Establishment of Eco-parks

A new trend under the industry chain of wasterecycling.

The Eco-parks comprise integratedtreatment facilities for food waste, animal solid waste and other organicwaste. In the eco-parks, by-products such as biodiesel and biogas can be reusedor recycled. Synergy between operations of various treatment facilities can enhancerecovery of waste as well as reduce waste output. Meanwhile, local governmentwould usually prefer eco-park with integrated treatment facilities given thatthey are able to provide a one-stop waste treatment solution for various typesof waste, thus eliminating the need for coordination among multiple serviceproviders. The establishment of eco-parks is therefore an opportunity for thePRC food waste treatment and animal solid waste treatment industry in thefuture.

The Company’s organic waste treatment projectscan be divided in to the following types:

Animal solid waste treatment: The Companyengages in the treatment of animal solid waste and generate useful resources inthe process, through our proprietary processing technologies such as theautoclave dehydration system. During the Track Record Period, the Company hadbeen contracted to build and operate 28 animal solid waste treatment projectsin various provinces in the PRC and had a total stipulated waste treatmentcapacity under the concession agreements of all waste treatment projects of 510tonnes per day, as at the Latest Practicable Date.

Food waste treatment: The Company engages in thecollection and treatment of fruit, vegetable and other food and kitchen wasteusing technologies and techniques such as automatic sorting, anaerobicdegradation and biodiesel processing. During the Track Record Period, theCompany had two food waste treatment projects in Guangdong Province and had atotal stipulated waste treatment capacity of approximately 830 tonnes per day.

Waste incineration: The Company engages in thetreatment of household waste. The process utilizes technologies and techniquessuch as incineration and steam turbines, through which the Company generateselectricity. During the Track Record Period, the Company has been contracted tobuild and operate one waste incineration facility in Wuchuan City, GuangdongProvince to generate a stipulated waste treatment capacity of approximately1,200 tonnes per day.

Integrated organic waste treatment environmentalpark: Leveraging its capabilities to provide various waste treatment services,the Company also offers integrated solutions to local governments whereby theCompany combines different waste treatment facilities and processes on onesingle site. During the Track Record Period, the Company was contracted tobuild and operate two integrated organic waste treatment projects in GuangdongProvince, which have a total stipulated waste treatment capacity of 4,090tonnes per day.