In a significant move to refocus its business strategy, Singapore-based Sembcorp Industries has announced its decision to sell its subsidiary, Sembcorp Environment, to TBS Energi Utama, a prominent Indonesian energy firm. The deal, valued at S$405 million (approximately US$306.6 million), was confirmed on Friday, November 8, 2023.

This transaction comes shortly after TBS Energi Utama's strategic acquisition of Asia Medical Enviro Services from Dymon Asia Private Equity in August 2023. Asia Medical Enviro Services is known for its specialized services in the treatment of biohazardous and medical waste in Singapore, highlighting TBS's growing footprint in the environmental services sector.

Sembcorp has reassured stakeholders that upon completion of the sale, which is expected by the first half of 2025 pending necessary regulatory and shareholder approvals, TBS will maintain the existing management and staff at Sembcorp Environment. This commitment aims to ensure a seamless transition while providing job security for employees during the change.

According to Melvin Yong, Assistant Secretary-General of the National Trades Union Congress (NTUC), Sembcorp Environment has kept the Built Environment and Urban Trades Employees' Union informed about the sale. The union will work closely with management to address any concerns from the affected workers, emphasizing that job retention will be prioritized.

This strategic divestiture aligns with Sembcorp's ambitious plans for growth in the renewable energy sector and its commitment to driving a sustainable energy transition. The proceeds from this sale will be strategically reinvested to bolster Sembcorp's initiatives focused on renewable energy projects as outlined in their strategic plan for 2024-2028.

Industry experts are watching this development closely, as it marks a pivotal shift in Sembcorp’s operational focus and underscores the increasing collaboration between Singaporean and Indonesian firms in the energy and environmental sectors.