DSM builds further muscle in China with new Shanghai campus

By Jess Halliday

- Last updated on GMT

DSM is to construct a new HQ complex in Shanghai, signalling an
even greater commitment to China as it reaches towards its Vision
2010 goals for revenue from emerging economies.

Known as the DSM China Campus and located in the Zhangjiang Hi-Tech Park in the Pudong New Area of Shanghai, the complex will include office premises for all business units, as well as R&D activities for some areas - in particular performance materials.

The Dutch chemicals group has made no secret of its focus on supplying China's food industry and production of nutritional products in the country. As part of its Vision 2010 strategy - in which nutrition and specialty chemicals figure large - it aims to realise revenues of US$1bn from emerging economies by 2010.

The firm was over half-way to this goal in 2005, with reported revenues of $600m from China, India and Africa.

A spokesperson told NutraIngredients.com that the biggest benefit of the DSM China Campus for the nutrition area is that the company will have one office location, which will make working together easier. Until now the nutrition offices have been split over several sites throughout the city.

Although nutrition R&D will not take place on the new campus, in November 2005 DSM established a joint laboratory with Fudan University in Shanghai to research new technologies, including production of vitamins, carotenoids and food ingredients. DSM's initial investment on announcement of the arrangement amounted to some RMB36 million (€3.8m).

Also towards the end of 2005 and faced with stiff price competition from Chinese vitamin makers, the firm cemented its links with large Chinese vitamin and antibiotic maker NCPC, with a US$164 million deal (subject to complex regulatory approval) under which DSM gained a 49 per cent controlling interest in two joint ventures, including one for the production of vitamin C and B12.

The latest news comes on the back of a $10m investment in building a new flavours plant at the DSM facility - a first for food in China - in Xinghuo, near Shanghai, which is expected to be fully operational by this April.

Initially 400 DSM employees will be based at DSM China Campus, but there will be room to accommodate more as the group reached new stages of development in the region. At present DSM has 3,500 employees in China, including those involved in joint ventures.

Globally the DSM head count is around 22,000. The group will report its full year 2006 results in mid February.

Managing board chairman Peter Elverding reiterated yesterday - at a press conference at DSM headquarters in The Netherlands - that nutrition and specialty chemicals are at the core of the group's strategy over the coming four years.

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