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DSM to strengthen focus with cost efficiency measures

These changes will result in structural savings of EUR 125-150 million to be fully achieved by the end of 2017, the company reports.

25th August 2015

Innovation in Textiles
 |  The Netherlands

Medical/Hygiene, Transport/​Aerospace, Sustainable, Civil Engineering

Following recent portfolio changes, these adjustments aim to create a more agile, focused and cost efficient organization, with a stronger business and market focus and globally leveraged support functions.

These changes will result in structural savings of EUR 125-150 million to be fully achieved by the end of 2017, the company reports. DSM will also strengthen its management structure by establishing an Executive Committee, enabling faster strategic alignment and operational execution.

Business improvement programme

In addition to these changes, DSM is developing a business (growth) improvement and efficiency programme for the Nutrition business that will be communicated at the Capital Markets Day on 4 November 2015.

“In an increasingly global and fast-paced business environment we need to adapt our organizational and operating model to service our customers even better. With the adjustments announced today, we become more agile, focused and cost-efficient. Businesses fully focus on growth, while at the same time we become more competitive by leveraging our global support functions,” said Feike Sijbesma, CEO/Chairman of the Managing Board, Royal DSM.

Optimisation of support functions

The support functions will be globally leveraged across DSM to capture scale-benefits and deliver high-quality professional support at lower costs, among others via further standardization of processes, delayering, and elimination of duplications, resulting in a more efficient pooling of resources with clearer accountability for performance. This will lead to a reduction in size of the support functions, also in view of the transfer into partnerships of the Pharma, Polymer Intermediates and Composite Resins businesses.

This new organizational model will apply to Finance, HR, Legal, IT, Business Services, Indirect Sourcing, Communications and Corporate departments as well as the Regional centres. In addition, DSM will implement efficiency measures in its major R&D centres globally.

 The DSM business groups remain the cornerstones of the company and their focus will be on the primary functions of the company: Innovation and R&D, Direct Sourcing, Manufacturing & Operations and Marketing & Sales. The optimization of the support functions will enable the business groups to increase their business and market focus and operate in today's business environment with greater agility.

Executive Committee

DSM will strengthen its management structure by establishing an Executive Committee, enabling faster strategic alignment and operational execution by increasing focus on the development of the business, innovation and people.

The members of the Executive Committee will be the Managing Board members Feike Sijbesma (CEO/Chairman), Geraldine Matchett (CFO), Stephan Tanda (Life Sciences) and Dimitri de Vreeze (Materials Sciences), as well as Chris Goppelsroeder (Nutritional Products), Philip Eykerman (Strategy and M&A), Rob van Leen (R&D and Innovation) and Peter Vrijsen (Human Resources).

www.dsm.com

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