DSM Re-examining China Strategy

HEERLEN, Netherlands Royal DSM N.V. announced the contracts to establish nutrition and anti-infectives joint ventures in China with North China Pharmaceutical Group Corp. Ltd. (NCPC) have been suspended. The companies announced their intention to form a strategic partnership in 2004; however, the joint ventures in the nutrition and anti-infectives areas were not signed until early 2009. Further, a change in ownership at NCPC has delayed implementation of the contracts, which will delay launch beyond a reasonable timeframe.

DSM will maintain its ongoing business relationship with NCPC while searching for alternative partners in China; the country represented 8 percent of DSMs net sales in 2008. Jan Zuidam, deputy chairman of the DSM Managing Board, commented: China is transforming from the worlds manufacturing base into one of the worlds 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.