During the COVID-19 crisis of 2020, we created a dedicated internal DSM startup and later partnered with VDL Groep (VDL), a Dutch, family-owned industrial conglomerate, to swiftly create a business supplying quality face masks and filter material to Dutch and EU markets. We will use this startup model to scale future innovative businesses.
Accelerating production to meet demand
The COVID-19 crisis highlighted the structural problem of worldwide reliance on long global supply chains, for the supply of critical personal protective equipment (PPE) such as face masks.
Global demand for medical face masks and critical filter material quickly exceeded supply when confronted with the pandemic. A shortage arose that endangered healthcare workers, the continuity of healthcare systems, and the overall response to the COVID-19 crisis. Meanwhile, the overstretched market conditions lead to price increases and low quality, inadequate equipment entering the market. To address the need for locally-produced, reliable, high-quality and responsibly-priced PPE, DSM and VDL’s solution is to build local PPE manufacturing capability. Our entry into the PPE market is purpose-led, helping to address both an immediate societal requirement and a longer-term structural need.
The increased utilization of single-use PPE such as medical face masks creates significant sustainability challenges. Localizing production to end-use location is a first step, however, we and our joint venture partners aim to make sustainability a future development direction for our PPE activities – for example, by looking into the use of circular materials.
The urgent need for locally-produced, reliable, high-quality and responsibly-priced PPE motivated us to apply our experience with startups in to quickly develop a new business and partnership, and to establish operations in the Netherlands. This and other recent experiences provided a blueprint for quickly establishing and scaling up innovative businesses in future.
A small, dedicated, and entrepreneurial team with a high degree of autonomy was created to set up the new venture, ensuring fast decision-making and execution. All team members devote more than 60% of their time to the venture and have short communication lines with each other with day-to-day business decision-making power. A venture board composed of senior DSM leaders convenes to decide on changes to business plans and to approve large investments. Funding requests are linked to business milestones such as having a CE-certified mask ready for commercial launch or having operations plans in place. The team is supported by a light, standalone sales, purchasing and accounting system, facilitating quick transactions and rapid progress.
Do you know?
How many face masks were used by the Dutch healthcare system per week during the height of the first wave?
Ten million. During the peak of the first wave of COVID-19 in March and April 2020, the Dutch government reported that the use of face masks by healthcare workers had increased more than tenfold, to slightly more than 10 million per week (4.5 million intensive care unit (ICU) masks, 6 million surgical masks).
The first product to be manufactured was a Dutch-designed, FFP2 medical face mask for use in high-contamination risk environments such as intensive care units, with production in Helmond (Netherlands). The development of the masks relies on the production of the non-woven filter material, meltblown polypropylene (MBPP), which was in short supply during the first wave of the COVID-19 pandemic. To combat the shortage, we have started construction on an MBPP plant in Geleen (Netherlands). The establishment of the first permanent production facility of critical filter material in the Netherlands will provide greater resilience to possible future surges in demand for face masks and the underlying materials.
The healthcare providers will be prioritized to receive the product initially, and production will be extended as the market may demand to support professionals in other sectors such as public transport, schools and educational institutes, and private companies across Europe.
Dutch PPE Solutions has been created by means of a streamlined procedure for establishing ventures, in line with our strategy to deliver growth and value through innovation. The result is an organization that is built for speed, progressing from concept to production in approximately six months. Initial production of face masks began already in October 2020. The manufacturing facility for MBPP is expected to be fully operational in April 2021.
The establishment of the first permanent production facility for critical filter material in the Netherlands will provide greater resilience to possible future surges in demand for face masks and the underlying materials.
“During the past months the Corona crisis has taught us that you can't tell a pandemic what to do and that it's important for continents to provide for their own needs. This means we owe it to ourselves to create certainties close to home. The realities of this pandemic means there is, and remains, a worldwide need for high quality face masks. I’m proud that DSM and VDL stepped up quickly to respond, enabled by fast decision making and short communication lines between our two companies which has accelerated our progress when it is needed most.”Willem van der Leegte
How we support the SDGs
3 – Ensure healthy lives and promote well-being for all at all ages
The DSM / VDL Groep joint venture will strengthen the EU healthcare system’s ability to respond to future waves of COVID-19 and similar viral pandemics.
9 – Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation
The DSM/ VDL Groep joint venture aims to restore PPE manufacturing and associated employment to the EU.