1. Market Analysis
EFW in Yangtze Delta Region
By Qingjia Yang
In May 2009
yangerban@hotmail.com
Regional Overview
The new national economical planning of China has defined
Yangtze Delata as three regions: Shanghai, Zhejiang, Jiangsu.
General Infromation
● Population accounts 5.8% of China.
● GDP accounts 22.37% (2005) of China.
● Absorbed 52% of paid-in foreign capital in China (2004).
● Annual GDP increment counts 15.6% (2004), highly above average.
● Home comsumables sales ranks NO.1 of China, meaning abundant home scraps.
● Higher governmental attention to environmental issues and higeher standards.
2. Municipal solid wastes Disoposal Data
in 2007 China and Yangtze Delta
Municipal solids Decontamination Landfilling Compost Incineration Decontamination
wastes Generation Amount Amount Amount Amount Rate
Region
(Megatons/yr) (Megatons/yr) (Megatons/yr) (Megatons/yr) (Megatons/yr) (%)
National 152.15 94.38 76.33 2.50 14.35 62.03
Shanghai 6.91 5.47 3.77 0.59 1.08 79.16
Jiangsu 8.98 7.81 5.77 2.03 86.91
Zhejiang 7.72 6.74 4.02 2.66 87.35
Source:
《各地区城市生活垃圾清运和处理情况 (2007年)》,
http://www.stats.gov.cn/tjsj/qtsj/hjtjzl/hjtjsj2007/,in China State
Statistics Bureau website
Facilities distribution
Decontamination
Landfilling Compost Incineration
Region Facilities
(Sites) (Sites) (Sites) (Sites)
National 460 366 17 66
Shanghai 12 4 2 2
Jiangsu 32 23 9
Zhejiang 41 27 14
Yangtze Delta 85 54 2 25
Source:
《各地区城市生活垃圾清运和处理情况 (2007年)》,
http://www.stats.gov.cn/tjsj/qtsj/hjtjzl/hjtjsj2007/,in China State
Statistics Bureau website
3. Data Analysis
Decontamination methods rates
Landfilling Rate
Compost Rate Incineration Rate Landfilling Compost Incineration
Decontamination among
among among Rate among Rate among Rate among
Region Rate Decontaminatio
Decontamination Decontamination Generation Generation Generation
n
(%) (%) (%) (%) (%) (%) (%)
National 62.03 80.88 2.65 15.20 50.17 1.64 9.43
Shanghai 79.16 68.92 10.79 19.74 54.56 8.54 15.63
Jiangsu 86.91 73.88 25.99 64.25 22.61
Zhejiang 87.35 59.64 39.47 52.07 34.46
Yangtze Delta 84.79 67.73 28.82 57.43 24.44
Data Analysis
Yangtze Delta Municipal solid Wastes amount and proportions of entire China amount
Total Generation Decontamination Landfilling Compost Incineration
National Amount
152.15 94.38 76.33 2.50 14.35
(Megaton/yr)
Yangtze Delta
Amount 23.61 20.02 13.56 0.59 5.77
(Megaton/yr)
Yangtze Delta
Proportion among 15.52% 21.21% 17.76% 23.60% 40.21%
China
Yangtze Delta Domestic Waste amount and proportions in
whole China
25.00 45.00
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4. Municipal waste solids disposal summary in
Yangtze Delta
Based on the foregoing data analysis, we can come to basic picture
on the current EFW market in Yangtze Delta Region.
Total market Disposal structure EFW Facilities
• Municipal solid waste • Decontamination rate • 25 EFW facilities had been
accounts 15.52% of China. reachs 84.49%, much built by end 2007,
higher than national accounting 38% of China
• Decontamination amount while the whole nation had
average, 62.03%
accounts 21% of China’s 66 facilites, .
decontamination amount. • Landfilling and
incineration rate among • Average incineration
• Incineration accounts capability per facility was
decontamination counts
40.21% of entire China’s 633.23 tons/day, with total
67.73% and 28.82%
incineration capabilities. capability as 15808 tons/day
respectively, while the
• Landfilling only accounts national number is 80.80% in Yangtze Delta.
17.76% of total landfilling and 15.20%.
amount of China.
EFW market conclusions in Yangtze Delta
According to the foregoing, we can make basic conclusions as belows:
●The current EFW market in Yangtze Delta takes about 40% of the whole cake of China,
according to the incineration facilities (38% of China) and capabilities (40.21% of
China) in Yangtze Delta.
●The incineration method to dispose municipal solid wastes has better potential in
Yangtze Delta than other regions in China, as incineration accounts bigger
proportion (28.82%) in the whole disposal amount in Yangtze Delta than the national
average (15.20%).
●The current EFW market in Yangtze Delta is also more competitive than other regions
along with the past years’ flourishing development in Yangtze Delta .
●Among the three provincial level regions in Yangtze Delta, EFW has more potential in
Shanghai and Jiangsu than Zhejiang, as incineration only accouts 19.74% in
Shanghai and 25.99% in Jiangsu among the whole disposal amount, while the
number in Zhejiang is already 39.47%.
5. Competitors in Yangtze Delta
The EFW competitors in Yangtze Delta can be
simply sorted as 4 types:
A: Multi-national environmental companies
These companies have decades of abundant experieces in EFW project
developing and facility operation globally, comparatively lacking of local
familarity.
● Veolia Environment
● Covanta
● Golden State Environment
● Waste Management Incoperation ( WM’s CEO just declared in April 2009 that it would
enter China’s waste management market, and it was bidding for EFW projects from Shanghai
Chengtou.)
● Suez Environment ( Currently only operating industrial incineration plants in China, but
intending to join the market.)
Competitors in Yangtze Delta
B: China national dominated environmental companies
These players have strong governmental backgrounds and ample finacial
support from parent companies, relatively can be called powerful
competitors.
● Everbright International Group (4 EFW plants in YD)
● Shanghai Environment Group ( 2 EFW plants in YD)
● Shanghai Pudong Fazhan Group ( 2 EFW plants in YD)
● Zhongke Energy and Environment ( 2 EFW plants in YD)
● Wuxi Guolian Group ( 2 EFW plants in YD)
● Dynagreen Group ( 2 EFW plants in YD)
6. Competitors in Yangtze Delta
C: Local private environmental companies
These companies came from the strong private industrial groups such as real
estate , chemicals etc in Yangtze Delta. They have obvious local advantages
and good financing abilities from private capital market.
● Wenzhou Weiming ( 8 EFW plants in YD)
● Hangzhou Jinjiang ( 1 EFW plants in YD)
● Zhejiang Meixinda ( 2 EFW plants in YD)
D: Local public owned environmental companies
These companies only own 1 EFW facility which was developed by local
authority.
● Hangzhou Lvneng
● Nibo Fenglin
Key players strategy in China
Veolia Environment
Strategy: Aquire the facility operation by financial leverage and excellent
technological strength.
As a global leader in the environmental business, Veolia targeted the operating
domination of facilities, both in the water and solids area, while it coperated with local
companies to exchange the investment for facility operation.
Even it seems that Veolia has invested and paid large quantities of cash in the market,
it never give in the operating domination of facilities, while it mostly just takes
minority stock on the investment JVs but takes fully domination on the operating entities.
Therefore, smart finacial operation is a tool for Veolia to leverage the acquisitions
of facility operation, in forms of BOT, or TOT.
7. Key players strategy
Everbright International
Strategy: Focus on the eastern regions, develop steadly the market by
strong financial capabilities.
Everbright’s facilities mostly was based in Jiangsu and Shangdong, whilst it
planned to gradually develop from the east to the west of China.
Everbright uses its local advantages and strong finacial capability to encroach the
market in middle cities.
Everbright also developed strategic relationship with different regional or global
companies to enlarge the business in different regions.
Key players strategy
Wenzhou Weiming
Strategy: Relying on the round-Wenzhou area, utilize the localized
technology to earn market.
Weiming sets up most of its business in Zhejiang, relying on the splendid economic
climate around Wenzhou and local advantages.
Weiming also developed the localized grate furnace , which ranks advanced in China and
benefit the company’s business with its economical technology.
8. Advantages Comparison
The following 3 factors influcing EFW business can describe the 3 players’ position.
Everbirght Weiming
Local
Advantages
Financial Technological
Capabilities Excellence
Veolia
Critical Iusse of EFW:
Residents Complaints
As for most of EFW projects, the resident
complaints has been critical now and Shanghai Minhang
EFW project
shouldn’t be ignored when planning the (terminated in 2006)
) Shanghai
projects. Jiangqiao EFW
project (2nd phase)
Nanjing Jiangbei
EFW project
Abortion
Higher Delay
Investment
Project proved
unfeasible on the
environment impacts, or
too mcuh cost for
decreasing environment
Complaints solved impacts. EIA apprved, project
with an agreement executed
with residents,
such as home
relocation etc.
Residents Complaints