DSM to close citric acid plant in China

27-08-2008 | |

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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