22 November 2004 00:01 [Source: ICB Americas]
While shifting strategies at chemical companies are often defensive moves or reactions to a changing marketplace, DSM has taken a proactive approach in its evolution into a largely life sciences company.
“Transformation has become kind of a household word for DSM,” said chairman Peter Elverding at a meeting of the Société de Chimie Industrielle-American Section, in New York.
DSM has made great strides in achieving almost all of the goals laid out in its Vision 2005 strategy, which included upping to 80 percent the proportion of sales coming from specialty products and achieving annual sales of €10 billion.
The centerpiece of DSM’s transformation was the divestment of its petrochemicals business in 2002 and the subsequent acquisition of Roche’s vitamins and fine-chemicals operation in 2003. The company took a measured approach in its M&A decisions, first analyzing which types of acquisitions had been most successful in its past and then mapping out—and sticking to—some specific financial criteria.
Another critical component was easing the integration process by preparing for the post-acquisition situation months to years before the deal had closed. “Most people have a tendency to focus on the deal itself,” notes Mr. Elverding. But companies “have to prepare for that post-acquisition situation.”
Since it set its sights on the life sciences industry, over half of the company’s €8 billion portfolio is in food, feed and pharma markets.
Going forward, the company will look to add to its performance materials segment, with any purchases likely to be in the €500 million range.
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
Asian Chemical Connections