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DSM acquires majority share in UHMWPE fiber manufacturer in China


Heerlen, NL, Royal DSM N.V., the global Life Sciences and Materials Sciences company headquartered in the Netherlands, announced today that it has signed an agreement to acquire the majority shareholding in Shandong ICD High Performance Fibre Co Ltd. (“ICD”), based in Laiwu, Shandong province, China. Closing of this transaction is expected in the course of 2011.

The acquisition of the majority share in ICD will bring complementary manufacturing and technology assets to DSM in addition to strengthening the company’s presence in this key market. The agreement with ICD, a manufacturer of UHMWPE (ultra high molecular weight polyethylene) fiber and a potential strong player in the Chinese market for high performance fibers, concludes an extensive selection process by DSM to find the right company in the Chinese market.

This strategic step underlines DSM’s commitment to its sales growth and strategic objectives in China and reflects its policy of acquiring businesses with strong potential and a proven track record of success. The acquisition of the majority share in ICD also fits in DSM’s corporate strategy DSM in motion: driving focused growth with expansion in High Growth Economies as one of the growth drivers.

Nico Gerardu, member of the DSM Managing Board and responsible for DSM’s Performance Materials cluster said: “China is a key market for DSM and we will continue to grow our long term commitment to it. We have invested significant time and effort to identify the right partner to ally with for this acquisition and we are extremely excited about the prospect of bringing ICD into the DSM portfolio.”

Gerard de Reuver, President of DSM Dyneema, added: “China is an important market in terms of both UHMWPE fiber production and consumption and this announced acquisition further develops our position and will help us grow and succeed in this market. This move strengthens our position to better serve our Chinese customers and builds on the long standing success of DSM’s investments in China"

Ren Yi, General Manager of ICD, commented: “This is an exciting development for everyone at ICD and I believe it will help to secure our future growth and success in the Chinese UHMWPE fiber market. We expect to benefit significantly from DSM’s global know-how, operating standards and technical expertise which will help us enhance our ability to serve our customers and develop new markets and application opportunities in China.”

For DSM, the acquisition of a majority share in ICD represents a key milestone in the global development of its high performance materials business, DSM Dyneema. The parties have agreed not to disclose the financial terms of this transaction.


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