Yardway in push for sewage treatment business

PUBLISHED : Thursday, 30 December, 2010, 12:00am
UPDATED : Thursday, 30 December, 2010, 12:00am

When the mainland announced that environment protection would be one of its main focuses in the next decade, savvy companies lost no time in jumping on the bandwagon.

One of them was Yardway Group, a new player in the waste water treatment business, which has now joined forces with state conglomerate Beijing Capital to expand into the largely untapped village and township markets.

Less than a third of the area in second-tier and smaller cities have sewage treatment systems, Wang Yongchen, an expert in water protection, said. But environmentalist Wang Yongchen points out that most of the mainland's rural regions do not have a system for collecting sewage treatment fees, a potential challenge for companies in this line of business.

According to Liu Xiaoguang, chief executive of water treatment major Beijing Capital Group, large waste water treatment companies have been reluctant to tap rural markets because of low returns.

'Everyone wants to protect the environment, but the investment and returns don't tally,' Liu said. 'Yardway's new technology might help us overcome this problem.'

Yardway says it holds a patent on something known as magnetic separation technique and is manufacturing mobile sewage treatment facilities that can be carried around rural areas with scattered population. The company says this technique can cut treatment costs by up to 75 per cent.

Two mobile sewage treatment facilities are already in use in the suburbs of Beijing and plans are afoot to spread them to 31 other cities where Beijing Capital operates.

Yardway Group has changed hands thrice since its establishment in Hong Kong in the 1980s. A Hong Kong-listed firm, previously it traded equipment and machinery for airports and high-speed railways.

But this January, Xu Zhongping became the largest shareholder of Yardway Group, with about 49.7 per cent of the stock through his company Gentle International Holdings.

Xu set a new development strategy for the company by cutting down on the old business and moving into waste water treatment.

The company bought a sewage treatment plant in Liaoning province in April. It went on to spend about 10 million yuan (HK$11.73 million) to acquire Beijing Jingrui Kemai Water Purification Technology, which owns the patent for the magnetic separation technique. Xu is also the largest shareholder of the firm.

Yardway won shareholder approval yesterday to change its name to China Environment Technical Holding.