DSM cuts jobs at major production site

In December the company said it would shed around 290 jobs at its site in Grenzach, Germany. Three locations in Switzerland are the next to undergo cost-cutting.

One of the division's most important production sites at Sisseln, which makes vitamins E, A and K1 as well as various astaxanthin formulations, will lose 280 jobs . Another 140 will go from the division's head office in Kaiseraugst and the European sales office in Birsfelden over the next two years.

The Dutch group bought Roche's vitamins and fine chemicals division in September 2003. The integration programme, dubbed the 'Vital' project, is designed to reduce costs, streamline business processes and increase efficiency across all of the merged nutrition activities. It is expected to affect all areas of DSM Nutritional Products worldwide in the coming months.

DSM said that new technologies at the vitamin E plant at Sisseln, expected to come on stream in the first half of 2004, will also help the business improve its cost structure, in addition to the job cuts.

Marketing efforts and new research projects are slated to further promote growth at DSM Nutritional Products​, the world's biggest supplier of vitamins, carotenoids and other fine chemicals, in the future.

But the business remains under pressure from unfavourable exchange rates influenced by a weak dollar and severe competition from emerging economies, in particular China, on vitamin prices. These factors have impacted chemicals firms across the board in recent months but DSM's third quarter results were worse than expected, with a 75 per cent drop in operating profit to just €26 million and losses of €78 million.

The group will take a one-off charge of €102 million for restructuring measures but says Nutritional Products can make earnings (before interest and tax) of at least €150 million in 2004 and a €25 million operating profit in this year's fourth quarter. Full year results will be announced next week.