Thursday 28 October 2021

DSM under fire for potential move out of Limburg in subsidy row

DSM’s current headquarters in Heerlen. Photo: DSM

Specialty chemicals group DSM is under fire for apparently saying it may pull out of Limburg if the provincial authority does not come up with a €1.75m subsidy towards new headquarters in Maastricht.

Maastricht city council and the province had offered €3.5m in subsidies to help fund the construction of new, smaller headquarters next to the railway station. But now the province has apparently called its contribution into question.

DSM has stressed that its preference is to remain in the region ‘where our roots lie’ and had opted for Maastricht because of its ‘international character’.

However, the input of the local authorities and developer ‘including the subsidy options at the municipality and province, were decisive for DSM in establishing its head office in Maastricht, South Limburg’, the company said in a statement.

The former state mining company is currently based in Heerlen but its current offices are too big, hence the need for a new location. And although DSM’s departure would cost no more than 700 jobs, the move would be a major blow to part of the country with high unemployment and low average incomes.

Local officials fear that if DSM does leave, there could be a regional brain drain. ‘We have a lot of jobs for people with few skills and the balance could be further skewed,’ Heerlen councillor Roel Leers told the Financieele Dagblad.

Reputation

Tilburg University economist Sylvester Eijffinger told the paper that the company has been focusing on sustainability and socially aware entrepreneurship.

‘But dropping these and making it all about shareholders… the damage to your reputation is bigger than a couple of million euros in subsidies,’ he said.

Amsterdam and a location abroad, thought to be Basel, are the other main options for a new HQ, according to DSM itself. However, Amsterdam economic affairs chief Victor Everhardt told the Parool that the city has not been involved in trying to poach DSM. And local Socialist councillors have called for solidarity for the people of Heerlen.

Amsterdam has attracted several other Dutch multinationals in recent years, including Philips, which switched from Eindhoven in 1997 and AkzoNobel which moved from Arnhem to the Zuidas business district in 2007.

DSM booked net profit of just over €1bn in the first six months of this year, including a book profit of €567m from divestments and described the period as ‘very good’.

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