The Polymer Intermediates cluster consists of DSM Fibre Intermediates.

DSM Fibre Intermediates produces caprolactam and acrylonitrile, which are raw materials for synthetic fibers and plastics. Other products include ammonium sulfate, a fertilizer, diaminobutane, sodium cyanide and cyclohexanone. DSM Fibre Intermediates, with plants in the Netherlands, the United States and China, is with a market share of 20% the largest merchant caprolactam producer in the world. With a market share of 25%, DSM is a major player in the merchant acrylonitrile market in Europe.

Caprolactam is the raw material for polyamide 6, a thermoplastic polymer. This is a versatile material, which in the form of fibers is used in carpets, sports and leisure clothes and textiles. It also has applications in engineering plastics applications including electronics, automotive industries and specialty packaging materials and in tires as tire cord. DSM’s caprolactam production capacity is more than 600,000 tons per annum (tpa). In addition, the business group produces about 1.2 million tpa of fertilizer (ammonium sulfate) as a co-product.

Polyamide 6 is also used in dentists’ chairs, hooligan-proof stadium seats, food packaging, medical packaging, lingerie, sleeping bags, parachutes and tennis racket strings. It is the most widely used material in carpets, having excellent resistance to wear, crushing, matting and dirt. It also has a more favorable eco-footprint compared to other materials and is recyclable.

Polyamide 6 has reached the mature phase of its life cycle, where market demand and selling prices are strongly influenced by supply/demand cycles. It is facing competition from other materials, such as polyamide 66, polyester and polypropylene.

Acrylonitrile is a raw material used in textile fibers (acrylic or modacrylic), ABS plastics used in automotive, toys and computers, latex rubber, paints, coatings and water-purification products. It is also used in baby-food jar closures.

The business group’s acrylonitrile production capacity is 260,000 tpa. DSM Fibre Intermediates also produces about 25,000 tpa of sodium cyanide, which is used in detergents and in the synthesis of vitamins. It also produces diaminobutane, an intermediate for Stanyl^®.

DSM Fibre Intermediates’ distinguishing characteristics are its process technology, reliability and service. The business group aims to exploit its global cost and technology leadership position in caprolactam while growing its position in China parallel to a further strengthening in Europe and North America in close cooperation with DSM Engineering Plastics, for which caprolactam is a very important raw material. For acrylonitrile the business group aims to strengthen its manufacturing base in Sittard-Geleen (Netherlands).

During most of 2008, there was a healthy supply and demand balance in caprolactam and acrylonitrile with a global utilization rate above 90%. At the beginning of the fourth quarter, however, market conditions became significantly more difficult as demand weakened strongly in combination with significant customer destocking in anticipation of lower prices following the drop in oil prices and a recession in North America and Europe.

The business group responded by temporarily shutting down a number of plants. Slow demand and lower feedstock costs resulting in a drop in caprolactam prices put pressure on operating profit and margins towards the end of the year. For the full year, sales decreased by 3%; operating profit showed a strong decrease.

Looking ahead, the impact of the turmoil in the financial markets and the current difficult economic situation will be significant for DSM Fibre Intermediates and lower global utilization rates are expected.