DSM to Build Fifth Dyneema Yarn Production Line; Markets Demand Expansion At Top Speed.

Business Editors

HEERLEN, The Netherlands--(BUSINESS WIRE)--Nov. 20, 2001

DSM N.V., the Dutch chemicals group, today announced that DSM High Performance Fibers, the producer of Dyneema superstrong polyethylene fibre, is going to expand its production capacity once again.

At the existing Heerlen (Netherlands) production site, a fifth production line with a capacity of 600 tpa will be built. The project involves an investment of around EUR 30 million and comes on top of a number of other expansions carried out this year to meet the fast growing market demand. The fifth Dyneema yarn production line will come on stream in the last quarter of 2002, bringing total capacity at Heerlen to 3,200 tpa. In 2002 the company's workforce will grow by approximately 30.

Keep up with market demand

The market for Dyneema is growing strongly. The combination of high strength and low weight is the reason that Dyneema is increasingly used in high-performance protective products such as lightweight bullet-resistant vests and helmets, vehicle armouring, safety gloves and protective clothing, as well as in sails and other sport articles, nautical ropes and cables, fishing lines and fishing nets. Over the last few years demand in protective applications has grown very fast. On top of that, Dyneema's successful track record in rope and twine applications has accelerated the replacement of steel and polyester in these applications."We have changed our organization to keep up with market demand, which is increasing very fast," says Pieter Greidanus, director of DSM High Performance Fibers. "The most recent capacity expansion scheme for Dyneema yarns confirms this: by the end of 2002 total production capacity will be 3,200 tpa, more than double the 2000 figure."

Vision 2005: Focus and Value

"The market for Dyneema is growing even faster than we expected," comments Peter Elverding, chairman of the DSM Managing Board. "These investments will enable the Dyneema business to implement its growth strategy at an accelerated pace. The investments in these high performance products are fully in line with our Vision 2005: Focus & Value strategy."

This strategy, presented at the end of last year, defines DSM's goals for the next few years. Elverding: "By 2005 DSM aims to rank among the world's leading players in the field of specialties characterized by a high added value. To this end, DSM is transforming itself into a specialty company: a company specializing in advanced chemical and biotechnological products and performance materials".

Expansion in North America 

"We expect demand for Dyneema products to outstrip the capacity of the five Dyneema production lines within two years," says Pieter Greidanus. "Therefore, DSM has initiated an engineering study into the construction of a sixth Dyneema fibre plant in the USA. We have a solid position in Europe now and fast growing sales in North America." In 2001 DSM High Performance Fibers also built a 400 tpa production line for Dyneema UD in Greenville (NC) in the USA. Dyneema UD is a special sheet material made of Dyneema fibres, which is used for personal ballistic protection and lightweight vehicle armour. The Dyneema UD line will start production in the coming months. "This capacity expansion, too, is badly needed, as our 400 tpa Dyneema UD unit at Heerlen is running at full capacity," says Randy McGowan, director of DSM High Performance Fibers USA Inc.

Dyneema

Dyneema is a superstrong polyethylene fibre developed by DSM. It is manufactured by a gel spinning process, a DSM invention. This technology, which has been patented worldwide, yields the world's strongest fibre: up to fifteen times stronger than steel and forty percent stronger than aramid fibres on a weight-for-weight basis. Dyneema also has a low density (it floats on water) and high resistance to abrasion, moisture, UV rays and chemicals. Its high-energy absorption makes it bullet-resistant. Superstrong Dyneema is used in high-performance protection items (lightweight bullet-resistant vests and helmets), vehicle armouring, sails, nautical ropes, fishing lines, fishing nets, cables, protective gloves and other protective clothing.

DSM High Performance Fibers

DSM High Performance Fibers, based in Heerlen, the Netherlands, is part of DSM's Venturing & Business Development business group. The first production line in Heerlen came on stream in 1990. In 1996 and 1997 DSM High Performance Fibers started up two other production lines, which boosted total capacity for the production of Dyneema to 1,500 tpa. DSM High Performance Fibers and the Japanese company Toyobo own a joint venture in Osaka that produces Dyneema fibres for the Japanese market.

DSM

DSM is a highly integrated international group of companies that is active worldwide in the field of life science products, performance materials, polymers and industrial chemicals. The group has annual sales of EUR 8.1 billion and employs about 22,000 people (year-end 2000) at more than 200 sites worldwide. By 2005 DSM aims to rank among the world's leading players in the field of specialties characterized by a high added value, strong growth and more stable profit levels, with group sales of EUR 10 billion. At least 80% of this should be generated by specialties in which DSM holds global leadership positions.