17, Kallang Junction, #04 03 Singapore 339274 Tel: 65 6536 2489 Fax: 65 6536 7672 Email: enquiries@ecowise.com.sg Website: www.ecowise.com.sg PRESS RELEASE ECOWISE TO ACQUIRE 70% STAKE IN RUBBER COMPOUND AND TYRE RETREADING BUSINESSES OF SUN ORGANIZATION SDN BHD Proposed acquisition of 70% share capital of Sunrich Integrated Sdn Bhd will be for a total consideration of approximately RM 44.07 million, of which 40% will be satisfied by cash and the rest through the issuance of 39 million shares at S$0.28 per share Proposed acquisition is part of ecowise s ongoing strategic expansion plan for its resource recovery business and will boost the Group s recurring income stream for the long term. Post acquisition plans include expansion of existing businesses through subsidiaries and franchising, R&D and manufacturing of eco Rubber, if economically viable, and applying ecowise s expertise in resource recovery and renewable energy into the acquired business, where feasible. Singapore, 24 December 2009 Mainboard-listed ecowise Holdings Limited ( ecowise or together with its subsidiaries the Group ), a company in the business of Renewable Energy and Environmental Solutions Services, today announces that it has entered into a Sale and Purchase ( S&P ) agreement to acquire a 70% stake in Sunrich Integrated Sdn
Bhd ( Sunrich ) for a total consideration of approximately RM 44.07 million (approximately S$ 18.12 million). 40% of this latest investment will be satisfied via cash and the rest through the issuance of 39,000,000 shares at S$0.28 per share. About Sunrich Headquartered in Seremban, Malaysia, Sunrich is a company owned by Mr Loh Moi Sung and Mdm Chee Kwan Ying, who collectively owns the entire Sun Organization Sdn Bhd ( Sun Organization ). Sunrich is to become the holding company for the subsidiaries of Sun Organization that are in the business of producing rubber compounds for tyre retreading, retreading of tyres & total tyre management and manufacturing of specialty compound for automobile industry and other industries ( rubber compound and tyre retreading businesses ). Key subsidiaries of Sun Organization have operated for more than three decades and have established good track record and reasonably good brand entity. The restructured Sunrich will be sizable in terms of business volume. Sunrich possesses an integrated value chain with significant economies of scale, comprising the upstream production of rubber compound for the retreading of tyres to the retreading of tyres and total management of the lifecycle of tyres which provides competitive advantages over the other compound manufacturers or tyre retreaders. Commenting on the S&P agreement signed between the two companies, Mr Lee Thiam Seng, Chairman and CEO of ecowise remarked, This is indeed an exciting acquisition both in terms of scale and strategic fit with ecowise. As a well-established and
sizable player in the industry, they have demonstrated impressive growth and profitability over the years. Having been in the business for more than 30 years, they are an established name in the market. The rubber compound and tyre retreading businesses of Sun Organization has a turnover of RM141.5 million and a net profit after tax of RM 9.5 million in the financial year ended 30 June 2009 (unaudited). Ongoing Strategic Expansion of Resource Recovery Business Commenting on the strategic fit between the two Groups, Mr Lee Thiam Seng remarked, Besides being a dominant player in the recovery of used copper slag in Singapore, Sunrich can provide ecowise with an immediate and significant in-road into the rubber compound and tyre retreading markets in Malaysia. Sunrich s businesses add another dimension of financial strength and stability to ecowise. Its financial performance and operational management should boost ecowise s recurring income stream in the long term. Mr Lee Thiam Seng, Chairman and CEO of ecowise remarked. Post Acquisition Opportunities Beyond the proposed acquisition, opportunities abound for ecowise to develop additional processes and technologies that are technically and economically feasible and which complement Sunrich s material resource base businesses. These plans include the extraction and recovery of materials such as rubber and steel wires from waste tyres and the implementation of energy savings and refuse derived fuel/ biomass co-generation projects.
Sunrich is profitable and has sufficient internal funding to undertake the expansion of its current businesses into the regional markets through overseas subsidiaries and franchising. Sunrich also intends to embark on the R&D of eco-rubber compound, that is expected to have resource conservation element in the tyres usage and application with improve properties such as better wear and rolling resistance that prolong tyre lifespan and lower fuel consumption, and to manufacture such compound if economically viable. Malaysia has long been a key producer of rubber products. The types and volume of materials that can be recovered, recycled and reused in this industry present new opportunities for the Group. If we can successfully leverage on Sunrich s substantial resource base, ecowise can help to enhance Sunrich s footprint and dominance in the Malaysian market. We can also bring Sunrich beyond resource recovery into environmental services and introduce their rubber compound. tyre retreading and management know-how and expertise into our existing markets, namely Singapore and China. Mr Lee concluded. - The End - Issued on behalf of ecowise Holdings Limited by Cogent Communications Pte Ltd Tel: (65) 6323 1060, Fax: (65) 6222 1210 Ms Liew Shi Wei, shiwei@cogentcomms.com (DID: 6323 1193; Mob: 97106507) Mr Neo Aik Kee, aikkee@cogentcomms.com (DID: 6323 3936; Mob: 9793 0504) Mr Roger Poh, roger@cogentcomms.com (DID: 6323 3178; Mob: 9455 2690)
About ecowise Holdings Limited ecowise Holdings Limited ( ecowise or together with its subsidiaries the Group ) is an integrated environmental solutions provider and is principally involved in two major business segments namely, the recovery of industrial waste and the generation of renewable energy. Under the industrial waste recovery segment, the Group is an appointed clearing contractor of used copper slag and general waste for certain major shipyards and fabrication yards in Singapore. The used copper slag is then processed and sold to contractors and companies largely dealing in abrasives and surface treatment. A large part of the off take for recycled copper slag is sent to ready mix concrete suppliers to be mixed into eco concrete. In its renewable energy segment, the Group currently operates a biomass cogeneration plant which supplies heat energy to a number of industrial users. It became the first Singapore registered company to successfully secure the sale of Certified Emission Reduction certificates (or CERs, commonly referred to as Carbon Credits) on 5 November 2007. The CERs, which will be sold to with Kansai Electric Co Inc, a leading electric power company in Japan, will be generated from ecowise s Clean Development Mechanism project which involves drying of waste, such as spent grains from breweries, and heating of ISO tanks by using waste steam generated from its biomass cogeneration plant. In its recent move to accelerate the growth of its renewable energy segment, the Group entered into a jointventure in Wuhan, PRC. The joint venture has acquired a coal fired power plant and is currently in the process of converting it into a bio mass cogeneration plant. The Group has been awarded by National Parks Board for the Design, Build and Operate of Biomass Co generation Systems at Gardens by the Bay (Marina South), Singapore. The plant will have the capacity to generate 0.9MW of electricity and 5.4MW of heat. About Sunrich Integrated Sdn Bhd Sunrich Integrated Sdn Bhd( Sunrich ) is a newly established Malaysia based company owned by Mr Loh Mui Sun and Chee Kwan Ying who are the legal and beneficiary owners of the entire issued and paid up capital of Sun Organization Sdn Bhd ( Sun Organization ) to become the holding company for Sun Organization s subsidiaries that are in the business of producing rubber compounds for tyre retreading, retreading of tyres & total tyre management and manufacturing of specialty compound for automobile industry and other industries ( rubber compound and tyre retreading businesses ). Sun Organization possesses more than three decades of specialized knowledge and expertise in the rubber compound and tyre retreading. Its business is divided into three segments under different subsidiaries. Sun Tyre Industries Sdn Bhd manufactures and markets retread tyres under brand names such as Suntex, Winner, Autoways and Trakar. Sun Rubber Industry Sdn Bhd manufactures rubber compound and custom made compound such as Precured Tread Liners, Cushion Gum & Perforated Sidewall Veneer, Gum Cor and Orbitread Compound etc. and it is one of the biggest rubber compound manufacturer in Malaysia. Saiko Rubber (M) Sdn Bhd manufactures high technology rubber masterbatch, colour masterbatch and compound to serve the specialized industries such as office automation industry, automotive industry, electronic and electrical industry.