Eyeing the enormous potential of the environmental protection industry, which is being actively promoted by the Chinese government, a number of listed companies are venturing into the sector through acquisitions and mergers to either raise funds in the capital market or undergo a transformation, reports the Jiefang Daily, the newspaper of Shanghai's Party Committee.
Among the most notable companies involved in such ventures is XE Flavor - the country's top high-end restaurant group.
XE Flavor announced recently that it had closed five branches over the past six months, bringing the number of stores it had closed to 13 after it shut down eight branches in major cities, including Beijing, Zhengzhou and Shanghai in the first half of last year.
A company spokesperson stated that the company had closed the stores to stem losses and in accordance with its strategy of shifting its focus from its main business to the environmental protection sector.
The company also aims to return to profitability this year by investing in diversified businesses, including environmental protection and culture, the spokesperson added.
The company fully acquired Hefei Tianyan Green Energy Development in December 2013. It also invested 200 million yuan (US$32.6 million) to buy a 51% stake in Jiangsu-based Zhongyu Environmental Technology in the middle of 2013.
China's energy saving and environmental protection industry maintained annual growth of over 15% in the value of its output and by 2015, its total output value is expected to reach 450 million yuan (US$73.5 million), making the sector a new pillar industry for the economy, according to the goals set by the State Council in August 2013 under a policy report relating to accelerating the industry's development.
The enormous pressure exerted by economic development on the environment has risen to a crucial point, therefore, the government is attaching great importance to environmental governance and the principle of making it a major part of government policy is unlikely to change during the next few years, according to the report.
Dealing with smog is another priority for the industry. China released its Action Plan for Air Pollution Prevention and Control on September 2013, which was a rehash of the 12th Five Year Plan on Air Pollution Prevention and Control for the Key Regions, released in December 2012.
About 1.7 trillion yuan (US$277 billion) of private capital is expected to be pumped into various projects covered by the action plan over the next five years, mainly to control PM2.5 - airborne particles of less than 2.5 microns in diameter - and other forms of pollution in highly-polluted areas.
The State Council announced recently that the central government has set up a special fund and will give 10 billion yuan (US$1.63 billion) this year in subsidies to regions with good performance in air pollution prevention and control.
The government also plans to invest 2 trillion yuan (US$326 billion) in water pollution prevention and control.
