DSM to close citric acid plant in China

by Eric Schroeder
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HEERLEN, THE NETHERLANDS — Royal DSM n.v., a global life sciences and materials sciences company, said it will close its citric acid manufacturing plant in Wuxi, China, by the first quarter of 2009. According to DSM, the closing follows a request from the local government to relocate the plant from its current location because of the need for future urban developments.

DSM said it will receive a compensation amount from the Wuxi government and does not expect to incur a loss related to the facility closing.

"The market for citric acid has been under substantial pressure for several years, mainly due to structural overcapacity in China," DSM said. "As the structural overcapacity is expected to remain, DSM has decided not to rebuild the capacity elsewhere but concentrate its production at the site in Tienen (Belgium), whose competitiveness has substantially improved lately due to restructuring and process optimizations."

Based in Heerlen, DSM is a major producer of citric acid, which is used as flavoring in soft drinks, fruit juices, sweets, jams and jellies. It is also used as a binding agent in biodegradable detergents and in other applications such as antioxidant.

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