DSM to close citric acid manufacturing plant in China

Royal DSM N.V., has announced the closure of 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 social plan is being prepared for the several hundred people who will be affected by the closure.

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.