There's an expression about a tiger trying to change its stripes. How about a Dutchman?
DSM, a huge Netherlands-based company, at onetime was something of a tiger in the rubber industry. It owned EPDM rubber plants in the U.S. and Holland, and had a joint-venture facility in Japan—coverage of the world's three great markets, the company's top officials said. Repeatedly.
DSM also had acquired Copolymer Rubber & Chemical in Baton Rouge, La., one of only two independent SBR producers in the U.S. Copolymer was a cash cow for DSM when demand for SBR was hot, but DSM, like other owners of the business, did little to reinvest in a plant that turned out such a mature product.
Twenty years ago DSM started to change its stripes. It began heading toward becoming a “life sciences” and “material sciences” company, and expanded in chemicals for nutrition, health, pharmaceuticals. Perhaps not such a reach for a business that started out as a coal mining concern.
Rubber started falling out of the mix.
The company created a corporate holding zone where it parked various businesses that it really wanted to dump, although it typically refrained from admitting that fact. Eventually all the rubber entities were divested.
The pending sale of the firm's remaining EPDM business—which no longer includes plants in the U.S. and Japan, both closed—takes DSM out of the rubber field.
So where does that leave the 420 people who work for DSM Elastomers, and the EPDM unit's customers?
Maybe better off. If you're an employee—with the caveat you don't lose your job when the new owner takes over—would you rather be working for a firm committed to getting out of the business, or one committed to being in the rubber industry. As a customer, do you want to have a relationship with a Lanxess, or a supplier that doesn't want to be in the field?
The answer is obvious.