Today, Royal DSM N.V., headquartered in Heerlen, The Netherlands, confirmed that it is engaged in discussions with North China Pharmaceutical Group Corporation (“NCPC”) of Shijiazhuang, Hebei Province, People’s Republic of China, regarding a strategic partnership via a.o. participation in the equity ownership of North China Pharmaceutical Company, Ltd. (“NCPC Ltd.”), a company which is listed on the Shanghai stock exchange.  DSM’s equity participation in NCPC Ltd. is related to the establishment of joint ventures in the area of vitamins and anti-biotic products.

According to the agreement signed between NCPC and DSM on November 22, 2004, DSM intends to contribute USD 25 million, which equals to RMB 206,602,500 at the exchange rate of USD 1 to RMB 8.2641 on November 11, 2004, to acquire 58,197,887 state-owned shares of NCPC Ltd. held by NCPC at the price of RMB 3.55/share.

Definitive agreements, detailing the various transactions, have yet to be worked out and such agreements will require the approvals of several internal and external parties. DSM believes that the yet unknown time schedule of the regulatory approvals for all of the anticipated arrangements will determine the schedule for completing the planned transactions.

NCPC

NCPC, together with its affiliates, is one of the largest vitamins and antibiotics manufacturers in the People’s Republic of China, originally established in 1953 in Hebei Province. NCPC comprises 28 controlled subsidiaries, 12 associated companies, and an additional 20 indirectly controlled subsidiaries. Total 2003 group revenues of NCPC are approximately RMB 7 billion  (EUR 700 million).