Dutch specialty chemicals company Royal DSM N.V. today acquired Syntech, a producer and marketer of coating resins. Syntech has annual sales of around USD 30 million, generated with a broad portfolio of coating resins. The acquisition of Syntech further strengthens DSM's liquid coating resins portfolio and will enable DSM to further accelerate the expansion of its activities in the Chinese market.

The acquisition will be cash earnings per share enhancing as of year one.

The coating resins market in China is growing rapidly and Syntech has a leading position in the industry. Its flexible and modern production platform can be quickly adapted to expand production capacity. Syntech's activities are concentrated at one location in Shunde (Guangdong province). The site includes production facilities, self-owned R&D laboratories and a pilot plant for product development. The company's sales force is of a high quality and covers all relevant areas in China.

Peter Elverding, chairman of DSM's Managing Board of Directors, gave the following comment: "The acquisition of Syntech is the first step in the context of DSM's new strategy Vision 2010 - Building on Strengths. It serves two key strategic targets: growing our resins portfolio in the Performance Materials cluster and expanding our presence in the emerging China market. The acquisition provides an accelerated growth path into the Chinese coating resins market, from which our new and existing customers will benefit ."

DSM Coating Resins is rapidly growing its leading position in all coating resins markets. The acquisition of Syntech follows the takeover of NeoResins (now DSM NeoResins) in February of this year and will enable DSM to become one of the leading industrial coating resins suppliers in China.

About Syntech
Syntech is one of the leading Chinese coating resin producers. The company produces resins that are applied in can, coil, industrial wood and general industry coatings for example. Syntech sells various types of liquid coating resins, such as alkyds, polyesters, amino resins and acrylic resins. For 2005, the company expects sales of approximately USD 30 million. Syntech employs some 180 people and is based in Shunde, Guangdong province.

About DSM Coating Resins
DSM Coating Resins is a global market leader in polyester resins for powder coatings, can coatings and coil coatings. DSM Coating Resins plays a leading role as a resins supplier to the decorative coatings, protective & maintenance coatings and industrial coatings markets. DSM Desotech, which forms part of DSM Coating Resins, is the world leader in glass fiber coatings. In February 2005, DSM acquired NeoResins, the worldwide leader in waterborne resins. DSM Coating Resins had annual sales of EUR 710 million in 2004 (pro forma including sales of DSM NeoResins). The business group has production sites in Europe, USA and Asia and currently employs around 1,450 people.

Coatings market
In all coating markets, ecological considerations and ever-stricter environmental legislation are playing an increasingly important role in product development. In line with DSM’s corporate strategy, DSM Coating Resins wants to be among the best companies in the world in the area of safety, health and environmental management. As a leading, customer-oriented resins supplier, DSM Coating Resins gives high priority to designing resin systems with tomorrow's environmental requirements in mind.

China is among the fastest growing coating markets, with a projected average annual growth rate of about 10 to 15% in the coming years. This growth is supported by the economic development of China, with above average GDP growth, above average growth of the construction industry and relocation of manufacturing activities from Western countries. 

In recent years the Chinese coating industry has become part of the globalizing coatings market. Multinational paint producers have become much more active in China and there is also a strong tendency to leverage technologies for high performance coatings meeting tomorrow's environmental requirements into the Chinese market.