South Korea’s SK ecoplant Co Ltd is said to be moving ahead with plans to divest its 30% minority stake in Cenviro Sdn Bhd, drawing interest from at least five potential buyers.
The bidders reportedly include affiliates of South Korean conglomerate Samsung; French water, waste and energy management giant Veolia Environnement SA; pension fund Kumpulan Wang Persaraan (Diperbadankan) (KWAP) leading a consortium with I Squared Capital and Quantum Capital; private equity house TPG; and Alam Flora Sdn Bhd, a 97.37%-owned unit of Malakoff Corp Bhd, itself 38.45% controlled by MMC Corp Bhd, the flagship of tycoon Tan Sri Syed Mokhtar Albukhary. The bidding timeline remains unclear for now.
SK ecoplant has nearly five decades of experience in integrated waste management, energy, engineering and construction.
Currently, sovereign wealth fund Khazanah Nasional Bhd holds the controlling 70% interest in Cenviro, which has grown steadily over the past decade as waste management becomes an increasingly critical urban issue.
“The strong level of interest is not surprising,” says one source. “Cenviro is a quality asset with a solid controlling shareholder. For any buyer, partnering with Khazanah — a government-linked investment company — brings both stability and good networks. The waste management sector is also seen as having strong long-term growth prospects. Unless the pricing turns out to be unrealistic, the deal should proceed smoothly.”
When news of SK ecoplant’s planned exit surfaced in late June, reports indicated the sale could value Cenviro at around US$300 million (RM1.27 billion). Based on this, SK ecoplant’s 30% stake would be worth about RM381 million, excluding any premium.
SK ecoplant entered Cenviro in May 2022 as a strategic partner to Khazanah. A subsidiary of SK Group — South Korea’s second-largest conglomerate — the company has over 47 years of expertise spanning integrated waste management, energy, engineering and construction, with a footprint in 15 countries.
The Korean firm currently has three board representatives at Cenviro — Hanseung Ok, Heo Kwanyoung and Park Deok Seop — alongside five other directors.
Industry observers note that SK ecoplant has been restructuring its portfolio, moving away from waste management. Talk has also surfaced that it may sell two environmental subsidiaries, Renewus and Renewone, to US private equity giant Kohlberg Kravis Roberts & Co (KKR), though this remains unconfirmed. Reports further suggest a potential divestment of SK Oceanplant, its offshore wind substructure business.
Cenviro, formerly UEM Environment Sdn Bhd, was acquired by Khazanah in 2014 from wholly-owned UEM Group. At the time, there were plans to list the company on Bursa Malaysia to raise about RM1 billion, but the listing never materialised.
Today, Cenviro’s operations are spread across three main subsidiaries:
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Kualiti Alam Sdn Bhd (wholly-owned): Runs an incineration facility, solidification and treatment plants, a secure landfill, and a clinical waste treatment centre capable of handling more than 100,000 tonnes of hazardous waste annually.
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Cenviro Recycling and Recovery Sdn Bhd: A licensed resource recovery business covering 13 scheduled waste codes, including full recovery of used oil and solvents, as well as partial recovery of e-waste and specialised waste streams.
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E-Idaman Sdn Bhd: Provides solid waste collection and public cleaning in Kedah and Perlis with a fleet of over 170 vehicles, handling some 1,450 tonnes of waste daily from more than 350,000 premises. The business employs around 3,650 workers and operates an active recycling division.
Financially, Cenviro has remained profitable for several years. For FY2023, it posted RM34.64 million in after-tax profit on RM263.86 million revenue. In FY2022, profits peaked at RM62.78 million on RM284.59 million revenue — the highest in the five-year period between 2019 and 2023, according to filings with the Companies Commission of Malaysia (SSM).
As at Dec 31, 2023, Cenviro held total assets of RM794.18 million and liabilities of RM272.42 million, with retained earnings amounting to RM482.51 million.
