Press release

DSM and KuibyshevAzot commence strategic cooperation in Russia

Heerlen, NL, 04 Jul 2011 09:17 CEST

Royal DSM N.V., the global Life Sciences and Materials Sciences company, and KuibyshevAzot OJSC (KA) today announce they have commenced their strategic cooperation, as announced in January 2011. As a result of this strategic cooperation, DSM Engineering Plastics has two joint ventures with KA. In both joint ventures DSM Engineering Plastics holds a majority share. In addition, KA has received a license under DSM Fibre Intermediates’ technology for the production of cyclohexanone.

The two joint ventures of DSM Engineering Plastics and KA relate to marketing and sales of engineering plastics in Russia and other members of the Commonwealth of Independent States (CIS) and secondly for the production of engineering plastics compounds in a plant located in Togliatti (Russia). The strategic cooperation between DSM and KA relative to engineering plastics has also resulted in a license grant under DSM’s proprietary cyclohexanone technology to be applied at KA’s Togliatti caprolactam plant, resulting into a further increase of its capacity to meet the growing demand for this polyamide 6 intermediate.

DSM Engineering Plastics and KA are joining forces in a marketing and sales joint venture to better capture opportunities in the growing market for engineering plastics in Russia and other countries in the region. The joint venture concentrates on polyamide 6 (PA6), both compounds and high viscosity applications including film. DSM Engineering Plastics holds a 51% stake in the joint venture.

DSM Engineering Plastics also acquired 80% in the engineering plastics compounding plant located on KA’s manufacturing site in Togliatti. As such, DSM is the first western PA6 supplier with its own manufacturing presence in Russia and the CIS. Financial details and capacity of the plant will not be disclosed.

As a result of the license agreement between DSM and KA, DSM will realize royalty income over 15 years. As consideration for the license, DSM Fibre Intermediates has further obtained drawing rights on part of the increased production capacity of KA. DSM has proprietary world-class cyclohexanone and caprolactam technologies with multiple licensees worldwide.

KuibyshevAzot OJSC

KuibyshevAzot OJSC is one of the leading companies of the Russian chemical industry. The company located in Togliatti, Samara region, conducts its business in two areas: production of caprolactam and its derived products (PA-6, high tenacity yarns, cord fabric, engineering plastics) production of ammonia and nitrogen fertilizers. KuibyshevAzot takes a leading position in output of caprolactam and polyamide in Russia and CIS and is among the top ten major global producers of these products. The company consistently builds up the proportion of higher added value product, by realization from 2003 projects for further caprolactam processing. In 2009 the company realized net sales of RUB 16,039 million ($ 505.2 million with 5,300 employees.

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