DSM may sell materials business
Royal DSM confirmed in a Sept. 14 statement that it has started a review of strategic options for its materials businesses, including a possible change of ownership.
The Dutch firm also is simplifying its operating structure and reorganising its Health, Nutrition & Bioscience activities into three, new, market-focussed business groups: A Food & Beverage Business Group that combines the food, beverage and pet food activities of the current DSM Food Specialties and DSM Nutritional Products divisions; a Health, Nutrition & Care Business Group; and an Animal Nutrition & Health Business Group.
"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," said Geraldine Matchett and Dimitri de Vreeze, co-CEOs in a statement.
DSM will begin reporting according to the new structure on Jan. 1. Financial re-statements will be provided prior to the publication of the first quarter of 2022 trading up-date.
The company said that its materials businesses will likely not be able to "maximize their full potential to drive the important industrial shift to a bio-based and circular economy" within that context. Going forward, the materials business group will be managed largely on a standalone basis and the global support functions will be realigned accordingly.
DSM is a global supplier of specialty plastics and chemicals. The firm employs 23,000 worldwide and has annual sales of almost $11 billion.
In 2020, materials made up about 19 percent of DSM's overall sales, with the remainder coming from nutrition. Materials' sales were down 13 percent in 2020, with adjusted EBITDA down 27 percent.
The materials business bounced back in the first half of 2021, with sales up 33 percent and adjusted EBITDA up 86 percent.
In late 2020, DSM Engineering Materials said that it would replace "a significant portion" of fossil feedstocks used to make its high-performance polymers with feedstock from recycled waste plastics and/or bio-based hydrocarbons. This goal came via a partnership between DSM and renewable materials firm Neste of Helsinki.
In early 2020, DSM announced a major expansion of its plastics materials plant in Evansville, Ind. Officials said at the time that the expansion will enhance the site to make the next generation of advanced materials, including bio-based thermoplastics.
They added that the expansion is being driven by increasing customer demand for advanced material solutions in multiple industries. The project will help meet increased regional demand for DSM's grades of nylons 6, 6/6, 4/10 and 4/6, as well as the firm's PET, polybutylene terephthalate, copolyester and polyphthalamide materials.
Senior Reporter Frank Esposito contributed to this story.