Netherlands-based DSM Hit by Chinese Competition

Royal DSM NV, the leading Netherlands-based vitamins producer, has claimed that Chinese competition has led to a deterioration in results for its anti-infective pharmaceuticals business. The company has also cited government moves that have led to an oversupply of Penicillin G in China.

DSM recently entered discussions with leading Chinese drugmaker North China Pharmaceuticals Corporation, reportedly with a view to obtaining a US$25mn stake in the company's anti-infectives output. The move is intended to ensure competitiveness with low-cost rivals, which are a feature of the more basic end of the Chinese market.

The group, which has reported a 66 percent rise in operating profit to EUR489mn (US$638.73mn) for 2004, has also acquired Swiss drugmaker Roche's minority stake in a Shanghai-based vitamins joint venture, following its purchase of Roche's nutritional products business in 2003.