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Acromec unit to build, operate waste-to-energy plant for Chew's Agriculture poultry farm

SPECIALIST engineering firm Acromec's 80 per cent owned unit will build, own and operate a waste-to-energy power plant at Chew's Agriculture's new poultry farm at Neo Tiew Road, off Lim Chu Kang.

The power plant - which would be Acromec's first - is meant to boost recurring income and diversify the company's business into renewable energy, it announced on Tuesday.

Under the 15-year agreement, Chew's Agriculture will supply its poultry waste to Acropower to convert into biogas to generate electricity, and Chew's will purchase the electricity generated at agreed prices at no more than a 10 per cent discount to the prevailing Energy Market Authority electricity tariff rate.

Additionally, Chew's is to exclusively purchase the farm's electricity requirements from Acropower and is to supply Acropower with all the waste at the farm.

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Acromec will have to build a facility that can process daily waste produced by 600,000 egg-laying chickens by March 31 2020, and will supply to the farm no less than 0.5 megawatt per hour.

The facility will have a maximum capacity to process waste produced by up to 720,000 egg-laying chickens on a daily basis, and supply electricity up to 0.8 megawatt per hour on a daily basis. Under the agreement, Chew's Agriculture will also have to scale up its initial production size within five years beyond 720,000 chickens, but not exceeding 1.5 million chickens. Construction of the facility is expected to be completed by March 31, 2020.

After 15 years, Chew's Agriculture will have the option of purchasing the facility.

The agreement is not expected to have any material impact on the consolidated net tangible assets and earnings per share of the group for the financial year ending Sept 30, 2019.

Lim Say Chin, executive chairman and managing director of Acromec, said: "This project is a win-win situation for both parties. Disposal of animal waste is a costly issue for farms, and by converting it into energy, Acromec is expected to benefit from an economic viewpoint and will also be contributing towards protection of Singapore's environment."

Acromec currently designs and constructs facilities requiring controlled environments such as laboratories, medical and sterile facilities and cleanrooms. 

The agreement is subject to the approval of its shareholders in a general meeting to be convened, and details about funding where relevant will be provided in a circular.

Acromec closed unchanged at S$0.085 on Tuesday before the announcement was made.