New player enters alternative energy race in Singapore

Jessica Cheam, Straits Times 5 Mar 09;

A NEW local player has joined the race for alternative ways to produce energy.

Mainboard-listed ISDN Holdings has won rights to technology that can convert Singapore's waste into diesel fuel.

The engineering firm marked its first foray into the environmental business yesterday by announcing a new $1 million joint venture, W2Energy.

The new firm will build plants that can convert waste such as plastic, wood, waste oil and municipal solid waste into diesel fuel. ISDN Holdings will own 35 per cent of this company, with the rest owned by two German partners.

One of them is German scientist Christian Koch, who holds the intellectual property rights to the process that enables the conversion of waste into high-quality diesel, ISDN managing director Teo Cher Koon told The Straits Times.

W2Energy has a 20-year licence to use this technology to build plants that employ a catalyst to convert any waste containing hydrocarbons into synthetic diesel fuel. This fuel can be classified as biodiesel and will enjoy tax breaks and potential carbon credits, said Mr Teo.

A typical plant, which produces around 500 litres of diesel per hour, costs about 4 million to 5 million euros (S$7.8 million to S$9.7 million) to build.

Dr Koch has built such plants in countries such as Germany, the United States, Spain and Mexico.

Mr Teo said the plants are designed in such a way that they can tap into the energy they generate to operate.

W2Energy will provide the same technology and expertise to build these plants, and it will tap into ISDN's existing network to spread this technology to Asia, he added.

The firm will target waste management businesses and governments. 'This environmentally friendly technology enables countries to address their waste issues. Recycling waste such as plastic is a big challenge, and most countries just bury them,' said Mr Teo.

Market research by ISDN has shown an 'extremely encouraging' response, he added. 'There are many markets where there is a need for technologies like this which can convert waste into something useful.'

Within Asia, W2Energy is first targeting Singapore and China as places where it can build its plants, and will later move on to other countries in the region.

ISDN does not expect its new business to take long to generate revenue, said Mr Teo. 'It's no surprise we're going into this business. It is very promising.'

The firm recently reported a 13.2 per cent increase in revenue to $116 million for the 2008 financial year, with net profit climbing 21.8 per cent to $6.8 million. Its shares closed three cents down at 50 cents yesterday.