DSM Acquires Chinese UHMWPE Fiber Manufacturer

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Royal DSM NV (Heerlen, The Netherlands) announced on Feb. 17 that it has signed an agreement to acquire the majority shareholding of Shandong ICD High Performance Fibre Co Ltd., based in Laiwu, Shandong province, China. Closing of this transaction is expected in 2011. Terms of the transaction were not disclosed.

The acquisition of the majority share in ICD will bring complementary manufacturing and technology assets to DSM, in addition to strengthening the company’s presence in this key market. The agreement with ICD, a manufacturer of UHMWPE (ultra high molecular weight polyethylene) fiber and a potentially strong player in the Chinese market for high-performance fibers, concludes an extensive selection process by DSM to find the right company in the Chinese market.

This strategic step underlines DSM’s commitment to its sales growth and strategic objectives in China and reflects its policy of acquiring businesses with strong potential and a proven track record of success.

Gerard de Reuver, president of DSM Dyneema, added: “China is an important market in terms of both UHMWPE fiber production and consumption and this announced acquisition further develops our position and will help us grow and succeed in this market. This move strengthens our position to better serve our Chinese customers and builds on the long standing success of DSMís investments in China.”

Ren Yi, general manager of ICD, commented: “This is an exciting development for everyone at ICD, and I believe it will help to secure our future growth and success in the Chinese UHMWPE fiber market. We expect to benefit significantly from DSMís global know-how, operating standards and technical expertise which will help us enhance our ability to serve our customers and develop new markets and application opportunities in China.”