Market-driven growth and innovation

Based on existing leadership positions, DSM intends to grow its sales in four Emerging Business Areas: personalized nutrition, specialty packaging, biomedical and white/industrial biotechnology. This growth will be accelerated by innovation in the markets targeted.

DSM also intends to further grow the specialty content of its portfolio. In this connection the definition of specialties has been made more specific. Whereas under Vision 2005 all life science products and performance materials businesses were classified as specialty, as of 2006, specialties will be businesses that have product, application or custom manufacturing leadership. Under this sharper definition, the current specialty leadership portfolio represents 40% of DSM’s total sales, versus 60% consisting of products that compete primarily on the basis of price or costs.

By 2010 DSM aims to have grown its specialties portfolio to 60% of sales, coming from 40% under the new specialty leadership definition. Profitable growth via specialty leadership business, innovation and geographic growth should lead to an underlying sales growth rate of 5% per year (including small acquisitions) under an assumed economic scenario and increasing over time within this bracket.

To boost innovation, significant additional resources will be made available. Some 250 new people will be recruited to work in dedicated, business-driven innovation teams. On average € 50 million per year (€ 30 million in 2006 increasing to € 70 million in 2010) will additionally be spent on innovation. About 15% of capital expenditure will be allocated to new business development in this context. And the innovation infrastructure in DSM’s main research centers will be upgraded. By 2010, DSM wishes to generate up to € 1 billion in sales based on these intensified innovation efforts.