eco group companies report
TRANSCRIPT
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ECO Group Of Companies
40 Tuas West Road, Singapore 638389Tel: (65) 6517 3600 Fax: (65) 6862 0133
ECO GROUP OF COMPANIESStrategic Analysis
Waste Management (Singapore: EGC)
SUBMITTED TO:
Institute of Certified Public Accountants of Singapore
12 Aljunied Road,#04-02 KH Plaza @ Aljunied,
Singapore 389801
BY: Smita Salil MhatreCandidate ID - (S7979820G)
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ECO Group Of Companies
40 Tuas West Road, Singapore 638389Tel: (65) 6517 3600 Fax: (65) 6862 0133
VISION
To be the waste management company of choice
MISSION
To help organisations manage their waste efficiently and safely through comprehensive
waste minimization, recovery and disposal solutions thereby adding value to their
operations and complementing the social efforts of building a cleaner and safer
environment.
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ECO Group Of Companies
40 Tuas West Road, Singapore 638389Tel: (65) 6517 3600 Fax: (65) 6862 0133
Eco Group of Companies is a unique blend of core competencies and capabilities has served
them well within the waste management industry. This analysis will fully investigate the ability
of the organisation to exploit growth opportunities in a slow growing, but expanding industry.
Key Points:
Driving forces which affect the external environment in which waste management
companies, such as Eco Group of Companies, operate in are: regulatory influences and
government policy changes, fuel prices, and new technology that would reduce
significantly needed landfills.
Key success factors which influence the market and fashion successful companies
include the following: rights to acquire and possession of landfills, the ability to control
operation costs, and the human factor within the firms.
Current Strategy
Eco Group of Companies current strategy is to achieve operational excellence in order to
be successful for their stockholders.
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ECO Group Of Companies
40 Tuas West Road, Singapore 638389Tel: (65) 6517 3600 Fax: (65) 6862 0133
Behind the luxury and convenience of modern living lies the real price of this industrial
production the generation of hundreds of million tons of hazardous and non-hazardous waste
every year.
This pattern follows the general trend in early economic growth described by the environmental
Kuznets Curve (Kuznets 1995, Barbier 1997). This development model, together with new
lifestyles associated with greater affluence, has led to rapid changes in consumption patterns, the
generation of large quantities of waste and changes in waste composition. These are the drivers
behind exponentially growing waste management problems in Asia and the Pacific.
Although most countries in Asia and the Pacific have ratified the Basel Convention on the
Control of Trans-boundary Movements of Hazardous Wastes and their Disposal, the region as a
whole lacks a common approach to the import of hazardous wastes.
Asian markets hold very good longer term potential for waste management companies in most
areas of solid and hazardous waste management. The Asian market for solid and hazardous
waste management was estimated at approximately $3.0 Billion (US) in 1995 by EBI.
Demand is driven by an increasing awareness of environmental concerns, coupled with a high
level of environmental focus by international financial institutions (IFIs) and non-governmental
aid organizations (NGOs) who direct a very large amount of effort to this region. Most
internationally funded investment projects now mandate that proper environmental studies and
controls are in place.
The recent decline in the Asian economy has had an impact on the potential market for services
in the near to middle term. The impact will be felt most strongly on product sales and services to
the private sector, which require hard currency or local financing. For this reason Asian markets,
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ECO Group Of Companies
40 Tuas West Road, Singapore 638389Tel: (65) 6517 3600 Fax: (65) 6862 0133
particularly those in countries most affected by the economic setbacks such as Thailand, Korea,
Malaysia, and Indonesia, may not be as attractive in the short term. However, the need for waste
management will not disappear and service will be required at some point.Over the past two to
three decades in Singapore, rapid industrialization and economic development have caused a
tremendous increase in solid waste generation. The yearly disposed solid waste increased from
0.74 million tones in 1972 to 2.80 million tones in 2000. Solid waste management in Singapore
has traditionally been undertaken by the Ministry of Environment (ENV), with the participation
of some private sectors in recent years. The hierarchy of solid waste management in Singapore is
waste minimization (reduce, reuse and recycle or so-called 3 Rs), followed by incineration and
landfill which is the most preferred disposal method. Waste minimization, the utilization of
incineration ashes, industrial waste management is regarded to be the major challenges in the
future.
Singapore Industrial production growth rate
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ECO Group Of Companies
40 Tuas West Road, Singapore 638389Tel: (65) 6517 3600 Fax: (65) 6862 0133
Source: CIA World Factbook - Unless otherwise noted, information in this page is accurate as of February 19,
2010
GDP per capita in selected countries in Asia and Pacific Region (source: GEO 2000)
Singapore was given the top rating for the overall quality of its environment survey covered 12
Asian territories. It also topped the list in managing air pollution, traffic congestion and for its
attractiveness for foreign direct investment.
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ECO Group Of Companies
40 Tuas West Road, Singapore 638389Tel: (65) 6517 3600 Fax: (65) 6862 0133
Technology affects not only the waste management industry, but many other industries as well.
Recent developments in waste management technology are providing new ways to clean up
industrial wastes and yielding efficient new production methods that are less polluting than
traditional processes. Waste management technology can even help convert industrial and other
wastes into useful products. All of these technological changes create new business opportunities
for EGC. While they use these technologies, they need to work with the ENV co-operatively
because the ENV may not approve all of the technology for the waste management industry.
Also, markets for waste treatment plants, equipment and instruments are becoming uniform in
the global arena. It will boost international cooperation in the development of products and
services utilizing the new technology. The program is an excellent opportunity for EGC.
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ECO Group Of Companies
40 Tuas West Road, Singapore 638389Tel: (65) 6517 3600 Fax: (65) 6862 0133
Strategic Group Map
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ECO Group Of Companies
40 Tuas West Road, Singapore 638389Tel: (65) 6517 3600 Fax: (65) 6862 0133
The Porters Five Forces Model is a market opportunities analysis model
Threat of Entrants: LOW
High investmentThreat
Buyer Power:Strict regulations Of NewMODERATEHigh exit barriers EntrantsCommercial & businessLOW
No cross border labor customer: make own
choice
BargainingRivalry
Power of
SuppliersMODERATEHIGH
Supplier Power: HIGH
Unionized Labor LOW
Strong, big suppliers
Threat ofPay premium for license Substitutes& rights
Competitive Rivalry:Bargaining MODERATE
Power of Buyers Slow industry growthMODERATE in Singapore
High strategicstakes
Intense competition
Threat of Substitutes: LOW
Few to zero substitutes forWaste Management
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ECO Group Of Companies40 Tuas West Road, Singapore 638389
Tel: (65) 6517 3600 Fax: (65) 6862 0133
Competition
A few players in the region, the competition is fierce because of powerful customers
who prefer a modern and consolidated service provider for their national operations.
In addition, customer loyalty to a particular provider is low due to short renewal
contracts. Demand for environmental services is growing at a very slow rate,
coupled with powerful customers and low loyalty proves that the industry is fiercely
intense.
In the growing industrial world disposal of the waste have been a key agenda for any
company but more important is the way the waste get dispose off. Many companies
nowadays are seeing this in a way to generate revenue. It has attracted many
companies to find innovative ways to dispose of waste. E.g. absorve is used in
preparation of road in Singapore.
New entrants: Entry for the new entrants is mainly driven by the capacity to have
expertise and resources in handling waste. For a startup its very difficult to get land
and technology know how to setup the business.
End users/Buyers: In this type of industry it important what kind of product can be
generated. Majority of the industrial waste is in form of water pollutant with the
increasing government and international regulation buyers are keen to ensure that
the wastes are properly disposed. Also emphasis is on recycling of the product at
minimum cost.
Suppliers: Eco group have already have the technological know-how, and have
already started to build the processing facilities to support this type of future
technology. Facilities to process waste are normally huge in size, modern, and in
compliance with strict federal regulations. They require strong, large, and competent
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ECO Group Of Companies40 Tuas West Road, Singapore 638389
Tel: (65) 6517 3600 Fax: (65) 6862 0133
companies to design and make them. As a result these equipment suppliers have
bargaining power over the players in the industry.
Substitutes: Industries have no other option other than to develop their own waste
management strategy or to rely on specialist like Eco group of companies. With ever
growing stringent government regulation industries have no option but to rely on
Specialist Company to take care of their industrial waste and generate some revenue
through waste disposal.
Complementary products/ the government/ the public: Companies need to
continue to improve relations with governmental agencies that have the power to
revoke any operating licenses. The Waste Minimization Unit of the Resource
Conservation Department (RCD) within the national Environment Agency (NEA) is
to formulate policies to promote and spearhead waste minimization in Singapore.
The Unit develops, promotes and oversees the implementation of program on waste
minimization and recycling. It also carries out studies to enhance waste recycling. In
addition to regulatory controls, the co-operation of industries in ensuring that
hazardous wastes are properly managed and disposed of in Singapore is essential.
Companies continue to participate in international events on the Basel Convention
and adopt and practice the principles of Basel Convention in dealing with Tran
boundary movements of hazardous wastes.
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ECO Group Of Companies40 Tuas West Road, Singapore 638389
Tel: (65) 6517 3600 Fax: (65) 6862 0133
ECO group of companies:
ECO business involves mainly waste management in the industrial and commercial
industries with forte in hazardous and non-hazardous waste. It also provides third-
party environmental laboratory services, consultancy services and conducts R&D
programmers on waste treatment processes and environmental technologies. ECO
Special Waste Management provides comprehensive waste management solutions to
customers by offering one-stop services and facilities to treat both hazardous and
non-hazardous wastes.
ECO Industrial Environmental Engineering Pte Ltd: ECO-IEE is the corporate
headquarter of the group and has three wholly-owned subsidiaries namely ECO
Special Waste Management Pte Ltd (ECO-SWM), ECO-SWM - Provides waste
management solutions for hazardous wastes, ECO Resource Recovery Centre Pte
Ltd (ECO-RRC) - provide waste management services for industrial solid non
hazardous wastes And ECO Energy Recovery System Pte Ltd (ECO-ERS) :
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ECO Group Of Companies40 Tuas West Road, Singapore 638389
Tel: (65) 6517 3600 Fax: (65) 6862 0133
Centralized collection of internal drainage water with the aid of oil interceptor and
oil skimmer is our practice towards minimizing water pollution .
The corporate vision identifies where the firms orientation for the future is in order
to best serve stakeholders needs. The vision incorporates current realities and any
expected future conditions to create an ideal scenario within a relevant time frame
the vision statement is trying to achieve the best-in-class in each part of their
business for the future.
Value Chain Analysis
In todays environment, it is becoming ever more critical for firms to develop
sustainable competitive advantages. In order for decision makers to develop this
advantage, they must also understand their own firms resources and capabilities, as
well as be able to evaluate these strengths and weaknesses in terms of competitive
advantage. Value chain analysis provides strategic decision makers a systematic
technique for scanning their internal organizations. By focusing on competitively
relevant strengths and weakness, decision makers can better see the potential of
these resources and capabilities for adding or subtracting value to the firms
processes. This understanding can then lead to generic strategies that will most
likely lead to sustained competitive advantage.
Companys current strategy is to achieve operational excellence in order to be
successful for their stockholders. The Companys plan for growth will be grounded
in margin expansion from better pricing while continuing to cut costs, and they will
apply a disciplined approach to growing their returns from new capital investments.
The Company plans to pursue operational excellence by focusing on what they are
doing well, particularly by focusing on the areas of safety, maintenance, and
productivity. They are committed to finding the best practices throughout their
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ECO Group Of Companies40 Tuas West Road, Singapore 638389
Tel: (65) 6517 3600 Fax: (65) 6862 0133
organizations and standardizing those practices and processes throughout the
Company
Establishing National Recycle Goals and Packaging Standards
This strategy responds to threats of government regulations and landfills and also
simultaneously creates golden opportunities for WMI. By working in conjunction
with the government, EGC can possibly minimize the government regulations and
create some items to their favor. With increasing consumption, landfills are
becoming full and the numbers of available landfills become limited. This initiative
will try to urge consumers to recycle and buy reusable items, and promote the
company.
Alternative 2: Deploying Automated Trucks to Pick up Solid Waste (Threat and
Strength)
As with other firms in the industry, EGC employs a lot of human labor for it
services. This particular resource represents a large piece in EGCs cost and its
union, in certain conditions; this would be a challenge for EGC. This alternative
favors using EGCs strong cash in hand to deploy fleets of automated pick up trucks
in residential-customer segments. This would significantly reduce EGCs
dependency on human labor and dramatically lower operating costs contributed by
human labor costs.
As based on research and analysis, two solid recommendations that will enable
Company to remain competitive within the waste management industry.
1. Convert fleet to alternative fuels
2. Expand Waste-to-Energy
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ECO Group Of Companies40 Tuas West Road, Singapore 638389
Tel: (65) 6517 3600 Fax: (65) 6862 0133
The Future of Eco Group of companies: New Products/Services
In order to take advantage of opportunities within the market Eco group will need to
continue their focus on energy generation. This will come in the form of increasing
the waste-to-energy production facilities and continual improvement in waste-to-
energy processes. Money should be allocated to research and development in order
to stay ahead of other competitors and look for continuing alternatives for waste
disposal. Eco groups will also need to continue to improve and focus on recycling
programs to support the more environmentally friendly customers and look at
expansionary opportunities. There is also the opportunity to better utilize existing
resources to generate increases in revenue.
Possible Merger and Acquisitions:
Eco Group will need to continue their focus on environmentally friendly practices
and maintain there compliance with governmental permit regulations. They will
need to continue their acquirement of new competencies in environmental disposal
and recycling programs, to minimize their impact on the environment. They will
also continue to make customer service process improvements and change to meet
the needs of the growing customer segments. It should continue to keep its current
base of customers and operating segments. Waste Managements current revenue
segments include collection, landfill, transfer, recycling, and waste-to-energy. They
will still focus on municipalities, industrial, commercial, and residential customers.
It is anticipated that Waste Management will move further into the areas of
recycling, and waste-to-energy as America moves toward a goal of zero waste. This
could lead to a slight increase in commercial or industrial customers seeking more
environmentally friendly solutions. Looking at the present demographic of Eco
Group of companies, it make a ideal to be acquire by large companies who wants to
leverage on its presence in Singapore and technology Know-how.
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ECO Group Of Companies40 Tuas West Road, Singapore 638389
Tel: (65) 6517 3600 Fax: (65) 6862 0133
In conclusion, after analyzing global environment surrounding Eco Group of
Companies we discovered a significant driving force involving rapidly changing
socio/political arena which could trigger strategic change in the industry. In
addition, we identified key success factors which the firm should take into serious
consideration while structuring strategic decision and continuous improvement
programs. Of special note is the benchmark capability of effective operating cost
management with regard specifically to transportation. These influencers led to our
recommendations regarding fuel conversion and capital expansion into waste-to-
energy. By adjusting fleet operations, the firm is better able to develop its ability to
mitigate risk from volatile oil prices. And in diversifying into the waste-to-energy
industry, Company faces a future in an emerging industry, with lessened risk
exposure due to the changing nature of the environmental services sector. We
strongly recommend immediate implementation of our action plans, which will help
to ensure Companies continued competitive advantage and industry leading position.
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ECO Group Of Companies40 Tuas West Road, Singapore 638389
Tel: (65) 6517 3600 Fax: (65) 6862 0133
References:
http://www.eco.com.sg/english/index.htm
http://www.frost.com/prod/servlet/report-toc.pag?repid=P114-01-00-00-00
http://www.unep.or.jp/ietc/publications/spc/State_of_waste_Management/2.asp
http://www.singstat.gov.sg/
http://www.singstat.gov.sg/stats/themes/economy/indprd.html
http://www.singstat.gov.sg/statsres/ssc/ssic2010.html
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http://www.gdrc.org/uem/waste/continuum/continuum.html
http://unep.org/geo/geo4/report/GEO_Report_Full_en.pdf
Michael E. Porter, especially the 1998 book Competitive Strategy: Techniques for
Analyzing Industries and Competitors (Free Press).
Asian Development Bank (2003), Asian Development Outlook, Competitiveness in
Developing Asia: Taking Advantage of Globalization, Technology, and Competition
in Part 3, Manila.
http://www.adb.org/Documents/Books/ADO/2003/part3.asp
http://www.wastemanagement.com/
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ECO Group Of Companies40 Tuas West Road, Singapore 638389
Tel: (65) 6517 3600 Fax: (65) 6862 0133
http://www.investor.reuters.com/business/IndustryOverview.aspx?industry=WASTEM&target=/business/bussecindustry/bussecindfake/bussecindoverview
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