Partnerships

As part of DSM's strategic transformation and move away from more commoditized and cyclical areas, we established joint ventures for the pharma activities (DSM Sinochem Pharmaceuticals for anti-infectives in 2011 and Patheon for contract development and manufacturing services in 2014) and for the bulk chemical businesses in Polymer Intermediates and Composite Resins (ChemicaInvest in 2015).

The results of these joint ventures are reported under 'Share of profit of associates and joint ventures' and 'Other results related to associates and joint ventures' in the Consolidate Income statement 2017 vs 2016. See also Associates and joint ventures.

These joint ventures were created with the intention of ultimately exiting these businesses and maximizing value.

DSM Sinochem Pharmaceuticals

x € million (100%)
2017
2016
   
Net sales
440
431
   
Adjusted EBITDA
73
62
Adjusted operating profit
42
34
Capital employed at 31 December
323
223

DSM Sinochem Pharmaceuticals (DSP) continued to deliver strong growth over the year as its sustainability-driven antibiotics platforms are increasingly valued by the market. Sales growth was partly offset by negative foreign currency effects. DSP is a 50/50 joint venture between DSM and Sinochem Group, a Fortune 500 company. DSP is the global leader in sustainable antibiotics, next-generation statins and anti-fungals. DSP develops, produces and sells intermediates, active pharmaceutical ingredients (APIs) and drug products. DSP is at the forefront of technological and process developments for anti-infectives and cholesterol-lowering molecules, using environmentally-friendly technologies such as fermentation and enzymatic conversions to replace chemical processes. Headquartered in Singapore, the group has manufacturing sites and sales offices in China, India, Egypt, the Netherlands, Spain, the US and Mexico.

Sustainable antibiotics
DSP takes a leading role in making and promoting sustainable antibiotics. Its high-quality APIs, called PureActives®, are manufactured using enzymes rather than chemicals. This process emits much less CO2. Additionally, DSP sites worldwide have implemented requirements for clean and sustainable production. It operates dedicated waste water treatment plants at all manufacturing sites in combination with antimicrobial activity testing.

DSP works with partners across the entire value chain to buy, use and sell responsibly made antibiotics. Its approach includes taking a proactive stance on antimicrobial resistance (AMR). DSP is a signatory company to the UN Industry Roadmap on combating AMR and member of the Pharmaceutical Supply Chain Initiative. In 2017, DSP joined the AMR Industry Alliance as a member of the Board and several working groups. This alliance brings together over 100 research-based pharmaceutical, generics, biotech and diagnostic companies and associations, to drive and measure the life sciences industry's progress in curbing antimicrobial resistance.

Patheon

Patheon was formed in 2014 as part of a USD 2.6 billion transaction between JLL Partners and DSM, which combined the businesses of DSM Pharmaceutical Products and Patheon, Inc. The company is a leading global provider of outsourced pharmaceutical development and manufacturing services ranging from formulation development to clinical and commercial-scale manufacturing, packaging, and lifecycle management. In 2017, DSM divested Patheon. Cash proceeds were about €1.5 billion. Together with the approximately €0.5 billion in cash that DSM already received in recent years, including the proceeds from the Initial Public Offering of Patheon, the total cash proceeds from the divestment of DSM's custom manufacturing activities in Pharma amount to approximately €2.0 billion.

ChemicaInvest

x € million (100%)
2017
2016
   
Net sales
1,933
1,802
   
Adjusted EBITDA
205
107
Adjusted operating profit
156
(36)
Capital employed at 31 December
454
556

ChemicaInvest is a global leader in the production and supply of caprolactam and a leading European supplier of acrylonitrile and composite resins. DSM has a 35% shareholding in the company. ChemicaInvest showed a good financial recovery in 2017 driven by favorable conditions in the caprolactam and acrylonitrile markets and continued growth in the composite resins market, combined with an improved cost structure and lean operational management.