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DSM to sell its materials division to focus purely on producing sustainable food and health products

September 21/2021

MOSCOW (MRC) -- Dutch specialty chemicals maker DSM plans to sell its materials division, which some analysts suggested could sell for around USD5.7 billion, as its focuses purely on producing sustainable food and health products, reported Reuters.

Based in the southern Dutch town of Heerlen, DSMs products range from vitamins, baby formula and animal food to specialized materials such as plastics which are used in construction, clothes and automobiles.

Although a spin-off of its materials division had been anticipated by analysts for years, the present confirmation of the move lifted DSM shares 3% in Amsterdam, making them the strongest gainer in the blue chip AEX-index.

DSM is on its way to (finally) become a focused health, nutrition and bioscience group, KBC Securities analysts wrote.

KBC predicted a EUR4.8 billion (USD5.7 billion) selling price for the materials unit, after the EUR1.6 billion sale last year of DSMs resins and functional materials businesses to Germanys Covestro.

That sale cut revenues of the remaining materials unit, which makes engineering and protective materials, to just under EUR1 billion in the first half of 2021, with an adjusted EBITDA of EUR232 million. DSM reported total sales of EUR4.5 billion over the first six months of the year, as core earnings hit EUR925 million.

As MRC reported earlier, in April 2021, DSM said it had completed the sale of the resins & functional materials businesses to Covestro for EUR1.6 billion (USD1.9 billion), including EUR1.4 billion in cash. It included DSM Niaga, DSM additive manufacturing, and the coatings activities of the DSM advanced solar business, which together represented EUR1.01 billion of DSMs 2019 total annual net sales and EUR133 million of DSMs 2019 total EBITDA.

We remind that Covestro closed the sale of its European polycarbonates (PC) sheets business to the Munich-based Serafin Group effective January 2, 2020. This includes key management and sales functions throughout Europe as well as production sites in Belgium and Italy.

According to MRC's ScanPlast report, overall estimated consumption of PC granules in the Russian market were almost 56,000 tonnes in January-July 2021, down by 3% year on year (58,000 tonnes).

Royal DSM, commonly known as DSM, is a Dutch multinational corporation active in the fields of health, nutrition and materials. The Materials cluster is made up of DSM Engineering Materials, DSM Protective Materials and DSM Resins & Functional Materials. DSM Engineering Materials specialty plastics are used in components for the electrical and electronics, automotive, flexible food packaging and consumer goods industries.
Author:Margaret Volkova
Tags:Europe, PC, coatings, sheet extrusion, car components, medicine, petrochemistry, construction, paints and coatings, Covestro, DSM.
Category:General News
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