Business Overview

6. INFORMATION ON OUR GROUP 6. INFORMATION ON OUR GROUP 6.1 HISTORY AND BACKGROUND Our Company was incorporated in Malaysia under the Act on 9 December 2009 as a private limited company under the name Hiap Huat Holdings Sdn Bhd. Subsequently on 9 September 2011, we converted our status from a private limited company to a public limited company to facilitate the Listing of our Group on the ACE Market. Our present authorised share capital is RM50,000,000 comprising 500,000,000 Shares. Our present total issued and paid-Up share capital is RM24,830, 133 comprising 248,301,330 Shares. We are a licensed Scheduled Waste recycler, involved in collecting, recycling, re-refining and producing recycled products from waste oil, waste soivents and used drums and containers that we are licensed to collect, treat and process. We specialise in the collection and storage of waste oil, treating and recycling of the waste oil collected, formulation of refined base oil into recycled industrial products with commercial values and finally, marketing of our end products. Our oil based and solvent based end products derived mainly from our recycling and recovery process are sold under our own “AF1”, “Top Up”, “NEKKO”, “Cap Rumah” and “Flag” brand names. Our Group’s founders, Chan Ban Hin and Soo Kit Lin, together with our Group Managing Director, Chan Say Hwa, have played a pivotal role in steering the growth of our Group, from a simple standalone hardware trader in the 1980s, to become one of Malaysia’s integrated waste oil recyclers today. Our group’s corporate structure is depicted below:
The history of our Group can be traced back to 1985 when our founders, Chan Ban Hin and his spouse, Soo Kit Lin, established HHMT at Taman Bukit Maluri, Kuala Lumpur to operate in the trading of hardware such as construction materials, mechanical tools and paint products. In 1988, HHMT expanded its hardware trading operations to include a hardware retail wing, allowing the business to cater to commercial, industrial and retail customers. Through hardware trading and retailing, our founders gained extensive knowledge in paint and solvent products, and learnt how recycled materials could be used to produce industrial grade lacquer. Recognising the potential and growing demand for alternative and more economical paint and solvent products in the market place, the founders re-engineered HHMT’s business model in 1990, and expanded the business of HHMT by venturing into the processing of paint and solvent products from waste materials with the development of our in-house blending technological applications. To cater for the expansion in HHMT’s business, the company shifted its operations to a 200 sqm factory bUilding based in Sri Damansara, Kuala Lumpur in 1990. In 1994, HHMT was awarded 2 licences by the DOE, Pahang, enabling the collection, storage and treatment of waste hydraulic oil, waste solvents and paint. Following thereto, HHC was incorporated in the same year to assume the entire business operations of HHMT to better reflect our new business focus and direction. In order to cater for the demand of HHC’s growing business, HHC relocated its operations to a bigger operating premise in Bentong, Pahang of 2,073 sqm in 1994.
6. INFORMATION ON OUR GROUP (Cont’d) In 1995, following the transfer of the 2 licences awarded by the DOE, Pahang from HHMT to HHC and the subsequent business re-organisation exercise, HHC assumed the entire business operations of HMMT, thereby becoming an official licensed Scheduled Waste contractor. The late 1990s saw the official entry of our Group Managing Director, Chan Say Hwa, the son of our founders, into the business. Our Group Managing Director took the challenge of starting from rank and file, which allowed him to be well-versed in every aspect of the waste oil recovery and recycling business. This paved the platform for his eventual succession at the helm of the Group’s business in 2008. In furtherance of our objective of being an integrated waste oil recycler and to diversify our products and services offering, our Group’s production capacity underwent several growth phases. We expanded our operating premises in Bentong, Pahang from a land area of 2,073 sqm to 12,414 sqm via 6 separate acquisitions of other neighbouring factory sites adjoining our first production site between 1998 and 2010. In 1999, HHC was further awarded with a third licence by the DOE, Pahang enabling our Group to include in our business the recycling of waste lubricating oil and used oil filters. Our Group also embarked on a product diversification strategy to ensure that we have a wide range of end products to cater to different groups of customers. Chan Say Hwa, our Group Managing Director, saw a demand for recycled end products derived from waste oil, and thus, progressively brought in technologies such as the Ultrafiltration Membrane System in 2006, the Ultimate Vacuum Distiller in 2007, the Wipe Film Evaporator and Centritherm Evaporator in 2011, which can produce different types of end products, and improve product quality (Please refer to Section 6.15 for further details on the technologies used). The utilisation of such technologies in our production process has paved the way for our Group to be an integrated waste oil recycler. Unlike most industry players, which only treat and process waste oil into semi-finished products with a small product line, we have the capabilities to process waste oil for the production of finished products, and our product line extends beyond recycled fuel oil, and includes lubricant products. In 2000, HHC started to produce grease-based products from the recycled waste oil that our Group recycles. The production of grease products was SUbsequently transferred to HHP in 2002. In 2001, HHC obtained its fourth licence from the DOE, Pahang for the collection and recycling of industrial drums and containers. In 2002, our Group, through the establishment of our subsidiary, TMP, commenced its operations to produce recycled lubricant products from the waste oils that our Group recovers. With our Group’s extended product range and to better manage our various products, XFH was founded and commenced its operations, operating from our office based in Bandar Menjalara, Kepong, as our Group’s distribution arm in June 2002. The year 2003 also saw the penetration of our Group into the Northern region of Peninsular Malaysia. Previously focused on serving the Central region of Peninsular Malaysia, our Group through our wholly-owned subsidiary, Transada, which was awarded a licence from the DOE, Perak, extended our outreach with the commencement of operations to collect, treat and recycle waste solvents and waste oils at our second production plant in Gopeng, Perak of 1,351 sqm. This allowed us to tap into the supply of Scheduled Waste and the demand for waste oil products and services in the Northern region of Peninsular Malaysia.
6. INFORMATION ON OUR GROUP (Cont’d) In 2006, HHC acquired the assets and liabilities (including the business operations) of CNT Hardware & Petroleum Trading (TR 0057525-U), a sole proprietorship principally engaged in the trading of fuel oil and petroleum based products, from Chan Say Hwa. This business operations segment was subsequently transferred to CNT upon its incorporation in 2007. In 2007, XFH’s office was shifted from Bandar Menjalara, Kepong to our Group’s current main office premises at Taman Ehsan, Kepong. In 2008, a branding exercise was launched to raise awareness and reinforce our “Hiap Huat” brand name and position as an established and reliable recycler of waste oil, and at the same time, to carry out our corporate social responsibility by educating the public of the importance of ensuring the sustainability of our environment. Our branding exercise started with the creation of a logo, which was trademarked in 2009. In 2010, our Group underwent a restructuring exercise to position its businesses within the Hiap Huat Group to enable a more efficient and streamlined corporate structure, realising operational, procurement and administrative efficiencies. Hiap Huat was established as a management holding company and acquired all operating entities under the Hiap Huat flagship in 2010 (namely HHC, Transada, TMP, XFH, CNT, HHP, HHS and HHC Labuan), thus assuming the role of an umbrella company for our Group. In 2011, pursuant to an internal reorganisation to streamline our business operations, the operations of both CNT and HHP were taken-over by HHC. CNT and HHP are currently dormant. Our Group’s management is currently in the midst of evaluating the future plans for both the subsidiaries in conjunction with the Group’s future plans for the setting up of a supplier call centre and launching of loyalty programmes for our suppliers. Continuing with our Group’s expansion plans and to cater to the increasing demand for recycled oil products, we had in 2009 acquired a piece of industrial land in Pulau Indah, Klang, Selangor for the construction of our third production plant. Following thereto, in 2010, TMP was awarded an approval-in-principle by the DOE, Selangor for the operation of a solvent and oil treatment plant on the aforesaid premises. The production plant, which is expected to be completed and commissioned in the first quarter of 2013, will further expand our Group’s production capabilities. Under the stewardship of our founders and Chan Say Hwa, our Group’s business saw much transformation, and today we are one of the few in this business with the capabilities to produce and market finished recycled end products that can be directly used by end consumers. We have set forth plans to strengthen our position in the marketplace through our upcoming Pulau Indah plant, which will boost our production capacity of recycled base oil by approximately 3.64 times to produce a total of approximately 33.70 million litres of recycled base oil per annum as compared to approximately 9.27 million Iitres presently, to be achieved mainly through the installation and commissioning of new machineries to be used (Please refer to Section 6.12 of this Prospectus for further details on the production facilities and capabilities). We have also further set our sights on expanding our Group’s business operations into East Malaysia. All these strategic plans will continue to strengthen our pOSition as one of the leading players in waste oil recycling and recycled oil production in Malaysia.
6. INFORMATION ON OURGROUP (Cont’d) 6.2 KEY ACHIEVEMENTS AND MILESTONES Our key achievements and milestones since inception are as follows:

1995 1999 2000 2001 2002 2003 2004 2006 2008 2010 HHC became an official licensed Scheduled Waste contractor upon the transfer of the 2 DOE licences awarded by the DOE, Pahang from HHMT to HHC, enabling the collection, storage and treatment of waste hydraulic oil, waste solvents and paint. Awarded a DOE licence by the DOE Pahang for the collection and recycling of waste lubricating oil and used oil filters. Expanded product range to include production of grease-based products. Obtained DOE licence from the DOE, Pahang for the collection and recycling of industrial drums and containers. Expanded product range to include manufacturing of lubricant products. Set up and commenced operations for the Group’s second production plant in Gopeng, Perak upon obtaining a DOE licence from the DOE, Perak for the collection, treating and recycling of waste solvents and waste oil. Awarded BS EN ISO 14001 certification by Moody’s International Certification recognising the Groups’ EMS. Group’s factory in Bentong was certified with OHSAS 18001 by Moody’s International Certification for its health and safety management systems. Launched a branding exercise to reinforce Group’s industry position and brand name with the development and registration of Group’s logo, which was subsequently trademarked in 2009. Awarded BS EN ISO 9001 certification by Moody’s International Certification. Granted an approval-in-principle by the DOE, Selangor to operate a solvent and oil treatment plant in Pulau Indah, Klang, Selangor. 6.3 PRE-IPO RESTRUCTURING We have implemented a pre-IPO restructuring scheme prior to our Listing, of which is set out as follows: . 6.3.1 Bonus Issue We had on 9 September 2011 implemented a bonus issue of 10,000,000 new ordinary shares of RM1.00 each in Hiap Huat to all existing Hiap Huat shareholders via the capitalisation of RM10,000,000 of our retained profits based on our audited financial statements for the financial period ended 31 July 2011 on the basis of 1 new ordinary share of RM1.00 each for every 1.4830133 existing ordinary share of RM100 held on 9 September 2011. Upon completion of the Bonus Issue, the issued and paid-up share capital of Hiap Huat was increased from RM14,830,133 comprising 14,830,133 ordinary shares of RM1.00 each to RM24,830, 133 comprising 24,830,133 ordinary shares of RM1.00 each.
6.3.2 Share Split We had on 12 September 2011 implemented a share split of 24,830,133 ordinary shares to 248,301,330 ordinary shares by sub-dividing the par value of the ordinary share of RM1.00 per share in our Company to RMO.1 0 per share. 6. INFORMATION ON OUR-GROUP (Cont’d) Upon completion of the sub-division of our Shares, our issued and paid-up share capital became RM24,830, 133 comprising 248,301,330 Hiap Huat Shares. 6.4 INFORMATION ON THE LISTING SCHEME In conjunction with and as an integral part of the listing of and quotation for the entire enlarged issued and paid-up share capital of our Company on the ACE Market, we undertook the listing scheme, which involves the following exercises: (i) Public Issue;
(ii) Offer For Sale; and

(iii) Listing. 6.4.1 Public Issue To facilitate the listing of and quotation for our Company’s entire enlarged issued and paid-up share capital on the ACE Market and to comply with the Listing Requirements with regard to the shareholding spread, our Company shall undertake the Public Issue of 85,000,000 Public Issue Shares at the Issue Price in the following manner: (a) 5,000,000 Public Issue Shares representing approximately 1.50% of our enlarged issued and paid-up share capital at the Issue Price payable in full on application shall be made available for application by the public investors through a balloting process.
(b) 80,000,000 Public Issue Shares representing approximately 24.00% of our enlarged issued and paid-up share capital will be made available for application by way of private placement to selected investors.

Upon completion of the Public Issue, our Company’s issued and paid-up share capital will be further increased from RM24,830, 133 to RM33,330,133. 6.4.2 Offer For Sale In conjunction with our Listing, our Company will undertake an offer for sale of up to 50,000,000 Offer Shares to selected investors at the Offer Price. The Offerors are offering up to 50,000,000 Offer Shares for sale, representing approximately 15.00% of our enlarged issued and paid-up share capital. 6.4.3 Listing Our Company will seek the iisting of and quotation for our entire enlarged share capital of RM33,330, 133 comprising 333,301,330 Shares on the ACE Market. 6.5 SHARE CAPITAL As at 31 August 2011, the authorised share capital of our Company was RM25,000,000 comprising 25,000,000 ordinary shares of RM1.00 each. On 9 September 2011, the authorised share capital of our Company was increased to RM50,000,000 comprising 50,000,000 ordinary shares of RM1.00 each. On 12 September 2011, pursuant to the Share Split, our Company’s authorised share capital became RM50,000,000 comprising 500,000,000 ordinary shares of RMO.10 each. 6. INFORMATION ON OUR GROUP (Cont’d) As at the LPD, the existing issued and paid-up share capital of our Company is RM24,830,133 comprising 248,301,330 Shares. The changes in the issued and paid-up share capital of our Company since incorporation are as follows:
09.12.2009  3  1.00  Cash  3  18.08.2010  14,830,130  1.00  Otherwise than cash  14,830,133  09.09.2011  10,000,000  1.00  Bonus Issue  24,830,133  12.09.2011  0.10  Share S lit  24,830,133
As at the LPD, there are no outstanding warrants, options, convertible securities or uncalled capital in Hiap Huat. In addition, there are no discounts, special terms or instalment payment terms applicable to the payment of the consideration for the allotment. 6.6 INFORMATION ON OUR SUBSIDIARIES The details of our wholly-owned subsidiaries as at the LPD are set out below:
6.6.1 HHC HHC was incorporated in Malaysia as a private limited company under the Act on 6 December 1994 under its present name. HHC is principally engaged in the business of manufacturing, recycling and refining all kinds of industrial paints, oils and solvent chemical products and commenced its business on 1 June 1995. The present authorised share capital of HHC is RM10,000,000 comprising 10,000,000 ordinary shares of RM1.00 each. The issued and paid-Up share capital is RM3,649,912 comprising 3,649,912 ordinary shares of RM1.00 each. There has been no change in the issued and paid-up share capital of HHC for the past 3 years preceding the LPD. As at the LPD, there are no outstanding warrants, options, convertible securities or uncalled capital in HHC. In addition, there are no discounts, special terms or instalment payment terms applicable to the payment of the consideration for the allotment. As at the LPD, HHC does not have any subsidiary and associated companies. 6.6.2 Transada Tansada was incorporated in Malaysia as a private limited company under the Act on 16 July 1997 under its present name. Transada is principally engaged in the business of manufacturing, recycling and refining all kinds of industrial paints, oils and solvent chemical products and commenced its business on 16 July 1997. The present authorised share capital of Transada is RM500,OOO comprising 500,000 ordinary shares of RM1.00 each. The issued and paid-up share capital is RM320,000 comprising 320,000 ordinary shares of RM1.00 each. There has been no change in the issued and paid-up share capital of Transada for the past 3 years preceding the LPD. 6. INFORMATION ON OUR GROUP (Cont’d) As at the LPD, there are no outstanding warrants, options, convertible securities or uncalled capital in Transada. In addition, there are no discounts, special terms or instalment payment terms applicable to the payment of the consideration for the allotment. As at the LPD, Transada does not have any subsidiary and associated companies. 6.6.3 TMP TMP was incorporated in Malaysia as a private limited company under the Act on 26 April 2002 under its present name. TMP is principally engaged in the business of manufacturing, recycling and refining all kinds of petroleum based products, industrial paints, oils, solvent chemicals products and other related products and commenced its business on 26 April 2002. The present authorised share capital of TMP is RM1,000,000 comprising 1,000,000 ordinary shares of RM1.00 each. The issued and paid-up share capital is RM1,000,000 comprising 1,000,000 ordinary shares of RM1.00 each. Details of the changes in the issued and fully paid-up share capital of TMP for the past 3 years preceding the LPD are as follows:
As at 01.01.2009 27.02.2009 04.11.2009 06.08.2010  282,006 123,992 500,000  1.00 1.00 100  Bonus issue Cash Cash  94,002 376,008 500,000 1,000,000
As at the LPD, there are no outstanding warrants, options, convertible securities or uncalled capital in TMP. In addition, there are no discounts, special terms or instalment payment terms applicable to the payment of the consideration for the allotment. As at the LPD, TMP does not have any subsidiary and associated companies. 6.6.4 XFH XFH was incorporated in Malaysia as a private limited company under the Act on 22 June 2002 under its present name. XFH is principally engaged as a distributor of paint, hardware and related products and commenced its business on 22 June 2002. The present authorised share capital of XFH is RM500,000 comprising 500,000 ordinary shares of RM1.00 each. The issued and paid-up share capital is RM240,004 comprising 240,004 ordinary shares of RM100 each. There has been no change in the issued and paid-up share capital of XFH for the past 3 years preceding the LPD. As at the LPD, there are no outstanding warrants, options, convertible securities or uncalled capital in XFH. In addition, there are no discounts, special terms or instalment payment terms applicable to the payment of the consideration for the allotment. As at the LPD, XFH does not have any subsidiary and associated companies. 6. INFORMATION ON OUR GROUP (Cont’d) 6.6.5 CNT CNT was incorporated in Malaysia as a private limited company under the Act on 15 February 2007 under its present name. CNT, currently dormant, was previously engaged in the trading of hydraulic oil, transformer oil and petroleum products. The present authorised share capital of CNT is RM100,000 comprising 100,000 ordinary shares of RM1.00 each. The issued and paid-up share capital is RM100,OOO comprising 100,000 ordinary shares of RM1.00 each. There has been no change in the issued and paid-up share capital of CNT for the past 3 years preceding the LPD. As at the LPD, there are no outstanding warrants, options, convertible securities or uncalled capital in CNT. In addition, there are no discounts, special terms or instalment payment terms applicable to the payment of the consideration for the allotment. As at the LPD, CNT does not have any subsidiary and associated companies. 6.6.6 HHP HHP was incorporated in Malaysia as a private iimited company under the Act on 4 May 2000 under its present name. HHP, currently dormant, was previously engaged in the production of grease based products. The present authorised share capital of HHP is RM100,000 comprising 100,000 ordinary shares of RM1.00 each. The issued and paid-up share capital is RM85,100 comprising 85,100 ordinary shares of RM1.00 each. There has been no change in the issued and paid-up share capital of HHP for the past 3 years preceding the LPD. As at the LPD, there are no outstanding warrants, options, convertible securities or uncalled capital in HHP. In addition, there are no discounts, special terms or instalment payment terms applicable to the payment of the consideration for the allotment. As at the LPD, HHP does not have any subsidiary and associated companies. 6.6.7 HHS HHS was incorporated in Malaysia as a private limited company under the Act on 29 April 2008 under its present name. HHS is currently dormant and is intended to be principally engaged as a provider of facilities maintenance services outsourced by industrial customers. The present authorised share capital of HHS is RM100,000 comprising 100,000 ordinary shares of RM1.00 each. The issued and paid-up share capital is RM100,000 comprising 100,000 ordinary shares of RM1.00 each. There has been no change in the issued and paid-up share capital of HHS for the past 3 years preceding the LPD. As at the LPD, there are no outstanding warrants, options, convertible securities or uncalled capital in HHS. In addition, there are no discounts, special terms or instalment payment terms applicable to the payment of the consideration for the allotment. As at the LPD, HHS does not have any subsidiary and associated companies. 6. INFORMATION ON OUR GROUP (Cont’d) 6.6.8 HHC Labuan HHC Labuan was incorporated in Malaysia as a private limited company under the Act on 15 JUly 2009 under its present name. HHC Labuan is currently dormant and is intended to be principally engaged in the business of manufacturing, recycling and refining all kinds of petroleum based products, industrial paints, oils, solvent chemical products and other related products. The present authorised share capital of HHC Labuan is RM100,000 comprising 100,000 ordinary shares of RM1.00 each. The issued and paid-up share capital is RM10,000 comprising 10,000 ordinary shares of RM1.00 each. There has been no change in the issued and paid-up share capital of HHC Labuan since its incorporation up to the LPD. As at the LPD, there are no outstanding warrants, options, convertible securities or uncalled capital in HHC Labuan. In addition, there are no discounts, special terms or instalment payment terms applicable to the payment of the consideration for the allotment. As at the LPD, HHC Labuan does not have any subsidiary and associated companies. 6.7 OUR BUSINESS/PRINCIPAL ACTIVITIES Our Group is a licensed and integrated Scheduled Waste recycler. We are involved in collecting, recycling, re-refining and producing recycled products from the waste oil, waste solvent and used drums, containers and oil filters we are licensed to collect, treat and process. Our Group’s key business activities may be summarised as follows:
6. INFORMATION ONOUR GROUP (Cont’d) Our Group has been in the recycling industry for the last 17 years. As such, we are able to source waste oil and solvent and used drums and containers by tapping on our established network of suppliers, as well as the supplier base of our third party agents. Our procurement team would visit our suppliers periodically to collect the waste oil and solvent and used drums and containers and at the same time, build good rapport with potential suppliers. Waste oil and solvent and used drums and containers collected are subsequently transported to our factory premises for safe handling and proper storage. During the recovery process, waste oil and solvent are treated and re-refined in accordance with our internal policies and processes to achieve the highest possible quality standards. The output, at the treatment and re-refinement stage, are semi-finished products such as recycled base oil. Our Group places much emphasis on capitalising on our capabilities to produce finished products which are ready to be used by end users. Treated and re-refined base oil will undergo a further formulation step before they become finished ready-tD-use products. Our finished products are packed and marketed by Dur internal sales team. Pursuant tD the EQA, 2 Df Dur subsidiaries, namely HHC and Transada have premises that are classified as Prescribed Premises licensed by DOE, Pahang and DOE, Perak as: • an Off Site Scheduled Waste RecDvery Facility, which licenses bDth HHC’s and Transada’s premises tD be used fDr the retrieval Df material Dr product from any Scheduled Waste which is nDt produced Dn thDse premises;
• an Off Site Storage Facility, which licenses bDth HHC’s and Transada’s premises tD be used fDr the collection and transfer/transpDrtatiDn Df any Scheduled Waste which is nDt produced Dn thDse premises; and
• a cDntractDr that undertakes the handling, transpDrt Dr stDrage Df Scheduled Waste Dutside the premises Df a Waste GeneratDr.

As an Off Site Scheduled Waste RecDvery Facility and an Off Site Storage Facility, HHC and Transada are licensed tD handle the fDIlDwing Scheduled Waste:
HHC SW303
SW305/SW306/ SW307/SW312
SW306/SW307 SW308 SW309 SW310 SW314 SW315 Glue waste containing Drganic sDlvents excluding solid polymeric materials Spent lubricating oil, spent hydraulic Dil, spent mineral Dil-water emulsiDn and Dily residue from autDmDtive wDrkshDp, service statiDn Dil Dr grease interceptDr Spent hydraulic Dil and spent mineral Dil-water emulsiDn Oil tanker sludges Oil-water mixture such as ballast water Sludge from mineral oil storage tank Oil Dr sludge from refinery plant Tar residues from refinery plant 200,000L 2,640,000L 160,000L 240,000L 240,000L 400,000L 40,000L 140,000L 6. INFORMATION ON OUR GROUP (Cont’d)
HHC and Transada are required to maintain a list of Waste Generators to whom they provide services. Approval from the Director General is required to be obtained as and when there is any addition to the list of Waste Generators. In this respect, HHC and Transada are required to provide the Director General with information on the vehicles that are used by HHC and Transada and details of the drivers in relation to the handling and transport of Scheduled Waste. The abovementioned licences are renewable annually. In the past, HHC and Transada have been able to renew their licences annually. Further details on the licences are set out in Section 6.23 of this Prospectus. 6.7.1 Our Services (i) Scheduled Waste collection services Our subsidiaries that are involved in the recovery process collect Scheduled Waste from industrial and commercial establishments. We also provide environmental services to customers that include the collection, transportation and recycling or third-party disposal of a variety of hazardous and non-hazardous wastes classified under waste code category SW 3. We utilise our collection network to provide containerised waste services to our customers who require removal of a variety of waste products that require specialised handling, such as inks, paints, used oil filters, waste oil, waste solvent, brake fluid and other similar waste materials. 6_ INFORMATION ON OUR GROUP (Cont’d) These establishments can also be considered as suppliers, as they provide the raw materials necessary to produce our end products. Among establishments targeted by us are factories such as automotive assemblers, chemical manufacturers, steel mills, packaging companies and amongst others, vehicle workshops and traders. We are licensed to recover, transport, and recycle 3 categories of Scheduled Waste, detailed in the following figure:
As at the LPD, we have a fleet of 21 DOE-approved vehicles to pick up and transport Scheduled Waste from various parts of Peninsular Malaysia to our treatment plants in Bentong, Pahang and Gopeng, Perak. As at the LPD, we also employ 9 third party agents whom in total have a fleet of 25 DOE­approved vehicles, all registered with HHC’s and Transada’s DOE transport licence, to collect Scheduled Waste from various parts of Peninsular Malaysia on our behalf. In addition, we have also employed a third party agent with a DOE-approved marine vessel, registered with HHC’s DOE transport licence, to collect and transport Scheduled Waste from ships/tankers anchored offshore within the coastal waters of Malaysia. The Scheduled Waste are collected and transported to our treatment plants in Bentong, Pahang and Gopeng, Perak. Our key third party agents are as follows:
6. INFORMATION ON OUR GROUP (Cont’d) These third party agents, whom are independent companies, are employed by us via service agreements which are entered into by us with the respective agents and are valid for a year, save for the service agreement entered into with the third party agent with a DOE-approved marine vessel which is valid for three years. The third party agents collect and transport Scheduled Waste from the Waste Generators to our treatment plants using only their own transportation which are registered and approved by the DOE. Our arrangements with these third party agents are not in breach andlor in non-compliance with the relevant rules and regulations of the DOE. For the Period under Review, our purchases of Scheduled Waste from our third party agents constitute 20.58%, 22.62%, 33.32%, 37.38% and 24.26% of our direct materials of waste oil, waste solvents and used drums. We are not dependent on these agents as we are able to appoint other external transporters andfor to employ our own transporters in replacement of the agents. However, due to cost and efficiency savings and staffing flexibility, the Group employs the services of these agents. (ii) Scheduled Waste recycling Collected Scheduled Wastes are recycled at our treatment plants in Bentong, Pahang and Gopeng, Perak. All collected Scheduled Waste are inspected and sorted before the start of the recycling process to produce recycled end products. Waste Oils Waste oils are inspected, pre-treated and filtered to become recycled base oil. We then segregate the recycled base oil based on our internal grading system which is divided into 3 categories depending on the quality of the recycled base oil. Grade A refers to recycled base oil of the highest quality, while Grade B refers to recycled base oil of medium quality, and Grade C refers to recycled base oil of the lowest quality. This is important as the grade determines the type of process that the recycled base oil goes through, and subsequently, the recycled end product that can be produced. Our internal specifications of the various grades of recycled base oils produced by our Group, which also meets the allowable level of contaminant and specification of recovered waste oil as stipulated in the Guidelines on Standard and Specification of Recovered Waste Oil in Malaysia as issued by the DOE, are as follows:
Density at 15°C Viscosity at 40°C Water Flash point Pour point Total sediment Color  Litrelkg cSt % vlv T °C (%) mlm  Max Min Max Min Min Max Max  0.900 30 0.1 180 -5 0.1 2.5  0.900 20 1 100 -5 0.5 4.5  0.990 5 3 377 -5 05 >4.5
Solvents Solvents are usually lab-tested first to determine Whether they can be pre-treated directly or otherwise. Solvents that cannot be pre-treated directly will go through a distillation process and lab tested to ensure that it is suitable for blending. Again, the sorting process (via lab test) is important, as it determines the suitable process and end product produced. 6. INFORMATION ON OUR GROUP (Cont’d) Empty drums, other containers and oil filters Empty drums and other types of containers and oil filters are sorted via visual inspection and segregated according to their respective type. Each type of container is then processed to be disposed, reused, or recycled according to the type of material, while oil filters are processed to be recycled or disposed. While we employ various processes in recycling Scheduled Waste, one of the most important process is blending. Blending is a method where the raw material is ‘blended’ together with additives and other materials to produce various end products. It is only through experience that one can match the correct amount of additives and materials to be blended with recycled base oil and solvents, and produce good quality high value end products. Therefore, we employ only experienced staff to handle our recycling activities, as quality fluctuations can be quite large due to the nature of our raw materials. For recycling of drums and other containers, we use a solvent flushing system to clean the drums and containers. Please refer to Section 6.14 of this Prospectus for further details on our production process flow. 6.7.2 Our Products We stand apart from many other similar Scheduled Waste contractors in Malaysia due to our capabilities in producing recycled end products from recovered waste materials. The recycled products that we produce from our Schedule Waste recycling as described in Section 6.7.1 (ii) above are depicted as follows:
Recycled oil products The waste oil we collect and recover is treated and formulated into recycled end products, namely, recycled fuel oil and recycled lubricant products. Our recycled fuel oil is sold in bulk quantities with a minimum order of 1,OOOL Recycled fuel oil is mainly used by various manufacturing companies as substitute energy fuels in industrial burners and factories. 6. INFORMATION ON OUR GROUP (Cont’d) Our recycled lubricant products comprising lUbricating oil and grease products which are used in the automotive and manufacturing industries are packed and marketed under our own brand names as depicted below: .
Types of lubricating oil products
Types of grease products Recycled paint and solvent products Used solvents. on the other hand. is recycled and further processed to become useful products again. such as recycled paint and other solvent products and is largely used for industrial applications. Our recycled paint and other solvent products are packed and marketed under our brand names as depicted below:
Types of paint products 6. INFORMATION ON OUR GROUP (Cont’d)
Types of paint products
Recycle TolueneRecycielPA Types of recycled solvent products Recycled drums and containers We also collect and recover used drums, pails and carboys, which are given a new lease of life after undergoing a flushing and cleansing process using solvents (which are then recycled again). Recycled industrial drums and containers are sold in pieces, with a minimum order of 20 pieces. 6.8 PRINCIPAL MARKETS The principal market for our products and services are the industrial, automotive, and retail establishments in Malaysia. Our top three products are our recycled fuel oil, recycled lubricant products and recycled paint and solvent products. For the Period under Review, substantially all of our revenue is derived from Malaysia. While Malaysia is and will continue to be the key focus region of our Group’s business, it is part of our future plan to grow our overseas business. We see good potential in the developing countries for our recycled lubricant business. Lubricants are commonly used in automobiles and machineries. Thus, countries such as Indonesia, Vietnam, the Philippines and Myanmar with a growing demand for lubricant products for vehicles and machineries, would present a growing and ready market for our products due to the competitive pricing of recycled lubricants as well as substitutability of recycled lubricants over original lubricants. 6.9 TYPES, SOURCES AND AVAILABILITY OF RESOURCES Our costs of raw materials constitute 87.81%, 80.03%, 74.81% and 70.13% of our cost of sales for the FYE 2008, FYE 2009, FYE 2010 and FYE 2011 respectively, and 62.63% of our cost of sales for the FPE 2012.

6. INFORMATION ON OUR GROUP (Cont’d) The principal raw materials for our products are waste oils and solvents, used empty drums and containers, pigments, resin, fatly acids, lubricant additives and hydrocarbon polymers. We source our raw materials of waste oils and solvents and used empty drums and containers from Malaysia. As our Group has been in the recycling industry for the last 17 years, we are able to source our principal raw materials of waste oils and solvents and used empty drums and containers by tapping on our established network of suppliers, as well as the supplier base of our third party agents. These are industrial and commercial establishments, which include automotive assembly plants and automotive workshops, as well as those from the oil and gas, semiconductor and printing industries, among others. Our procurement team visits our suppliers periodically to collect the Scheduled Waste and at the same time, build good relations with potential suppliers. Based on the IMR Report, the total oil and hydrocarbon waste generated by Malaysia in 2011 was approximately 133,261 metric tonnes. For the FYE 2011, we have collected 14,103 metric tonnes of waste oil, thus, capturing 10.58% of the total waste oil market in Malaysia. We believe that with our existing established extensive and diverse supplier base comprising 2,353 suppliers as at the lPD together with our future plan and strategies of expanding and reinforcing our supply chain as well as expansion to increase outreach to customers and suppliers as detailed in Sections 6.27.1 and 6.275 of this Prospectus respectively, our Group will be able to source principal raw materials for our products as and when the needs arises. The other raw materials, namely pigments, resin, fatly acids, lubricant additives and hydrocarbon polymers, which account for 6% to 17% of the raw materials used to produce our end products, are sourced locally. 6.10 MAJOR CUSTOMERS As at the lPD, our Group has a wide base of customers with approximately 903 customers, all of which are based in Malaysia. Our customers are mainly manufacturing companies from a wide range of industries, among which are construction and engineering, steel mills, automotive manufacturing, production of construction materials and trading of motor oil products. Our Group’s major customers who accounted for 10% or more of our Group’s total revenue for the Period under Review are as follows:
6. INFORMATION ON OUR.GROUP (Cont’d) Note: We supply mainly recycled fuel oil to the major customers. The substantial decrease in sales to major customers in FYE 2009 as compared to FYE 2008 is in line with the overaJl decrease in revenue of our recycled fue’ oil by RM16.07 million or 56.01% from RM28.69 million in FYE 2008 to RM12.62 million in FYE 2009, resulting from the global financial cn”sis which started from the last quarter of 2008 and continued in the first half of 2009. thereby substantially affecting the loeaf demand and also our selling prices of recycled oil products during the first half of FYE 2009. The decrease in sales to the major customers in FYE 2010 was mainly the result of a lower volume of recycled fuel oil sold to them due to the change in our focus to concentrate on the sales of our recycled lubricant products which generates a higher gross profit margin as compared to recycled fuel oil. In FYE 2011, the sales to the major customers increased due to the increase in orders from the major customers resulting from our competitive pn·cing and product quality. We do not consider ourselves as dependent on any single customer during the Period under Review as our Group has a diversified customer base from various business segments. All the major customers, as listed above, are not related to our Group. 6.11 MAJOR SUPPLIERS Our purchases of waste oils and solvents from our suppliers form the bulk of our cost of sales and accounted for approximately 79.36% of our Group’s raw material purchases in FYE 2011. The remaining 20.64% of our raw material costs were mainly attributable to purchases from our suppliers of other raw materials such as used empty drums, pigments, resin, fatty acids, lubricant additives and hydrocarbon polymers. Our Group’s sole major supplier who accounted for 10% or more of our Group’s total purchases during the Period under Review is as follows:
BASF Petronas Chemicals Sdn Bhd Manufacturing and marketing of acrylic, oxo and butanediol products.  2  1,810 10.13  1,485 16.27
As our Group has a diverse range of suppliers, majority of whom are from Malaysia, we do not consider ourselves as dependent on any major supplier who accounted for more than 10% of our Group’s purchases during the Period under Review. As at the LPD, we have a well-diversified supplier base comprising 2,353 suppliers. The major supplier, as listed above, is not related to our Group. Our purchases from each supplier are determined after taking into account various criteria such as competitive pricing, quality of products, availability of supply and delivery lead time. 6.12 PRODUCTION FACILITIES AND CAPACITY Our waste management process is being coordinated and managed from our Group’s headquarters located in Kepong, Selangor, while our recovery and recycle manufacturing operations are carried out at our 2 treatment plants which are located at Bentong, Pahang and Gopeng, Perak respectively. Our production plant based at Gopeng, Perak recovers and recycles waste oil and waste solvents collected from the northern region of Peninsula Malaysia, and only produce intermediate products being recycled base oil and recycled solvents used in the production of our recycled end products. 6. INFORMATION ON OUR GROUP (Cont’d) The recycled intermediate products produced in Gopeng, Perak are subsequently sent to our main treatment plant in Bentong, Pahang for final processing to produce our Group’s recycled end products. In addition to the processing of our recycled end products from the aforementioned waste oil and waste solvents, our production plant based at Bentong, Pahang also has the capabilities to recover and recycle waste oil, waste solvents and used drums/containers. As at the LPD, our 2 recycling and production plants mentioned above have an aggregate gross area of approximately 17,638 sqm. Our main recycling and production plant based in Bentong, Pahang is equipped with the following recycled end products production lines: (i)  Paint production line;  (ii)  Lubricant production line;  (iii)  Grease production line;  (iv)  Solvent distillation line;  (v)  Drum and container recycling line; and  (vi)  Fuel products recycling line.
We set out in the table below the estimated maximum production capacity and the approximate utilisation rate for each type of our production lines during the Period under Review:
Paint production line (L)  2,995  2,995  2,995  2,995  1,498  48.07  57.49  49.42  46.97  44.10  Lubricant production line (L)  3,744  3,744  3,744  3,744  1,872  40.55  49.57  56.20  52.29  41.58  Grease production line (Kg)  1,872  1,872  1,872  1,872  936  24.36  22.26  23.00  15.55  12.61  Solvent distillation line (L)  1,997  1,997  1,997  1,997  998  27.11  33.94  41.03  39.38  39.63  Drum and container recycling line (Pieces)  270  270  270  270  135  55.55  56.19  59.84  45.71  24.98  Fuel products production line (L)  24,085  24,085  24,085  24,085  12,042  97.21  53.32  48.90  56.53  59.51
Notes: (1) The annual production capacity of our production facilities is measured in terms of the number of unit products that can be processed by the respective facility in a year based on 312 operational days.
(2) Based on the production capacity for 6 months.
(3) Save for the decrease in the utilisation rate of the fuel products and grease production line, the increase in the utilisation rates Df all other recycled products were mainly due to the increase in Scheduled Waste collected dunng this period thus providing more raw maten·afs for recycling. The decrease in the utilisation rate of the fuel products production line was mainly due to the significant lower orders from our customers in light of the global financial cnsis which slowed down all industrial activities.
(4) The solvent distillation fine experienced a continued increase in the utilisation rate from 33.94% in FYE 2009 to 41.03% in FYE 2010 as a result of more solvents collected during this period. As for the lubncant production line, it continued to n·se in utilisation rate from 49.57% in FYE 2009 to 56.20% in 2010 as a result of our focus to sell more recycled lubn”cant products which generates the highest gross profit margin.
(5) The increase in the utilisation rate of our fuel products production line is mainly due to the increase in Scheduled Waste collected dun”ng this period thus providing more raw materials for recycling coupled with fhe increase in the sales of recycled fuel oil. The decrease in the utilisation rates for the grease production line was due to a decrease in the orders from our customers while the decrease in the utilisation rates of the drum and container recycling line was due to supply constraints.

6. INFORMATIONONOUR.GROUP (Cont’d) (6) Yhe decrease in the utilisation rate of our lubricant production line in FPE 2012 was mainly due to the decrease in the volume sold for our recycled lubn”canf products. The continued decrease in the utilisation rate for the grease production line was due to the continued decrease in the volume sold while the continued decrease in the utilisation rate of the drum and container recycling line was due to the continuous supply constraints.
(7) Please refer to Section 6.26.3 of this Prospectus for information on material plant and machinery used in our production facilities.

The production process of the Group for our recycled oil products and the amount of recycled oil products produced has been dependent on the quality of waste oil being collected for production of the required recycled oil products. During the majority of the Period under Review, the recycling of waste oil to produce recycled base oil was conducted utilising the Group’s ultrafiltration membrane system (for the production of recycled lubricant products and recycled grease products) and centrifuge decanter (for the production of recycled fuel oil). As such, the utilisation rate of the lubricant production line is highly dependent on the quality of waste oil collected. In the event the amount of high quality waste oil collected is low in any given period, the utilisation rate of the lubricant production line will also be low. In view of the limited supply of high quality waste oil and the limitations of the ultrafiltration membrane system to produce Grade A base oil for the production of lubricant oil prodUcts where our Group intends to focus, we invested in a new technology, namely the wipe film short path evaporator (“WFE”) towards the end of year 2010 in our Bentong plant to overcome these limitations. The WFE technology enables better production capabilities and efficiencies wherein it eliminates the difficulties of procuring high quality waste oil while reducing the timeframe for the production of base oil from a variety of waste oil quality. In 2011, the WFE technology was introduced into the production process in stages as it was tested and fine-tuned. The WFE has been fully operational since 2012 and thus it is expected to improve the utilisation rates of the production lines of the recycled oil based products. In view of the current low production utilisation rates, the new waste oil recycling technology, namely WFE, and in line with the efforts of the Group to grow its business, especially the Group’s oil recycling business, the Group is currently in the midst of constructing a third treatment plant at Pulau Indah, Selangor (“Pulau Indah Plant”) (Please refer Section 6.26.1 of this Prospectus for further details on the Pulau Indah property). This treatment plant, which is being constructed at a cost of approximately RM25.47 million is entirely funded via internally generated funds and bank borrowings, and is scheduled for completion and commission by the first quarter of 2013. When the Pulau Indah Plant is commissioned, the annual production capacity of recycled base oil would be increased by approximately 33.70 million litres (via the installation of 4 units of WFE) or by approximately 3.64 times of its current capacity of approximately 9.27 million litres for the production of recycled base oil (produced via a unit each of Ultrafiltration Membrane System (annual production capacity of 1.69 million litres), WFE (annual production capacity of 4.21 million litres) and Centritherm Short Path Evaporator (annual production capacity of 3.37 million Htres)) which is the key raw material for the lubricant production line and fuel products production iine. As disclosed in Section 6.27.5 of this Prospectus, the Pulau Indah Plant is part of our Group’s future plan and strategy to increase our outreach to customers and suppliers to tap on the waste oil generated in the marine sector and neighbouring industries. We anticipate that with the abundant supply of waste oil from the Pulau Indah region and thereby the consequential increase in recycled base oil, we will be able to boost our existing lubricant and fuel products production which is currently underutilised. With the additional recycled base oil supply, we may also consider to venture into the sale of recycled base oil to supplement our revenue stream. In addition, the strategic location of the Pulau Indah Plant would allow us to enjoy savings in view of reduced logistics cost as well as payments to third party agents for the collection of Scheduled Waste. 6. INFORMATION ON OUR GROUP (Cont’d) 6.13 CAPITAL EXPENDITURES AND DIVESTITURES Save as disclosed below, our Group has not incurred any other material capital expenditures and divestitures (including interests in other companies) during the Period under Review and up to the LPD:
Note: * Negligible There are no material expenditures or divestitures currently in progress, within or outside Malaysia. 6.14 PROCESS FLOW The wastes that we collect from our sources are transported by DOE-licensed trucks to our DOE­licensed premises. Understanding the rationale behind the requirements set forth by DOE, we have established standards and practices, which are in compliance with ISO 14001, to ensure that our premises always comply with these requirements. These include our inventory records, documentation control and labelling. We ensure that our staff members have gone through sufficient training on how to properly collect and handle the wastes and that their practices comply with guidelines and requirements by the DOE. Before the actual processing of the collected wastes, laboratory tests are conducted on the collected wastes to analyse whether the waste should be pre-treated or otherwise. Based on the results of the test analysis, we will determine which process should be utilised to recover the valuable substances out of the wastes. It is our philosophy to recycle and recover as much as possibie. As SUCh, we endeavour to operate a recycling system in which all wastes that are recyclable are recycled. This means that the wastes from one unit can be sent to another unit for another round of recycling, until the final residues can no longer be recycled. The residues will be sent to Kualiti Alam to be disposed of properly. 6. INFORMATION ON OURGROUP (Cont’d) Our operations mainly comprise 3 primary components, which we set out below the flow chart depicting the major steps for each of the 3 primary component processes as follows: (i) Recycling of waste oil
Collected waste oils are sampled for testing in our laboratory facility to determine its sUitability for re-refining as well as to determine the most appropriate treatment procedure(s) most suitable to treat the sampled waste oils. The collection of waste oil is conducted by our trained staff_ The collected waste oil will subsequently be clearly labelled and stored at our licensed premises, following the guidelines and requirements that are released by the DOE. Thereafter, we conduct pre-treatment on the collected waste oil after our analysis confirms its SUitability for recycling. The objective of pre­treatment is to remove any excess water from the waste oil. The waste oil will undergo demulsification/dehydration wherein water and particles are separated from the waste oil. Following the pre-treatment, the waste oil will be fed into different systems for further treatment. Our capacity comprises three systems to recycle waste oil in such a way that we are able to recover the highest possible economic value from the waste oil. Each system will return a different grade of recycled oil from which we can produce different output products. Waste oil that undergoes our re-refining process will be transformed into Grade A recycled base oil. We will subsequently blend Grade A recycled base oil with viscosity improvers, formulated additives and other chemicals to produce lubricant products. Our blending process will help to impart certain desired characteristics to the final lubricant products and improve its properties. These products are of the highest value among our product range. 6. INFORMATION ON OUR GROUP (Cont’cI) We also have in place a membrane filtration system that allows us to recover Grade B recycled base oil from the pre-treated waste oil. Grade B recycled base oil is the base stock for our production of grease products by means of blending with additional substances such as fatty acid or hydrate lime, amongst others. This system is usually utilised for our recycling of waste hydraulic oil. Last but not least, our centrifuge separation system is utilised as another system for our waste oil recycling. This system will separate concentrate materials suspended in waste oil by way of centrifugal force. The process allows us to recover Grade C recycled base oil from the pre-treated waste oil which will be converted into recycled fuel oil. The final products of our recycling will be packaged accordingly. Upon successful quality control inspection, they are ready for marketing and sale. Our processes ensure that we recover as much recyclable content as possible from the waste, and only render the content that has little or no economic value as residues. We always try our best to make sure that these residues have been properly treated and are not toxic/hazardous. They will subsequently be sent to Kualiti Alam for final disposal. (ii) Recycling of waste solvent and paints
Most solvents are derived from alcohol or petroleum based feedstock. Solvents are widely used in a number of industries. We have in place two methods to recycle waste solvent and paints. 6. INFORMATION ON OUR GROUP (Cont’d) For the first method, we put the waste solvents through a distillation process, upon which recycled solvent is produced. We utilise our distiller unit to separate water from the waste solvents. Our distiller unit has been customised in such a way that it is both energy and cost saving, and ensures higher efficiency and improved safety for our distillation process. We might conduct further laboratory tests On the distilled solvents to determine their quality. Our recycled solvents can be blended with IPA, Toluene, AcetOne or other chemicals to produce recycled thinner. Our recycled thinner can be used for the manufacturing of our paint products, or for sale to our customers. The residue from our distillation will be transported to Kualiti Alam for final disposal. For the second method, the waste paints will go through a process that comprises neutralisation, filtration and demulsification. This method usually involves adding chemicals to the waste paints to remove water and other particles from the waste paints. The filtration process will remove any solid particles from the waste paints. Thereafter, the materials that we recover will be blended with formulations. The products will be inspected to ensure that they meet our quality control standards. Finally, our paint products are ready for packaging and sale. (iii) Recycling of used drums, pails and carboys
!,nspoction & removal oflabols
6. . ·.INFORMATION ON OUR GROUP (Cont’d) Like other recycling processes of other wastes, we ensure that our collection of used drums, metal pails and carboys complies with the guidelines and requirements set out by the DOE. Upon the transportation of these materials to our licensed premises, an inspection is carried out to determine their quality. The labels on these materials are removed. At the next stage, the drums/metal pails/carboys will be cleaned or flushed using solvents, depending on the results of our earlier inspection. Solvent ftushing is carried out to remove contaminants from these containers. The used solvents after this process will be recycled at our solvent recycling unit. We will send any residues that no longer have recoverable economic value to Kualiti A/am for final disposal. After the containers are properly cleaned, they will be dried before they enter the next stage of our recycling process. Those that meet our quality standard will either be re­used at our existing plants or be further prepared for marketing and sale purposes. Meanwhile, unwanted metal drums/pails and carboys will be scrapped using our crusher machine and sold to metal scrap dealers and plastic recyclers respectively. 6.15 TECHNOLOGY We strongly advocate the adoption of technologies in our operations to meet our production needs and specifications and thus monitor the market for and invest in, current and new technological advancements which are deemed suitable for our processes. We strongly believe that through the capitalisation of appropriate technologies we can achieve the following: • Produce higher quality recycled products and meet the ever-changing demands and expectations of our customers;
• Improve efficiencies in our production process by shortening cycle time and meeting customers’ requirements timely; and
• Reduce production costs, thus, providing us opportunities to pass on savings to our customers, and simultaneously, improve our margins.

Through the introduction and adoption of available technologies, our Group is able to achieve better optimisation of our recycling and production capabilities as follows:
2002 2005 2009 2010 Improved basic solvent distiller to medium vacuum distiller, leading to an increase in production output by 50%. Improved quality of recovered waste oil through the usage of membrane filtration, resulting in an increase in product value by 80%. Improved our medium vacuum distiller to an ultimate vacuum distiller. The improved version is able to handle a very wide range of waste solvent. Invested in evaporation technology to distil waste oil to become recycled base oil. Improved base oil recycling system by making it compact in size. Also adapted infrared in the heating process, instead of traditional heating by oil boiler. The new design creates convenience, higher mobility and heightens safety in system­handling. It further improved efficiency in production output by 40%. 6. INFORMATION ON OUR GROUP (Cont’d) Currently, the key technologies we apply in our production process are as follows: (i) Ultimate Vacuum Distiller
The Ultimate Vacuum Distiller is a versatile extractor that we apply in the distillation of solvents or sludge. It assists in handling solvents or sludge with higher boiling points. This distiller is both cost and energy saving. It is also safe for our working environment as it can operate at lower temperatures.
(ii) Ultrafiltration Membrane System

Ultrafiltration membrane systems are widely used by communities and industries worldwide for reuse, drinking water, and pre-treatment to reverse osmosis. We believe we are one of the few companies in Malaysia’s oil recycling industry to apply this technology in refining the waste oil that we collect. The membrane employed is of robust fibre, thus, it is able to handle large volumes of oil each time, and ensures long term integrity. It is designed for minimal operator intervention as only One operator is required to operate the system per shift. This reduces our manpower needs and operational costs. (iii) WFE The WFE is able to distill oil at low temperatures (the boiling point for oil is 400°C). Oil distilled through this method condenses in a very short period of time. This helps to reduce the risk of possible damage to the properties of the oil and improves the overall production output. (iv) Centritherm Short Path Evaporator The Centritherm Short Path Evaporator is specifically for short path distillation, otherwise known as molecular distillationl evaporation. Short path distillation covers a range of applications which are, otherwise, not possible in traditional evaporation units, as it requires high temperature and high vacuum operation. This method heats via infrared, and evaporates more solvents per unit area. This gives rise to a thinner film compared to wipe film, thus, improving production output and quality. The Centritherm Short Path Evaporator provides convenience as it is mobile and suitable for on-site setup. 6.16 OUR COMPETITIVE ADVANTAGES We believe our key competitive advantages are: (i) Our established track record and reputation in the market place We have been in the recycling industry for more than 17 years. Throughout the years, we have grown into a licensed and integrated waste oil recycler, with the capabilities to recycle and produce a wide range of finished products from waste oil. Unlike most industry players who are only able to produce semi-finished products such as recycled base oil, we have invested in technologies, which have given us the platform to become an integrated waste oil recycler. 6. INFORMATION ON OUR GROUP (Cont’d) (ii) Our strong branding which makes us a recognisable brand name We are one of the few waste oil recyclers in Malaysia that has invested in corporate branding. We reinforced our long-standing market presence by having our “Hiap Huat” logo trademarked, our packaging redesigned and our corporate web content improved to align our corporate beliefs. We are presently in the midst of preparing our applications to trademark our product brand names. We believe that our branding must go hand in hand with our corporate social responsibility message, which is to ensure the sustainability of our environment. This message is strongly embedded in our logo. We believe that through strong branding, along with our endeavour in improving product quality, our “Hiap Huat” brand name will be synonymous with ensuring the long-term sustenance of our environment and ultimately, become the choice waste oil recoverer and recycler in Malaysia. (iii) Our investments in technologies One of the key emphases of our Group’s business is honing our knOWledge and investing in technology (which consists of machineries) to produce recycled end products that are well demanded in the marketplace. This positioning allows us to stand out from many of our competitors as the majority of them currently focus, and have technological capabilities, mainly in production up to the stage of semi-finished raw materials. Purchasers of these semi-finished raw materials would have to take additional processing steps to transform them into finished products before they can be used. For the past 5 years up to the LPD, we have invested a total of approximately RM10 million in technologies and machinery (which are sourced from Australia, China, Germany, Malaysia, Sweden and Taiwan) as a testament to our commitments in technologies. The information on type of technologies and machineries invested by us at our production facilities are as follows:
6. INFORMATION ON OUR GROUP (Cont’d) We constantly keep ourselves abreast of new and applicable technologies that are available in the marketplace. We believe that these are essential as they sharpen our capabilities, allowing us to recover more from the waste we collect, and at the same time, produce recycled end products that command a higher value. With ever-increasing knowledge and technologies, coupled with the experience we have accumulated in producing end products, we have become a more flexible and responsive company, with heightened abilities to receive, and ultimately process, new types of waste. (iv) Better prof1t margins as our business model provides us an edge in securing key raw materials
Our Group’s business model capitalises On the technological platform to realise our capabilities to recycle products from the Scheduled Waste we collect. On top of semi­finished products, the application of technologies acquired have allowed us to take our business a step further by giving us the capabilities to refine and formulate our semi­finished products into finished products, such as grease and lubricants, which can be used by end users. As finished products have higher commercial values than semi­finished products, our Group, thus, enjoy better profits as compared to those who are solely engaged in producing products up to the semi-finished stage. As a result of higher margins, we have the advantage of stronger purchasing power in securing waste oil supplies. In addition, we are able to appeal to our existing and new waste oil suppliers by offering them more attractive rates for their supplies thereby putting us in a better position to secure our key raw materials.
(v) Reliable environmental solutions provider
We have a proven track record of 17 years in proViding responsible environmental solutions that meet the needs of our customers and the communities we serve under our Schedule Waste collection services. We are the among the 11 waste oil recovery companies in Malaysia that maintains an EMS that conforms to the ISO 14001 standards, thereby enhancing our compliance performance and our brand with our target customers. With our proven expertise and environmentally-responsible protocols, we are able to reduce our customers’ liability and assure regulatory compliance when providing these environmental services to our customers. In addition, our closed-loop processes ensure that waste oil and solvent are collected, transported, processed and then re-introduced into the marketplace. These methods of handling both hazardous and non-hazardous waste throughout a full product recovery cycle minimise the introduction of such waste into the ground and water. As environmental awareness increases, we believe customers will look to providers like us with a demonstrated track record of providing responsible environmental solutions.
(vi) Integrated operations allows for significant operating leverage

In the waste oil recycling business, our integrated operations allow us to capture more of the value of waste oil throughout its product recovery cycle, from collection to the eventual reuse. We believe we generate significant cost advantages and revenue opportunities by eliminating the incremental costs we would have to pay to third-party waste oil collectors if we did not have our own waste oil collection network. In addition, we generate greater revenues from the re-refining and recycling of waste oil we collect and process into high quality recycled base oil and blended recycled lubricating oils and their ultimate sale than what we would obtain from selling our partially processed waste oil in the fuel markets. 6. INFORMATION ON OUR GROUP (Cont’d) (vii) Recurring revenue stream from a large, diverse customer base Our customers require regular service calls for collection, replenishment, maintenance and technical assistance. This recurring service demand generates a stable source of revenue under our Scheduled Waste collection services. These recurring visits with our customers allow us to build lasting relationships, create a dependable recurring revenue stream and the opportunity to cross-sell our products and service offerings. In addition, we have a large and diverse customer base. As at the LPD, we have a wide base of customer with approximately 903 customers in a wide range of industries. In addition, in the FPE 2012, our top 10 customers accounted for less than 60% of our total revenue, with no customer accounting for more than 27% of our revenue. (viii) Strong environmental, health and safety performance in highly regulated industries We believe many customers choose our services because of our technical expertise and our enVironmentally-responsible processes. Our EMS, which is compliant with ISO 14001 standards, is a testament to our commitment to environmental stewardship. In addition, we are also accredited with OHSAS 18001 for our health and safety management systems. We are among the 6 waste oil recyclers in Malaysia with full-fledged accreditations for EMS and health and safety management systems. 6.17 QUALITY CONTROL We place great emphasis on quality control of all our products to strive to meet the highest standard for the recycled end products that we produce. Each of our production facilities has its own quality control unit and the quality management system employed by each of them is certified to the appropriate ISO standards, i.e. ISO 9001. We were accredited with BS EN ISO 9001 since August 2010. Our quality management systems in place at each of our production facilities undergo both annual internal and external audits to ensure compliance to established procedures and measure effectiveness of control systems. External audits of our quality management systems are conducted and certified by Moody International Certification. Our quality control processes for our products and facilities are conducted at each of our plants through “batch” testing of products at various stages of production to effectively detect and remedy any deviation from our established product quality standards. We have 5 personnel dedicated to quality control and management systems led by our certified chemical engineer. All our products undergo final quality inspection immediately after being produced, packaged and labelled to ensure that all products and packaging satisfy our internal quality criteria. Our end products are stored in our warehouse before delivery to customers. Our quality control staffs continue to monitor and check that our products are properly handled and stored to prevent damage. Finally, checks are also made to ensure that our products are not damaged before they are delivered to our customers. To maintain our machinery and equipment in good order, regular maintenance and repairs are carried out by our in-house maintenance team. Machine downtime for such major maintenance activities ranges from 1 to 2 days, and is conducted on a quarterly basis. Since maintenance is typically carried out during the low demand season or at night, it has minimal impact on our operations. Although we adopt stringent maintenance policies, we have not faced any stoppages or disruptions in our production processes as a result of machinery breakdown or malfunction. There have been no material rejections of our products by our customers, nor have there been any material write-offs due to spoilage for the last 4 FYE 2008, FYE 2009 FYE 2010 and FYE 2011 and the FPE 2012. 6. INFORMATION ON OUR GROUP (Cont’d) 6.18 HEALTH, SAFETY AND ENVIRONMENTAL MATTERS We regard compliance with applicable environmental regulations and the health and safety of our workforce and communities we serve as critical components of our overall operations. We are accredited with BS EN ISO 14001 by Moody’s International Certification for the development of an EMS that governs all our activities and helps to achieve high levels of compliance. We are also accredited with OHSAS 18001 by Moody’s International Certification for our health and safety management systems. We are among the 11 waste oil recovery companies in Malaysia that maintains an EMS that conforms to ISO 14001 standards, thereby enhancing our compliance to quality performance and our brand with our target customers. Following guidance from the DOE, we developed a set of processes and practices that enable us to systematically assess and manage the compliance of our operations. In our EMS, we have mapped every job position that impacts compliance to each regulation that governs that job, allowing us to assess risk and clearly identify roles and responsibilities at every level of our company, as well as apply specific state and local regulatory requirements for each job. The backbone of our EMS is the comprehensive set of documentation and procedures, our Standard Operating Procedures, which specifically identify the manner in which the job must be completed in order to comply with specific local regulatory regulations. In addition, a majority of our internal operating requirements are more stringent than those imposed by the relevant authorities. Our commitment to compliance with health, safety and environmental regulations also enhances our operating performance. Our compliance staffs are centrally managed but support all aspects of our operations. They are responsible for supporting the facilities, permitting and regulatory compliance, health and safety compliance and initiatives, regulatory training, transportation compliance, remediation projects and all related record keeping. To ensure the effectiveness of our EMS and related regulatory reporting, our compliance organisation monitors daily operational activities and automatically generates and sends weekly reports to senior management, informing of the status of our environmental compliance and health and safety programs. Additionally, environmental compliance is a core part of our overall company audit program. Our dedicated auditors evaluate not only the performance of the facilities but also of the environmental professionals assigned to support our facilities, allowing us yet another chance to identify any weaknesses or opportunities for improvement in our ongoing compliance programs. The internal environmental audit team also evaluates the risk associated with third-party disposal vendors and helps us ensure we minimise any potential future liabilities. Our facilities are frequently inspected by local regulatory agencies. Although our facility based in Kepong has been cited on occasion for regulatory violation (Please refer to Section 5.1.3 of the Prospectus for further details), we have adopted remedial measures to prevent recurrent violations and believe that each facility operates in substantial compliance with all applicable regulations. Between agency oversight and our own environmental, health and safety team and internal audit function, we believe our facilities are under constant oversight and review which further helps reinforce our culture of compliance. 6. INFORMATION ON OUR GROUP (Cont’d) 6.19 SALES AND MARKETING As at the LPD, our sales department comprises of 9 full time employees, with an average of 6 years of experience in the oil recycling industry. They are trained and equipped with the technical knowledge and competency to effectively market our products and services to our customers. 6.19.1 Marketing activities The marketing strategies we adopt allow us to position our Group as a long-term player in the oil recycling industry. We firmly believe that one of the keys to our success is our branding strategy. We believe that by positioning our company as a provider of “cradle to cradle” recycling programmes and services, we will be able to contribute to the sustainable development of Malaysia and encourage other people to do so. We pride ourselves on our ability to recover as much economic value from a wide range of waste types as possible. Our approach to provide minimal discharge services puts us one step ahead from the earlier, more common practice of “cradle to grave” in waste recycling. We have initiated the rebranding of our products and services, with an emphasis on environmental awareness and conservation. Our website has been redesigned to be aligned with our branding. Our logo and slogan, “Let’s recycle today for a better tomorrow”, connotes our commitment to practice cleaner and greener activities and adhere to the principle of “4Rs” ­Reduce, Reuse, Recycle, and Recover. Our sales teams also conduct direct marketing to potential and existing customers in order to grow our existing customer base in Malaysia. Based on the information gathered, our management and production department will analyse the demand and supply for our products, and adjust our production and sales strategies according to the changing market needs. Our sales staffs regularly visit our existing customers to obtain feedback regarding our products and to introduce our new product offerings. We believe such visits enable our customers to better understand our products and to enhance our customers’ confidence in our products and services. In the long run, we are determined to successfully continue fulfilling our role as a waste recycler. In addition, we will extend our knowledge to the people, and endeavour to educate them better on the importance and benefits of recycling. Our intention to utilise modern media tools and channels to reach out to various target audiences are detailed in our future development plans. Presently, we have not participated in any trade fair/exhibition or listed our company in trade directories. Nevertheless, as we expand our business, we will engage ourselves in more advertising and promotion activities to reach out to a larger pool of customers. To boost our international sales component, we will capitalise on the support of a number of authorities and organisations, including the Malaysia External Trade Development Corporation, to establish an international network. 6. INFORMATION ON OURGROUP (Cont’d) 6.19.2 Sales and distribution We have established an extensive sales and distribution network, compnslng internal and external channels, to ensure a wider outreach for the products we produce and market. Our internal sales team We have an internal sales team that is responsible for marketing our products within the entire Peninsular Malaysia. Our sales team is actively involved in 3 main functions, as follows: Expanding the sales of our recycled products; Promoting our Scheduled Waste collection services to customers; and Proactively supporting our recycling operations by means of establishing two-way relationships with our clients.
Our knowledgeable sales executives are able to attend to queries by customers, and extend their product understanding to potential new customers. They work in close collaboration with other departments of the Group to provide the most satisfying support possible to our customers. We recognise the importance of building strong and long-term rapports with our customers. This approach allows us to not only stabilise and boost the sales of our products and services, but also to ensure the sustainability and growth of our supply of raw materials. On our part, we deliver a wide range of products and services to our customers and satisfactorily meet all their needs. In return, an increasing number of our customers will be willing to become our new supply sources of raw materials. Our sales team members are based at our headquarters, which allows the team to be continually informed and updated on the actual operations and inventories of our company, and be able to attend to customers within a wider geographical coverage. This helps us improve our efficiency and minimise any possible miscommunication. Our external sales and distribution channel In conjunction with our internal sales efforts, we also work hand in hand with local third party agents to secure a wider geographical coverage domestically. Our agents, each having their strengths in particular areas, are located nationwide. Together, they constitute an extensive network and provide us with assistance in securing raw material supplies and transportation! collection activities. In doing this, we are able to focus our resources on our recycling activities, and cater to a larger pool of customers. To reach out to customers outside of the country, we have listed our contact details on online portals such as Bizearch (bizearch.com), Global Traders List (global.mingluji.com) and Alibaba.com. We try our best to respond to all queries and entertain orders from overseas customers. Despite the relatively smaller size of our international sales, we put in every effort to deliver the best products and services, and uphold our position as an established waste oil recycler 6.20 SEASONALITY Our Group is generally not affected materially by any seasonal factors. However, we note that supply of waste oil and demand for automotive lubricants can decrease during the festive seasons (Hari Raya and Chinese New Year), and SUbsequently, increase markedly after the festivities. This is caused by a rise in the demand for automobile servicing due to heavier-than­usual usage of automobiles by Malaysians over the festive seasons. 6. INFORMATION ON.OURGROUP (Cont’d) 6.21 INTELLECTUAL PROPERTY RIGHTS Save for the trade mark as disclosed below, we have no other registered patent and trade mark:
fuels (including motor spirit) and i1luminants; candles, wicks for lighting included in Class 4; all included in Class 4 We have registered the above trade mark with the Intellectual Property Corporation of Malaysia. The term of a registered trademark is 10 years from the date of the approval of the registration and is renewable for another 10 years. As at the LPD, we have also submitted the following trademark, which has been gazetted on 21 June 2012, for registration with the Intellectual Property Corporation of Malaysia: HHC  4  Industrial oils and greases, lubricants, dust absorbing, wetting and· binding compositions, fuels (including motor spirit) and i1luminants, candles, wicks for lighting included in Class 4  20 April 2011 1 2011007155
6.22 DEPENDENCY ON PATENTS, LICENCES, INDUSTRIAL, COMMERCIAL OR FINANCIAL CONTRACTS OR NEW MANUFACTURING PROCESSES (i) Dependency on the patent and intellectual property rights
Save for our proprietary patent and intellectual property rights disclosed in Section 6.21 of this Prospectus, our Group is not dependent on any patents and intellectual rights for our business operations.
(ii) Dependency on major licences

Save for the major licences disclosed in Section 6.23 of this Prospectus, our Group is not dependent on any other major licences. I Company No.: 881993-M I 6. INFORMATION ON OUR GROUP (Cont’d) (iii) Dependency On industrial, commercial and financial contracts There are nO material agreements or cOntracts (including informal arrangements or understanding or understandings), as at the LPD, which have been entered into by our Group and which our Group is highly dependent upon. 6.23 APPROVAL, MAJOR LICENCES AND PERMITS Save as disclosed below, our Group has not obtained any other approvals and does not hold any regulatory licences or permits.
6. INFORMATION ON OUR GROUP (Cont’d)  4. I HHC  Business/Advertisement licence  Bentong  Expiring on 31  I Licence must be renewed not later than 30 January  Municipal  December 2012  each year.  Lot A2, Jalan MIEL, Kawasan Perindustrian  Council  Bentong, 28700 Bentong, Pahang- Processing of grease  Licence no.: 01982  5. I HHC  Business/Advertisement licence  Bentong  Expiring on 31  Licence must be renewed not iater than 30 January  Municipal  December 2012  each year.  Lot A1, Jalan MIEL, Kawasan Perindustrian  Council  Bentong, 28700 Bentong, Pahang -Waste  solvent I oil and used filter factory  Licence no.: 04185  6.  Business/Advertisement licence  Bentong  Expiring on 31  Licence must be renewed not later than 30 January  Municipal  December 2012  each year.  Lot A5, Jalan MIEL, Kawasan Perindustrian  I Council  Bentong, 28700 Bentong, Pahang ­ Lubricant oil processing factory  Licence no.: 04183  7.  BusinessAdvertisement licence  Bentong  Expiring on 31  Licence must be renewed not later than 30 January  Municipal  December 2012  each year.  Lot B1, Jalan MIEL, Kawasan Perindustrian  Council  Bentong, 28700 Bentong, Pahang -Paint  factory  Licence no.: 04184  s-1 HHC  I Temporary Building Permit on Lot A6, Jalan  Bentong  For the year  MIEL, Kawasan Industri Bentong, 28700  Municipal  2012 only  Bentong, Pahang  Council  Bill No.: 26522
6. INFORMATION ON OUR GROUP (Cont’ct)
9. 10.  HHC HHC  Temporary Building Permit for the construction of a temporary open shed on the existing semi-detached factory on Lot PT 15677-PT 15681, PT 18216 and PT 18210 Jalan MIEL, Kawasan Perindustrian Bentong, Pahang Darul Makmur Bill No.: 26532 Off Site Scheduled Waste Recovery Facility License for approved Scheduled Waste codes (SW 303, SW 322, SW 323, SW 324, SW 429, SW 430, SW 308, SW 309, SW 310, SW 314, SW 315, SW 327 and SW 410) at LotA1, Jalan MiEL, Kawasan Perindustrian Bentong, 28700 Bentong, Pahang. Licence no.: 004390  Bentong Municipal Council 1 January 2012 to 31 December 2012 DOE, Pahang I 1 May 2012 to 30 April 2013  The types of waste other than specified in the approval of the Environmental Impact Assessment (EIA) report reference no. AS C(S)35/210/101/003 Vol 5 (55) dated 16.03.2010 or other types of waste that do not meet the waste acceptance criteria are forbidden to be processed for recovery purposes without prior written permission from the Director General. The location and layout of the premises must be in accordance with the Layout Plan numbered BA2.01. The production process must be in accordance with the recovery method as stated in the EiA report which was approved via a letter by the department dated 16.03.2010. The design and specification of equipment used must be in accordance to the approved Written Permission issued by the DOE, Pahang on 23.08.2010.  Complied
I Company No.: 881 993-M I 6.  INFORMATION ON OUR GROUP (Cont’ct)  11.  HHC Off Site Scheduled Waste Recovery Facility License for approved Scheduled Waste codes (SW 409) at Lot A3, Jalan MIEL, Kawasan Perinduslrian Bentong. 28700 Bentong, Pahang. Licence no.: 000281  DOE, Pahang  I  1 May 2012 to 30 April 2013  The types of waste other than specified in the approval of the Environmentai Impact Assessment (EIA) report reference no. AS(B) 501013/905/019 dated 20.06.2001 and the AS:CT 35/210/101/002 Vol 9 (31) dated 18.12.2007 or other types of waste that do not meet the waste acceptance criteria are forbidden to be processed for recovery purposes without prior written permission from the Director General.  Complied  The location and layout of the premises must be in accordance with the drawing plan numbered SD/KU9707/01 entitled Location and Site Plan.  The process of recovery of the containers used is that of washing by using ‘Toiuene’ and ‘Kerosene’ only.
I THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK I Company No.: 881993-M I 6. INFORMATION ON OUR GROUP (Cont’d)
12.  I HHC  I Off Site Scheduled Waste Recovery Facility License for approved Scheduled Waste codes (SW 322, SW 323, SW 305, SW 306, SW 307, SW 312, SW 410, SW 418) at Lot A4, Jalan MIEL, Kawasan Perindustrian Bentong, 28700 Bentong, Pahang.  DOE, Pahang  1 May2012 to 30 April 2013  Licence no.: 000278
The types of waste other than specified in the approved I Complied Environmental Impact Assessment (EIA) report reference no. AS (B) 50/013/902/053 (30) dated 20.04.1998 and the AS.:CT 35/210/101/002 Vol 9 (31) dated 18.12.2007 or other types of waste that do not meet the waste acceptance criteria are forbidden to be processed for recovery purposes without prior written I permission from the Director General. The location and layout of the premises must be in accordance with the drawing plan numbered SD/KlI9707/01 entitled Location and Site Plan.
The production process of solvent I thinner from waste solvent must go through the process of recovery by distillation method.
The production process of reconstituted fuel oil from waste oil must go through the process of recovery by centrifugation method.
The design and specification of equipment used must be in accordance to the approved Written Permission NO.2.4a issued by the Head Office of Department of the Environment on 28.08.1998.
13 I HHC I Off Site Storage Facility License for the purposes of collection, transfer and transport of Scheduled Waste for approved Scheduled Waste codes (SW 322, SW 417, SW 306, SW 307 and SW 418) at Lot A-6, Jalan MIEL, Bentong Industrial Estate, 28700 Bentong, Pahang for Licence no.: 000279 I DOE, Pahang 1 1 May 2012 to I Other types of waste other than those stated in this Complied 30 April 2013 license are not allowed to be transported. Each containerlbarrel used must be clearly label in accordance with the Third Schedule (Regulation 10) of the Environmental Quality (Scheduled Wastes) Regulations 2005. I Company No.: 881993-M I 6.  INFORMATION ON OUR GROUP (Cont’a’)  14.  HHC Off Site Storage Facility License for the purposes of collection, transfer and transport of Scheduled Waste for approved Scheduled Waste codes (SW 303, SW 305, SW 306, SW 307, SW 308, SW 309, SW 310, SW 312, SW 314, SW 315, SW 322, SW 323, SW 324, SW 327, SW 409, SW 410, SW 417, SW 418, SW 429, SW 430) at Lots A1, A3, A4 and A6, Jalan MIEL, Kawasan Perindustrian Bentong, 28700 Bentong, Pahang.  DOE, Pahang  I 1 May 2012 to 30 April 2013  Other types of waste other than those stated in this license are not allowed to be transported. The appropriate labels in accordance with the Third Schedule (Regulation 10), the Environmental Quality (Scheduled Wastes) Regulations 2005 shall be labelled on all containers containing Scheduled Wastes.  Complied  Licence no.: 000877  15.  I HHC Off Site Storage Facility License: Collection, transfer and transport of Scheduled Waste -TAIKO 1 ship for approved Scheduled Waste codes (SW 303, SW 305, SW 306, SW 307, SW 308, SW 309, SW 310, SW 312, SW 314, SW 315, SW 322, SW 323, SW 327, SW 409, SW 410, SW 417, SW 418, SW 429 and SW 430) at Lots A1, A3, A4 and A6, Ja Ian MIEL, Kawasan Perindustrian Bentong, 28700 Bentong, Pahang.  DOE, Pahang  I 1 May 2012 to 30 April 2013  Other types of waste other than those stated in this license are not allowed to be transported. The appropriate labels in accordance with the Third Schedule (Regulation 10), the Environmental Quality (Scheduled Wastes) Regulations 2005 shall be labelled on all containers containing Scheduled Wastes.  I Complied  Licence no.: 004412
I Company No.: 881993-M I 6. INFORMATION ON OUR GROUP (Cont’d)
16. I HHC I Additional Transportation for the Licensee 1 unit pontoon to transport Scheduled Waste from Langkawi Island to Kuala Kedah, Kedah Boat number: KKD00130T Boat name: PERTIWI VII Official pontoon number: 327447 Approval letter’s reference no.: AS (B)K 501013/911/312 ~Certificate of Unfired Pressure Vessel Qualification Registration No.: PH PMT 11 Manufacturer Name: Tong Cheng Iron Works Co. Ltd Manufacturer No.: 1803995 Type of Vessel: Air Receiver Address of Installation: HHC, Kawasan MIEL, Bentong Industrial Estate, 28700 Bentong, Pahang. Licence No.: PMT -PH 39350 I DOE, Kedah Department of Occupational Safety and Health, Pahang Up to 30 April 2013 I Expiring on 5 September 2013 This approval only applies for the transportation of I Complied Scheduled Waste under the codes SW305, SW306, SW307, SW322, SW323 and SW410 only and the Company is not allowed to transport any other waste besides those stated herein. The transportation of the abovementioned Scheduled Waste from Langkawi to the Kuala Kedah Jetty, Kedah and SUbsequently to the licensed premise that is Hiap Huat Checimals Sdn Bhd, Lot A-4, Jalan MIEL,
I Kawasan Perindustrian Bentong, 28700 Bentong, Pahang shall only use those vehicles registered with the Department of Environment Pahang (Appendix B Compliance Schedule No. 000887). This certificate is valid until the staled expired dale, unless it has been suspended, revoked or otherwise terminated earlier under the provisions of The Factories and Machineries Act 1967 and provided that the provisions of The Factories and Machineries Act 1967 and regulations applicable to the unfired pressure
vessels are not violated. I Company No.: 881993-M I 6. INFORMATION ON OUR GROUP (Cont’d) 6. INFORMATION ON OUR GROUP (Cont’d)
18.  HHC  Certificate of Unfired Pressure Vessel Qualification Registration No.: PH PMT 491 Manufacturer Name: Tong Cheng iron Works Co. Ltd Manufacturer No.: 9801162 Type of Vessel: Bekas Udara Address of installation: HHC, Kawasan MIEL, Bentong Industrial Estate. 28700 Bentong, Pahang.  Department of Occupational Safety and Health, Pahang  Expiring on 5 September 2013  This certificate is valid until the stated expired date, unless it has been suspended, revoked or otherwise terminated earlier under the provisions of The Factories and Machineries Act 1967 and provided that the provisions of The Factories and Machineries Act 1967 and regulations applicable to the unfired pressure vessels are not violated.  Licence No.: PMT -PH 39351  19.  HHC  Certificate of Unfired Pressure Vessel Qualification Registration No.: PH PMT 1166 Manufacturer Name: Tong Cheng Iron Works Co. Ltd Manufacturer No.: 1800456 Type of Vessel: Bekas Udara Address of installation: HHC, Kawasan MIEL. Bentong Industrial Estate, 28700 Bentong, Pahang.  Department of Occupational Safety and Health, Pahang  Expiring on 5 September 2013  This certificate is valid until the stated expired date, unless it has been suspended, revoked or otherwise terminated earlier under the provisions of The Factories and Machineries Act 1967 and provided that the provisions of The Factories and Machineries Act 1967 and regulations applicable to the unfired pressure vessels are not violated.  Licence No.: PMT -PH 39352

 

20. 21.  HHC HHC  Certificate of Unfired Pressure Vessel Qualification Registration No.: PH PMT 3908 Manufacturer Name: 514 -Puma Ind. CD. Ltd., Taiwan Manufacturer No.: TX6070080N Type of Vessel: Air compressor Address of Installation: Lot A4, Jalan MIEL, Kawasan MIEL Bentong, 28700 Pahang. Licence No.: PMT -PH 40252 Certificate of Unfired Pressure Vessel Qualification Registration No.: PH PMT 3906 Manufacturer Name: 408 -Tong Cheng Iron Works CD. Ltd., Taiwan Manufacturer No.: 09180592 Type of Vessel: Air receiver tank Address of Installation: Lot A4, Jalan MIEL, Kawasan MIEL Bentong, 28700 Pahang. Licence No.: PMT -PH 40251  Department of Occupational Safety and Health, Pahang Department of Occupational Safety and Health, Pahang  Expiring on 11 December 2013 Expiring on 11 December 2013  This certificate Is valid until the stated expired date, unless it has been suspended, revoked Dr otherwise terminated earlier under the provisions of The Factories and Machineries Act 1967 and provided that the provisions of The Factories and Machineries Act 1967 and regulations applicable to the unfired pressure vessels are not violated. This certificate is valid until the stated expired date, unless it has been suspended, revoked Dr otherwise terminated earlier under the provisions of The Factories and Machineries Act 1967 and provided that the provisions olThe Factories and Machineries Act 1967 and regulations applicable to the unfired pressure vessels are not violated.
I Company No.: 881993-M I 6. INFORMATION ON OUR GROUP (Cont’d)
I Company No.: 881993-M I 6. INFORMATION ON OUR GROUP (Cont’d)
26.  I HHC  I Licence to carry out port ancillary services  Port Klang  1 January 2012  I This licence must be presented whenever required and  within the limits of the port, Port Klang.  Authority  to 31 December  shall not be transferred or leased.  2012  Activities: Acceptance of Scheduled Wastes  This iicence is only valid in the premises of Port Klang  from ships.  (North Port, South Port and West Port).  Licence No.: LPK:JPH/100-16/54(2)  This licence shall not be defined as:  (i) Guarantee for work, and  (Ii) Compliance with the other applicable laws, including  any act, by-laws made under it.  27.  I HHC  I Permit for the recycling of oil based waste  Ministry of  From 20 January  The composition of the Board of Directors shall  and spent solvent to produce reconstituted  Internatlonai  2000  generally reflect the equity structure of the company and  fuel oil and distillation solvent at Lot A4,  Trade &  the Ministry of International Trade and Industry shall be  Jalan MIEL, Kawasan Perindustrian  Industry  informed of the appointment and of any changes in the  Bentong, 28700 Bentong Pahang Darul  Board of Directors.  Makmur  The company shall take and train Malaysians in order to  Serial No.: 000314  I reflect the multi-ethnic composition of the state  Permit No : 000056  I  I  population for all levels of employment,  The maximum capacity of recyciing allowed for waste  solvent is 500 barrels per month and for waste oil is  2,200 barrels per month. Any increase in the capacity of  recycling shall first obtain the approval from the  Secretary General of the Ministry of International Trade  and Industry in advance.  28.  I  HHC  Certificate of Registration  Boustead  24 August 2011  This certificate must be renewed no later than 30 days  Naval  to 23 August  prior to expiration.  Certificate No.: R: 11239  Shipyard Sdn  2013  Bhd
I Company No.: 881993-M I 6. INFORMATION ON OUR GROUP (Cont’d)
29. I HHC  I Certificate of Registration as a Supplier &  Service Contractor  TNB registration No. : 3003093  3o:l HHC  ICompany Registration Declaration  Certificate  Registered in the foilowing field codes ­ 020500,100101,100102,110100,110200,  140100, 180200,220401,220402,220403,  220406,220801,220803,221301  Licence no.: K2085690504904529  ~I HHC  t  Permit to Purchase, Store and Use of  Sodium Hydroxide  Licence no.: 030700  32. I  HHC  I Permit for marketing and wholesale  distribution of Recycled Fuel Oil -In the  local area of Peninsular Malaysia.  PDA serial No. A 005814  PDA Permit No. 15918
Tenaga Nasional
Berhad Ministry of Finance I Department of Health, Pahang Ministry of Domestic Trade, Co-Operatives and Consumerism Expiring on 29 June 2014 30 June 2011 to 29 June 2014 Expiring on 31 December 2012 24 September 2010 to 23 September 2013 The validity date of the registration is subject to the validity period of the registration certificates issued by the Ministry of Finance, Public Contractor Services Centre, Electrical Contractor Services Centre and any other related professionai certificates Any changes to information previously provided by the company should be updated online on www.eperolehan.gov.mywithin 21 days from the date the change occurred. The Company must ensure that the fields that have been registered in this certificate does not overlap with fields that have been approved on any of the foilowing I companies: (a)  have an owner or board of directors I directors,  management and employees of the same, or  (b)  operate in the same premises.
Failure to apply for renewal of registration after one year from the date of expiry of registration may result in registration with the Ministry of Finance Malaysia being canceled and removed automaticaily from the eProcurement system. The company must make a new application. This permit is issued subject to the provision of the Poison Ordinance 1952 and the Poisons (Sodium Hydroxide) Regulations 1962. ICompany No.: 881993-M I 6. INFORMATION ON OUR GROUP (Cont’d)
33.  I HHC  Scheduled Article Permit For the purchase of Scheduled Articles: 50 liters of petrol 50 liters of diesel Licence serial No. C 004746  I Enforcement Division, Ministry of Domestic Trade, Co-Operatives and Consumerism  20 July 2012 to 19 January 2013  ‘  The Permit Holder shall only store the Scheduled Articles at Lot A6, Jalan MIEL, 28700 Bentong, Pahang. This Permi! is not transferable. This Permit is valid for the duration of the issued date and the renewals should be submitted to the Controller at least one month prior to the expiration date.  34.  I HHC  Licence for the following: 1. Production of Paint/Cellulose/ Chemical materials -Paint Products Wholesalers 2. Storing of Paint/Cellulose/Chemicai materials -Storing of Paint Products 3. Illuminated Advertisement for Hiat Huat Chemicals 4. Illuminated Advertisement at Hiap Huat Chemicals’ place of business.  Selayang Municipal Council  Expiring on 31 December 2012  This licence must be displayed within the licensed premises and shall be renewed upon expiry  I  Complied  35.  I HHC  Serial No. 201200007276 I Permit to Buy and Remove Used Materials From the Perai Industrial Free Zone Licence no.: 01026  Seberang Perai Municipal Council  13 March 2012 to 12 March 2013
36  I HHC  I Licence to buy rubber for the manufacture of rubber products Licence no.: C01-17765-001-1  Malaysian Rubber Board  29 December 2011 to 28 December 2012  Required to dispose/destroy vulvanized rubber residues in accordance to the authorizing Malaysian Rubber Board’s instructions  IComplied  ~cence to purchase, remove and store palm fatty acid at Lot A2, Jalan MIEL, Kawasan MIEL, Bentong Industrial Estate, Bentong, Pahang  Malaysian Palm Oil Board  1June 2012 to 31 May 2013  Licence no.: 549737012000
I Company No.: 881993-M I 6.  INFORMATION ON OUR GROUP (Cont’d)  38.  HHC Certificata of Registration as Vendor Declaration Eligibility to participate in tha tender / quotation or tandar in Falda Group of Companies  Felda Holdings Bhd  1 October 2011 to 30 September 2013  This registration will be suspended / blacklisted / revoked in the event Shareholdars / Partners / Diractors are convicted in any criminal/illegal activities and found guilty by the courts in Malaysia or overseas of any crima / offence.  Ragistration no.: NB-011011 00222-01  39.  HHC Permission to transport: 1. Lubricating oil (40,000 L) between Kota Kinabalu and Port Klang 2. LUbricating oil (40,000 L) batween Sandakan and Port Klang 3. Lubricating oil (40,000 L) between Labuan and Port Klang 4. Lubricating oil (60,000 L) batween Tawau and Port Klang 5. Othar diasel fual (400,000 L) batween Sibu and Port Klang 6. Lubricating oil (400,000 L) betwean Sibu and Port Klang 7. Lubricating oil (60,000 L) batwaan Kuching and Port Klang 8. LUbricating oil (40,000 L) between Bintulu and Port Klang g. Lubricating oil (60,000 L) between Miri and Port Klang  Royal Customs and Excise Malaysia, Intarnal Taxes Division (Industry, Petroleum & Gas Saction)  20 Septembar 2012t019 December 2012 for No. (1) -(4) dan No. (6) -(g) except for No. (5) whara tha validity period is from 29 Saptambar 2012 to 28 December 2012  Reference no.: Pek Am/bi1.133 Appendix D
6. INFORMATION ON OUR GROUP (Cont’d)
I Company No.: 881993-M I 6. INFORMATION ON OUR GROUP (Cont’d) 6. INFORMATION ON OUR GROUP (Cont’d)

45.  I Transada  I Additional Transportation for the Licensee 1 unit pontoon to transport Scheduled Waste from Langkawi Island to Kuala Kedah, Kedah  DOE, Kedah  Expiring 30 April 2013  This approval only applies for the transportation of Scheduled Waste under the codes SW305, SW306, SW307 and SW322 only and the Company is not allowed to transport any other waste besides those stated herein,  I Complied  Boat number: KKD00130T Boat name: PERTIWI VII Official pontoon number: 327447 Approval letter reference no.: AS (B)K 501013/905/290 Vol 03(11)  The transportation of the abovementioned Scheduled Wastes from Langkawi to the Kuala Kedah Jetty, Kedah and subsequently to licensed premise that is Transada Chemicals Sdn Bhd at Gopeng shali only use those vehicles registered with the Department of Environment Perak (Appendix B Compliance Schedule No. 004167).  46  I Transada  Approval for additional transport vehicles bearing the registration number SU 8134, SA 2613X and SS 7596B for the transportation licence No. 004167 for Transada Chemicals Sdn Bhd  DOE, Perak  Complied  47.  I Transada  Approval letter reference no.: (B) A35/400/104/005 I Licence to manufacture alkaline/acid/soivents/baits etc. Advertising licence  Kampar District Council  From January to December 2012  Licence no.: L-0008476-6
6.24 INTERRUPTIONS IN OPERATIONS DURING THE PAST 12 MONTHS Our Group has not experienced any disruptions in business which has significantly affected our operations during the 12 months period prior to the date of this Prospectus. I Company No.: 881993-M I 6.  INFORMATION ON OUR GROUP (Cont’cf)  6.25  EXCEPTIONAL FACTORS AFFECTING THE BUSINESS Save for the risk factors highlighted in Section 5 of this Prospe ctus, we do not fores ee any excep tional factors which may affect our business.  6.26 6.26.1  PROPERTY, PLANT AND EQUIPMENT Properties owned by our Group  Details of the land and buildings owned by our Group as at the LPD are as follows:  1.  HHC Lot No. A-1, Jalan MIEL, Kawasan Perindustrian MIEL, 28700 Bentong, Pahang Title identification: PN 11605 Lot 18211 (formerly held under HS(D) 12163, PT No. 15677), Mukim and District of Bentong, State of Pahang. Leasehold for 66 years, expiring on 22.03.2053  Industrial land with a 111, storey semi-detached factory building used as factory  Certificate No. 38/93 dated 27.09.1993  Land area: 2,088 Gross built-up area: 926.7  I The land shall not be transferred, leased or charged without the I consent of the VAB Menteri Besar Pahang Charged to Alliance Islamic Bank Berhad  806
6.  INFORMATION ON OUR GROUP (Cont’d)  2.  I HHC Lot No. A-2, Jalan MIEL, Kawasan Perindustrian MIEL, 28700 Bentong, Pahang Titie Identification: PN11606 Lot 18212 (formerly held under HS(D) 12164, PT No. 15678), Mukim and District of Bentong, State of Pahang  I Industrial land with a 1Y, storeyIsemi-detached factory building used as factoryI and warehouse  Certificate No. 38193 dated 27.09.1993  Land area: 1,864 Gross bullt­up area: 926.7  The land shall not be transferred, leased or charged without the consent of the YAB Menteri Besar Pahang  Charged to United Overseas Bank (Malaysia) Bhd  649  Leasehold for 66 years, expiring on 22.03.2053  3.  I HHC Lot No. A-3, Jalan MIEL, Kawasan Perindustrian MIEL, 28700 Bentong. Pahang Title identification: PN 11607 Lot 18213 (formerly held under HS(D) 12165, PT No. 15679), Mukim and District of Bentong, State of Pahang  I Industrial land with a 1Y, storey I semi-detached factory building used as I administrative office and factory  Certificate No. 38193 dated 27.09.1993  I  Land area: 1,716 Gross built-up area: 926.7  The land shall not be transferred or charged without the consent of the YAB Menteri Besar Pahang  Charged to United Overseas Bank (Malaysia) Bhd  I  643  Leasehold for 66 years, expiring on 22.03.2053
I Company No.: 881993-M I 6. INFORMATION ON OUR GROUP (Cont’d)
4. HHC I Industrial land with a1Y, storey Lot No. A-4, Jalan MIEL, Kawasan Perindustrian I semi-detached MIEL, 28700 Bentong, Pahang factory building used as factory Title identification: I PN 11609 Lot 18214 (formerly held under HS(D) 12166, PT No. 15680), Mukim and District of Bentong, State of Pahang Leasehold for 66 years, expiring on 22.03.2053 I
5. HHC I Industrial land with a1Y, storey Lot No. A-5, Jalan MIEL, Kawasan Perindustrian , semi-detached MIEL, 28700 Bentong, Pahang factory building used as staff Title identification I canteen, factory PN 11610 Lot 18215 (formerly held under HS(D) and warehouse 12167, PT No. 15681), Mukim and District of Bentong, State of Pahang Leasehold for 66 years, expiring on 22.03.2053 The land shall not beCertificate No. Land area: Charged to United transferred or charged 38/93 dated 1,553 Overseas Bank 27.09.1993 without the consent of (Malaysia) Bhd. the YAB Menteri Gross built-Besar Pahang up area: 926.7 I 631 ~
Land area: The land shall not beCertificate No. Charged to 1,538 transferred or charged Malaysian38/93 dated without the consent of Industrial27.09.1993 Gross built-the YAB Menteri Development Besar Pahang Finance Berhad up area: 926.7 6. INFORMATION ON OUR GROUP (Cont’d) 6. INFORMATION ON OUR GROUP (Cont’d)
6.  I HHC Lot No. A-6, Jalan MIEL, Kawasan Perindustrian MIEL, 28700 Bentong, Pahang Title identification: PN 11611 Lot 18216 (formerly held under Pajakan Negeri 2486, Lot 15403), Mukim Bentong, Daerah Bentong, Negeri Pahang  I Industrial iand with a1 Y, storey semi-detached factory building used as production office, factory and warehouse  Certificate No. 38/93 dated 27.09.1993  Land area: 2,073 Gross built-up area: 926.7  The land shall not be transferred or charged without the consent of the YAB Menteri Besar Pahang  I  – I  811  Leasehold for 66 years, expiring on 22.03.2053  7.  HHC Lot B-1, Jalan MIEL, Kawasan Perindustrian MIEL, 28700 Bentong, Pahang Title identification: PN 11598 Lot No. 18210, Mukim Bentong, Daerah Bentong, Negeri Pahang  Industrial land with a 1Y, storey semi-detached factory building used as factory and warehouse  Certificate No. 38/93 dated 27.09.1993  Land area: 1,582 Gross built-up area: 587  The land shall not be transferred or charged without the consent of the YAB Menteri Besar Pahang  Charged to Alliance Bank Malaysia Berhad  619  Leasehold for 66 years, expiring on 22.03.2053

I Company No.: 881993-M I 6. INFORMATION ON OUR GROUP (Cont’d)
I Company No.: 881993-M I 6. INFORMATION ON OUR GROUP (Cont’d) Lot No. B3, Jalan MIEL, Kawasan Perindustr!an MIEL, 28700 Bentong, Pahang Title identification: PN 11602 Lot 18208 Mukim and District of Bentong, State of Pahang.  Industrial land with a 1Y, storey semi-detached factory building currently under renovation to be used as warehouse  Certificate of Fitness No. 38/93 dated 27.09.1993  Gross built­up area: 587  The land shall not be transferred, leased or charged without the consent of the YAB Menteri Besar Pahang  Leasehold for 66 years, expiring on 22.03.2053  14.  I HHC Lot No. B4, Jalan MIEL, Kawasan Perindustrian MIEL, 28700 Bentong, Pahang Title identincation: i PN 11603 Lot 18207 Mukim and District of Bentong, State of Pahang.  Industrial land with a 1Y, storey semi-detached factory bUilding currently under renovation to be used as warehouse  Certificate of Fitness No. 38/93 dated 27,09,1993  Land area: 1,390 Gross built­up area: 587  The land shall not be transferred, leased or charged without the consent of the YAB Menteri Besar Pahang  Charged to Alliance Islamic Bank Berhad  Leasehold for 66 years, expiring on 22.03.2053
I Company No.: 881993-M I 6. INFORMATION ON OUR GROUP (Cont’d)
Notes: (1) The purchase of the property was only completed in July 2012.
(2) As at the LPD, the oons/ruction of our office building and production facilfty has been completed (The building plan approval for the construction of the production facility was obtained on 11 January 2011). The Company is currently in the midst of obtaining the necessary approvals from the loca/ authorities for the said

production plant and expects to obtain the Certificate of Completion and Compliance by Dec 2012. The said production plant is antidpated to be commissioned by the first quarter of 2013. None of the properties disclosed above are in breach of any land use conditions and/or is in non-compliance with current statutory requirements, land rules or building regulations. No valuations have been conducted on any of the properties disclosed above. 6. INFORMATION ON OUR GROUP (Cont’d) 6.26.2 Properties rented by our Group Details of the land and buildings rented by our Group as at the LPD are as follows:
I Company No.: 881993-M I 6. INFORMATION ON OUR GROUP (Cont’d)
Ng Wing Nyet (as landlord)/HHC (as tenant) 01-13. Taman Benus Jaya, 28700 Bentong, Pahang Veerapath; AIL Jeyasingam (as landlord)/HHC (as tenant) 02-24, Taman Benus Jaya, 28700 Bentong, Pahang  2 bedroom flaUapartment used as worker’s hostel 2 bedroom flat/apartment used as worker’s hostel  517 I w1  1 year expiring on 12 November 2012(3) 1 year expiring on 12 November 2012141  2,160 2,160  Chin Ah Faa (as landlord)/HHC (as tenant) 03-8, Taman Benus Jaya, 28700 Bentong, Pahang  2 bedroom flaUapartment used as worker’s hostel  517 I 1 year expiring on 7 March 2013  2,160  Tiang Soon Ee (as landlord)/XFH (as tenant) OS 5-3-P, Block 5, Oesa Satu Apartment, Oesa Aman Puri, Off Lorang 01/5, 52100 Kepong, Selangor  3 bedroom apartment used as worker’s hostel  655  1 year expiring on 6 October 2013  4,800
Note: (1)  The tenancy was sUbsequently renewed 1 year expiring on 31 October 2013 at a rental per annum of RM6, 000.  (2)  The tenancy was sUbsequently not renewed or extended upon its expiry.  (3)  The tenancy was sUbsequently terminated on 24 September 2012.  (4)  The Company intends to renew the tenancy for another year and is currently in the midst of preparing the tenancy agreement,
To best of our Directors’ knowledge, none of the rented properties disclosed above are in breach of any land use conditions and/or is in material non­compliance with relevant land rules and building regulations. 6. INFORMATION ON OUR GROUP (Cont’d) 6.26.3 Material plant and machinery As at the LPD, our material plant and machinery are as follows:

The total audited net book value for all our material plant and machinery as at 30 June 2012 is approximately RM8.31 million. For information on production capacity, please refer to Section 6.12 of this Prospectus. 6.27 FUTURE PLANS AND STRATEGIES OF OUR GROUP Our objective is to maximise our shareholder value by consolidating our position as a market leader in the oil recycling industry in terms of integration of operations, profitability and return on capital. In the shorter term, we intend to focus on expanding and reinforcing our supply chain. In the medium to longer term, we will look to expand our product portfolio and production capacity. 6.27.1 Expanding and reinforcing our supply chain Our Group currently depends on the continued support of our long-standing customers as well as third-party contractors for our current supply of waste oil and other key raw materials. 6. INFORMATION ON OUR GROUP (Cont’d) We intend to expand and reinforce our supplies of waste oil through the following three modes: (i) Setting up a supplier call centre
Through a supplier call centre, we are able to keep our existing and potential suppliers updated of our competitive rates On a more regular basis. A survey was embarked and completed in the first of quarter 2011 to gather feedback, requirements and expectations, and the results thereof will provide the framework for our supplier management system. We intend to schedule the launch of our supplier call centre by the first quarter of 2013.
(ii) Launching loyalty programmes for our suppliers

We also hope to increase loyalty amongst our suppliers by rolling out our loyalty programmes to reward our long-standing suppliers. Our survey was completed in the third quarter of 2011 and we expect to roll out our supplier loyalty programme by the third quarter of 2013. (iii) Expanding our pool of alternative suppliers such as the marine sector We intend to forge more tie-ups to reach out to alternative suppliers operating in other industries, in particular, the marine industry which generates a lot of waste oil. By 2013, we .expect to have more collaboration with strategic partners in this sector. Our three-prong approach would not only attract new suppliers, thus growing our existing supply pool, it will also promote supplier retention. 6.27.2 Increase permitted treatment capacities Currently, our production facilities are centred at 2 separate locations in Malaysia, Bentong, Pahang and Gopeng, Perak. Combined, our 2 production facilities are permitted to treat and recycle approximately 50.88 million litres of waste oil, approximately 15.22 million litres of waste solvent and approximately 0.52 million pieces of used drums and cOntainers per year. As part and parcel of our expansion plans to cope with extended demand for our end products and to widen our revenue stream with the sale of recycled base oil, we are in the midst of building a third production facility at Pulau Indah, Selangor. As at the third quarter of 2012, the construction of our office building and production centre has been completed. The Company is currently in the midst of obtaining the necessary approvals from the local authorities for the said production plant. We anticipate our new treatment and production outfit in Pulau Indah to be operational by the first quarter of 2013. Once fully operational, our Group’s Pulah Indah plant will be permitted to treat and recycle up to 61.2 million Iitres of waste oil, 19.68 Iitres of waste solvents and 0.42 million pieces of used drums/containers per year. This raises our overall Group’s permitted treatment and recycling capacities of waste oil, waste solvents and used drums and containers by approximately 2 times, 2 times and 1.80 times respectively. 6.27.3 Market expansion Currently, the main market for our products is in Malaysia itself, with negligible amounts of exports overseas. We currently do serve some overseas orders via Singapore, but only on an occasional basis. However, we have seen an increase in queries from potential overseas customers about our products and services signifying that there are untapped potential and growth opportunities in the overseas market. 6. INFORMATION ON OUR GROUP (Cont’d) We have plans to expand our market beyond Malaysia. By way of trade portals and existing potential overseas customer contacts (obtain during their enquiries about our products and services), we will aggressively embark on this market expansion in tandem with the completion and commission of our third production facility at Pulau Indah. Our marketing efforts will step in by end 2013, and will continue for the next five years. We intend to increase the export of our products to account for 50% of our total revenue. Four countries that we are targeting are Indonesia, Vietnam, the Philippines and Myanmar, which has a high concentration of automobiles and motorcycles. 6.27.4 Increase focus on products with higher margins Solvents and other chemicals have been our key products in recent history. However, the market for solvents is shrinking as factories are moving out of Malaysia and into countries with cheaper production costs, such as the People’s Republic of China and Vietnam. Factories in Malaysia are also taking various measures to reduce production costs, one of which is prolonging the use of oil, lubricants, and solvents used by their machineries and equipment. Therefore, both supply (of waste solvents) and demand of solvents and chemicals are on the downward trend. With supply on the decline, the cost of purchasing solvents will likely rise, thus reducing the profit margins. Hence, we are switching our focus from selling recycled solvents to recycled oil products. We have existing technologies to recycle waste oil, which is easier and safer to handle and process, compared to waste solvents and chemicals. Raw materials for the production of recycled base oil are also easier to procure. Base oil can be recovered from waste engine oiL With approximately 600,000 new passenger vehicles registered in 2011, Malaysia has emerged as one of the biggest passenger vehicle markets in South East Asia. Over the years, waste oil generated by automotive car workshops is on an upward trend, which is in line with the increase in car sales, and we expect this trend to continue. Therefore, we will have an abundant supply of raw materials for the production of base oiL 6.27.5 Strategic expansion to increase outreach to customers and suppliers We intend to establish our Group as the Scheduled Waste recycler and producer of recycled oil for the whole of Malaysia, including East Malaysia. To achieve this, we are seeking to expand our production facilities by identifying strategic grow1h locations in the country. One of our ongoing projects is the establishment of a production plant at Pulau Indah. Pulau Indah is an island located off the west coast of Selangor. The island is home to Westport, the biggest super port in the region, and has also been earmarked for several developments, one of which is the Pulau Indah Industrial Park (“PIIP”), an integrated industrial park that covers an area of 5,324 acres, and Selangor Halal Hub Pulau Indah (“SHHPI”). By setting up our next production plant in Pufau Indah, we will be located within close proximity to the marine sector, which we intend to tap upon, as well as the current and upcoming industries operating within the PIIP and SHHPL This gives us easy and natural access to a wider pool of potential suppliers of waste oil and customers of recycled oil products.

 

 

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