of 5-10% p.a.1 as water tariffs as a

% of household disposal income compared to

other global peers is still low2

• Demand for better quality drinking water

o Tightening of drinking water standard coupled

with deterioration in raw water quality favours

better treatment technology.

o Increase in adoption of membrane based

drinking water plants.

• Stable supply of membrane products is critical for

the Group’s membrane based water and

wastewater treatment system

• Rationale of acquisition:

o Strengthen strategic relationship between UEL and

MTL

o Leverage on MTL’s membrane technology

o Benefit from the growth of the MTL in view of its

strong membrane technologies and research and

development capabilities

Move towards Vertical Integration

• Leading manufacturer and supplier of polyvinylidenefluoride (“PVDF”) hollow fibre membrane and membrane products

• One of the few manufacturers of high performance PVDF hollow fibre membranes in the world today

Acquired 13.2% stake for

S$35 million on 9 Jan 2013

Established Track Record:

• Recognized as a market leader in industrial MBR in AsiaStellar reputation with prominent clients such as Sinopec, CNOOC, CNPC, municipalities and major industrial parks etc.

Pioneer of MBR technology in Asia - the Preferred Water Treatment method of Tomorrow:

• MBR received the Chinese government’s stamp of approval

Strong Support from KKR, Strategic Partner:

• 2 major investments from KKR totally US$154 million (includes US$40 million pending approval from EGM)

Experienced Management with Proven Execution Capabilities:

• Strong leadership and dedicated team

Twin Engine of Growth: EPC and Investment

• Technology and EPC capability allow UEL to venture into high margin upgrading industrial projects

Competitive Strengths

End


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