DSM NV, a materials supplier based in Heerlen, the Netherlands, wants to double its sales in China to $1 billion by 2010, far exceeding other parts of the world in market growth.
The company estimates a 3-5 percent growth rate on average for its global network.
In gearing up for the fast-growing Chinese market, the company recently opened its first research and development center in China, opened a joint research lab with a local university, launched a joint venture and plans to run a new manufacturing facility there early next year.
The R&D center, in Shanghai, will conduct market studies and cooperate with local universities, scientific institutions and key manufacturers in the areas of nutritional products, food specialties and resins. The company plans to staff the center primarily with Chinese scientists.
DSM (China) Ltd. President Stefan Sommer said the Shanghai center will cooperate with DSM research institutions in Europe and North America.
DSM also opened a 36 million-yuan ($4 million) joint lab with Fudan University in Shanghai that can accommodate 20 scientists, according to Li Xuedai, sales director for DSM China.
Also last month, DSM set up a joint venture with privately owned Zhejiang Shangyu Yuntao Chemicals Co. Ltd. With a current 51 percent stake, DSM plans to buy out the unit in three years.
Wholly owned DSM Engineering Plastics (Jiangsu) Co. Ltd. in Jiangyin will start operating early next year with initial annual capacity of 26.5 million pounds.
Jan Zuidam, DSM deputy chairman, said the company has entered a third phase of business growth in China, featuring local R&D efforts. The first phase was technology licensing in the 1960s, and the second comprised significant investments in the past decade, he said.
To be competitive as a foreign company in the Chinese resin market, Zuidam said ``it is important that you can differentiate, as the low-cost level of Chinese enterprises is hard to match.''
He said DSM has an advantage in that ``more and more international customers are setting up production facilities in China and these customers want to ensure product quality by using resins based on international standards.''
To date, DSM has four wholly owned subsidiaries, six sales offices and seven joint ventures across China. It manufactures engineering resins and other materials - including coating resins - locally, with a workforce of about 3,000. Sales in China reached $420 million in 2004, up 25 percent from the previous year. In comparison, sales in 1993 were $20 million.
