June 23, 2017
DSM bullish on China as it bares expansion plans
Nutrition and material sciences company Royal DSM has placed its bet on China, where the company's sales last year, according to its CEO, Feike Sijbesma, grew by about 6% over 2015.
"We have been doing very well in China in terms of sales and profits. Our business in China has potential for high growth," Sijbesma said, as reported by China Mail.
In fiscal year 2016, out of DSM's global net sales revenues of nearly 8 billion euros (US$8.48 billion), 1 billion euros were turned over by China, according to its earnings report.
Sijbesma said that with the growth of the Chinese economy, disposable income is rising and urbanisation process is accelerating. Consequently, he added, more Chinese people choose to eat meat, especially chicken and pork, and processed food.
"Those contribute to the business growth of our animal nutrition products like animal feed additives and human nutrition products", Sijbesma said.
To position itself more securely in the huge Chinese market, the Dutch company recently acquired Suzhou Sunshine New Materials Technology Co. Ltd., a Chinese manufacturer of high-performance solar photovoltaic backsheets.
DSM said it would expand its product portfolio for the solar PV market through the acquisition, according to the China Mail report.
"We are bullish on the growth potential of the solar energy market in China, and we have plans for investing in new factories for materials and further collaborating with Chinese enterprises in this field", Sijbesma was quoted as saying.
Earlier last year, Sijbesma said DSM, also the world's largest vitamin maker, would continue investing in life sciences business in China, even as it opened in June 2016 a factory in Shanghai to make vitamin B6 products. It is its largest manufacturing base.
The company also intends to expand its manufacturing plant in Tongxiang, Zhejiang province, which produces gellan gum, a stabilizing and texturizing agent used in a wide variety of foods and beverages.
Sijbesma said the Netherlands-based company likewise planned to launch new manufacturing plants and open research and innovation centres.
One of the plans also involves developing an animal nutrition business to meet the demand for quality ingredients and additives for animal feed, as Chinese consumers demand better and safer sources of nutrition from meat and eggs.
"I am not with the people who are overconcerned with economic slowdown (of China). I am still positive about China's underlined fundamentals with consumption-driven growth, talent with knowledge who can contribute to innovations and consumers willing to spend more amid urbanisation," Sijbesma told China Daily early last year.