DSM (company)

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Royal DSM
Naamloze vennootschap
Traded as
Industry Chemicals
Founded 1902; 114 years ago (1902)
Headquarters Heerlen, Netherlands
Key people
Feike Sijbesma (CEO), Geraldine Matchett (CFO), Rob J. Routs (Chairman of the Supervisory Board)
Products Nutritional ingredients, specialty food ingredients, engineering plastics, Dyneema®, coatings, biomedical materials, biomass conversion technology, solar efficiency technology.
Revenue 7.722 billion (2015)[1]
€573 million (2015)[1]
Profit €88 million (2015)[1]
Total assets €11.473 billion (2015)[1]
Total equity €5.541 billion (2015)[1]
Number of employees
20,750 (2015)[1]
Website www.dsm.com
DSM Headquarters, Heerlen, the Netherlands 2011

Koninklijke DSM N.V. (Royal DSM, commonly known as DSM), is a Dutch multinational active in the fields of health, nutrition and materials. Headquartered in Heerlen, at the end of 2015 DSM employed 20,750 people in 50 countries and posted net sales of €7,722m.[1]

Organization[edit]

DSM’s 5 business groups are clustered according to product and market combinations, with the business group directors reporting directly to the Managing Board. Since 2015 DSM's activities are grouped into three clusters: Nutrition, Materials and Innovation Center.

Nutrition[edit]

The Nutrition cluster is made up of DSM Nutritional Products and DSM Food Specialties. DSM Nutritional Products produces essential nutrients such as synthetic vitamins, carotenoids, nutritional lipids and other ingredients for the feed, food, pharmaceutical and personal care industries. DSM Food Specialties manufactures food enzymes, cultures, yeast extracts, savory flavors, hydrocolloids and other specialty ingredients for the dairy, baking, beverage and savory segments.

Materials[edit]

The Materials cluster is made up of DSM Engineering Plastics, DSM Dyneema and DSM Resins & Functional Materials. DSM Engineering Plastics’ specialty plastics are used in components for the electrical and electronics, automotive, flexible food packaging and consumer goods industries. DSM Dyneema is the inventor, manufacturer and marketer of Dyneema®. DSM Resins & Functional Materials manufacture resins solutions for paints, inks, stereolithography, and industrial and optical fiber coatings.

Innovation Center[edit]

In addition to the role of supporting innovation in the businesses and DSM’s venturing activities, the Innovation Center is responsible for the company’s ‘Emerging Business Areas’; DSM Biomedical (biomaterials and regenerative medical devices), DSM Bio-based Products & Services (biomass-conversion technology) and DSM Advanced Surfaces (AR-coatings and Photovoltaic-films for solar modules).

Current strategy[edit]

Financial targets[edit]

In November 2015 DSM announced that up to 2018 it was targeting a high single-digit annual percentage increase in EBITDA and a high double-digit annual basis point increase in Return on Capital Employed (ROCE). It will focus on organic sales growth, reducing costs and strict capital allocation and does not expect to engage in large acquisitions in the near future.[2]

Environmental targets[edit]

Within its corporate strategy the company also defines long-term sustainability aspirations, which include targets to improve the eco-efficiency of its operations. In November 2015 DSM set the following environmental reduction targets:

Indicators New targets
GHG efficiency improvement 45% by 2025 (reference 2008)
Energy efficiency improvement 1% annually (>10% from 2015-2025)
Renewable electricity 50% by 2025
Reduction of emissions to air per unit of product (VOC, NOX, SO2) 40% in 2020 (reference 2015)
Waste 80-90% recycled by 2020
Water Water risk assessments completed on 90% of selected sites by 2020

Since 2010,[3] the Short[1]- and Long-Term Incentive[1] elements of the remuneration of DSM’s Managing Board[4] and executive bonuses[5] relate to the company’s financial and environmental performance in equal measure. Since 2004[6] DSM has been either the Materials industry group leader, (6 years) or among the leaders, (also 6 years) in the annual Dow Jones Sustainability Index.

Shares[edit]

DSM is listed on Euronext Amsterdam and is a constituent of the AEX index. Options on DSM shares are traded on the European Option Exchange in Amsterdam. In the USA, a sponsored unlisted American Depositary Receipts (ADR) programme is provided by Deutsche Bank Trust Co. Americas. These ADR’s are listed on the OTCQX International Premier Marketplace.

History[edit]

DSM was formed by the Dutch State in 1902 to mine coal reserves in southern Limburg and although the company had diversified into commodity chemicals and petrochemicals by 1973 when the last mine closed, DSM retains a link to its origins by continuing to use the initials of the original ‘Nederlandse Staatsmijnen’ (Dutch State Mines)[7] to this day.

In 1989 the government floated 70% of its shares in the company on the Amsterdam Stock Exchange (now Euronext Amsterdam) with the remaining 30% floated in 1996, thereby completing DSM’s privatization. The 21st Century has seen DSM follow successive five-year strategic periods of portfolio transformation and internationalization involving acquisitions, divestments and partnerships.[8][9] In 2001 DSM reported 48% of its workforce was based in the Netherlands, in 2015 this was 23%.[1]

Acquisitions[edit]

  • 1998: Gist-brocades (food ingredients, pharmaceuticals, yeast- and enzyme-based production process technology).[10]
  • 2000: Catalytica Pharmaceuticals (pharmaceutical intermediates).[9]
  • 2003: Roche’s vitamin division.[9]
  • 2005: NeoResins (water-based coating resins).[9]
  • 2011: Martek (nutritional products derived from microalgae and fermentation technology).[9]
  • 2011: Vitatene (natural carotenoids derived from fermentation of Blakeslea trispora fungus).[11]
  • 2012: Verenium’s food enzymes and oilseed processing business.[12]
  • 2012: Kensey Nash (biomedical regenerative medicine).[13]
  • 2012: Ocean Nutrition Canada (fish-oil derived nutritional products).[14]
  • 2012: Cargill ’s cultures and enzymes business.[15]
  • 2012: Fortitech (customized nutrient premixes).[16]
  • 2013: Unitech (micronutrient premixes and macronutrient blends).[17]
  • 2013: Andre Pectin (food hydrocolloids).[18]
  • 2013: Tortuga (nutritional supplements for pasture raised cattle).[19]
  • 2015: Aland (vitamin C).[20]
  • 2015: Cubic Tech (high performance ultra-lightweight flexible laminates and fabrics).[21]

Divestments[edit]

Partnerships[edit]

DSM has stated that these partnerships have been created with a view to it ultimately exiting the businesses concerned.[citation needed]

  • 2009: DSM and NCPC sign contracts to establish nutrition and anti-infectives joint ventures in China[27]
  • 2011: DSM Sinochem Pharmaceuticals, joint venture (DSM 50%) with the Sinochem Group. DSM Sinochem Pharmaceuticals is a manufacturer of generic anti-infective molecules.
  • 2014: Patheon, joint venture (DSM 49%) with JLL Partners. Patheon is a full service pharmaceutical manufacturing and development company.
  • 2015: ChemicaInvest, joint venture (DSM 35%) with CVC Capital Partners. ChemicaInvest consists of three business units; Aliancys (composite resins), AnQore (acrylonitrile) and Fibrant (caprolactam).

DSM has applied IFRS 11 to its associates and joint ventures since 2013.

World Food Programme (WFP)[edit]

DSM became a WFP Private Sector Partner in 2007, forming the "Improving Nutrition, Improving Lives" partnership to lend expertise in improving the nutritional value of the food WFP distributes to those in need.

WFP receives DSM’s technical and scientific knowledge in the field of high nutrient products as well as financial assistance. The partnership focuses on developing new and improved nutritious products, such as micronutrient powders and fortified rice, that help WFP deliver not just more food, but also provide the nutrients necessary to fight hunger and prevent micronutrient deficiencies in vulnerable communities.[28]

References[edit]

  1. ^ a b c d e f g h i j "Annual Report 2015". DSM. Retrieved 1 March 2016. 
  2. ^ Groningen, Elco van. "DSM to Cut Up to EU300 Million in Costs, Exit Joint Ventures". Bloomberg.com. Retrieved 2016-03-09. 
  3. ^ Milne, Richard; Steen, Michael (2010-02-23). "DSM to link managers' pay with green credentials". Financial Times. ISSN 0307-1766. Retrieved 2016-03-09. 
  4. ^ Paolo Perego, Associate Professor, Department of Accounting & Control, Rotterdam School of Management, Erasmus University. "Sustainability bonuses: a credible sign of corporate responsibility?". discovery.rsm.nl. Retrieved 2016-03-09. 
  5. ^ "BUSINESS: Get your bonus? Nah, I missed my climate target". www.eenews.net. Retrieved 2016-03-09. 
  6. ^ "DSM, KLM rank high in annual Dow Jones Sustainability Index  : Biofuels Digest". www.biofuelsdigest.com. Retrieved 2016-03-09. 
  7. ^ Messing, F.A.M. (1988). De Mijnsluiting in Limburg. Leiden: Nijhoff. p. 224. ISBN 90-6890-241-5. 
  8. ^ Volberda, Henk (2013). Re-inventing Business. Assen: Van Gorcum. p. 270. ISBN 978 90 232 5146 0. 
  9. ^ a b c d e Jeannet, Jean-Pierre, Schreuder, Hein (2015). From Coal to Biotech: The Transformation of DSM with Business School Support. Berlin Heidelberg: Springer-Verlag. pp. 198, 207, 215, 233. ISBN 978 3 662 46299 7. 
  10. ^ Cassiman, Bruno; Colombo, Massimo G (2006). Mergers & Acquisitions: The Innovation Impact. Cheltenham: Edward Elgar Publishing. p. 145. ISBN 978 18 472 0158 4. 
  11. ^ "DSM completes acquisition of Vitatene S.A.U.". AllAboutFeed. Retrieved 2016-03-08. 
  12. ^ "DSM Acquires Verenium Assets". www.cancernetwork.com. 2012-03-28. Retrieved 2016-03-08. 
  13. ^ Jones, Kristin. "Royal DSM to buy Kensey Nash for $337M". MarketWatch. Retrieved 2016-03-08. 
  14. ^ Steinglass, Matt (2012-05-18). "DSM to acquire Canadian nutrition group". Financial Times. ISSN 0307-1766. Retrieved 2016-03-08. 
  15. ^ "Cargill confirms signing of agreement with DSM on sale of cultures and enzymes business". www.cargill.com. Retrieved 2016-03-08. 
  16. ^ NutraIngredients.com. "DSM buys Fortitech for €495m; "We are done for awhile"". NutraIngredients.com. Retrieved 2016-03-08. 
  17. ^ "NZ Ministry of Business, Innovation and Employment". www.business.govt.nz. Retrieved 2016-03-08. 
  18. ^ "DSM Closes Acquisition Of Andre Pectin's Stake - Quick Facts". RTTNews. Retrieved 2016-03-08. 
  19. ^ Andrew Noel. "DSM Buys Animal-Nutrition Supplier Tortuga for $576 Million". Bloomberg.com. Retrieved 2016-03-08. 
  20. ^ FeedNavigator.com. "Vitamin C supply: Aland deal won't change DSM's global ranking". FeedNavigator.com. Retrieved 2016-03-08. 
  21. ^ "Mesa's Cubic Tech Corp. purchased by Dutch company". azcentral. Retrieved 2016-03-08. 
  22. ^ "Gulf Industry Online - Sabic gets world boost". www.gulfindustryworldwide.com. Retrieved 2016-03-15. 
  23. ^ "History of OCI Nitrogen". www.ocinitrogen.com. Retrieved 2016-03-08. 
  24. ^ "Teknor Apex Company has acquired the Sarlink TPV product range". www.teknorapex.com. Retrieved 2016-03-08. 
  25. ^ "Press Releases - LANXESS News". lanxess.com. Retrieved 2016-03-15. 
  26. ^ "Emerald Performance Materials completes acquisition of DSM Specialty Products, BV". www.emeraldmaterials.com. 2010. Retrieved 2016-03-08. 
  27. ^ http://www.dsm.com/corporate/media/informationcenter-news/2009/03/20-09-dsm-ncpc-sign-contracts-to-establish-nutrition-and-anti-infectives-joint-ventures-in-china.html
  28. ^ "United Nations World Food Programme | DSM | Improving Nutrition, Improving Lives Partnership". www.wfp.org. Retrieved 2016-03-08.