After a year-long strategic review, Sembcorp Industries has unveiled plans to recycle capital from upstream utility investments to businesses spanning the entire energy supply chain. Will that boost the group’s ROE and electrify its shares?

SINGAPORE (Mar 5): Long-time energy executive Neil McGregor has certainly been busy this past year. At a full-year results briefing and presentation on a strategic review on Feb 23, almost 11 months after he took over as CEO of Sembcorp Industries, McGregor laid out an extensive plan that aims to position the utilities and marine conglomerate for a future environment that is quite different from the one it has operated in over the past two decades.

For one, the move towards clean energy has picked up pace, not least because of carbon-emissions targets, and penalties, that are coming due. At the same time, Sembcorp’s erstwhile strong homeground advantage as a utilities provider to petrochemical companies on Jurong Island has diminished somewhat: The sector’s expansion over the years has attracted other power players and the consequent oversupply of power generation in the market has crimped profitability at Sembcorp.

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