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Stake sale may help Shanghai tame trash piles
By Wang Ying (China Daily)
Updated: 2009-08-17 08:04 China's emerging financial center Shanghai is justly proud to have broken many development records in the past several years but one - the record amount of refuse produced by the city - is not well-publicized. The heap of trash discharged by Shanghai each year is equal to five Jinmao Towers (the tower is the city's second-tallest building). A large part of that is disposed in landfills but Shanghai is fast running out of space for its dumps. The situation is exacerbated by the construction boom leading to the opening of the 2010 Shanghai World Expo. Finding alternative ways to get rid of waste, which the city generates at an average rate that recently surpassed the 10,000 ton-a-day mark, has become an urgent task for city planners. From June 20 to August 20, Shanghai will produce 565,000 tons of trash, according to a Xinhuanet report. In its search for a clean and sustainable way to dispose of the mounting garbage, Shanghai will get help from a US firm, Waste Management Inc (WMI) of Texas. Earlier this month, State-owned Shanghai Chengtou Group (SCG), the largest waste management company in the city, said it reached an agreement to sell a 40 percent stake in its subsidiary, Shanghai Environment Group (SEG), to Wheelabrator China Holdings, a Hong Kong subsidiary of WMI, for 970 million yuan. In a statement to the Shanghai Stock Exchange, SCG said that it began searching for a "strategic partner" for SEG in 2008 to help the company develop projects that turn waste into energy. The move was more about adding expertise than it was about money, according to Qin Yan, an analyst with First Capital Securities. "Chengtou has already built the nation's largest waste recycling and 'waste-to-energy' power plant in Shanghai, but compared with WMI's experience in waste removal and utility, it has more to learn," said Qin. WMI is the leading waste management services company in North America. As of Dec 31, 2008, the company served nearly 20 million municipal, commercial, industrial, and residential customers through a network of 367 collection operations, 355 transfer stations, 273 active landfill disposal sites, 16 waste-to-energy plants, 104 recycling plants, and 111 landfill gas projects.
Shanghai is an ideal place to put such technology into practice. About 80 percent of the city's garbage ends up in landfills, so burning the trash and converting it to energy would be a significant space-saving measure, according to Qin. Burning waste reduces its volume by 90 percent (residual ash is left). The energy produced is an economical alternative to fossil fuels and nuclear power. "This is the largest household garbage deal in China," said Lin Feng, an investment manager with Sinolink Securities. "Apparently Chengtou intends to strengthen its solid waste treatment capability," he added. Chengtou was already a dominant company in the water supply industry, its main business. With little room to develop in that sector, it is instead exploring the potential of the waste-to-energy industry, said Lin. The waste-to-energy business could be big in a city as populous as Shanghai, added Lin. Major Japanese cities such as Tokyo and Kyoto already recycle almost 100 percent of their urban waste into power. WMI can help Shanghai catch up with its overseas counterparts in waste management, said Qin. Shanghai-based Chengtou has also diversified into waste-water management, solid waste transfer and transportation, solid-waste incineration, landfills and property sales. (For more biz stories, please visit Industries)
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