Sound Group China: Urban Waste Entrepreneurs

Posted: 12 Mar 2012

See all articles by John D. Macomber

John D. Macomber

Harvard University - Business School (HBS)

Chad M. Carr

Harvard Law School

Fan Zhao

Harvard University - Business School (HBS)

Date Written: March 15, 2011

Abstract

Private sector entrepreneur in China with advanced solid waste management capability competes with state owned enterprises and also government policies supporting a rival technology. Wen Yibo has used engineering expertise and political savvy to build a major privately held company providing the entire supply chain of water treatment, waste water, and integrated municipal solid waste capabilities. The company's services include engineering, manufacturing, consulting, "engineer, procure construct," "build operate transfer," and other forms of public-private partnership. The handling of municipal solid waste takes up to 50% of the annual budget of many urban areas in the developing world. The ability to use private sector funds and expertise could be critical to urban development. However, state owned enterprises can observe the success of private business and can enter and compete using their own skills, contacts, and inexpensive capital. The government may also be interested in subsidizing incineration over composting as a part of "waste to energy" strategy, even though this is less efficient than generating electricity from a coal or gas plant. The company has to decide whether to stick to its waste management roots or expand into an opportunistic incineration technology with minimal and nominal waste-to-energy benefits.

Learning Objective: 1.) Awareness of Municipal solid waste problems. 2.) Engineering and financial analysis of solid waste management alternatives. 3.) Analysis of government incentives in incineration and composing 4.) Analysis of private sector provision of public services.

Suggested Citation

Macomber, John D. and Carr, Chad M. and Zhao, Fan, Sound Group China: Urban Waste Entrepreneurs (March 15, 2011). Harvard Business School Finance Case No. 211-086, Available at SSRN: https://ssrn.com/abstract=2020574

John D. Macomber (Contact Author)

Harvard University - Business School (HBS) ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

Chad M. Carr

Harvard Law School ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States
617-496-2785 (Phone)

Fan Zhao

Harvard University - Business School (HBS) ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

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