DSM Agro production delay to last longer than expected

Dutch life sciences and materials sciences company DSM says that an interruption in production that occurred at DSM Agro last month will take longer to end than originally anticipated. However, in view of the current positive business climate the outlook will not be lowered, the firm noted.

At the beginning of June technical problems arose at one of the DSM Agro ammonia plants in the Netherlands. The production interruption was originally expected to last only a few weeks. Unfortunately it now turns out that the repair might last 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, the firm says.

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 25.0 million euros ($39.4 million) to 30.0 million euros, most of which it will book in the third quarter.