DÜSSELDORF, GERMANY (Nov. 12, 4:20 p.m. EST) — Dutch chemicals giant DSM NV continues to seek a buyer for its commodity polyolefins business, as it strives — perhaps partly via acquisition — to focus on higher-value-added sectors such as life sciences and performance materials.
“Polyethylene and polypropylene is only a regional game for DSM,” Jos Goessens, director of DSM Engineering Plastics, said at K 2001, held Oct. 25-Nov. 1 in Dusseldorf. “We clearly have indicated a desire to sell this business.”
Instead, the company wants to build its portfolio in such specialty products as nylons, copolyesters and high-heat resins.
DSM officials clearly were annoyed when, just as the K show was opening, European news reports suggested DSM was preparing to make a bid — in competition with Germany's BASF AG — for a significant stake in Rhodia SA.
Rhodia of Lyon, France, is the world's third-largest manufacturer of nylon resins. Earlier that week, Franco-German chemicals group Aventis SA, which holds one-quarter of Rhodia's shares, spurred the speculation when it confirmed it wanted to sell that stake.
BASF flatly denied it was interested, and DSM responded only when directed to do so by the French stock market authority. In that Oct. 23 statement, DSM confirmed it had inquired about Aventis' shareholding with Rhodia, but said, “This contact has been of a preliminary and exploratory nature only, and did not result in any specific conclusions.” DSM indicated there had been no contact between the firms for months.
“Currently, there is no basis for negotiation. A further announcement will be made only if and when appropriate,” DSM said.
DSM and Rhodia officials refused to comment further on the matter at the K show.
Rather, DSM chose to discuss products and applications relevant to its 1,370-employee engineering plastics business, which accounted for sales last year of 590 million euros ($531 million), out of DSM NV's group sales of 8.1 billion euros ($7.29 billion). Goessens highlighted 2001 product introductions such as Akulon UltraFlow nylon 6, Stanyl HighFlow nylon 4/6, Xantar C polycarbonate/ABS blends, and Segregate halogen-free flame retardants.
He also said DSM had converted a Genk, Belgium, pilot plant for its Arnitel U high-heat copolyester ester elastomer into a commercial plant this summer. The grade has been under development for six to seven years. DSM quadrupled the production capacity from unspecified pilot-plant levels, and started a reactive extrusion line to make the specialty material.
Company officials declined to offer predictions on its fourth-quarter or 2002 performance, but third-quarter results released that week showed group pretax operating profit down 29 percent on 4 percent lower sales, compared with year-ago periods.
In reference to the performance materials sector, whose third-quarter profit dropped 34 percent, the firm's financial statement said: “All business groups, in particular DSM Engineering Plastics, saw their volumes decrease due to the adverse economic conditions worldwide, especially in the electrical/electronic and automotive sectors, but selling prices showed a slight increase on average.”
It added that “DSM Composite Resins saw its profits improve.”