Royal DSM N.V., the global Life Sciences and Materials Sciences Company headquartered in the Netherlands, today announces the closure of its citric acid manufacturing plant in Wuxi (China) by Q1 2009. The closure follows a request from the local government to relocate the plant from its current location as this location is needed for future urban developments. DSM will receive a compensation amount from the Wuxi government and does not expect to incur a book loss. A good social plan is being prepared for the several hundred people who will be affected by the closure.
The market for citric acid has been under substantial pressure for several years, mainly due to structural overcapacity in China. As the structural overcapacity is expected to remain, DSM has decided not to rebuild the capacity elsewhere but concentrate its production at the site in Tienen (Belgium), whose competitiveness has substantially improved lately due to restructuring and process optimizations.
DSM continues on the announced track for partnership and has finalized the carve-out of the citric acid business as announced in September 2007.
DSM is a large producer of citric acid. The product is used as flavoring in soft drinks, fruit juices, sweets, jams and jellies. It is also used as a binding agent in biodegradable detergents and in other applications such as antioxidant. Citrique Belge, the DSM citric acid site in Belgium, has been producing citric acid since 1929.
DSM - the Life Sciences and Materials Sciences Company
Royal DSM N.V. creates innovative products and services in Life Sciences and Materials Sciences that contribute to the quality of life. DSM's products and services are used globally in a wide range of markets and applications, supporting a healthier, more sustainable and more enjoyable way of life. End markets include human and animal nutrition and health, personal care, pharmaceuticals, automotive, coatings and paint, electrics and electronics, life protection and housing. DSM has annual sales of almost EUR 8.8 billion and employs some 23,000 people worldwide. The company is headquartered in the Netherlands, with locations on five continents. DSM is listed on Euronext Amsterdam. More information about DSM can be found at www.dsm.com