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DSM expands contracts in China

By Richard Clarke

November 10, 2009

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Royal DSM N.V., the global Life Sciences and Materials Sciences company headquartered in the Netherlands, today announces that the contracts to establish nutrition and anti-infectives joint ventures in China with North China Pharmaceutical Group Corporation Ltd. (NCPC) are suspended. DSM will continue its search for partners in China as the company prepares for further growth in the country, which in 2008 represented 8% of DSM's net sales.

Jan Zuidam, Deputy Chairman of the DSM Managing Board, comments: "China is transforming from the world's manufacturing base into one of the world's leading economies with one of the highest growth rates. Economic prosperity and strong domestic demand, driven by a fast-rising income level combined with an increased focus on innovation, are expected to fuel economic growth in China for the coming decades. DSM is very well positioned in China and is continuously seeking opportunities to further improve its position."

In 2004 DSM announced its intention to form a strategic partnership with NCPC. Earlier this year the contracts for joint ventures in the areas of nutritional products (vitamins) and anti-infectives were signed.

DSM has been informed that, due to the recent change in the ownership of NCPC, the implementation of these contracts has been delayed and possibly cannot be effectuated within a reasonable timeframe. Although still interested in the cooperation, the contracts are suspended, while both parties are maintaining their ongoing business relationships. At the same time, DSM will look for alternative solutions for the prospective partnerships.

DSM will continue to explore other opportunities for further growth in China through strategic cooperation, also in the areas of nutritional products and anti-infectives.

DSM in China
DSM began trading with China in 1963. Today, DSM has invested in China for over a decade. DSM has its China regional headquarters and R&D center in Shanghai. The company currently has 14 manufacturing sites in China and employs nearly 4,000 people. DSM's business is growing healthily and steadily in China with revenue of above USD 1.1 billion in 2008. In addition, DSM is committed to China's sustainable development. More information: www.dsm.com.cn.

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