10 Associates and joint arrangements

Associates and joint ventures

The following table analyses, in aggregate, the carrying amount and share of profit and other results of associates and joint ventures.

In the second quarter of 2020, an impairment test was carried out by the POET-DSM Advanced Biofuels joint venture, triggered by the decision to mothball the second-generation bio-ethanol plant in Emmetsburg (Iowa, USA). While previous impairment tests were based on the value-in-use of POET-DSM, this method was no longer applicable due to ceased operations, and the recoverable amount was determined based on the fair value minus cost to sell. Given the challenging market conditions and the specialized nature of the assets, the fair value minus cost to sell and, hence, the recoverable amount was assessed to be negligible. Based on this impairment test, an impairment loss of €74 million was included in ‘Share of the profit of associates and joint ventures’ and the carrying amount of DSM’s share in POET-DSM has been reduced to zero.

Joint operations

In 2020, DSM and VDL Group established Dutch PPE Solutions VoF, Eindhoven (Netherlands), a joint operation in which DSM and VDL Group each hold a 50% share. Dutch PPE Solutions will establish production of medical face masks and the first permanent production of critical face mask components in the Netherlands. The plant producing meltblown polypropylene, the critical material layer in medical face masks that filters viruses, is expected to be fully operational in Sittard-Geleen (Netherlands) in April 2021.

DSM accounts for the assets, liabilities, revenues and expenses relating to Veramaris (2017), Avansya VoF (2019), and Dutch PPE Solutions (2020) in accordance with IFRS 11 for joint operations and therefore recognizes the amounts in accordance with the contractual entitlement and obligations of DSM.