Covanta Announces Partnership with Chongqing Iron & Steel, Entry into Chinese Energy-from-Waste Market
Covanta to Acquire 40 Percent of Chongqing Sanfeng Environmental Industry Co., Ltd.
Joint venture positions Covanta to participate in China's rapidly growing Energy-from-Waste market
FAIRFIELD, N.J., Feb. 12 -- Covanta Holding Corporation (NYSE:CVA), announced it has signed an agreement to purchase a 40 percent stake in Chongqing Sanfeng Environmental Industry Co., Ltd. (Sanfeng), a subsidiary of Chongqing Iron & Steel (Group) Limited. Sanfeng designed, built, operates and has minority interests in two modern 1,200 ton per day (tpd) energy-from-waste facilities, both of which utilize Martin Gmbh technology. The facilities are located in Chongqing Municipality and Fuzhou Municipality, Fujian Province. In addition Sanfeng is pursuing several Energy-from-Waste development opportunities in China.
"We are very excited about our new partnership with Chongqing Iron & Steel and about Sanfeng as a solid platform for growth in this dynamic market," said Anthony Orlando, President and Chief Executive Officer of Covanta. "With Chongqing Iron & Steel, we have a partner with a rich and proud history of success in the Chinese marketplace, and one which shares our enthusiasm for expanding the role of energy-from-waste by providing environmentally responsible waste disposal and clean renewable energy. In addition to its license agreement to utilize Martin's Sity 2000 technology in China, Sanfeng has demonstrated expertise in designing and building energy-from-waste facilities and a commitment to grow the business by providing world-class service for municipal clients. I am confident we and Chongqing Iron & Steel will be excellent partners."
"We are very pleased to have the largest energy-from-waste company in the world as our partner," said Mr. Dong Ling, Chairman of Chongqing Iron & Steel (Group) Co., Ltd. "Our expertise in design, construction and equipment manufacturing combined with Covanta's long and successful track record of developing and operating energy-from-waste facilities makes for a very strong partnership that is well positioned to compete in China's energy-from-waste market."
China generates an estimated 280 million tons of municipal solid waste annually, most of which is currently being disposed of via landfilling. The Chinese Ministry of Construction has outlined a National Waste Disposal Plan to increase energy-from-waste from 2005 levels of less than 2 percent of waste disposal to 30 percent of total municipal waste disposal by 2030.
Covanta's purchase of its 40% stake in Sanfeng is subject to Chinese regulatory approvals and other conditions precedent, and is expected to close during the second quarter of 2007. Upon closing, Sanfeng will be converted into a Sino-foreign joint venture with its name changed to Chongqing Sanfeng Covanta Environmental Industry Co., Ltd. While financial terms of the transaction were not disclosed, it is not expected to have a material impact on Covanta's financial results in the near term.
About Covanta Holding Corporation:
Covanta Holding Corporation is a New York Stock Exchange listed company engaging in waste disposal, energy services and specialty insurance through its subsidiaries. Covanta's subsidiary, Covanta Energy Corporation, is an internationally recognized owner and operator of energy-from-waste and power generation projects. Covanta Energy's energy-from-waste facilities convert municipal solid waste into renewable energy for numerous communities, predominantly in the United States.
Source: Covanta Holding Corporation
CONTACT: Gavin Bell, Vice President, Investor Relations, +1-973-882-7107