Business segments

ZhongDe Group operations are divided into two separate business segments: the medical waste incinerator business and the municipal waste incinerator business (including industrial and hazardous waste).

 

Medical Waste Incinerator Business

In the medical waste incinerator business, ZhongDe Group revenues amounted to EUR 15.5 million in the 2006 financial year. In the first quarter of 2007 revenues totalled EUR 3.9 million. This corresponds to 81.8% and 52.5% of total revenues for the ZhongDe Group for each respective accounting period.

Incinerators manufactured for this business segment use pyrolytic incineration techniques and can currently process between 1 and 32 metric tonnes of waste per day. Based on internal estimates, the ZhongDe Group is one of the leading manufacturers of incinerators for medical waste in China with a market share of approximately 35% as of the end of 2006. The LFRY-32 incinerator sold by the ZhongDe Group in 2004 to the Nangong Project in Peking has a processing capacity of 32 metric tons per day. According to expert opinion it is currently the largest medical waste incinerator in China. Revenues and unit sales in the medical waste incinerator segment have risen sharply in the last three years. This rise is primarily the result of conditions laid down by the Chinese government in reaction to the SARS epidemic, stipulating that hospitals must gather medical waste in a central location and dispose of it properly.

 

Municipal Waste Incinerator Business

In the municipal waste incinerator business, ZhongDe Group revenues amounted to approximately EUR 3.5 million in the 2006 financial year. In the first quarter of 2007 revenues also totalled EUR 3.5 million. This corresponds to 18.2% and 47.5% of total revenues for the ZhongDe Group for each respective accounting period. ZhongDe Group’s municipal waste incinerator business produces pyrolytic, grate and rotary kiln incinerators for the disposal of municipal waste with a current waste disposal capacity of between 10 and 150 metric tons per day. In this business segment, the ZhongDe Group focuses on small Chinese cities of 100,000 - 200,000 inhabitants and medium-sized Chinese cities with between 200,000 and 750,000 inhabitants. Both groups are witnessing a growth in demand for municipal waste incinerators.