Case Analysis On ROYAL DSM

Introduction
Royal DSM is a Dutch Multinational, headquartered in Heerlen,
active in the fields of health, nutrition and materials.
It was founded in Netherlands in early 1902 as a coal mining
company. Mined coal from 1906 to 1973. First produced coke oven
gas in 1921.
In 1930s expanded into plastics and started Caprolactam
production in the 1950s; polyethylene and melamine in the
1960s.
Started restructuring and diversifying in the 1980s into specialty
chemicals.
1990s saw DSM transforming into petrochemicals, life sciences
and performance materials.

Challenges
Important Challenges:
Upgrading the companys ICT to meet the demands of the new
diversified company
Enable execution of the companys new business strategy
Standardizations of ICT infrastructure to gain operational
efficiency
Improve its ability to disentangle an acquired business from
the parent company and integrate them into DSM
simultaneously
How to standardize technology infrastructure across departments and business
units?

Timeline of an Evolving DSM

1902

1906

1921
1929

After 1945
1950s
1960s
1973
1980s
1989
1998
2000

DSM started with 6 workers

First mined coal
Started producing coke-oven gas (Byproduct of coal)
Began producing chemicals (nitrogenous fertilizer and ammonia)
Opened its first Research Lab
Production of Caprolactum (used in production of nylon)
Opened polyethylene and melamine plants
Closed its last mine and exited Coal Mining
Restructuring and expansion of its products ( inclusion of speciality chemicals)
Went Public on the Amsterdam Stock Exchange (AEX)
Acquired Royal Gist-Brocades N.V.(Food ingredients and penicillin)
Launch of Vision 2005 : Focus and Value

Jo van den Hanenberg was hired to the new corporate CIO position
2001
Acquired Catalytica (Pharmaceutical intermediates, sterile formulation and
packaging)
2002
Sold petrochemical business to Saudi Arabian Basic Industry Corp(SABIC)
Acquisition of Vitamins and Fine Chemicals Division from Roche
2005 Launch of Vision 2010 : Building on Strengths and purchased NeoResins

Aquisitions
1998: Gist-brocades (food ingredients, pharmaceuticals, yeast- and enzyme-based production
process technology).
2000: Catalytica Pharmaceuticals (pharmaceutical intermediates).
2003: Roches vitamin division.
2005: NeoResins (water-based coating resins).
2011: Martek (nutritional products derived from microalgae and fermentation technology).
2011: Vitatene (natural carotenoids derived from fermentation of Blakeslea trispora fungus).
2012: Vereniums food enzymes and oilseed processing business.
2012: Kensey Nash (biomedical regenerative medicine).
2012: Ocean Nutrition Canada (fish-oil derived nutritional products).
2012: Cargill s cultures and enzymes business.
2012: Fortitech (customized nutrient premixes).
2013: Unitech (micronutrient premixes and macronutrient blends).
2013: Andre Pectin (food hydrocolloids).
2013: Tortuga (nutritional supplements for pasture raised cattle).
2015: Aland (vitamin C).

Business Model

Concept
Divest in petrochemicals and
increase foothold in life science
products and performance
materials industries.

Capabilities
Value
Diversify portfolio for long term
growth and sustainability.

Decentralized ICT is able to adapt to a

changing business environment.
ICT has a cross-industry outlook that is
able to support innovation processes.
Small reliable supply base.
One-jump strategy allows for
immediate transition and integration.
EVITA program brought immediate
attention and resolutions to problems.

STRENGHTHS
Newer and cheaper products in
the market
Vision 2005 and Vision 2010
One jump Strategy
EVITA Program

WEAKNESSES
Lack of information flow and
control
Massive expenditures on
additional growth in
petrochemicals
Decentralized and NonStandardized
IT departments

OPPORTUNITIES
It could stay in Europe or
expand globally
Change in global trends
Technological advances
Realign business by
acquisition
Invest in current business
for growth
No standardized IT
infrastructures among IT
departments

OPPORTUNITY STRENGTHS
STRATEGY
Increased focus and value
towards critical business units
through Vision 2005.
Globalization.
Growth in Local Strategic
Partnership(LSP).
Acquisition of business units
which provides a strategic
advantage.

OPPORTUNITY WEAKNESS
STRATEGY
Standardization of ICT.
Restructuring of business.
Implementation of
appropriate strategies.

THREATS
Differences in IT
infrastructure among

THREAT STRENGTHS
STRATEGY
Transition and Integration of

THREAT WEAKNESS
STRATEGY
Divestment of business units.

T.W.O.S
ANALYSIS

IT IMPACT MAP

Problems Faced By DSM

ICT was decentralized.
Acquiring royal gist brocades made the ICT
infrastructure more complex.
Need to build ICT focused on 3 important concept
-Global standardization of ICT infrastructure and
enterprise model
-Service delivery oriented ICT.
Complete transformation of the ICT was needed.

Royal DSM chooses Unisys

Provided IT support service to the employees of royal
DSM
Provided single point of contact service desk to respond
to end users IT issues.
Service was provided in seven languages.
Users were managed through a joint governance
framework engineered to provide end users with a
uniform service experience for all provisioning and
support.

Vision 2005
Focus on Growth Opportunities
Divest Petrochemical business & acquire new
businesses comparable in size to the divested business.
Target sales :- 10 billion Euros
Expand in life sciences & performance material markets

Divesting
Entire petrochemical section.
Complete disentanglement of ICT of petrochemicals
from DSM
Sold to Saudi Arabian Basic Industry Corp (SABIC) for
2.25 billion Euros
Signified a move from bulk commodity player to
specialty player

Acquiring Roche & One Jump

Transition Strategy
Bought the Vitamins & Fine Chemicals Division from
Roche for 1.75 billion Euros.
Acquisition doubled DSMs life sciences business
The VITAL Program - Integrated a.w.a Transformed
Roches V&FC
The eVita Initiative Everything based on DSM
standards

Recommendation
Implementing CRM to improve customer relation using
Pull strategy.
Improving information and communication technology.
Improving effectiveness in each department improves
productivity minimizing waste.
Introducing Six sigma.

Present scenario
Since 2015 : Nutrition, Materials and Innovation center.
Nutrition- Vitamins, food enzymes etc.
Materials- Specialty plastics and resins
Innovation- DSM biomedical, bio based products and
services

 Latest acquisition 2015

Cubic Tech (high performance ultra-lightweight flexible
laminates and fabrics)
50 countries- 88 million profit (2015)
Pharmaceutical company in haryana

THANK YOU