Singapore waste assets reportedly attracting interest

The waste and recycling business unit of Singapore-based Sembcorp Industries reportedly is drawing interest from two global equity investment firms if Sembcorp follows through on a sale.

An early-May Reuters report points to both New York-based KKR & Co. and Australia-based Macquarie Asset Management as having expressed interest in the waste and recycling collection and management assets, known as SembWaste.

In response to the media coverage, Sembcorp issued a statement May 10 saying it “regularly reviews its portfolio from time to time” and that  “no definitive transaction in respect of any potential sale has been entered into by Sembcorp with any party, and there is no certainty that any such transaction will materialize.”

Funds managed by Macquarie already have stakes in several waste and recycling-related companies, including waste-to-energy plant manager Wheelabrator, plastic recycling company Circularix, construction and demolition recycling firm DTG and municipal waste and recycling firm LRS. Each of those companies is based in the United States.

KKR includes in its portfolio Texas-based medical waste management services firm Trilogy MedWaste, India-based environmental services firm Re Sustainability Limited and Australia-based GreenCollar, which has a plastic recycling business unit.

The Reuters report says both equity firms have emerged as “among potential bidders” for the Sembcorp business unit, which could carry a price tag of about $500 million. Sembcorp is 49 percent owned by Singapore state investment fund Temasek Holdings, and Reuters says Sembcorp has hired London-based HSBC to manage the potential sale of SembWaste.

According to the Sembcorp, its SembWaste business unit collects waste and recyclable materials from more than 440,000 households and 5,000 industrial, commercial and institutional customers. The firm also collects discarded construction and demolition (C&D) materials.

In 2022, Sembcorp overall achieved about $7.1 billion in sales, up 21 percent from the previous year and had a net profit “before exceptional items” of $665 million, up 87 percent from 2021.