Cenviro on the lookout for M&A opportunities

KUALA LUMPUR: Khazanah Nasional Bhd’s wholly owned subsidiary Cenviro Sdn Bhd, which is investing at least RM20 million on a digital transformation exercise, is on the lookout for more mergers and acquisitions (M&A), said its CEO Khalid Bahsoon.

“I can’t announce yet; we are looking at various companies but all to do with recycling and recovering, within the waste management business,” he told reporters at the signing of a software license and support agreement with SAP Malaysia yesterday.

He said the group will also increase its shareholding in Shan Poornam Sdn Bhd from 40% to 60% by third quarter this year. Last year, Cenviro acquired 40% shares in Shan Poornam, a Penang-based company that manages electronic waste (e-waste).

“Of course, we are looking at other possibilities as well. Anything in respect to the waste industry. We are looking at recycling and recovering companies,” he added.

Cenviro, which provides integrated environmental solutions, has over 2,000 clients (waste generators) nationwide and is a leader in waste management, from treatment to recycling, recovery and final disposal.

Last month, Cenviro (Johor) Sdn Bhd signed a 10-year contract with Petroliam Nasional Bhd for the treatment of waste from the Refinery and Petrochemical Integrated Development (Rapid) in Pengerang.

It is also in the midst of developing a training centre and ecopark on 100 acres in Seremban. The project, which will take up to five years to complete, will focus on recycling and recovery activities to reduce dependence on landfills.

Last year, Cenviro signed a memorandum of understanding (MoU) with DONG Energy, an integrated energy company that is 59%-owned by the Danish government. The MoU is to develop an integrated waste management concept in Malaysia that incorporates REnescience technology.

“We have tested it already so now we are looking at the next phase of commercialisation. That is for municipal waste, as in solid waste,” said Khalid.

Meanwhile, Cenviro will deploy multiple SAP solutions including SAP Suite on HANA with IS-U Waste Management as part of its digital transformation exercise. The deployment will leverage on the services of Deloitte Consulting SEA with iTelligence Outsourcing MSC as hosting partner.

Khalid said the digital transformation exercise will be implemented in three phases. The first phase, which will cost RM20 million, will be completed in 18 months.

“The biggest would be the first phase, which is the foundation of the whole system and the subsequent phases we have not confirmed the value yet, depending on needs at the time,” he said.

“Cenviro is growing quite rapidly and we anticipate that in the event of new M&As, there will be further requirements in the future. The main system that we are implementing now will be able to support the future expansions,” he added.

The exercise, which will see SAP and its partners deploying a fully-integrated enterprise resource planning system, will help Cenviro reconcile financial data from different sources, improve operational performance monitoring and consolidate its 20 different systems into a more efficient process.

Khalid said it expects to see results within the first year, including higher productivity and efficiency, and cost reduction.