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DSM Anti-Infectives to close clavulanic acid production site in Sweden

Heerlen, NL, 02 Oct 2008 09:15 CEST

Royal DSM N.V., the global Life Sciences and Materials Sciences company headquartered in the Netherlands, today announces that DSM Anti-Infectives has decided to close its site in Strängnäs, Sweden. The site mainly produces clavulanic acid. Total cost of closure will be slightly above EUR 10 million (after tax) and will be reported as an exceptional item in Q4.

The facility will cease operations towards the end of 2009. In total close to 100 jobs will be affected. DSM will provide a good social plan for the people involved. Local representatives of the workforce and of the relevant authorities have been informed of the decision. Existing business obligations will be fully respected.

In June 2007, DSM Anti-Infectives announced the outcome of its strategic review. Through a partnering strategy combined with innovation initiatives and restructuring measures, DSM believes the greatest value will be generated. As part of the review, clavulanic acid was not considered a long term strategic product for the group. Since June 2007 several options were evaluated, resulting in the decision to close the site.

Jan Zuidam, Vice Chairman of the Managing Board of Directors of Royal DSM said: “The strategic review for DSM Anti-Infectives we announced last year is aimed at creating a sustainable and profitable future for the business group. We are well on track with the implementation of this strategic review. After careful consideration and despite all the efforts of our workforce we had to conclude it is not possible to maintain a profitable manufacturing activity for the product in Sweden.”

Clavulanic acid is a beta lactamase inhibitor used in combating the resistance of bacteria to amoxicillin, an important broad spectrum antibiotic. The exit from the clavulanic acid business allows DSM Anti-Infectives to focus on its portfolio of generic Active Pharmaceutical Ingredients.