dsm: factbook 2012

Life Sciences and Materials Sciences

DSM at a glanceFactbook 2012

DSM, the Life Sciences and Materials Sciences company

Our purpose is to create brighter lives for people today and generations to come. We connect our unique competences in LifeSciences and Materials Sciences to create solutions that nourish, protect and improve performance.

DSM uses its Bright Science to create Brighter Living for people today and for generations to come. Based on a deep understandingof key global trends that are driving societies, markets and customers, DSM creates solutions to some of the world’s great chal-lenges, thus adding to both its own and its customers’ success.

DSM believes that its continued success will be driven by its ability to create shared value for all stakeholders, now and in the fu-ture. It creates sustainable shared value by innovating in ways that allow its customers to provide better People, Planet and Profitsolutions solutions to the challenges facing society, the environment and end-users. In this way, DSM’s customers derive valuefrom being able to offer end-users improved products; society and the planet derive value from the impact of more sustainable,longer-lasting, safer, healthier and more nutritious alternatives; and, as a result, DSM and its shareholders derive value fromstronger growth and profitability. Finally, DSM’s employees feel engaged and motivated both through the contribution they maketo a better world and the success this creates for the company in which they work.

DSM – Bright Science. Brighter Living.™

Royal DSM is a global science-based company active in health, nutrition and materials. By connecting its unique competences in Life Sciences and Materials SciencesDSM is driving economic prosperity, environmental progress and social advances to create sustainable value for all stakeholders. DSM delivers innovative solutions thatnourish, protect and improve performance in global markets such as food and dietary supplements, personal care, feed, pharmaceuticals, medical devices, automotive,paints, electrical and electronics, life protection, alternative energy and bio-based materials. DSM’s 22,000 employees deliver annual net sales of around € 9 billion.The company is listed on NYSE Euronext. More information can be found at www.dsm.com.

Life Sciences and Materials Sciences

http://www.dsm.com./

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Table of Contents

Page

4 Bright Science. Bright Living.™

5 Our businesses

6 Strategy

10 Overview key financial data

12 Clusters12 Nutrition20 Pharma26 Performance Materials34 Polymer Intermediates38 Innovation Center

44 Sourcing/Purchasing

45 Organization

46 Share structure

47 Remuneration

48 History

49 Five Year Financial Summary

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DSM has transformed itself into a leading Life Sciences and Ma-terials Sciences company that is active in health, nutrition andmaterials and creates value for its customers by helping themprovide solutions to the world’s great challenges. DSM uses itsbright science to create brighter lives for people today andgenerations to come by providing the ingredients to developinnovative more sustainable, healthier, more nutritious andbetter performing products.

DSM has a very strong starting position to realize its ambitiousgrowth targets as set in its strategy for the period till 2015, allbased on its strong global market position (with about 40% ofits total sales of € 9 billion coming from high growth econo-mies), its unique technological knowledge as a basis for innova-tion, its strong track record in sustainability, its very solid bal-ance sheet, and the experience and expertise of its 22,000 peo-ple.

DSM believes that its continued success will be driven by creat-ing shared value for all stakeholders, now and in the future. Itcreates sustainable shared value by innovating in ways thatallow its customers to provide better solutions serving People,Planet and Profit solutions to the challenges facing society, theenvironment and end-users. In this way, DSM’s customers de-rive value from being able to offer end-users improved prod-ucts; society and the planet derive value from the impact ofmore sustainable, longer-lasting, safer, healthier and morenutritious alternatives; and, as a result, DSM and its sharehold-ers derive value from stronger growth and profitability.

Finally, DSM’s employees feel engaged and motivated throughthe contribution they make to a better world and the successthis creates for the company in which they work. In short, DSMis a multi-stakeholder-oriented company with a triple bottomline (People-Planet-Profit) creating value for its customers,shareholders and employees as well as society at large.

As a global company, DSM is actively engaged in addressing thesame key trends that face all its stakeholders: meeting chang-ing demands arising from global shifts in demographics andtechnology, mitigating the impact of climate change whilesearching for new forms of energy and trying not just to feedbut also to improve the health of a growing population.

In DSM’s Life Sciences markets, these trends manifest them-selves through the related impacts of increasing personalwealth, urbanization and expanding life expectancy.

Bright Science. Brighter Living.™Urbanization drives the consumption of processed foods andthe need for a more efficient food chain, while rising wealthtranslates into increased demand for proteins from meat, fish,eggs andmilk – in turn driving demand for DSM’s food and feedproducts. Food security (access to nutritious food for all peopleat all times) is one of the main themes to which DSM is contrib-uting. At the same time, a focus on healthy and active aging isdriving demand for fortified foods and supplements. And final-ly, an aging population means increased healthcare spending,which DSM addresses through its engagement in preventivehealth and services to pharmaceutical companies.

Performance and sustainability are key drivers impacting de-mand in DSM’s Materials Sciences markets, where the companyis accelerating the transformation toward the production anduse of materials that are lighter, healthier, safer, stronger andmore durable and that have lower environmental footprintsthroughout their value chains than traditional materials such assteel.

For automotive manufacturers for instance, this transformationmeans providing more features for drivers while simultaneouslyreducing the environmental impact of vehicles over theirlifecycle. This requires not just lighter materials but also inno-vations that reduce friction – a factor that is important in othertransport sectors as well. Miniaturization and constant innova-tion still drive the market for electronics manufacturers, but E-waste and resource availability and efficiency are growing con-cerns. In order to avoid health risks and reputational problemsfor their brands, electronics manufacturers want to be able touse materials that not only offer increasingly lower hazards anddeliver excellent performance, but are also efficiently recycla-ble or even bio-based. Similarly, the building and constructionindustry needs paints and coatings that offer improved qualityand appearance while at the same time minimizing health risksand offering exceptional environmental performance.

Bringing DSM’s Life Sciences and Materials Sciences competenc-es together offers cross-fertilization opportunities allowingfurther advances. This cross-fertilization is managed throughDSM’s Emerging Business Areas (EBAs). A thorough understand-ing of how advanced materials can be used in the human bodyto strengthen or replace body parts and accurately delivermedicines is driving DSM’s biomedical materials business. Bymerging its broad biotechnology capability with its materialsbusinesses, DSM is able to find renewable solutions for the postfossil age by creating bio-based materials and building blocksand by actively working to create commercially viable ad-vanced biofuels that do not compete with the food value chain.

While DSM continues to meet the needs of customers in themature markets of North America and Western Europe whichremain central to its core business – the company’s investmentfocus is increasingly on the high growth economies such as Asia,Central and Eastern Europe and Latin America, where DSM ex-pects 70% of its growth up to 2015 to take place. In turn, thismeans DSM is becoming steadily more international, enabling itto bring a global perspective to the challenges of all its cus-tomers. In addition to achieving sustainable, innovative organicgrowth, DSM will continue to take advantage of opportunitiesto acquire exciting businesses and to partner with others to thebenefit of all its stakeholders. And finally, the company willcontinue to improve its shareholder returns, supported by itssolid dividend policy.

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high-quality products that are tailored to meet customers’ per-formance criteria. DSM's performance materials are used in awide variety of end-use markets: the automotive industry, theaviation industry, the electrical and electronics industry, themarine industry, the sports and leisure industries, the paint andcoatings industry and the construction industry.

Polymer IntermediatesStrengthening backward integration for DSM EngineeringPlasticsThe Polymer Intermediates product cluster comprises caprolac-tam and acrylonitrile produced by DSM Fibre Intermediates(DFI). These products are raw materials for synthetic fibers andplastics. Caprolactam is a key feedstock for DSM EngineeringPlastics’ polyamide production. Globally, DFI is the largest mer-chant caprolactam supplier and the third largest merchant ac-rylonitrile supplier. In addition, the business group producesammonium sulfate, sodium cyanide, cyclohexanone and dia-minobutane.

Innovation CenterThe Innovation Center is an element of the strategy DSM in mo-tion: driving focused growth. It contains the activities of theDSM Innovation Center (including DSM Venturing) and theEmerging Business Areas (EBAs). The EBAs comprise new innova-tive growth platforms based on the combination of DSM’s com-petences in Life Sciences and Materials Sciences.

DSM Biomedical develops novel materials-based solutions tomeet the needs of the medical device and biopharmaceuti-cal industries with coatings, drug delivery platforms and awide range of biomedical materials for use in implantablemedical devices.DSM Bio-based Products & Services creates solutions forbioconversion of feedstocks for the production of bio-basedchemicals and materials and develops the technologies toenable the production of advanced biofuels.DSM Advanced Surfaces provides solutions for the develop-ment and application of smart coatings that boost perfor-mance and/or improve aesthetics across a wide range ofindustries and applications, including solar glass and thelighting industry.

NutritionContinued value growthThe Nutrition cluster comprises DSM Nutritional Products (DNP)and DSM Food Specialties (DFS). The nutrition and food ingredi-ents businesses serve the food and beverage, feed, personalcare and pharmaceutical industries. Their activities are basedon in-depth knowledge of customer/market needs. With cus-tomized formulation activities in more than 44 locations and amarketing/sales presence reaching over 60 countries, customerintimacy is a key success factor. The Nutrition businesses' tech-nical expertise is based on application knowhow and innovationtranslating market needs into products and services with newbenefits. Technologies in the Nutrition cluster are broad, utiliz-ing DSM’s competences in biotechnology (including fermenta-tion), chemical process technology and particle engineering.DSM has the world's broadest ingredients portfolio and holdsleading positions in many large ingredient markets for animaland human nutrition and health as well as personal care.

PharmaLeveraging partnerships for growthThe Pharma cluster includes the business group DSM Pharma-ceutical Products (DPP), one of the world’s leading custommanufacturing suppliers to the pharmaceutical industry. Manyof today’s medicines around the world contain ingredients pro-duced by DPP. The cluster also contains DSM's 50% interest inthe DSM Sinochem Pharmaceuticals joint venture (DSP). DSPwas formed from the former DSM business group DSM Anti-Infectives (DAI). DSP is one of the few producers and marketersof beta-lactam active pharmaceutical ingredients with a globalpresence, using cutting-edge low eco-footprint manufacturingtechnology.

Performance MaterialsGrowing via sustainable, innovative solutionsThe Performance Materials cluster comprises DSM EngineeringPlastics, DSM Dyneema and DSM Resins. These business groupsspecialize in the manufacture of technologically sophisticated,

Our businesses

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Global trendsThe global population is expected to grow from 7 billion now to9 billion by 2050. In addition, it is aging and becoming increas-ingly urban and wealthy, leading to increased consumption percapita and a bigger claim on the world’s resources. All thiscomes together in three key global societal trends: a globaldemographic shift, challenges in the field of climate and energyusage and a growing focus on how to secure health and well-ness for all.

Global ShiftsThe accelerating shift of wealth from West to East and fromNorth to South is the basis of a whole series of global shiftswhich are creating a more urban, more connected and moreprosperous world but with huge resource and culturalchallenges as a result.

Climate and EnergyThe accepted reality that our fossil age is causing considerablechange to our climate is driving the search for alternative ener-gy, chemicals and materials sources as well as efforts to reduceresource consumption in a multitude of ways as the world willenter an era of resource scarcity.

Health and WellnessThe impact of a growing, aging, more urban population is beingfelt across the world, but in remarkably different ways: thedrive to improve well-being and increase life span among thegrowing middle classes of the high growth economies contrasts

Strategy

with the continuing struggle to effectively feed the populationsin less well-off parts of the world.

DSM’s focus is on providing its customers with the innovationsand sustainable products they need to meet the societal andmarket demands arising from these trends. By adding to itscustomers’ success, DSM adds to its own success too.

DSM in motion: driving focused growthAfter a long history of successful transformations, DSM hasreached a next phase where it delivers on its mission ofcreating brighter lives for people today and generations tocome, driving focused growth and becoming a truly globalcompany.

It is DSM’s ambition to fully leverage the unique opportunitiesin Life Sciences and Materials Sciences, using four growthdrivers (High Growth Economies, Innovation, Sustainability andAcquisitions & Partnerships) and bringing all four drivers to thenext level. At the same time DSM aims to make maximum useof the potential of all four growth drivers to mutually reinforceeach other and generate a greater number of compellingbusiness opportunities.

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Strategic and financial targetsDSM has set itself ambitious targets for the current strategyperiod. The company has high aspirations, based on an as-sessment of the opportunities, particularly in high growtheconomies, innovation, sustainability, acquisitions and part-nerships, and aims at accelerated growth and increased pro-fitability.

For the period 2011 - 2015 capital expenditure can be ex-pected at a level comparable to that in the 'accelerated Vi-sion 2010' period (€ 500-550 million per year on average). Forthe total period, capital expenditure is expected to amountto € 2.5-2.7 billion, of which approximately USD 1 billion inChina. In addition, DSM aspires to keep working capital as apercentage of annualized net sales below 19%.

In 2010 DSM set a number of ambitious sustainability aspira-tions for 2015.

High Growth Economiesfrom reaching out to being truly global

A key element of DSM in motion: driving focused growth is forDSM to move from being a European company reaching out tothe world to being a truly global company. All the evidenceindicates that fast-growing economies such as China, India,Brazil and Russia and other emerging areas will be the majorgrowth engines for the world economy over the next decade.DSM’s market penetration in the high growth economies hasincreased from just 22% of sales in 2005 to 39% now, the tar-get

for 2015 being to move toward 50% of sales. DSM expects over70% of its growth in the period to 2015 to come from highgrowth economies.

DSM has a clear focus on China, where the company has set atarget to double sales to a level of at least USD 3 billion by2015. To support this growth DSM intends to invest USD 1 billionin China in this strategy period. DSM will also increase its pres-ence in other markets, doubling or even trebling revenues inIndia, Latin America and Russia.

Innovationfrom ‘building the machine’ to doubling innovation output

Since the announcement of the innovation boost back in 2005,as part of DSM’s Vision 2010 strategy, the company's increasedcommitment to innovation has significantly paid off, as shownby the achievement of numerous milestones, the most tangibleone being the fact that in 2010 DSM clearly exceeded its targetof achieving € 1 billion in additional sales through innovationcompared to 2005 (the actual contribution achieved was € 1.3billion in 2010).

Building on this track record, DSM is taking value creationthrough innovation to the next level. DSM has adopted a newdefinition of its innovation target which is more in line with thedefinition used by other mainstream innovators in the industry:percentage of sales created by new products and applicationsintroduced in the last five years, replacing the previous targetof an absolute amount of additional sales through innovation.

DSM’s target is to increase innovation sales from approximately12% in 2010 toward 20% of total sales by 2015. In 2011 innova-tion sales increased to 18% of total sales.

Sustainabilityfrom responsibility to a business driver

DSM’s sustainability strategy is strongly connected to the com-pany’s mission to create brighter lives for people today and forgenerations to come, and to its brand promise of Bright Sci-ence. Brighter Living.™ DSM believes sustainability will be a keydifferentiator and value driver over the coming decades.

The company is on track to achieve all the sustainability targetsit has set for 2015.

Acquisitions & Partnershipsfrom ‘portfolio transformation’ to ‘driving focused growth’

DSM applies stringent strategic, financial and sustainability cri-teria to any potential acquisition or partnership. In the screen-ing process a first selection is made on the basis of strategic fit.This results in a shortlist to which DSM applies its financial cri-teria. A key strategic criterion is that the business or partnershould add or increase a leadership position and should addvalue to DSM in terms of technological and/or market compe-tences.

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Change agendaThrough its Change Agenda, DSM is developing the cultureneeded to achieve its strategic ambitions. Building this cultureacross DSM will lead to a more agile organization that is fit tocope with fast moving developments in the business environ-ment. The three main themes of the Change Agenda are: exter-nal orientation, accountability for performance and inspiration-al leadership. These three themes are supported by DSM’s un-derlying beliefs in sustainability and diversity.

External orientation and drive for innovation:DSM has anchored its strategy in key long-term trends (globalshifts, climate & energy and health & wellness) that drive fun-damental societal needs. At the same time, the ‘clock speed’of business is ever increasing. DSM is convinced that, in order tobe able to rapidly adapt to changing industry and customerrequirements, the vast majority of its people need to be fullyin tune with the external world, not only anticipating customerneeds to drive innovation priorities, but also tracking best prac-tices for key business functions, broadening networks, engagingwith stakeholder groups, shaping the debate and collaboratingwith external stakeholders.

Accountability for performanceDSM believes that its work is critical to its customers and that itis therefore important that its employees take ownership anddeliver upon the ambitious targets established to meet custom-ers’ needs. Accountability for performance is about people tak-ing responsibility for their actions and for the performance oftheir teams, about recognizing and celebrating successes,bringing issues to the surface and viewing mistakes as individualand collective learning opportunities.

Inspirational leadershipDSM recognizes the importance of stronger inspirationalleadership to lead the company’s further cultural transfor-mation. This leadership is a combination of setting direction byformulating a vision and targets; pursuing this vision and thesetargets with passion, a sense of urgency and decisiveness; andconnecting with people by giving and inspiring trust, being au-thentic and showing humility.

The key financial criteria for acquisitions are a Single A creditrating for DSM, a contribution to cash earnings per share fromthe beginning and a contribution to earnings per share fromyear two. An acquisition should also support DSM's other fi-nancial targets.

In the exceptional case that a very attractive acquisition op-portunity arises of a size that would put pressure on financialmetrics, DSM may be willing to accept a temporary deviationfrom the credit metrics commensurate with its rating target.However, DSM believes that Single A ratings are the rightplace to be for the company to ensure sufficient financialand strategic flexibility at all times, and DSM would seek tomanage its balance sheet and underlying financials after suchan acquisition to allow the company to re-align ratios withSingle A ratings within a short period of time.

DSM will look for opportunities to strengthen competencesand market positions for the other three strategic growthdrivers: expansion in High Growth Economies, Innovation andSustainability.

Combining growth driversEach of DSM’s four strategic growth drivers is important in itsown right but they also reinforce one another. By combiningmultiple growth drivers, DSM will be able to generate agreater number of compelling, high-potential businessopportunities.

Organization and cultureDSM is transforming to become a genuinely global organiza-tionthat is capable of achieving its strategic ambitions. Bystrengthening and empowering its regional businesses, DSMdeepens local market insights and relationships.

In parallel, the One DSM drive progressively enhancesknowledge-sharing and collaboration across businesses, func-tions and regions, enabling DSM to realize the full benefits ofscale and diversity.

The business groups are the primary organizational and en-trepreneurial building blocks with a focus on customers andmarkets. The regional organizations strengthen the businessgroups by providing infrastructure and capabilities. They alsocater for local innovation in designated countries and presentthe One DSM face to the external stakeholders. As a sharedresponsibility, the regional organizations also support salesgrowth.

All this is supported and optimized by shared services(providing efficient high quality services in designated areas)and functional excellence groups (offering functional exper-tise and implementation capabilities). Corporate staff de-partments support the Managing Board in running the compa-ny.

Strategy

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Overview key financial data

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Business and trendsThe Nutrition cluster concentrates on the food and beverage,infant nutrition, dietary supplements, animal nutrition andpersonal care ingredients markets. These markets are experi-encing many of the same global trends that are impactingDSM as a whole, but also specific business and societal devel-opments that are profoundly shaping the future:

consumer demands for convenient and indulgent productsdeepening concern about the health and wellness ofrapidly aging populationsemerging demand patterns in high growth economiessustainability and food safety concernsconsumers’ growing desire for natural ingredients (‘cleanlabel spirit')

Sustainability and food safety concerns are leading regulatorsto apply stricter standards to the oversight of product con-tent, claims, processing methods and emissions. This is adevelopment that will impact producers such as DSM.

The ‘clean label spirit' in more mature markets, where con-sumers are asking for fewer E-numbers and ‘no artificial fla-vors or preservatives’, is a trend that DSM expects to widenover the coming years. DSM will address it pro-actively, alt-hough it will not represent a major part of demand for sometime.

Nutrition

2011 Sales by end-market

49%

37%

5%9%

Animal Nutrition &Health

Human Nutrition &Health

Personal Care

Food Specialities

2011 Sales by destination

36%

36%

23%

5%Europe

Americas

Asia

RoW

Against the background of the above-mentioned trends, DSMexpects that the fastest future growth will come from highgrowth economies, and that the established economies remainvital not only as the largest markets but also as the centraldrivers of product innovation (especially the US and WesternEurope).

What is clear is that future growth in this industry will be partlydriven by innovation. The total ingredients sector is growingfaster than global GDP. There is also a divergence between wellestablished ingredients and forms and more innovative ones.Growth is higher than GDP growth in markets for innovativesolutions, such as new enzymes or new forms of establishedingredients. In more established ingredients, such as ascorbicacid (generic vitamin C), growth is at or even below GDPgrowth. However, this is accompanied by a continuous drivetoward more quality, reliability, traceability and sustainability,enabling premium suppliers such as DSM to further expand theirmarket share.

The ClusterThe Nutrition cluster comprises the business groups DSMNutritional Products and DSM Food Specialties.

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About DSM Nutritional Products

DSM Nutritional Products is the leading supplier of vitamins,carotenoids, nutritional ingredients, UV filters and premixesfor human and animal nutrition and health. It also has themost complete feed enzymes portfolio worldwide. Its maincustomers are global, regional and local feed/premixcompanies, animal protein producers and food, beverage,dietary supplement, pharmaceutical, personal care andflavor/fragrance companies.

Market Animal Nutrition & Health (2011)

Animal Nutrition & Health addresses the nutritional additivessegment of the feed ingredients market which is estimated at€ 8.5 billion in 2011. Most relevant markets are carotenoids,feed enzymes and vitamins. Average market growth is 2-4%.

Main customers (Animal Nutrition & Health)Global players in feed / premix and animal protein pro-ducers (e.g. Nutreco, Cargill, Tyson , CP, BR Foods, AHIC)Many midsize local and/or regional organized feed/premixcompanies and animal protein producers

Market Human Nutrition & Health (2011)

Within the global food ingredients market, estimated at € 42billion in 2011, Human Nutrition & Health largely addressesthe nutritional ingredients part. This is the fastest growingsegment (4-5%) of the food ingredients market with close to€ 11.3 billion in 2011.

Main customers (Human Nutrition & Health)Large world class food companies (e.g. Nestlé, Coca Cola,Kraft, Unilever, General Mills, Pepsico, Danone, MeadJohnson etc. )World class dietary supplement companies (e.g. Pfizer,Bayer, etc.)Regional/local medium sized food, dietary supplementcompanies

RawMaterials

IngredientProducer

Feed/FoodPharmaCosmetic industry

Retail Endconsumer

DSM Nutritional Products

active forms premix

Key Drivers Profitability

Leadership in global markets: differentiation, innovation,scale, cost, quality.Strong customer value proposition – Quality for Life™programLong history of nutrition innovationValue strategyPremix footprint expansion in high growth economiesFocus on quality and manufacturing excellence

Key success factors DSM Nutritional Products

Global sales, marketing and distribution network includingglobal/regional key account managementHighly motivated and skilled workforcePremix Plants global footprintInnovation (products, concepts and processes)Complete product portfolio and full value chain playerStrong differentiation

DSM Nutritional Products

ANH market distributionCarotenoids

Feed enzymes

Vitamins

Amino acids

Other

HNH market distributionColor

Preservation

Processing aids

Nutrional ingredients

Texture

Taste

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Personal Care (2011)

The global Personal Care ingredients market has a size of est. €10 billion. DSM Personal Care is focusing on the active andperformance ingredients in sun care, skin care and hair careindustries. Average market growth is 3-6%.

Main customers (Personal Care)Global leading cosmetic companies (e.g. Unilever, Procter &Gamble, L’Oreal, Beiersdorf, Johnson & Johnson, etc.)Regional/local medium sized cosmetic companiesContract manufactures and distributors within the cosmeticindustry

Main Competitors DNPDSM is the only company to offer the complete value chain ofstraights, forms and pre-mixes. In addition DSM provides abroad range of cosmetic ingredients. All competitors cover onlypart(s) of the value chain.

Typical ones are BASF, Adisseo, NEPG, NHU, NCPC, XP &Shijiazhuang Weishen for vitamins & carotenoids, DuPont forenzymes.

Most attractive markets DNPThe high growth economies with big population representsubstantial growth opportunities for the nutrition and personalcare business, we are actively expanding our business in thehigh growth economies while extending our competitiveadvantages continuously in Europe and North America.

Current DSM Market positionDSM holds leading positions in the ingredient markets for humanand animal nutrition & health and for personal care.

StrategyThrough operational excellence, DSM Nutritional Productsmust maintain a cost position that is at least on par with thecompetition. This means continuing to look for process inno-vations and improvements, rigorous site selection, and pur-suing ‘asset light’ strategies.Continued differentiation in the market is the key to captur-ing value and margin growth. DSM Nutritional Products willcontinue to be the premium player in the sector, pursuingproduct and process innovation by making optimum use ofits technology. Connecting technological advances with con-sumer trends and customer needs, DSM remains the innova-tion front-runner in nutrition.The company will also look to grow by extending partner-ships and via acquisitions. This will focus on complementaryingredients, with a bias towards naturals, which can be mar-keted through DSM’s existing global infrastructure.

Main competitive advantagesGlobal reach, proximity to customersScaleFully integrated playerQuality for life™Innovation capabilities

Main productsVitamins (13 in total), as only player DSM Nutritional Prod-ucts can supply the complete range of vitamins in the mostsuitable forms for a wide range of human and animal usesA broad range of different carotenoids are manufactured asnature-identical coloring or stabilizing agentsThe most innovative DHA omega-3 and ARA omega-6productsThe most complete Feed enzymes portfolio in the industryPremixes for Animal Nutrition and HealthPremixes for Human Nutrition and HealthCosmetic ingredients for sun, skin and hair careSpecialty ingredients such as: lutein, lycopene, HyD™,eubiotics, feed enzymes (e.g. Ronozyme® P and ProAct)

Leendert StaalPresident

“DNP is well positioned to build onits vast experience, science andtechnical know-how, and extensiveglobal reach. Our innovation,addressing urgent societal needs, is akey driver for creating value forcustomers and stakeholders aroundthe world.”

Personal Care market distribution

Basic

Active

Technical

Production FacilitiesPremix facilityMain Sales Offices

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Manufacturing detailsManufacturing locations (CH, DE, FR, UK, ES, China, US)51 premix facilities globally distributed.Worldwide network of 43 sales offices

TechnologyHighly complex multi-step synthesisBiotechnologyFormulation technology, ActileaseTM

Natural product synthesisHeterogenous catalysisMicronisation and encapsulationApplication in feed, food, nutritional supplements andpersonal care

Key raw materials / intermediatesDiverse set of various raw materials.Main raw materials are secured through long-termpartnerships.

Main capex plannedExpansion of pre-mix facilities in both ANH and HNHbusinessImprovement & expansion projects in large Manufacturinglocations

Innovation strategyInnovate through entire life cycleContinued improvements via incremental application driveninnovationsOpen innovation with key customers and other partners

Key innovationsRONOZYME® ProAct - an enzyme preparation that maximiz-es protein utilization in feed

ROVIMIX® MaxiChick™ – a unique poultry feed solution toimprove egg fertility, embryo hatchability and chick livabil-ity.

RONOZYME® HiPhos – Helps monogastric animals utilize,otherwise non hydrolysable plant phosphorus which occursin form of Phytate, thereby reducing the supplementationof expensive mineral phosphates and reduces its environ-mental impact.

i-Health brands - the ‘Business to Consumer’ channel isfurther strengthened with the acquisition of Amerifit andthe introduction of brainstrongTM containing DHA.

Fruitflow® - was launched the first ingredient with a healthclaim approved by the European Food Safety Authority.Fruitflow® is a tomato-based concentrate that ‘helps main-tain normal platelet aggregation, which contributes tohealthy blood flow’.

beta-Carotene 10% Emulsion red – the improved perfor-mance offers manufacturers an allergen-free route to color-ful beverages, the product is suitable for vegetarians.

TILAMAR® - most innovative polymers for hair care

REGU®-FADE – a high performing and fast acting skinbrightener

Life’s DHA™ - a fish free, sustainable source of DHA omega-3 from algae that provides important brain, eye and heartbenefits throughout life and can be found in over 500 foods,beverages, infant formulas and supplements worldwide.

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Markets

Total Food ingredients market adds up to EUR 34bn.

Global market growth 2008-2012 (AAGR)Food enzymes 6-8%Cultures and media 5-7%Savory ingredients 3-5%

The growth in high growth economies is above average.

Most attractive marketsDairy, baking, savory and beverage industry in North Americaand Western Europe, with a growing focus on high growtheconomies such as China, India, Brazil and Russia.

About DSM Food Specialties

DSM Food Specialties is a leading global manufacturer of foodenzymes, cultures, yeast extracts and other specialtyingredients for the food and beverage industries. DSM FoodSpecialties’ advanced ingredients make a considerablecontribution to the success of the world’s favorite food brandsfor the dairy, baking, beverages, and savory segments.

Main customersLeading, large, world class food manufacturing companiesMany medium-sized food and beverage processors

Main CompetitorsDSM Food Specialties main competitors, e.g. DuPont,Chr. Hansen, Novozymes and LeSaffre offer a comparableportfolio or are focused on one of DSM Food Specialties’market segments.

Current DSM market positionDSM Food Specialties is leading in food and beverage en-zymes, yeast extracts and cultures.DSM Food Specialties holds leading positions (#1 or #2) inthe relevant segments of its portfolio.

DSM Food Specialties

Rawmaterials

FoodIngredientsandAdditives

Foodproducer

Retail/Endconsumer

Key drivers of profitability

Innovation in enzymes, savory ingredients and bio-activesScale and production efficiency

Key success factors of DSM Food Specialties

Innovation and value differentiationKey customer intimacyGlobal distribution networkQuality and application know-how

16%

9%

11%

6%

6%

11%

9%

12%

1%18%1%

BeveragesDairy

BakeryPreserves

SavoryMeat/Fish

Oils/fats

ConfectioneryOther

Funct. FoodSupplements

Food ingredients by application (global)

15%

12%

11%

11%5%

2%

33%

6%

5%

DSM

DuPont

Hansen

Novozymes

BioSpringer

ABF

Kerry BS

Cargill

Others

DSM relevant marketsize (€ 2.8bn)

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StrategyDSM Food Specialties’ growth strategy is to exploitopportunities of current businesses via organic growth basedon radical innovation, geographical expansion in emergingeconomies, and acquisitions.

Main competitive advantagesInnovation capabilitiesUnique patent protected ingredients, both on(fermentation) process and applicationsQuality for Life™ programGlobal reach through local distribution and applicationnetwork

Main productsThe product portfolio consists of many branded uniqueproducts that can be categorized in:

Food enzymesCultures and mediaAntibiotic residue testsProcess flavoursYeast extracts

Manufacturing detailsDSM Food Specialties has manufacturing locations across theworld: Europe (6), Americas (2) and in Asia Pacific (3).

TechnologyDSM Food Specialties has a world-class knowledge-intensivetechnology base, founded on two leading technologies:

fermentationenzyme technology

This technology base is focused on the core functionalitiesTaste, Texture and Nutrition. DSM Food Specialties uses bothclassical and modern biotechnology techniques includingproteomics to produce its products.

Key raw materials / intermediatesGlucose and molasses.

Main capex plannedDrying capacity for yeast extracts

Innovation strategyMarket driven product, process and system innovationContinued improvements via incremental applicationdriven innovationsOpen innovation with key customers and other partners

Key InnovationsDELVO® FRESH— A culture range which helps manufac-turers to create authentic tasting dairy products, specifi-cally adapted to local unique taste preferences.

Maxavor® YE All natural—a unique range of 100 per centnatural savory flavor ingredients. Globally certified asnatural, Maxavor YE All Natural combines the functionali-ty of thermal process flavors with a natural ‘yeast ex-tract’ declaration.

Brewers Compass™ – a unique enzyme solution that ena-bles brewers to produce up to 100 percent barley beers ofthe highest quality.

Panamore™ Soft, a new enzymatic solution for the bakingindustry , designed to improve the shelf life of bread.Containing a patent protected blend of enzymes, Pana-more™ Soft helps bakers meet consumer demand forbreads that look better and stay fresher for longer.

Brewers Clarex™ - Prevention of chill haze formation inbeer by simplefying the complex and costly beer coldstabilization process

Maxilact™ LGX - Long lasting clean taste in lactose-freeproducts

"Future growth in the foodingredients industry will be largelydriven by innovation. Consumerdemand for convenient and indulgentproducts, health & wellness andsustainability and food safetyconcerns create clear innovationopportunities. DSM has the leadingtechnologies, in-depth applicationexpertise and world-class facilitiesto develop (new) solutions in replyto these demands" Hans-Christian Ambjerg

PresidentProduction FacilitiesMain Sales Offices

20

Business and trendsThe pharmaceutical market is facing a range of trends anddynamics that are putting existing business models into ques-tion and are leading to some fundamental changes in theindustry, but which are also providing a number of futuregrowth opportunities for DSM's Pharma activities.

For innovative pharmaceutical companies, it is becomingmore difficult to discover new active molecules which havesufficient additional patient benefits and an acceptable riskprofile and which can get approved by the US Food and DrugAdministration (FDA) and other regulatory bodies. The costof developing such molecules is rising, while at the sametime health service providers – governments or insurancecompanies – are under enormous pressure to reduce cost.Medicines are becoming an increasingly important element oftotal healthcare costs, typically accounting for around 10% oftotal healthcare spend. As a consequence, both governmentsand insurance companies are looking to save costs, puttingpressure on the total healthcare value chain, including cus-tom manufacturing companies.

Pharmaceutical companies are consolidating, reviewing theirbusiness models and product ranges, and competing to devel-op increasingly ‘niche’, narrow spectrum and specializeddrugs, which are often difficult-to-administer drugs and bio-pharmaceuticals used only in hospitals. Although these canbe high value, volumes are lower. However, the intensity of

Pharma


10%1%

89%

Pharmaceuticals

Agriculture

Other


37%

39%

21%

3%Europe

Americas

Asia

RoW

cost pressure and the need to review business models acrossthe pharmaceutical industry is likely to result in above-GDPgrowth in the pharmaceutical outsourcing market, especiallyfor drugs nearing the end of their (patented) life cycle. Theimperative for pharma companies to optimize their asset baseis expected to lead to a greater focus on finding experiencedand highly qualified partners to take on manufacturing chal-lenges as a supplier.

In most countries increased attention is being paid to the over-all consumption of antibiotics. Infectious diseases continuehowever to be a major life threat, especially in high growtheconomies, and the beta-lactam anti-infectives continue to bemost physicians’ first choice of cure.

The ClusterThe Pharma cluster comprises the business group DSMPharmaceutical Products (DPP, concentrating on thepharmaceutical outsourcing markets) and DSM’s 50% interest inthe DSM Sinochem Pharmaceuticals joint venture (DSP,concentrating on the beta-lactam anti-infectives market)respectively.

21

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22

About DSM Pharmaceutical Products

DSM Pharmaceutical Products (DPP) is a leading provider ofcustom manufacturing, technologies and development servicesto the pharmaceutical, biopharmaceutical and agrochemicalindustries. With the increased focus on outsourced resources,DSM provides sustainable solutions for the future ofmanufacturing. This group’s business model also includesownership of registered products including activepharmaceutical ingredients (APIs) as well as finished dosagedrugs with ANDA and DMF filings.

R&DServices

Inter-mediates

ActivePharma-ceuticalIngredients

Finaldosage

Pharmadistribution

Endconsumer

DSM Pharmaceutical Products

Markets

DSM is active globally in the primary and secondarymanufacturing of pharmaceuticals and focuses on theinnovative (bio)pharma market as well as pharma finechemicals markets and generic drugs.The pharma outsourcing market has a size of USD 40 bn.

Market growth 2008-2012The global contract manufacturing market is expected toincrease at a CAGR of 9% (2003-2013) with respectivesegments growing at the following rates:

primary manufacturing, 7%secondary manufacturing, 11%biopharmaceutical, 13%.

Source: Kalorama

The average growth of worldwide pharmaceuticals sales for2010/2011 was 4-5% and for biopharmaceuticals 9%.Sources: IMS, EvaluatePharma

Most attractive marketsBiopharmaceutical API (primary, Cell culture-based) manu-facturing: GlobalBiopharmaceutical technology licensing and equipmentsales: GlobalBiopharmaceutical API (primary, microbial-based) manufac-turing: GlobalChemical API (primary) manufacturing and marketing:GlobalSolid dosage (secondary) manufacturing and marketing:GlobalSterile dosage (secondary) biopharmaceutical manufacturingand marketing: GlobalFood, personal care and bio/industrial manufacturingproducts: GlobalCrop protection (primary) manufacturing: Global CurrentDSM market position

DSM ranked 4th in contract manufacturing revenue globally in2010. Source: PharmSource, 2011 and Company Public Filings

Main customersDSM serves 9 of the top 10 global pharmaceutical companies,large biotechs, and mid-size pharmaceutical companies (e.g.Amgen, Shire, etc.) as well as select emerging pharmaceuticalcompanies all over the world.

Main competitorsPharma Chemicals: Lonza, BASF, Siegfried, Evonik, Divis,Dr. Reddy's, DishmanBiologics: Rentschler, Boehringer Ingelheim, Lonza, CMCFinished Dosage: Patheon, Catalent, VetterBioSolutions: Lonza


Focus on end-of-lifecycle drugs and new products pipelinein pharma industryInnovative technologies for the future of pharmamanufacturingExpansion of proprietary product portfolio

Key success factors of DSM Pharmaceutical Products

Strong pipeline of service contracts based on largestrategic customer partnershipsContinued demonstration of sustainable and innovativesolutions for customersIncreased presence in Asia and High Growth EconomiesCommitment to DSM Quality for Life™ standards

DSM Pharmaceutical Products

Global outsourcing market

41%

22%

20%

7%10% Contract research

Primary mfg

Secondary mfg

Formulation dev.

Other

23

Production FacilitiesMain Sales Offices

DSM Pharmaceutical Products’ facilities are approved by the USFDA, EMEA, Japan and many foreign regulatory agencies. DSMPharmaceuticals, Inc. is licensed by the US DEA to manufacturescheduled drugs.

TechnologiesA broad range of technologies with world-class competenciesincluding: biocatalysis, homogeneous catalysis, mammalian celllines, fermentation and chiral technologies.

Key raw materials / intermediatesVery diverse set of raw materials, whose procurement ismainly driven by customers’ regulatory filings.Sourcing other volumes from low cost countries such asChina and India.

Main CAPEXOur new Brisbane, Australia 70,000 square-foot mammalianbiopharmaceutical manufacturing facility, to be operational in2013, in close cooperation with the Australian Governments(Queensland State Government and the Commonwealth ofAustralia).

Innovation strategyTo maintain a leading and proactive position in deliveringcustomer solutions through innovations in R&D, (bio)chemistry,biologics and fermentation production technologies to supportincreasingly sustainable outsourcing by pharmaceuticalcompanies, while growing own product portfolio with ANDA andDMF filings.

Key InnovationsMicro Reactor technology – unique proprietary highproductivity technology for pharma chemicals

XD® technology – unique proprietary technology to improveyield dramatically in biologics

Lyo Advantage™ / Liquid Advantage™ – state of the artdistribution control system

Rhobust® direct capture technology for biologics

“As we see the pharmaceuticalbusiness model continue to shift,outsourcing of manufacturingbecomes more of a strategic focusfor pharma. With changes in thevalue chain, DSM offers a range andbreadth of services that can enhanceour customers’ ability to succeed.”

Alexander WesselsCEO

StrategyFurther optimization of DPP’s current assets and re-focusthem towards high growth economies in AsiaIntention to significantly expand range of own products.Partnership with another company which has strengths com-plementary to DPP.

Main competitive advantagesExtensive portfolio of services across the supply chain forsmall and large molecules and final dosage deliveryBroad range of innovative and cost-effective technologiesparticularly in biotechnology including for biopharmaceuti-cals, including cell culture-based and microbial fermenta-tion as well as green chemistryStrong quality and regulatory compliance track record

Main products / premium servicesDSM Pharmaceutical Products is a global provider of contractmanufacturing and development services including:

Clinical to commercial scale production of Active Pharma-ceutical Ingredients (APIs) – chemical and biologicalClinical trial and commercial scale finished dosage formsand packagingXD® proprietary mammalian cell culture production yieldoptimization technologyRhobust® biopharmaceutical harvest optimizing technologyInnovative technologies in Green Chemistry (e.g. InnoSyn™route scouting services)Micro reactor commercial scale productionAseptic liquid filling and Lyophilization, including CytotoxicsMore complex crop protection actives

Manufacturing detailsGroningen, Netherlands, cGMP biologics custom mfg.Brisbane, Australia, cGMP biologics custom mfg. (2013)Capua, Italy, cGMP microbial fermentation for pharmaDelft, NL, DSM Biotechnology CenterLinz, Austria, cGMP/ISO custom manufacturingVenlo, Netherlands, cGMP custom manufacturingRegensburg, Germany, cGMP scale-up facilityGeleen, NL, Research & DevelopmentGreenville, US Sterile and finished dosage products

24

About DSM Sinochem Pharmaceuticals

DSM Sinochem Pharmaceuticals (DSP) is a leading supplier ofraw materials, intermediates and active pharmaceuticalingredients (API) for anti-infectives such as antibiotics (forcombating bacterial infections), anti-fungals (for combatingfungal infections), and API for other therapeutic classes likecholesterol lowering medicines. DSP is one of the few APImanufacturers that continuously invests in R&D and thereforeis able to manufacture nearly all beta-lactam APIs and inter-mediates using proprietary biotechnology. DSP is also the onlyFDA approved penicillin producer in the Western hemisphere.

Markets

The total global anti-infectives market is estimated to be USD50bn (2010). DSM is mainly active in the beta-lactams(penicillin (SSPs) and the cephalosporins (SSCs)). In addition,DSM sells beta-lactam intermediates such as 6-APA and7-ADCA .

Market growth 2009-2013Average overall market growth is 3-5% for semi-syntheticcephalosporins (SSCs) to 4-5% for semi-synthetic penicillins(SSPs) with the highest market growth expected in Asia (SSP 6-8%, SSC 3-5%) .

ActivePharmaceuticalIngredient

Glucose PEN/Inter-mediates

Finisheddosage

Pharmadistribution

Endconsumer

DSM Sinochem Pharmaceuticals

12%

6%2%

5%

16%

12%

24%

23%

SSP'sSSC'sMacrolidesQuinolonesTetracyclinsAminoglycosidesSulfonamidesOthers


Basic PEN priceAccess to regulated marketsCurrency exchange rateProduction cost PENConversion margins from PEN to SSPs and SSCs

Key success factors DSM Sinochem Pharmaceuticals

Market access through global presence/alliancesNew technologiesAccess to ChinaProduct differentiation / Brand ValueOperational excellenceAccess to quality oriented customers

Current DSM market positionDSM Sinochem Pharmaceuticals belongs to the largest players inthe field of beta-lactams with leading positions in the highervalue added segments.

Most attractive marketsAlthough currently the western economies are the mostattractive markets, DSM Sinochem Pharmaceuticals has anincreased focus on the rapidly growing markets in Asia andLatin America.

Main customersLeading large pharmaceutical companies such as GlaxoSmithKline, Sandoz, Teva, as well as local midsized pharmaceuticalcompanies all over the world

Main competitorsCompetition is coming predominantly from Chinese/Indianproducers (e.g. United Laboratories, CSPC, Aurobindo) andEuropean producers (e.g. Antibioticos, Sandoz)

StrategyThe business group has retained profitability by implementingsignificant cost reductions and introducing new technologies,which is an ongoing process in any strategic context.

DSM Sinochem Pharmaceutical’ strategy has three main pillars:to retain its leading position in the global market for peni-cillin and penicillin derivatives, further strengthening of theposition in especially China is a prerequisite.to broaden the portfolio with generic APIs from other thera-peutic classes but anti-Infectives, andto integrate forward into finished dosage in selected mar-kets

DSM Sinochem Pharmaceuticals

AMEA China

EU&USRoW 0

20

40

60

80

2005 2008 2010 2015

High growth economiesRoW

SSP, SSC market distribution (2010) SSP, SSC market growth (2010)

5%-7%

25

Benefits of DSMPureActivesTM

Higher yield due to higher purityLess overages required due to higher purity and anincreased retest periodImproved machine efficiency due to better flowablilityWith larger batch size, testing and administration at QCdepartments will be reducedRelief of registration efforts due to reduced impurity levelGuaranteed activity of active substance over shelf lifeWaste produced during production is reduced by up to 90%Greenhouse-gas emissions reduced by over 50%Reduced emissions of residual solvents to airEmissions to water are reduced by approximately 50%Reduced toxicity of antibiotic ingredient, owing to absenceof almost all chemicals and solventsBetter taste due to the absence of residual solvents

The recent formation of the joint venture between DSM andSinochem of China strongly supports the achievement of thesestrategic targets, where partners continue to be a potentialdriver for further growth in line with the overall strategicobjectives of DSM’s corporate strategy.

Main competitive advantagesRegulatory and product qualityReliability and after sales serviceEnzymatic technologyGlobal market access

Main productsDSM Sinochem Pharmaceuticals is a leading supplier of activepharmaceutical ingredients such as:

Penicillin (PEN)Intermediates such as 6-amino-penicillanic acid (6-APA),7-amino-deacetoxycephalosporanic acid (7-ADCA)Semi-synthetic penicillins (SSPs) such as amoxicillin andampicillinSemi-synthetic cephalosporins (SSCs) such as cephalexinand cefadroxilNystatin, AtorvastatinProcess enzymes

Manufacturing detailsPenicillin Mexico6-APA China, Mexico, India7-ADCA NetherlandsSSPs Spain, Mexico, IndiaSSCs Spain, ChinaNystatin Capua, Italy

TechnologyDSM has integrated its competences in biotech and chemistryfor the development of a new range of high quality semi-synthetic penicillin and semi-synthetic cephalosporin. Theresults of this effort are the DSMPureActives™, each producedwith our innovative enzymatic technology. The APIs producedvia these proprietary biotechnology routes also offeradvantages in terms of increased patient safety based on thehigher purity of the products, and lower spillage in theprocessing step from API to finished dosage form.

Key raw materials / intermediatesGlucose, sodium phenylacetate/phenylacetic acid,phenyl glycin.

Main capex plannedDSM Sinochem Pharmaceuticals is actively pursuing jointventures in China, resulting in capacity expansion and asignificant improvement in economies of scale.

Key InnovationsInnovation in technology (implementing best technologiesthroughout global network)Expansion of DSP portfolio in generic APIs through productinnovationBranding PureActives™ (green routes)

“DSP is a global leader in beta-lactam antibiotics with over 140years of experience in fermentation.We stand for quality, reliability andcompliance; we stand for peace ofmind. By leveraging our newpartnership with Sinochem we areable to strengthen and further growour core business as well as toexpand our API portfolio andconsider a forward integrationinto finished dosage in selected

Lucas HendrikseChief Operating OfficerProduction Facilities

Tolling manufacturing siteR&D facilityMain Sales Offices

26

Business and trendsClimate change and the adverse effects of over-dependenceon fossil fuels continue to be the most important trends driv-ing the materials industry. DSM’s customers in virtually everysector are seeking products that reduce energy use or emis-sions in their own operations or, even more importantly,throughout their value chains.

In many cases DSM is active in the business of replacing met-als with lighter alternatives, and supports customers who areincreasingly seeking polymer solutions that are based on re-newable (rather than fossil-based) raw materials and solventfree products and processes that can help create more sus-tainable value chains.

Resource scarcity, which also impacts costs, is increasinglycontributing to these developments. Energy reduction is key.This means not only finding new, less energy-intensive waysto manufacture DSM’s own products, but also enabling energysavings in the application of these products, for example bydeveloping resins systems that require less energy for curing.By providing lighter weight solutions than, for instance, con-ventional metal structures, DSM products help reduce energyconsumption during use as well, thus making a significantcontribution to the reduction of energy and carbon footprintsacross the planet.

Performance Materials


27%

17%

3%16%

14%

23%

Metal/B&C

Automotive/Transport

Textiles

E&E

Packaging

Other


49%

17%

33%

1% Europe

Americas

Asia

RoW

An important field of application of performance materials isworkplace health and safety. Demand in this area is increasingbecause workplace health and safety standards are becomingmore common across the world as prosperity grows. Anotherfield of application is health and wellness. Here, the main focusis on meeting the needs of an increasing elderly population.These needs require new thinking, and new applications.

Urbanization is an important driver for building and construc-tion – one of the areas in which DSM plays an important rolewith innovative resins solutions. And finally, concerns aboutpersonal safety and global threats have not diminished, whichmeans there is a continuing demand for innovative protectivematerials.

The world has become multi-polar and more difficult to pre-dict, with rapidly growing prosperous middle classes in manyformerly ‘emerging’ countries. Demand for plastics and resins ishigh and increasing in these markets, not only because manu-facturers are seeking to meet growing local needs, but alsobecause global manufacturing has shifted to these countries.

On the safety and sustainability front, the replacement of halo-gen-based flame retardants in consumer electronics and thereplacement of solvent-based resins by water-based resins con-tinues.

The clusterThe Performance materials cluster comprises of DSMEngineering Plastics, DSM Dyneema and DSM Resins.

27

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28

About DSM Engineering Plastics

DSM Engineering Plastics is a global player in polyamides, andpolyesters. These materials are used in components for theelectrical and electronics, automotive, engineering andpackaging industries.

DSM Engineering Plastics

MarketsKey segments for semi-crystalline engineering plastics:automotive, electrical & electronics (E&E), (food)packaging, optical & glazing, and consumer/industrialKey products are polyamide 6, 66, 6/66, heat resistantresins (HRR), polyesters (PBT, PET), POMs, thermoplasticcopolymers

Total global market size for engineering plastics: ~ EUR 27bnin 2010


Market growth in key segments and regionsSustainable solutions: green materials, weight reduction(replacing metal, fuel efficiency reduced emissionshalogen free), driving innovationDrive for miniaturization, functionality and performanceGrowth in market share in high-end innovativeapplications

Key success factors of DSM Engineering Plastics

Global market leadership in chosen marketsGlobal presence (follow customers)Cost positionThe right portfolio of engineering plastics matching needsin chosen marketsAbility to commercialize market-driven innovationsProduct, application and value chain know-how

Most attractive marketsSegments: electrical power distribution, electroniccomponents, automotive under the hood, automotive safetysystems, flexible food packagingRegions: Asia, especially China and India, but also Europe.US is becoming more and more attractive because ofincreasing drive for sustainable solutionsProducts: heat resistant resins, polyamides

Market growth 2010-2015Growth of the engineering plastics market is expectedabove GDP, with highest growth in Asia Pacific, especially inChina, India and BrazilThe highest growth per product is in heat resistant resins

Distribution by regionChina

Rest of Asia

Europe

North America

RoW

Market by segmentAutomotive

E&E

Packaging & extrusion

Consumer & industrial

Market by productsPA6

PA66

PBT.PET

HRR

POM

TPC

DSM Engineering Plastics

Oil/gas Monomers Processingmolder

Systemsupplier

OEM/end userPolymerizat

Compounding

29

Examples of customersAutomotive: Bosch, Valeo, Peugeot, Tata MotorsE&E: Schneider, Siemens, Samsung, Philips, Nokia(Food) packaging: VF Verpackungen, WipackGeneral: Salomon

Main CompetitorsPA6: BASF, Lanxess, UBEHigh temperature PA: Dupont, Kuraray, Solvay, MitsuiThermoplastic copolyesters: Dupont, Toyobo

Current Global DSM Market position#1 in high temperature polyamides#2 in polyamide 6#2 in thermoplastic copolyesters#3 overall in semi-crystalline engineering plastics

StrategyTarget 10% top line growth annually via strong innovationdrive and global expansionFurther reduce impact of general economic conditionsand input costs by focusing on selected high growthsegments, global presence and backward integrationExtend global leadership in high temperature polyamides,polyamide 6 and TPCExtend leadership positions in selected end markets

Main competitive advantagesGlobal reach through regional networkInnovation and sustainability drive and excellence inlaunching innovationsUpstream integration with DSM Fiber Intermediates(caprolactam for PA6)

Manufacturing detailssee world map below

“Customers – Our Passion

Brighter Lives – Our Innovations

Greener Planet – Our Drive”

Roelof WesterbeekPresident

Key products of DSM Engineering PlasticsAkulon® and Novamid® polyamide 6, polyamide 66,polyamide 6/66Stanyl® polyamide 46Stanyl® ForTii™EcoPaXX™Arnite® polyester (PBT, PET)Arnitel® copolyester elastomer (TPC)

TechnologyInjection molding, extrusion, blow molding

Key raw materials / intermediatesCaprolactam, DAB, Adipic acid, BDO

Main Capex (2011)Capability enhancement of Polyester polymerization in Em-men, The NetherlandsExpansion of compounding capacities in the US and China

Innovation strategyCreate maximal profitable growth as solution provider forperformance thermoplastics. Capture opportunities from mainsocietal trends such as Climate and Energy, Functionality andPerformance and high growth economies.

Key InnovationsEcoPaXX™, the ecofriendly new green engineering plasticStanyl® ForTii™, DSM’s new polyamide with the highest heatresistance among DSM’s polymersStanyl® ForTii™, Laser Direct StructuringStanyl® thermoconductive polyamideHalogen-free flame retardants engineering plasticsAkulon® Fuel LockAkulon® for integrated oil sumpsArnitel® XG for halogen free FR cablesArnitel® Eco, a unique material creating more value withless environmental impactArnite® XL for extreme precision components

Production FacilitiesMain/Regional Sales Offices

30

MarketsDyneema® is used extensively in ropes, cables and nets in thefishing, shipping and offshore industries. It is also used in safetygloves for the metalworking industry and in fine yarns forapplications in sporting goods. In addition, it is applied in bullet-resistant armor and clothing for law-enforcement personneland the military. A number of new markets are in variousstages of scouting & development. The business group willcontinue to focus on the further development of ultra high-performance polyethylene materials and technologies and onextracting value from its IP assets.

Most attractive marketsLife protection (e.g vests, vehicle protection)Commercial marine (shipping, offshore, fishing)Sports (sails & rigging, fishing lines)High performance textiles (cut resistant gloves,clothing)

Market growth 2010-2015UHMwPE fiber and its derivative products are regarded as high-performance, high-value replacements for more traditionalmaterials such as polyester, polyamide, steel or other high-per-formance fibers, such as aramids. Competitive products aresegment specific. Penetration in existing markets was in pre-recession years over 10% per annum. During the recession,lower demand in industrial segments has impacted growth.However, additional applications, have continued to come onstream, such as lightweight containers for airfreight. The totalattainable market therefore is continuously growing as newapplications arise.

DSM Dyneema

About DSM Dyneema

DSM Dyneema is the inventor, manufacturer and marketer ofDyneema®, the world’s strongest fiber™.This product, based on ultra high molecular weightpolyethylene (UHMwPE) is produced by means of DSM’sproprietary processes. The Dyneema® brand enjoys very highrecognition in the value chains served


Market growth and penetration into existing applicationsSuccess of innovations, new launchesDyneema® and Dyneema Purity® brands

Key success factors of DSM Dyneema

Capability to manage growth, both in hardware and inpeopleAbility to commercialize market-driven innovationsProduct, application and value chain know howStrong, healthy IP position (patents and trademarks)Brand value (trust and innovation)

UHMwPENaphta /ethylene

Converter OEM End userUHMwPEfiberDyneema®

Examples of customersLife Protection: Ten Cate (vests, vehicle protection)Commercial Marine: Unitex (lifting slings), Badinotti (fishingnets), Samson (mooring lines)Sports: Gottifredi Maffioli (sailing ropes), Pure Fishing(fishing lines)High Performance Textiles: Ansell (Gloves)

Main competitorsHoneywell (Spectra® UHMwPE).DuPont (Kevlar® aramid)Steel & polyester producers

Current DSM market positionMarket leader in UHMwPE, overall leader in high performancefibers in many segments.

31


“The Dyneema® brand stands for abusiness culture which enables itspeople to do what it takes toconsistently deliver the brandpromise to all its stakeholders. “

StrategyDrive penetration of existing applications, exploitingadvantages in total cost of ownership and sustainablesolutions to substitute traditional offeringsEstablish strong relationships with key value chain playersAccelerate entry into targeted new markets (geographiesand end-uses)Position 2nd brand (Trevo™ ) as “no-frills” offering in certainsegments

Main competitive advantagesTechnical benefits related to physical attributes. Dyneema®

is up to 15 times stronger than quality steel and up to 40%stronger than aramid fibers; it floats on water and isextremely durable and resistant to moisture, UV light andchemicalsDyneema® brand: highly valued throughout the valuechains servedInnovation capabilities (products, applications,technologies) and excellence in launching innovationsClear eco-footprint advantagesGlobal commercial and operations footprint

Manufacturing detailsDyneema® yarn and Dyneema® UD are produced inGreenville, North Carolina (USA) and Heerlen (Netherlands)The new tape technology is applied in Greenville (USA)DSM is also a partner in a manufacturing joint venture inJapan for fiberTrevo™ is produced at ICD Shandong (China)

TechnologyDyneema® is manufactured through DSM’s proprietary gelspinning process. Dyneema® Tape and UD are also subject toextensive patent coverage.

Key raw materials / IntermediatesUltra High Molecular Weight Polyethylene (UHMwPE)

Gerard de ReuverPresident

Main capex plannednone

Innovation strategyIntroduce new applications and new products for Dyneema®Continue to build and extend Dyneema® brand valueProtect and strengthen IP positionsExtend eco+ and benefits of product portfolio

Key innovationsDyneema® Tape Technology for vehicle and personalprotection

Dyneema® Diamond Technology for optimum cut re-sistance and wearability of protective gloves

32

Main markets / applicationsFocus for DSM Resins is to combine the ‘winning solutions’ witha market-oriented, innovation-driven organization and alreadyexisting strong market positions. Main markets are shown in thegraphs.

DSM Resins

About DSM Resins

DSM Resins is a global player in the manufacture, marketingand sale of high quality resins for the coatings, inks andmaterials industries. The company employs over 2,400 peopleand has 22 manufacturing plants across the world. Thisreflects DSM Resins’ global activities and its dedication tolocal and global customers.


Market growth in key segments and regionsSustainable solutions: lighter, materials andenvironmentally friendly, safer, solvent free paintsGrowth in market share in high-end innovativeapplications

Key success factors of DSM Resins

Global market leadership and presenceBrand value (differentiation, reliability)Ability to commercialize market-driven innovationsLeading low footprint technology platforms gearedtowards markets

MonomersRawMaterials

CoatingsInksMaterials

OEM End userResins

Market growth 2010 - 2015Markets for Coating Resins and Composite Resins are long termexpected to grow above GDP. However, with ~50% end-marketexposure to the Building and Construction market, growth ratesare currently lower.

Most attractive marketsSelected key segments: right combination of end-markets,regions and technologies to capture the fastest growth such asindustrial wood, industrial metal (can & coil), automotive andoptical fiber.

Current DSM market positionDSM has a leading position in many industrial segments:Coating Resins:

In Industrial Coatings (wood, powder, UV), DSM is the globalleader, together with Cytec. In Metal (Can & Coil) , DSM isthe global leader together with Evonik. In Architecural /Deco, DOW and BASF are the global leaders.In the Fiber Optic Material segment, DSM is the globalleader.

Composite Resins:DSM Resins is the European market leader in unsaturatedpolyester resins with a market share of ~ 25%, followed byReichold, CrayValley and Ashland.

Examples of customersCoating Resins: AkzoNobel, PPG, DuPontComposite Resins: Menzolit, Beneteau Group

Main competitorsCoating Resins: BASF, Dow, Cytec, Hexion, 3D SystemsComposite Resins: Cray Valley, Reichhold, Ashland

Global Coating Resins market 2010 (€20bn)

Architectural (Deco & DIY)

Automotive

Metal (incl. Can & Coil)

Industrial Wood

Powder

Others (inc graphic art,optical fiber)

Global Composite Resins market 2011 (€5bn)

Building & Construction

Automotive

Marine

Tanks, Pipes & Relining

33

StrategyCoating Resins: Be global no 1 in specialty resins throughinnovation, focus and dedication.Composite Resins: Leading the composite resins industrythrough dedication and innovationAmbitious strategy will result in strong, double digit growthin net sales and a consistently improving financialperformance

DSM's resins business generates value with and for customersthrough continuous innovation so that they meet regulatoryneeds (such as REACH) and respond better to end-user demandsfor sustainability and quality. DSM will only be able to continuemeet these customer demands for innovation with its resinsbusiness if sustainable compensation for these efforts isreceived, beyond the increase in raw material costs. DSMbelieves a fundamental upward shift in pricing for the resins'value chain has therefore become unavoidable.

Main competitive advantagesGlobal reach through regional networkInnovation and sustainability drive and excellence inlaunching innovationsStrong unique technology position (f.i. waterbased resins,high solid resins, optical fiber coatings)DSM Resins brand highly valued through value chain served

Main productsThe resin primarily determines the properties of the end-products, such as coatings and composites.

Coating Resins:Waterborne resins for coatings and inksHigh solid resinsPowder resinsUV-curable resins and coatings

Composite Resins:Unsaturated polyester / vinyl ester resinsThermoset urethane resinsSizings and binders

Manufacturing detailsCoating Resins: United States (Illinois, North Carolina,Indiana, Massachusetts, Rhode Island), China, Japan,Germany, Spain, the NetherlandsComposite Resins: China, France, Italy, the Netherlandsand Spain

Main Capex51% stake in AGI TaiwanNew production facility for composites resins in Nanjing(CN)

Key raw materials / intermediatesGlycols, styrene, maleic-, phthalic anhydride, acrylates,isocyanates, acrylic monomers

Innovation strategyInvestment to create and execute innovation pipelineMarket-driven dedicated organizationSustainable innovations: providing solutions to globalsocietal issues

Key InnovationsDesoLite® Supercoatings: the newest generation of opticalfiber coatings, with improved microbend sensitivity

RP-10: aluminum replacing panel material made fromDyneema® HPPE fiber and Aeronite® composite resin

UVolve®: instant floor coatings

Uralac® EasyCure: low temperature cure powder coatingresins

Palapreg® ECO: the resin with the highest bio-renewablecontent (55%) on the market ever without sacrificing pro-cessing standards and product performance

DSM and Novomer Inc. (Waltham, MA, USA) are workingon development of a revolutionary coating resin usingcarbon dioxide (CO2) as a raw material.

"Driven by the fact that mosttraditional materials are made ofnon-renewable finite resources,sustainability and responsiblebehavior are quickly gainingimportance within the resins andfunctional materials industries. We,as DSM, want to provide new, moresustainable solutions, and look forexample at bio-based and bio-renewable products to movetowards potentially limitless rawmaterial supplies." Dimitri de Vreeze

President


34

Polymer IntermediatesBusiness and trendsCaprolactam

Caprolactam’s key outlet is polyamide 6, of which approxi-mately 4 million tons per year are produced worldwide. Theapplications of polyamide 6 are very diverse and cover manyend-markets, from carpets and textiles to cars, electricaldevices and packaging film. Some of these applications aresensitive to the larger economic cycle (automotive, housing,luxury electronics), while others (such as textiles) are quitestable.

DSM Fibre Intermediates (DFI) is the global leader in the pro-duction and supply of caprolactam, the raw material for pol-yamide 6. It has production facilities on three continents(Europe, North America, Asia) with a total production capaci-ty of nearly 700 kilotons per year. DSM supplies around 20% ofthe merchant market. DFI offers caprolactam of world-classquality with a high level of service to build long-term valua-ble partnerships with customers.

Over 40% of all caprolactam produced globally is made usingDSM’s proprietary technology.


11%

15%

47%

16%

11%Metal/B&C

Automotive/Transport

Textiles

E&E

Packaging


40%

14%

45%

1% Europe

Americas

Asia

RoW

Acrylonitrile

Acrylonitrile is a key ingredient for fashionable acrylic textileand carpet fibers and for materials (acrylonitrile butadienestyrene, ABS and styrene-acrylonitrile, SAN) for automobilecomponents, electronic devices, toys and sports equipment.The application of acrylonitrile in a wide range of valuable spe-cialty products (for example carbon fibers, water treatmentadditives, enhanced oil recovery, detergents) is rapidly grow-ing.

With its market share of 25%, DFI is the leading supplier in theEuropean merchant acrylonitrile market while globally it ranksthird. Acrylonitrile is produced at the Chemelot site in Sittard-Geleen (Netherlands) in two identical plants, with a total ca-pacity of 275 kilotons per year. The feedstocks for the produc-tion of acrylonitrile are air, propylene and ammonia. The on-site availability of these raw materials results in a high level ofefficiency. Even the recovered by-products of the productionprocess increasingly contribute to profitability.

The ClusterThe polymer intermediates cluster consists of DSM FibreIntermediates which supplies key intermediates to DSMEngineering Plastics.

36

Most attractive markets (2011)Polyamide 6 for E&E, automotive and food packagingTextiles in Asia (mainly China and Taiwan)

About DSM Fibre IntermediatesWith its market share of 20%, DSM Fibre Intermediates is thelargest merchant caprolactam producer in the world. Withplants in the Netherlands, the United States and China, itholds a global market position, a solid partnership in China,excellent performance, technological leadership and agrowing secured supply to DSM Engineering Plastics.With a market share of 25%, DSM Fibre Intermediates is amajor player in the merchant acrylonitrile market in Europe.In addition, the business group produces ammonium sulfate,sodium cyanide and diaminobutane.

DSM Fibre Intermediates

Oil Gas

PhenolCyclohexaneAmmonia

CaprolactamAcrylonitrile

PolyamidePA6, PA46Engineeringpolymers

OEM(parts)YarnsFilms

AutomotiveE&E, Films,TextilesCarpets


Global growth of engineering plasticsExposure to high growth Asian marketsHigh utilization rates

Key success factors of DSM Fibre Intermediates

Low cost operationsSecurity of sales (excellent global coverage)Reliable supply, consistently good product qualityTechnology leadership

MarketsCaprolactam, with a total global demand of some 4,300kt(merchant and captive) in 2011, is used predominantly forpolyamide 6, a high performance polymer, used in:

Textiles (lingerie, sportswear, leisurewear, fashion wear,travel and outdoor gear)Floor coverings (carpets, rugs)Industrial yarns (bias ply tyres, conveyor belts, mechanicalrubber goods, ropes, nets, fishing lines)Engineering plastics: automotive (air-inlets, engine covers),E&E (switches, connectors), equipment housingsFilms (food packaging, industrial packaging) Films (foodpackaging, industrial packaging)

Acrylonitrile’s main applications are textiles, building &construction (acrylic fibers), automotive and E&E (ABS), waterpurification (acrylamide). Global acrylonitrile demand is around5200kt.

Ammonium sulfate is mainly used as fertilizer, sodium cyanideis used in detergents and in vitamins synthesis, diaminobutaneis an intermediate for Stanyl®

Main markets Caprolactam (2011)Textiles

Floor covering

Industrial yarns

Engineering plastics

Film

Caprolactam merchant market distribution DSMCapro Corp.CPDCUbeHoneywellBASFSumitomoSinopecOthers

Acrylonitrile production distribution IneosAsahiAscendDSMSeccoFPCTaekwangJilinOthers

37

"Our goal is to further strengthen ourglobal market position and remainleading in caprolactam andacrylonitrile. Increasing demand andgood margins provide a solid base forexpanding capacity by building asecond, next generation caprolactamline in China."

Ed SheuPresident

Market growth 2011-2016Global demand growth of acrylonitrile / caprolactamover 3% per yearRegional: Strongest growth caprolactam in China / Taiwan >6% per yearUS and Europe relatively stableHalf the world’s caprolactam consumption is already con-sumed in Asia

In 2015, half the world’s caprolactam consumption is expectedto be in China / Taiwan.

Main customersCaprolactam: manufacturers of PA-6 products such as DSMEngineering PlasticsAcrylonitrile: manufacturers of acrylic fibers, adiponitrile,ABS/SAN, acrylamide, nitrile rubber

StrategyCaprolactam: DSM Fibre Intermediates has a threefold ap-proach to capitalize on the opportunities that are arising:doubling production capacity in China; continuously improv-ing existing assets by means of life time extension and vari-able cost reduction projects; and a firm commitment tosustainability.Acrylonitrile: maintain our sustainable position as one ofthe leading players in Europe.

Main competitive advantagesGlobal presenceCost leadershipOnly global producer in fast growing ChinaReliable partnerTechnology leadershipIntegration with DSM Engineering Plastics (PA6)

Manufacturing detailsCaprolactam over ~700 kt total(Geleen, Netherlands; Nanjing, China; Augusta, US)Acrylonitrile (Geleen, Netherlands) 285 ktSodium cyanide 28 ktAmmoniumsulfate 1200 kt

TechnologyDSM has proprietary world-class caprolactam technologies(HSO, HPO+™, HPO™, Hydranone™, Oxanone™) with multiplelicensees worldwide.

Key raw materials / intermediatesCyclohexane or phenol, ammonia for caprolactamAmmonia and propylene for acrylonitrile

Main capex plannedSecond line (200kta), world class caprolactam productionline in China (startup end of 2013)Life time extension projectsSustainability projects efficiency driven investments to saveon energy and raw materials and reduce emissions

Key InnovationsNew caprolactam production technologies from bio-renewable resources

Sustainability programs to radically reduce carbon footprintand reinforce our ‘green’ industry leadership

Process innovations to lower cost per ton produced


38

Innovation CenterBusiness and trendsDSM Innovation Center

The DSM Innovation Center was originally set up in 2006 tofacilitate the Vision 2010 change program toward an intrinsi-cally innovative organization. It has a business developmentrole, with its Business Incubator and Emerging Business Areas,as well as a leading role in enabling and accelerating innova-tion within DSM.

DSM Venturing

DSM Venturing actively invests in start-up companies thatcreate innovative products and services in health, nutritionand materials. DSM Venturing plays an important part inDSM’s open innovation policy and invests in activities that areof immediate or potential relevance to DSM business groupsand/or the DSM Innovation Center. In addition to direct in-vestments DSM Venturing is also involved in a number of ven-ture capital funds.

DSM Licensing

DSM Licensing aims to create value by assisting DSM businessgroups and DSM Emerging Business Areas (EBAs) with the initia-tion and management of collaboration on the basis of intellec-tual property (IP), including patents and know-how. DSM ap-proaches licensing as a completely integrated, powerful way ofcreating shared value with partners. In all of DSM's EBAs licens-ing will be one of the most important ways in which the compa-ny enhances its value proposition and speed to the market. DSMLicensing has been established in the DSM Innovation Center tofacilitate such IP intensive collaborations and to serve as a cen-ter of excellence for IP-based business.

Emerging Business Areas

DSM's Emerging Business Areas provide strong, long-term growthplatforms that optimally combine the available competences inLife Sciences and Materials Sciences. The company currentlyhas three Emerging Business Areas: DSM Bio-based Products &Services, DSM Biomedical and DSM Advanced Surfaces.

The Cluster

The cluster contains the activities of the DSM Innovation Center(including DSM Venturing) and the Emerging Business Areas(EBAs).

“ Innovation is in our genes; it is oursport. The DIC mission is to enableand accelerate innovation efforts DSMwide and to create new businessesoutside the scope of the current Busi-ness Groups, while addressing upcom-ing needs as a consequence of GlobalShifts in the areas of Climate & Ener-gy and Health & Wellness, based onour combined strengths in Life Scienc-es and Materials Sciences. ” Rob van Leen

Chief InnovationOfficer

40

About DSM Biobased Products & Services (DBPS)

At the core of DSM’s strategic focus on Life Sciences and Mate-rials Sciences is our key competency in Industrial Biotechnolo-gy (also known as White Biotechnology). This serves as thefocal point of our Emerging Business Area. DSM Bio-basedProducts & Services sees huge opportunities in the move to-wards a bio-based economy, particularly in bio energies suchas cellulosic bio-ethanol and biogas, and renewable buildingblocks and materials such as bio-based succinic acid and bio-based adipic acid.

Biobased products & services

RenewableFeedstockAgri-residue

Pre-treatmentEnzymaticConversion

PrimaryConversionFermentation

SecondaryConversionChemistry

OEM Endconsumer

MarketsBio-ethanol

Global cellulosic ethanol market expected to grow to 18bngallons in 2022, ~ US$ 50bnResulting in market value for enzymes & yeasts of ~ US$ 3-5bn in 2022US is leading, forecast ~ 7.5bn gallons of cellulosic bio-ethanol by 2022

Renewable building blocksMarket for renewable building blocks expected to grow to ~US$ 9bn in 2020

Current DSM market positionTogether with POET: Leadership position in the global cellu-losic bio-ethanol marketDSM holds no. 1 position in yeasts for cellulosic bio-ethanol.DSM holds top position in enzymes for cellulosic bio-ethanolUnique and essential combination yeasts and enzymes forcellulosic bio-ethanol

Unique combination biotechnology and tradition chemicalsynthesis and polymer technologies (materials)Proven track record in green processes

Most attractive marketsInclude the enzyme, yeast and other micro-organism part forthe cellulosic bio-ethanol market, currently estimated to beabove USD 0.5 billion, with rapid growth thereafter

Main customersSee customers in DSM’s Nutrition and Pharma cluster for tra-ditional biotechSee customers in DSM’s Materials Sciences clusters for bio-chems and biomaterialsBio refineries (cellulosic bio-ethanol)

Main competitorsNovozymes, DuPont, BASF/CSM, Lallemand, LeSaffreDSM has unique combination of enzymes and yeasts which areessential for conversion into cellulosic bio-ethanolClear alliances throughout the value chain needed for success

Main productsBio-succinnic acidEnzymes (a/o mixes to break down bio-masses)Yeasts (a/o to convert C5/C6 sugars)Others not disclosed yet


Market potential of renewable solutionsEco-footprint: Intrinsically lower carbon footprintsDrive at customers toward sustainable innovative solutionsPrice, availability and eco-footprint of conventionalresourcesGovernment backing (U.S.A.)

Key success factors DSM Bio-based Products & Services

Time to the marketNot competing with high capital intensive sectorHigh certainty of technological success andhigh technological spin-offSuccessful alliances throughout the value chain

DSM Biobased Products & Services

0

5

10

15

20

2011 2015 2020 2022

US

China

Brazil

EU

Market Cellulosic Ethanol (*)Global demand in billion gallons)

*: derived from Hart’s Global Energy Study

0.0

2.0

4.0

6.0

8.0

10.0

2010 2015e 2020e

SubstituteBio-chemicals

New Bio-chemicals

Growth renewable building blocks(Market value in billion US$)

41

StrategyDual track approach in cellulosic bio-ethanol & biogas:

demonstrate technology in a partnership with POETin cellulosic bio-ethanol (corn crop residue)roll-out technology using a licensing modellicense yeast technologysell enzymes and yeast

Microbial platform for production of biodiesel (from Martekacquisition)Production of bio-based chemicalsFocus on green materials with better performance andlower environmental footprintCombined Sales target with Biomedical Materials and Ad-vanced Surfaces in 2020 > € 1bn

Main competitive advantagesStrong partnerships (a.o. Roquette/POET)DSM’s unique combinations in biotech andchemistry (biomaterials)DSM’s unique combination in enzymes and yeasts(cellulosic bio-ethanol)Specialty portfolio such as heat resistant enzymesDeep understanding of value chain and end-users becauseof presence in Materials Sciences

Production / research facilities DBPSDelft (Netherlands), Elgin (US), Sao Paulo (Brazil), Shanghai(China), New Delhi (India), ,JV with POET: Sioux Falls (US), Emmetsburg (US)JV with Roquette: Lestrem (France), Cassano (Italy)Next to these DBPS locations, the DSM business clustershave biotech facilities all over the world

TechnologyUnique combination of biotechnology competences: yeasts,enzymes, bacteria, algeaUtilizing existing Life Sciences technologies to address to-day’s needs in renewable energy and sustainable materialsWe also create opportunities to combine our biotechnologyknowledge and skills with DSM’s in-depth knowledge of tra-ditional chemistry and manufacturing excellence to bringnovel integrated solutions across a variety of industry sec-tors

Key raw materials / intermediatesBiobased and renewable productsCellulosic biomass e.g. corn crop residue for POET DSMAdvanced biofuels

Main capex plannedThrough JV Reverdia, DSM and Roquette will expand bio-based succinic acid production capacity to ~10kt/yr by endof 2012Initial capex of USD 250 million in POET-DSM advanced bio-fuels JV, on stream in 2013

Key InnovationsNew robust enzymes mix able to break down biomass moreefficiently at higher temperatures

Advanced yeast strain capable of converting C6 / C5 sugarsinto bio-ethanol

Bio-based succinic acid and Bio-based adipic acid

“With its unique focus on Life Sciencesand Materials Sciences, DSM is wellpositioned at the forefront of anemerging bio-industrial era broughtabout by the need for renewableenergy sources and sustainablechemistry and materialsWe see that viable alternatives canand will be created by harnessing thepower of nature in creativesustainable ways” Anton Robek

PresidentDBPS locations

42

About DSM Biomedical

As one of the Emerging Business Areas, DSM Biomedicalprovides a proprietary product portfolio of coatings, drugdelivery platforms and a wide range of biomedical materialsthat enable the replacement, repair, enhancement andultimately the regeneration of tissue and organ function in thebody. Their novel materials-based solutions are designed tomeet the present and future needs of the medical device andbiopharmaceutical industries and ultimately improve patientoutcomes.

Market: Biomedical materialsThe market for biomedical materials is driven by the ongoingmarket growth in medical devices and the need for moresophisticated pharma drug delivery systems.

The biomedical materials market is estimated at USD 1.5 -2 bn with growth rates at 10-15% annually (2010).

The worldwide medical devices market is estimated atapprox. USD 150 bn in 2010.

Main customersLeading medical device companiesWorld class pharmaceutical companies

Most attractive marketsThe most attractive market is the USA, followed closely byWestern Europe and Japan. China, India and Brazil are ofgrowing importance. In this market, the cardiovascular, theopthalmology and orthopedics segments are the main focusareas for biomedical materials.

Main competitorsMaterials - AdvanSource, Arkema, Bayer MaterialScience,Invibio (Victrex), Lubrizol, Ticona, SurmodicsDrug Delivery - Durect, Evonik, Flamel, pSividia

Typically, competitors only serve one market segment ratherthan the whole market.

Current DSM market positionDSM Biomedical has a leadership position in the marketfor polymer based biomedical materials.DSM is the only company worldwide covering all majorapplications consuming biomedical materials, fromcoatings and implants to drug delivery systems.

StrategyDSM Biomedical develops materials-based solutions to meetthe present and future needs of the medical device and bio-pharmaceutical industries, specifically focused on developingsolutions for the cardiovascular, ophthalmic and orthopedicmarkets:

Biomedical materials - polymers for medical applicationsincluding neurostimulation leads, pacemakers, contactlenses, orthopedic implants, stents, implantable sensorsamong others.Coatings - hydrophilic, antimicrobial and non-fouling coat-ing technologies for medical devices such as catheters,with patient comfort as a priority.Drug Delivery - resorbable materials that deliver activecompounds to targeted parts of the body with a high levelof control and chemistry based design.

Key Profitability Drivers

Product pipeline in medical devices and pharmaStrong societal fundamentals and solutions requirementsfor continued growth in medical treatments usingbiomedical materialsImpact of health insurance policies

Key success factors for DSM Biomedical

Balanced product portfolio(Open) innovation competences and networkAccess to medical device and pharmaceutical industryIn-depth materials and pharma know-howValue capturing through broadening of technology/productportfolio and value sharing customer partnerships

Biomedical

RawMaterials

Biomedicalsolutionprovider

MedicalDevice -Pharmaindustry

Patients

DSM Biomedical

Hospitals/Pharmacies

Source: Frost & Sullivan, others

Medical device m arket (2010) CardiovascularOrthopedicsUrologyOphthalm ologyWound CareNeurologyGeneral surgery

Cosmetic surgeryOther

43

“Materials that belong to the body”

"DSM Biomedical is positioned tomeet a wide range of needs withour broad technology portfolio. Ourproduct pillars have applicationsacross many medical markets. Weare currently looking at acquisi-tions and joint ventures to enhanceour current market offering. Ourcollaborative efforts with medicaldevice and biopharmaceutical ma-nufacturers enable us to developmaterial solutions that improveour customer’s products and ulti-mately patient outcomes”

Christophe DardelPresidentManufacturing/R&D Facilities

Sales Offices

DSM Biomedical’s strategy actively exploits open innovation andto set up business models that are typical of knowledgebasedrather than production-based businesses.

Main competitive advantagesWide range of high quality innovative materials solutionsExcellent clinical track record in the medical andpharmaceutical fieldIP assets, comprising an extensive patent portfolio, masterfile data for regulatory submissions and the know how totailor materials to meet customer needsIn house, in-depth compentences in the Life Sciences andthe Materials SciencesExtensive network through partnerships in the public andprivate sector

Main productsBiomedical materials: Bionate® PCU, BioSpan® SPU, CarboSil®

TSPCU, Dyneema Purity® Fiber, Elasthane™ TPU, PurSil® TSPU,UHMWPECoatings: ComfortCoat® coatings, VitroStealth® coatingsDrug delivery systems: Trancerta™ Drug delivery

Manufacturing detailsManufacturing, and Research and Development centers inBerkeley (USA) and Geleen (The Netherlands)Manufacturing center in Greenville (USA) currently infinal validation phase

Key raw materials / IntermediatesHighly diverse set of various raw materialsRaw materials are a minor element in the knowledge basedoffering by DSM Biomedical

Main capex plannednone

Innovation strategyDSM Biomedical aims to complement cross companycompetences through open innovation:

Partnerships with key customersResearch alliances and cooperationsLicensing/venturingScientific Advisory Board

Key innovationsComfortCoat® coatings - These coatings include innovativehydrophilic coatings that can help improve patient comfortand care.

Bionate® II PCU - This thermoplastic polycarbonateurethane is an industry-leading medical grade polymer foruse in long-term implants and is backed by an establishedFDA Master File.

Dyneema Purity® fiber - the Ultra High Molecular WeightPolyethylene fiber is a superior alternative to traditionalmaterials in the orthopedic and cardiovascular fields, 15times stronger than quality steel with a lower profile, soft-ness and abrasion resistance, the fiber is also available asDyneema Purity® BLUE, the first 100% colored implantablegrade UHMWPE fiber.

Trancerta™ Drug delivery - a unique drug & biologicsdelivery system that is non-inflammatory and allows forgreater control over the rate and duration of release of thetherapeutic payload.

VitroStealth® coating—a non biofouling coating platformthat is designed to improve the accuracy and sensitivity ofin vitro diagnostics and in vitro and in vivo biosensor appli-cations.

44

Sustainable, innovative global supply chains in Life Sciences& Materials Sciences are vital as we strive to reach ourstrategic ambitions and realize our brand promise. The needfor long-lasting and meaningful relationships with keysuppliers is becoming more important every day – forsustainability, for innovation, and for effective riskmanagement. Our purchasing organization’s mission istherefore to connect customer needs with supplier solutions.By doing this, we extend the value chain to our suppliers, sothat they truly contribute to value creation and support ourcompetitiveness in areas such as:

SustainabilityInnovationBusiness growth, especially in High Growth EconomiesSecurity and quality of supplyNew business models and strategic alliancesCash management and cost control

Sustainability and supplier conductWe collaborate with our suppliers as a central way to help usachieve our sustainability goals and set our sustainabilityagenda for the years to come. DSM’s Supplier SustainabilityProgram is comprised of two main elements – compliance(supplier conduct) and business opportunities (supplier solu-tions). It has also helped make us a consistent winner in theDow Jones Sustainability World Index. The program involves athree-step approach with a Code of Conduct (covering > 90%of our external spend), supplier self-assessmentquestionnaires and supplier audits for large or high-risksuppliers. In addition we increasingly work with our suppliersto develop new ways to achieve our sustainability andinnovation goals. For example, we substitute oil-based rawmaterials with renewable resources, and we have increasedour use of renewable energy.

Supplier managementOur selection criteria for suppliers include, but are notlimited to, the following capabilities:

Business commitment: their level of strategic alignment,resource allocation, innovation and commitment to priceand cost reductionSecurity of supply: whether a supplier has delivered ontime and has put supply assurance systems in placeSustainability: whether they comply with a code of con-duct, and contribute to sustainable solutions for the valuechainQuality assurance: whether they conduct quality perfor-mance for products, services and documentation, andwhat their response is to non-performance

We work with our suppliers to continuously improve ourrelationship and performance by:

Managing key supplier relationships to better utilize thetrue capabilities of our most important suppliersUsing our supplier development program to develop thesupplier’s true strategic capabilityConducting regular supplier performance evaluationsExpecting suppliers to conduct their activities inaccordance with our Supplier Code of Conduct andpurchase conditions

Sourcing / PurchasingAbout purchasingPurchasing is a globally-operating functional group that consistsof a central DSM Sourcing unit and Business Group Purchasingdepartments, under the leadership of the Chief PurchasingOfficer. We distinguish two spend areas:

Chemicals & Utilities, which are the majority of thenecessary building blocks for the vast range of DSM productsIndirect Goods & Services, which cover the most diverserange of purchasing needs for DSM that are not directlyprocessed in our products (Facility Goods & Services, ICT,Physical Distribution, Technical Goods & Services)

The Purchasing organization’s mission is to connect customerneeds with supplier solutions. With in-depth knowledge ofsupply markets and close collaboration with our businesses andsuppliers, our Purchasing professionals bring suppliercapabilities to DSM in an efficient and transparent way. Weensure the best value by balancing quality of supply, price andrisk management (Total Cost of Ownership), and we activelycontribute to differentiated business strategies and goals forsustainability, innovation and ‘asset lite’ (capital efficiency).

Our matrix organization aims for world-wide collaborationbetween all Purchasing employees fully integrated in ourbusinesses. We emphasize a professional, collaborative,challenging and trustworthy approach, which createscompetitive advantages by getting the most possible value fromour supplier relationships.

External spend

DSM's external spend in 2011 was € 6.7 bn (which includeschanges in inventories and capex related spend).

Purchasing spend distribution

for continuing businessHighly oil dependant

Utilities/energy

Low/moderate oil dependant

Inorganics

Indirect

Natural products

45

DSM has a decentralized organizational structure built aroundbusiness groups that are empowered to carry out all short-termand long-term business functions. At the operational level, thebusiness groups are the primary organizational andentrepreneurial building blocks. The business groups aregrouped into clusters. Business groups within a cluster report toone member of the Managing Board. The clusters are the mainentities for external strategic and financial reporting.

This structure ensures a flexible, efficient and fast response tomarket changes. DSM has a number of functional and regionalorganizations to support the Managing Board and the businessgroups. Intra-group product supplies and the services of anumber of shared service departments and researchdepartments are contracted by the business groups on an arm'slength basis.

Koninklijke DSM N.V. (Royal DSM) is a company limited byshares listed on NYSE Euronext, with a Managing Board and anindependent Supervisory Board. Members of the ManagingBoard and the Supervisory Board are appointed (and, ifnecessary, dismissed) by the General Meeting of Shareholders.

The Managing Board is responsible for the company's strategy,its portfolio policy, the deployment of human and capitalresources, the company’s risk management system and thecompany's financial performance.

The Supervisory Board supervises the policy pursued by theManaging Board, the Managing Board's performance of itsmanagerial duties and the company's general course of affairs,taking account of the interests of all the company'sstakeholders. The annual financial statements are approved bythe Supervisory Board and then submitted for adoption to theAnnual General Meeting of Shareholders, accompanied by anexplanation by the Supervisory Board of how it carried out itssupervisory duties during the year concerned.

The company is governed by Dutch law and its Articles ofAssociation, which can be consulted at the DSM website(www.dsm.com). The General Meeting of Shareholders decideson an amendment to the Articles of Association by an absolutemajority of the votes cast. A decision to amend the Articles ofAssociation may only be taken at the proposal of the ManagingBoard, subject to approval of the Supervisory Board.

Organization

The DSM Managing Board (from left to right): Stefan Doboczky, Stephan Tanda, Feike Sijbesma (Chairman/CEO), Nico Gerardu, Rolf-Dieter Schwalb (CFO)

http://www.dsm.com)./

46

Shares and listingsAccording to the Articles of Association Royal DSM has twotypes of shares: one class of ordinary shares and two classesof Cumulative Preference shares, series A and B. At this time,next to ordinary shares only Cumprefs A have been issued.The Cumpref B are not issued nor outstanding at this time.

Ordinary shares Royal DSMissued as per 31 March 2011: 181,425,000 sharesThe average number of ordinary shares outstanding in2011 was 165,566,944. All shares in issue are fully paid.nominal value of € 1.50 per shareno certificates on these shares are issued, the votingrights are not limitedlisted on the stock market at Euronext Amsterdam

Cumulative Preference Shares Aissued and outstanding in 2010: 44.04 million sharesnot listed on the stock marketowned by three Dutch institutional investorsnominal value of € 1.50 per shareas of 1 January 2011 the annual dividend amounts to €0.23 per share ( 4.348% of the issuance price of € 5.2942)

Share Structure

Cumulative Preference Shares Bare not issued nor outstanding at this timeby virtue of DSM's Articles of Association, 375,000,000 cu-mulative preference shares B can be issuedthe DSM Preference Shares Foundation has the right to ac-quire such preference shares (call option) to a maximumcorresponding to 100% of the capital issued in any form oth-er than preference shares B, less onethe DSM Preference Shares Foundation is independent inaccordance with the requirement laid down in Appendix Xto the Listing and Issuing Rules or Euronext

Ordinary shares in Royal DSM N.V. are listed on the NYSEEuronext stock exchange in Amsterdam, the Netherlands (Stockcode 00982, ISIN code NL0000009827).

Options on ordinary DSM shares are traded on the EuropeanOption Exchange in Amsterdam, the Netherlands(Euronext.liffe).

In the United States a sponsored unlisted American DepositaryReceipts (ADR) program is offered by Citibank NA (Cusip780249108), with four ADRs representing the value of oneordinary DSM share.

47

Remuneration

Remuneration policyThe objective of DSM’s remuneration policy is to attract,motivate and retain qualified and expert individuals that thecompany needs in order to achieve its strategic andoperational objectives, whilst acknowledging the societalcontext around remuneration and recognizing the interests ofDSM's stakeholders. The following elements are taken intoconsideration:

DSM strives for a high performance in the field of sustaina-bility and aims to maintain a good balance between eco-nomic gain, respect for people and concern for the environ-ment in line with the DSM values and business principles asreflected in the DSM Code of Business Conduct. The remu-neration policy reflects a balance between the interests ofDSM’s main stakeholders as well as a balance between thecompany’s short-term and long-term strategy. As a resultthe structure of the remuneration package for the ManagingBoard is designed to balance short-term operational perfor-mance with the medium and long-term objective of creat-ing sustainable value within the company, while taking ac-count of the interests of its stakeholders.

To ensure that highly skilled and qualified senior executivescan be attracted and retained, DSM aims for a total remu-neration level that is comparable to levels provided by other(Dutch and European) multinational companies that are sim-ilar to DSM in terms of size and complexity.

The remuneration policy for the members of the ManagingBoard is aligned with the remuneration of other senior exec-utives of DSM.

In designing and setting the levels of remuneration for theManaging Board, the Supervisory Board also takes into ac-count the relevant provisions of statutory requirements,amended Dutch corporate governance clauses, societal andmarket trends and the interests of stakeholders.

DSM’s policy is to offer the Managing Board a total directcompensation approaching the median of the labor-marketpeer group.

Element Vehicle PerformanceMeasure Target Pay-out

Fixed 100% Base Salary Cash N/A 100%

Variable 50% Short TermIncentive

Cash Financial EBITDA before excep-tional itemsGross free cash flowOrganic net salesgrowth

10%

7,5%7,5%

Sustainability ECO+ productsEnergy EfficiencyEngagement index

10%5%5%

Other Individual 5%

50% Long TermIncentive

Financial TSR (relative) 25%

Sustainability Greenhouse gas emis-sions reduction 25%

Perfor-manceShares

Remuneration Framework

48

History of the companyIn 1902, the Dutch government formed the coal miningcompany ‘De Nederlandse Staatsmijnen' (Dutch State Mines),later renamed DSM. As the mining operation grew, so did thecompany's coal-processing operation. A by-product of thisoperation, coke oven gas, was converted into ammonia, animportant intermediate for a number of chemicals, includingnitrogenous fertilizers.

In the 1950s, chemical products became more prominent. DSMstarted focusing on providing industrial chemicals and rawmaterials for synthetic fibers and yarns.

In 1965, the Dutch government decided to close down the coalmining activities in the Netherlands. In 1975, the country's lastmine was closed. Fortunately, DSM had anticipated this and hadchanged its focus before that time.

By 1970 chemicals and fertilizers comprised the company'smain activities, accounting for two-thirds of its turnover. In the1970s and '80s DSM underwent major reorganizations to ensuresufficient scale and to diversify into high-quality plastics andfine chemicals.

After 1985, DSM developed a series of ambitious innovationprojects resulting in specialties such as the polyethylene fiberDyneema®, the World’s strongest fiber™.

In 1989, DSM was privatized and listed publicly.During the 1990s, the company paid greater attention tocreating a balance between commerce and research anddeveloping value-adding processes and products, particularlyproducts for the pharmaceutical and the food industries andperformance materials for the automotive and transportindustry and the electrical and electronics sector.

In 1998 DSM acquired Gist-Brocades and its divisions wereintegrated into the DSM Life Science Products cluster.

In 2002 DSM completed the sale of its petrochemicals businessin anticipation of future market movements. This was followedby the acquisition of Roche's Vitamins & Fine Chemicals Divisionin October 2003, which was subsequently renamed DSMNutritional Products.

Recent history 2005— 20112005

Acquisition of NeoResinsSale of DSM Bakery Ingredients to Gilde Investment Mana-gementNew DSM strategy towards 2010: accelerate growth,innovation, portfolio quality

2006DSM sells iodine business to Sociedad Química y Minera deChile (SQM)Holland Sweetener Company exits from aspartame businessDSM strengthens position in weight management byacquiring Lipid Technologies Provider AB

History

2007DSM acquired Pentapharm Holding Ltd.DSM announces new breakthrough polymerDSM NeoResins+ completes new factory for waterbornealkyd resins in Hoek van HollandDSM announces plans to accelerate its focus on Life Sciencesand Materials Sciences and divest all non-core businesses by2010

2008DSM acquires American specialty-resins producer SoluolDSM completes acquisition of The Polymer TechnologyGroup Inc.DSM doubles Stanyl® capacity with opening of new plant inGeleenDSM to sell Solutech to Lydall, Inc.

2009Opening of DSM China CampusDSM celebrates twenty years as a listed companyDSM opens new factory for waterborne acrylic resins inWaalwijkDSM and NCPC sign contracts to establish nutrition and anti-infectives joint ventures in ChinaDSM acquires Biopract in GermanyDSM first company to endorse the 'Roadmap to End GlobalHunger'DSM sells urea-licensing business (Stamicarbon) to MaireTecnimontDSM sells DSM Energy to TAQA

2010DSM sells DSM Agro and DSM Melamine to OrascomConstruction Industries (OCI)DSM sells Sarlink® unit to Teknor ApexDSM sells Citrique Belge to AdcuramDSM finalizes portfolio transformation and enters era offocused growthDSM to complete divestment program through sale of DSMElastomers (Keltan®)DSM completes sale of DSM Special Products to EmeraldPerformance MaterialsDSM acquires Microbia Inc. to expand its leading position inspecialty ingredients

2011DSM completes acquisition of Martek; adding a newNutrition growth platformDSM successfully acquires 51% stake of AGI in TaiwanDSM to acquire Vitatene S.A.U. to expand position in naturalcarotenoidsDSM and KuibyshevAzot commence strategic cooperation inRussiaDSM and Sinochem establish global anti-infectivesjoint ventureDSM completes acquisition of majority share in ChinaUHMWPE fiber manufacturer Shandong ICD

49

Five-year summary

50

Five-year summary

52

Disclaimer

DISCLAIMER

This document may contain forward-looking statements with respect to DSM's future (financial) performance and position. Suchstatements are based on current expectations, estimates and projections of DSM and information currently available to thecompany.

Examples of forward-looking statements include statements made or implied about the company’s strategy, estimates of salesgrowth, financial results, cost savings and future developments in its existing business as well as the impact of future acquisitions,and the company’s financial position. These statements can be management estimates based on information provided byspecialized agencies or advisors.

DSM cautions readers that such statements involve certain risks and uncertainties that are difficult to predict and therefore itshould be understood that many factors can cause the company's actual performance and position to differ materially from thesestatements.

These factors include, but are not limited to, macro-economic, market and business trends and conditions, (low-cost) competition,legal claims, the ability to protect intellectual property, changes in legislation, changes in exchange and interest rates, changes intax rates, pension costs, raw material and energy prices, employee costs, the implementation of the company’s strategy, thecompany’s ability to identify and complete acquisitions and to successfully integrate acquired companies, the company’s ability torealize planned disposals, savings, restructuring or benefits, the company’s ability to identify, develop and successfullycommercialize new products, markets or technologies, economic and/or political changes and other developments in countries andmarkets in which DSM operates.

As a result, DSM’s actual future performance, position and/or financial results may differ materially from the plans, goals andexpectations set forth in such forward-looking statements.

DSM has no obligation to update the statements contained in this document, unless required by law. The English language versionof this document is leading.

A more comprehensive discussion of the risk factors affecting DSM’s business can be found in the company’s latest Annual Report,a copy of which can be found on the company's corporate website, http://www.dsm.com

http://www.dsm.com/

DSM Investor RelationsP.O. Box 6500, 6401 JH HeerlenThe NetherlandsTel: +31 45 578 2864Fax: +31 10 459 0275Email: [email protected]

DSM Media RelationsP.O. Box 6500, 6401 JH HeerlenThe NetherlandsTel: +31 45 578 2421Fax: +31 45 574 0680E-mail: [email protected]

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