DSM increases Asia investment

After announcing in February that its Engineering Plastics headquarters would shift to Singapore by the end 2012, DSM NV has developed a program of Asia investment that will increase to $1 billion by 2015.

At a media event preceding Chinaplas 2012, DSM promised continuing growth through acquisitions and expansion of its existing network.

“In our company, we focus on the three P’s: People, Planet and Profit,” said Paul Taylor, sales director Asia Pacific, DSM Engineering Plastics.

Parent company Royal DSM NV opened a China Science and Technology Center in Shanghai in October 2011.

“One of the unique qualities of DSM is to combine life sciences and material sciences,” says Taylor. Currently, there are more than 100 experts working in this facility in both areas. In addition, the company plans a new Technical Center for Japan, located at Yokohama, scheduled to open 2013, and is expecting open another center in India.

The center in China features a fundamental material research center and a center for the development of automotive applications. The fundamental material research facility, according to Jeroen Crevecoeur, research and technology manager at DSM Engineering Plastics Asia Pacific, will focus on establishing material expertise in polymer processing, mechanical expertise and flame retardancy to help develop new materials.

“In Japan we will focus more on material and application testing, where we want to tailor the local application testing to the local niche market,” Crevecoeur said.

In addition DSM is making further investments in its Kaohsiung polymerization facility in Taiwan. This investment is expected to be completed by the last quarter of 2012.

In 2011, Netherlands-based DSM reached sales in China of $2 billion. By 2015, the company hopes to increase that to $3 billion.

Globally, 2011 was a banner year for DSM. Corporate sales around the world reached 9 billion euros ($11.99 billion), up 11 percent. The company’s total EBITDA rose 12 percent to 1.3 billion euros ($1.7 billion).

In Mainland China, DSM is already pursuing investment. The company is currently doubling capacity at its caprolactam facilities in Nanjing and Jiangyin by 2014. There are also expansion projects underway at the company’s polymerization and compounding plants in Jiangyin.

“China is the largest user of caprolactam in the world,” Li. said “It makes up 40 percent of global demand. There has been a shortage of supply in caprolactam, globally, and prices have been driven up.”

In the next few years, however, Li expects a steady increase in caprolactam production. “Demand for caprolactam only grows by 2 to 3 percent every year, globally,” he said. “This will make it hard to absorb all the new supply.”

DSM is positioning itself to focus on China, where demand is continuing to grow rapidly. The Nanjing plant sits at the base of a supply chain that includes the company’s two Jiangyin plants. This arrangement will secure consistent feedstock for nylon 6 resin, the raw material for barrier packaging film. Integrating the Nanjing and Jiangyin plants will make the Jiangyin site the largest barrier film polymer supplier in Asia.

“These investments will continue,” promised Taylor. “We’re about to open a new line for halogen-free cables. We see this [region] as so important for our future growth.”