Monday 20 September 2021

DSM to focus on food and nutrition, puts materials unit up for review

DSM’s current headquarters in Heerlen. Photo: DSM

Limburg-based specialty science group DSM confirmed on Tuesday that it is to fully focus on health, nutrition and bioscience and that it has started a review of strategic options for its materials businesses, including a possible change of ownership.

The transformation involves developing three distinct business groups. The food and beverage group, with current sales of around €1bn, will focus on the food industry, including sweeteners, alternative protein and dairy flavourings from newly acquired First Choice Ingredients, pending regulatory approval.

The health, nutrition and care unit will concentrate on speciality foods, including infant formula, dietary supplements and medical foods. This division has current sales of some €2.5bn.

The third unit, animal nutrition and health, which will have annual sales of around €3bn, will focus on animal protein production. Its products include vitamins and animal feed additives aimed at reducing methane production.

‘By focusing exclusively on our health, nutrition and bioscience activities we will be able to operate with greater agility and impact, and meet the growing need for better and more sustainable nutrition,’ the company’s joint chief executives Geraldine Matchett and Dimitri de Vreeze said.

Divestments

DSM sold its resins and functional materials arm to German polymer maker Covstro AG in a deal worth €1.6bn in 2020. The remaining materials operations will be managed on a stand-alone basis and are likely to be sold off.

The sale of the high value plastics operation would raise several billion euros for DSM and would mark the completion of the company’s transformation. DSM began life in 1902 as the state mining company, or De Nederlandse Staatsmijnen.

As mining ended in the 1960s  the company shifted to bulk and then speciality chemicals, moving into biotechnology at the end of the 20th century with the acquisition of Gist-brocades.

The company, which was recently embroiled in a row about moving its headquarters from Heerlen to Maastricht, booked net profit of just over €1bn in the first six months of this year, including a book profit of €567m from divestments.

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