DSM opens R&D centre in China

By Dominique Patton

- Last updated on GMT

Related tags: People's republic of china

Leading vitamin and specialty chemicals maker DSM opened its first
research and development centre in China today, designed to help it
achieve strong sales growth from this market in the next three
years.

The company has set its target revenue from China at $800 million by 2008, double the sales made in this market in 2003.

The 20-person R&D centre, based in Shanghai, will initially cater for the group's Nutritional Products, Food Specialties and NeoResins units.

For Food Specialties, which makes enzymes, preservation systems and savoury flavour ingredients, the centre will provide an applications lab and demo facility for customers.

But for Nutritional Products, the world's biggest supplier of vitamins and carotenoids, the Chinese R&D base will mainly offer resources for production in the region rather than new product development.

"For DNP (Nutritional Products), they're going to improve and develop new processes for existing products like vitamins, with an emphasis on local production set-up,"​ a spokeswoman told NutraIngredients.com.

DSM has recently entered into joint ventures with Chinese vitamin makers and is likely to increase production there in coming years. Manufacture of vitamins, now considered a commodity product, is dominated by Chinese companies whose low prices have put unrelenting pressure on European producers DSM and BASF.

DSM has recently concentrated all vitamin C production in Scotland, after closing a plant in the US, and cut jobs at all of its other vitamin facilities.

The company says it will also use the new R&D centre to build further partnerships with research institutions and universities in China to create new products for its customers there.

Although already in contact with such organisations, Jan Zuidam, deputy chairman of DSM's board of directors, said that having an R&D base in China would allow the group "to integrate better with China's science and technology community and to get embedded into the Chinese business value chain".

Later this month it will reveal details of a joint lab with Fudan University, expected to provide a link to Nutritional Products activities.

Worldwide, DSM has approximately 2,000 R&D staff and it spends around 4 per cent of net sales on these activities (€286 million in 2004).

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