From the notebook of business editor Tim Rausch

Article suggests DSM chemical sell off

An article in Bloomberg BusinessWeek suggests DSM is considering a move to get out of making caprolactam, which is done here in Augusta.

 

Bloomberg in November wrote about DSM looking for partners in the chemical sales business, but now is reporting through unnamed sources that the company is trying to sell off the production business, too.

 

Caprolactam? It is the building block of carpet and is also used in car parts. Royal DSM, which is based in Amsterdam, makes caprolactam in Holland, China and Augusta.

 

The idea is being attributed to Chief Executive Officer Feike Sijbesma, who wants to turn DSM away from being a chemical company into a nutritional product-based company. (DSM has a lot of business units, including vitamins.)

 

Caprolactam is a big part of the sales in the company’s polymer intermediates business, which is $2.1 billion in annual sales. But revenue last year was down 16 percent, Bloomberg says, for lower production volumes and higher prices that it could not pass along to customers.

 

Well, neither the company nor the company that it hired to assist in the possible divestiture is talking – the old ignore-the-rumor play in the playbook.

 

It is early in the process and there are no real answers, but it is worth putting the topic on the community’s radar that there might be a different name on the nameplate out there one day.

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