DSM agrees to Deretil management buyout

By Gareth Macdonald

- Last updated on GMT

Related tags: Management

DSM Deretil, the chemical side-chain manufacturing operation of DSM's anti-infectives unit, is to go it alone through a management buyout.

Deflt-based Deretil is a supplier of chemical side chains used in the production of active pharmaceutical ingredients (APIs) for anti-infective drugs like amoxicillin, ampicillin, cephalexin and cefadroxil, which are some of the most widely used broad spectrum antibiotics. The company is considered a major player in the sector and claims to supply around 95 per cent of the world's semi-synthetic penicillin and cephalosporine producers.

Deretil also makes nystatin, penicillin, penicillin intermediates and a number of enzymes used in industrial biomanufacturing processes at its 250,000 tonne per year production facility in Almeria, Spain.

The buyout, which is expected to reduce DSM's annual revenues by around €35m, is in keeping with the firm's 2007 strategic review action plan. In April, Feike Sijbesma, chairman of the DSM Managing Board, said that the firm would shift its focus and concentrate on expanding in the materials and life sciences.

Commenting on the Deretil plans Jan Zuidam, Deputy Chairman of DSM's management board explained : "This transaction gives better chances for DSM Anti-Infectives to fully focus on its core future activity as a leading player in generic API's, and for Deretil to focus on the specific dynamics of the side chain business. This is a good move for both parties, and we are convinced this will in the near future turn out a win for all involved​."

Deretil will completely focus on its core business: the marketing, sales and manufacturing of side-chains for the production of APIs. Lluis Franquesa, president of Deretil: "We are proud that DSM has put the trust in us to take over full responsibility and ownership of Deretil. We as management team of Deretil are fully aware of our responsibilities towards, our people, our customers and the society in which we operate, and are fully prepared to take this responsibility​.

We will continue as planned the previously announced restructuring of the manufacturing base, involving the closure of one of the plants on the Villaricos site in Spain and moving the production from that plant to China,​" added Franquesa.

DSM anti-infectives maintains India focus

The Deretil buy-out allows DSM anti-infectives to focus on its production of generic APIs, which it carries out with Indian partner Arch Pharmalabs under a deal the two firm's signed in 2007.

Under the agreement, DSM develops undisclosed "non infringing novel processes"​ to produce APIs using its technology portfolio in biocatalysis, fermentation and chemical conversion that are then transferred to Arch for commercial development at its manufacturing facilities in Guargon, New Delhi.

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