DSM to Close Citric Acid Manufacturing Plant in Wuxi (China)

DSM has decided not to rebuild the capacity elsewhere but concentrate its production at the site in Tienen (Belgium), whose competitiveness has substantially improved lately due to restructuring and process optimizations.

27/08/08 Royal DSM N.V., the global Life Sciences and Materials Sciences Company headquartered in the Netherlands, announces the closure of its citric acid manufacturing plant in Wuxi (China) by Q1 2009. The closure follows a request from the local government to relocate the plant from its current location as this location is needed for future urban developments. DSM will receive a compensation amount from the Wuxi government and does not expect to incur a book loss. A good social plan is being prepared for the several hundred people who will be affected by the closure.

The market for citric acid has been under substantial pressure for several years, mainly due to structural overcapacity in China. As the structural overcapacity is expected to remain, DSM has decided not to rebuild the capacity elsewhere but concentrate its production at the site in Tienen (Belgium), whose competitiveness has substantially improved lately due to restructuring and process optimizations.

DSM continues on the announced track for partnership and has finalized the carve-out of the citric acid business as announced in September 2007.

DSM is a large producer of citric acid. The product is used as flavoring in soft drinks, fruit juices, sweets, jams and jellies. It is also used as a binding agent in biodegradable detergents and in other applications such as antioxidant. Citrique Belge, the DSM citric acid site in Belgium, has been producing citric acid since 1929.