DSM Fibre Intermediates activities (currently within Industrial Chemicals), which provide backward integration for DSM Engineering Plastics and have a strong leadership position, will be reported in a new cluster Polymer Intermediates.

As a result of the above, DSM will create five reporting clusters, as follows:
・ Nutrition (Life Sciences)
・ Pharma (Life Sciences)
・ Performance Materials (Materials Sciences)
・ Polymer Intermediates (Materials Sciences)
・ Base Chemicals & Materials

The EBITDA margin targets of the clusters will be adjusted to reflect their new composition.
The new reporting structure will be effective for 2008 with restatement of 2007.
These portfolio adjustments are expected to be completed during the course of the Vision 2010 program. As a result, DSM will move closer towards its goal of deriving 60% of total revenues from specialty businesses, remaining only in those businesses formerly within the Industrial Chemicals cluster where backward-integration provides DSM with a competitive advantage.
In addition, over the remainder of the Vision 2010 period, DSM will seek to monetize the value of some other assets, mainly real estate.

Acquisitions
In addition to achieving its objective of organic sales growth above 5%, DSM is lifting its ambitions for growth through acquisitions, which will be targeted in the company’s core Nutrition, Pharma and Performance Materials businesses, as well as in the Emerging Business Areas. It is intended that acquisitions, to be made during the period 2008-2010 and financed from DSM’s strong cash flow, its balance sheet and from the proceeds of the various divestments to be undertaken, will add significantly to group revenues by 2010.
DSM will maintain its disciplined acquisition strategy.

Innovation
Market-driven growth and innovation is a key driver in DSM’s Vision 2010 strategy and is expected to contribute significantly to growth. DSM is fully committed to the Vision 2010 target of generating an additional EUR 1 billion in sales from innovation by 2010 and is confident that the pipeline of products currently in development will enable this target to be met. The innovation program is expected to contribute more than EUR 300 million to the company’s revenues in the current year, up from approximately EUR 170 million in 2006.
The additional annual innovation expenditure of currently EUR 40 million growing to EUR 70 million, announced at the commencement of the Vision 2010 program in 2005, will be maintained and investments will be made in technology and new product acquisitions, targeting at approximately EUR 75 million per year. This process is well under way; DSM recently acquired Pentapharm, a global leader in the production of active ingredients and system solutions for cosmetics which will help DSM Nutritional Products grow its presence develop and improve Pamako’s technology, and incorporate it in the existing DyneemaR life protection business.
Improved processes to maximize the benefits of DSM’s capabilities in innovation have been put in place and are working well. The Top 50 projects have been prioritized. The company has earmarked up to EUR 200 million for venturing investments until 2012.

Emerging Economies
DSM continues to experience strong growth in emerging economies. The particularly rapid development of the company’s presence in China, where DSM is currently achieving annual sales growth of around 20%, has enabled DSM today to raise its Vision 2010 growth objectives in China. The original target of USD 1 billion of revenues being derived from China by 2010 is now expected to be achieved well in advance of this time (2007 anticipated revenues: USD 900 - 950 million) and accordingly a new target of USD 1.5 billion by 2010 has now been set.

Operational Excellence
DSM has already announced two new programs in June this year to improve the performance and profitability of two businesses, DSM Anti-Infectives and the Aspire to Win program for DSM Nutritional Products, the latter of which is expected to deliver an annual minimum of EUR 100 million of improved profitability by 2010 and enable the Nutrition cluster to meet its Vision 2010 growth targets. DSM remains wholly committed to the pursuit of Operational Excellence and intends to continue and further strengthen the program with new initiatives in Advanced Manufacturing (for example, yield improvements and energy savings), Commercialization (product launch) and Excellerate (pricing program).

Sustainability (Triple P)
In the accelerated Vision 2010 strategy, DSM will continue to pursue its Sustainability / Triple P policy, paying keen attention to the performance of its activities not just on Profit, but also on People and the Planet. In the sector, the company ranks among the global leaders in sustainability and retention of global leadership in this area will be an ongoing priority for DSM. DSM continually strives to improve its eco-footprint and concrete targets have been set within the framework of Vision 2010 to further reduce emission levels. DSM has doubled its energy savings target from 1% to 2% per year. The company will seek to exploit the eco-advantages of DSM’s White Biotech industrial production capabilities which utilize renewable resources and are therefore beneficial both for the Planet and for Profit.
With regard to People, the ongoing diversification and internationalization of DSM’s workforce will be a continuing theme of the accelerated Vision 2010 strategy, benefiting the company’s performance culture.