DSM reports production interruption at DSM Agro
Royal DSM N.V. reports that an interruption in production that occurred at DSM Agro last month will take longer to end than originally anticipated. In view of the current positive business climate the outlook will not be lowered due to this event.
At the beginning of June technical problems arose at one of the DSM Agro ammonia plants in the Netherlands. The production interruption was originally estimated to last only a few weeks. Unfortunately it now turns out that the repair might take into October. DSM continues working on possible alternative solutions.
This incident was unexpected, but once repair has taken place, the plant will function again at full capacity. While the damage to assets is as such limited, the business-loss for DSM Agro, for which ammonia is the primary raw material, could run into several tens of millions.
Thanks to insurances, the total negative financial impact for DSM of this one-off incident is expected to be between EUR 25 to 30 million, most of which in Q3.
Considering the current positive business climate for both DSM Agro as well as for DSM as a whole, this interruption in production is no reason for DSM to lower the outlook it has given for the full year. Further details will be disclosed at the Q2 results presentation on July 29.
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