DSM expects soaring sales in China
By Xie Ye (China Daily)
Updated: 2004-06-01 08:47

Leading global chemicals group DSM is expected to at least double its sales in China to 600 million euros (US$714 million) by 2008 to cash in on the fast-growing market.

To meet its target, the Dutch company will expand the capacity of existing plants in China, build new production bases, and also seek acquisition opportunities, said Stenfan Sommer, president of DSM (China) Ltd.

Sommer said the company would mainly focus on expanding the business of life science - such as food specialty and nutrition products - and performance materials that are widely used in the automotive, electronics, textile and construction industries.

The expansion of several existing plants has already started. The company is increasing the annual production capacity of its caprolactam joint venture in Nanjing, capital of Jiangsu Province in East China, to 140,000 tons next year from 70,000 tons last year. Caprolactam is the raw material in the production of nylon.

DSM holds 60 per cent of the joint venture, while Sinopec, the largest petrochemical company in China, takes the remaining shares.

DSM is also expanding its composite resin facility in Nanjing to raise its annual production capacity by 50 per cent to 50,000 tons by 2005.

The joint venture, in which DSM has a 75 per cent stake, and a Sinopec subsidiary holds 25 per cent, is now able to produce 33,000 tons of resin a year.

Meanwhile, DSM is also "in the process of investigating" building a major melamin facility in China. The project is expected to involve an investment of more than US$100 million, Sommer said.

The high growth in the Chinese market for chemical products is stimulating DSM's investment drive.

The market has increased on average by 15 per cent annually over the past 10 years, and the same speed is expected during the next five years.

On the life science business front, Sommer believes the acquisition of the vitamin and fine chemicals division of Switzerland's Roche last year would help DSM build a strong presence in China.

New investment would focus on food specialties and nutritional products, he said.

DSM now has nine production joint ventures in China, producing chemical specialties and antibiotics. About 40 per cent of DSM's sales come from local production, and the remaining 60 per cent from imports.

Sommer said with the build-up of the company's capacity, the local production would play a bigger role in contributing revenues.

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