Royay DSM (DSM) wants to get more out of life, or at least life and material sciences. It focuses on nutritional products and performance materials, which it terms Life Sciences and Material Sciences. DSM's nutrition unit makes sweeteners and food enzymes, among other products, for the flavor and fragrance, food and beverage, and animal health industries. The company's pharmaceutical chemicals are used in cardiovascular, AIDS, and asthma medications. Its performance materials unit (DSM Resins and Dyneema) makes synthetic fibers, engineering plastics, and resins used in coatings. DSM's polymer intermediates unit includes raw materials used for synthetic fibers and plastics.
DSM has more than 24 locations across North America, Europe, Latin America, Africa, Asia, Oceania and Australia.
DSM's segments are Nutrition, Performance Materials, Polymer Intermediates, the Innovation Center, and Corporate Activities.
DSM Nutritional Products is one of the world’s leading suppliers of essential nutrients such as vitamins, carotenoids, nutritional lipids and other ingredients to the feed, food, pharmaceutical and personal care industries. Its Food Specialties unit is a major supplier of food enzymes, cultures, yeast extracts, savory flavors and other specialty ingredients for the food and beverage industries.
The Performance Materials cluster consists of DSM Engineering Plastics, DSM Dyneema, and DSM Resins & Functional Materials.DSM Engineering Plastics is a global player in developing, manufacturing and marketing specialty plastics used in components for the electrical and electronics, automotive, flexible food packaging and consumer goods industries. DSM Dyneema is the inventor, maker, and marketer of Dyneema, the world’s strongest fiber. DSM Resins & Functional Materials is a global player in developing, manufacturing and marketing high-quality resins solutions for paints and coatings, composites and fiber-optic coatings.
The DSM Innovation Center serves as an enabler and accelerator of innovation within DSM and has a general business development role, focusing on areas outside the current scope of the company's business groups. DSM Sinochem Pharmaceuticals is the global market leader in beta-lactam active pharmaceutical ingredients such as semi-synthetic penicillins and semi-synthetic cephalosporins, which represent the biggest class of APIs in antiinfectives.
In addition. DSM's DPx Holdings is a global leader in contract development and manufacturing services with customers across the pharmaceutical industry.
In 2014 DSM's net sales decreased by 2% due to lower sales from North America and Western Europe.
Acquisitions added 1% to net sales. Revenues from continuing operations in 2014 were 4% higher than in 2013 as higher volume accounted for a 5% increase in net sales. However, selling prices were 2% lower than in 2013.
In 2014 net income decreased by 63% due to a change in hedging reserve and re-measurements of defined benefit pension plans.
Net cash provided by the operating activities decreased by €190 million (from €998 million in 2013), primarily due to change in inventories, and trade receivables.
Accelerating growth through acquisitions and partnerships has been a fundamental element of DSM's business strategy. It has invested €2.8 billion in the acquisition of new businesses since 2010. It has also completed a number of value-enhancing partnerships.
The company is also taking steps to address the challenging external environment. Its key short-term priority is to take strategic actions regarding non-core businesses and to continue to focus on operational performance of its Nutrition and Performance Materials businesses. This will be complemented by accelerated actions to improve efficiency and reduce costs, specifically in Nutrition and across all functions of the company, including ICT, HR, Finance and Purchasing.
In 2015, Royal DSM NV, and CVC Capital Partners announced an agreement for a joint venture in the form of a new company for DSM's activities in Polymer Intermediates (Caprolactam and acrylonitrile) and Composite Resins, provisionally called NewCo. The partnership with CVC allows DSM to reduce the cyclicality of its portfolio to secure a competitive supply of caprolactam on DSM Engineering Plastics in the long term and be able to focus entirely on its Nutrition, Performance Materials and innovation activities, complemented by accelerated actions to improve efficiency and reduce costs.
Its joint venture with Sinochem, DSM Sinochem Pharmaceutical, was deconsolidated following new accounting rules for joint ventures. DSP improved its performance thanks to solid organic growth. It also formed DPx in partnership with JLL, combining DSM Pharmaceutical Products and Patheon into a leading pharma services company. DSM owns 49% of this joint venture.
In 2014 DSM opened the new center for research and development of advanced materials on the Bright Lands Chemelot Campus in Sittard-Geleen. The center employs more than 400 knowledge workers and brings significant technological competence and unique expertise in the Netherlands for applications around the world.
In 2014, Royal DSM NV announces that it has reached agreement with Standard Investment on the sale of DSM Synres. The transaction, which is expected to close in the first quarter of 2015, subject to customary approvals and notifications. DSM Synres produces alkyd solvents and acrylic coating resins site in Hoek van Holland for the global coating, adhesive and printing markets and has annual sales of approximately €50 million.
Mergers and Acquisitions
In 2014 DSM agreed to acquire Aland, a Hong Kong-based company producing vitamin C in China. This transaction will allow DSM to further strengthen its position in vitamin C.
In 2013 DSM obtained control of Tortuga Companhia Zootécnica Agrária Z.A., a Brazilian company with a leading position in nutritional supplements with a focus on pasture-raised beef and dairy cattle. Tortuga has annual sales of approximately €385 million.
That year DSM also bought Unitech Industries Limited (Unitech). Based in Auckland (New Zealand) Unitech was founded in 1970 and focuses primarily on the manufacture and sale of micronutrient premixes and macronutrient blends for the rapidly growing Asian human nutrition and health markets.