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Acromec unit signs LOI with Chew's Agriculture for construction of waste-to-energy power plant
ACROMEC'S subsidiary has signed a letter of intent (LOI) with egg producer Chew's Agriculture to operate a waste-to-energy power plant that will use chicken manure as feedstock. (see amendment note)
Acropower - an 80:20 joint venture between Acromec and Malaysian alternative energy company Green Energy Resources - will build-own-and-operate the plant, while a wholly-owned subsidiary of Chew's Agriculture, will supply the manure.
Under the LOI, Chew's Agriculture will purchase electricity from Acropower to power a new farm for a 15-year period at no more than a 10 per cent discount to the prevailing Energy Market Authority electricity tariff rate.
The plant, which is slated to start operations by Mar 1 2020, will be constructed on the upcoming farm as Chew's Agriculture relocates to Neo Tiew Road, off Lim Chu Kang.
Lim Say Chin, managing director of engineering services provider Acromec, said: "This LOI is an important first step in our drive into the renewable energy business. It has expanded the horizon of our value chain for our controlled environments engineering business, and will differentiate us from our competitors."
However, since the deal marks a departure from Acromec's core businesses, it will be convening an extraordinary general meeting to seek shareholder approval for its diversification plans.
The Catalist-listed group presently designs and constructs facilities requiring controlled environments, such as laboratories and medical facilities.
Amendment note: An earlier version of this story stated that Chew's Agriculture is a wholly owned subsidiary of Chew's Group. Acromec has clarified that Chew's Agriculture is no longer a subsidiary of Chew's Group.