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News 313 views last update:7 Aug 2012

DSM to close citric acid plant in China

Royal DSM N.V., headquartered in the Netherlands, said it will close its citric acid manufacturing plant in Wuxi (China) by Q1 2009.

The closure follows a request from the local government to relocate the plant from its current location as this location is needed for future urban developments.

DSM will receive a compensation amount from the Wuxi government and does not expect to incur a book loss. A good social plan is being prepared for the several hundred people who will be affected by the closure.

Not rebuilding
The market for citric acid has been under substantial pressure for several years, mainly due to structural overcapacity in China.

As the structural overcapacity is expected to remain, DSM has decided not to rebuild the capacity elsewhere but concentrate its production at the site in Tienen (Belgium), whose competitiveness has substantially improved lately due to restructuring and process optimizations.

DSM is a large producer of citric acid. The product is used as flavouring in soft drinks, fruit juices, sweets, jams and jellies. It is also used as a binding agent in biodegradable detergents and in other applications such as antioxidant.

Citrique Belge, the DSM citric acid site in Belgium, has been producing citric acid since 1929.

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