NewsFlashDSM plans $2bn basic chemicals sell-off

27 September 2007 09:41  [Source: ICIS news]

LONDON (ICIS news)--DSM will divest businesses with sales close to €1.4bn ($2bn) to help accelerate the move towards life sciences and materials the Netherlands based company said on Thursday.

The sell-off would include its melamine, urea, fertilizers and energy businesses and its elastomers; specialty products and maleic anhydride operations, most based at the Chemelot site in Geleen in the Netherlands.

DSM said it was also looking for a partner for its citric acid interests and would put these operations into a new Base Chemicals & Materials cluster to include all the businesses it wants to divest.

The cluster is expected to have sales of €1.5bn in 2007 and generate earnings before interest and tax (EBIT) of €200m.

The company’s fibre intermediates business, would be moved into the Polymer Intermediates cluster.

DSM said it wanted to complete the divestments by 2010 as part of its Vision 2010 strategy.

The company set new growth targets under Vision 2010 and raised its outlook for the full year 2007.

It wants to lift organic sales growth by more than 5% a year and raise sales to China from $1bn to $1.5bn. It said it wants to deliver €1bn of additional sales from innovation by 2010.

A dividend increase of 20% a share would be recommended to the March 2008 AGM, it said and was planning a new €750m share buy-back.

The full year operating profit outlook was raised to €820m plus or minus three per cent from an earlier €790m forecast.

DSM said it would step up its acquisitions efforts in the core business areas of nutrition, pharma and performance materials.

($1 = €0.71)

By: Nigel Davis
+44 20 8652 3214

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