Finance

DSM splits up and only focuses on nutrition and health

DSM had already taken the new path before and also sold other parts that no longer matched it. Now the ‘strategic options are being considered’ for the materials division and that is often nice language for looking for a buyer.

The materials division produces, among other things, high-quality plastics for the automotive industry and windmills and strong fibres. The splitting off is the final step in the process in which DSM has started to focus on health, nutrition and bioscience.

Three parts

In the future, DSM will consist of three parts. The Food & Beverage division (the food, beverage and pet food activities) accounts for more than 1 billion euros in turnover.

The branch for health, nutrition and care with a turnover of approximately 2.5 billion euros. This division produces, among other things, baby food and nutritional supplements.

The third part is the Animal Nutrition & Health Business Group with more than 3 billion euros in existing turnover. This division will focus on making animal protein production more sustainable.

Sustainable

“By focusing solely on our health, nutrition and life sciences businesses, we are able to operate more decisively and effectively, meeting the growing need for better and more sustainable nutrition,” said Geraldine Matchett and Dimitri de Vreeze, who jointly lead at DSM.

Previously, DSM was in the news when it invented a product that, when used in animal feed, can reduce the methane emissions of cows by 30 percent.

Splitting was process

Stock market experts have been arguing for some time in favor of splitting up DSM. Investors often find it difficult when a company focuses on two completely different parts. In addition, the results in the food divisions fluctuate less than in the materials division. “Investors don’t like that, you don’t know how to estimate DSM,” said RTL Z stock market commentator Hans de Geus.

The then CEO of DSM, Feike Sijbesman, said two years ago that he also wanted to get rid of all activities that are harmful to the environment. A year ago, DSM already sold a third of the materials division.

DSM recently announced that it would move its head office from Heerlen to Maastricht. Still in Limburg, but away from the mining area, where the company’s roots lie. DSM’s origins lie in coal mining in South Limburg.

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