Investor Relations

Life Sciences and Materials Sciences

Back to the Bio-based Future

Volkert ClaassenVP DSM Biobased Products and Services

Roundtable, November 29, 2010

Investor Relations

This presentation may contain forward-looking statements with respect to DSM’s future (financial) performance and position. Such statements are based

on current expectations, estimates and projections of DSM and information currently available to the company. DSM cautions readers that such statements involve certain risks and uncertainties that are difficult to predict and therefore it

should be understood that many factors can cause actual performance and position to differ materially from these statements. DSM has no obligation to update the statements contained in this presentation, unless required by law.

The English language version of this document is leading.

A more comprehensive discussion of the risk factors affecting DSM’s business can be found in the company’s latest Annual Report, which can be found on the

company's corporate website, www.dsm.com

Safe Harbor Statement

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Agenda

• “Back” to the bio-based future

• DSM in a leading position

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Hydrocarbons are running out …..

Peak Oil: 94-mbd in 2022The year flow breaches below today's 86-mbd: 2040The year we virtually run out of oil (excl BTL): 2257

and / or become much more expensiveSource: http://www.trendlines.ca/scenarios.htm

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1000 30002000

mbd

Living off the land Living off the landA brief

momentin history

and / or become much more expensive

Hydrocarbons are running out …..

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Climate Change

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Climate Change

Will become very tangible

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Bio-based economy has a lot to offer

Benefit for the planet:• Renewable substitutes for fossil

feed stocks• Opportunities to combat climate

changeBenefits for people and

companies:• New markets for farmers• New, green jobs• Securing high level jobs, R&D

capital• Lower dependency on oil-

producing countries

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BiomassBiomassOilOilCoalCoalNon-renewable Renewable

Where did it start…

Need for new and sustainable energy resources

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RenewableFirst generation Second generation

Where did it start…… and where are we heading?

Need for new and sustainable energy resources

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Agenda

• “Back” to the bio-based future

• DSM in a leading position

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DSM in motion: driving focused growth

People - Planet - Profit: creating value along three dimensions

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Aspirations

• Sales in 2020 > € 1bn

• High EBITDA margin

• Develop EBA Advanced Surfaces

Strategy Bio-based Products & Services• License and service model to

cellulosic ethanol industry• Production of bio-based chemicals

from traditional crops• Focus on green materials with

better performance

Strategy Biomedical• Expand current biomaterials,

application and technology portfolio• Grow emerging drug delivery

business through market presence/access

• Venture/partner for regenerative medicine & tissue engineering

EBA Strategy: Building new growth platforms

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Understanding the emerging new value chain

Feedstock Provision

FeedstockProcessing

Primary Conversion

Secondary Conversion

BioCompounds

& formulationConverters

• Grain seed milling• Biomass pretreatment - enzymatic conversion

• Farming• Storage • Distribution

• Fermentation• Chemical

conversion• Enzymatic

conversion

• Polymerization• Chemical

Synthesis

• Compounding• Formulation• Reactive

Extrusion

• Moulding• Film extrusion

MaterialMaterialSciencesSciencesLife SciencesLife Sciences

Food & Feed Bio Medical

Personal Care

Coatings Automotive

ElectricalPharma

Know how on end-markets needs and capabilities to make it happen

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DSM’s traditional biotechnology markets

Agricultural(by)products Sugars

Biomaterials

-

Biochemicals

BiofuelsEthanolHydrogen

BiospecialtiesFood ingredientsPharmaceuticalsFine chemicals

Chemo-physical treatmentand/or enzymes

Cell factory: Biocatalysisor Micro-organisms

Agricultural(by)products Sugars

Biomaterials

-

Bio-basedChemicals

BiofuelsEthanolHydrogen

BiospecialtiesFood ingredientsPharmaceuticalsFine chemicals

Chemo-physical treatmentand/or enzymes

Cell factory: Biocatalysisor Micro-organisms

Approx. 40% of DSM's sales in Life Sciences is bio-based

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DSM’s future in white biotechnology

Agricultural(by)products Sugars

Biomaterials

-

Biochemicals

BiofuelsEthanolHydrogen

BiospecialtiesFood ingredientsPharmaceuticalsFine chemicals

Chemo-physical treatmentand/or enzymes

Cell factory: Biocatalysisor Micro-organisms

Agricultural(by)products Sugars

Biomaterials

-

Bio-basedChemicals

BiofuelsEthanolHydrogen

BiospecialtiesFood ingredientsPharmaceuticalsFine chemicals

Chemo-physical treatmentand/or enzymes

Cell factory: Biocatalysisor Micro-organisms

Expansion in bio-based end markets

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DSM track record in modern biotechnology

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Maxirenfor cheeseindustry

Arachidonicacid for

infant nutrition

Cephalexin

Aldolases forcholesterol–lowering drugVitamin B2

Strong innovation record as a basis for further growth

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Replacing chemistry by biotech: a DSM example

13 chemical steps 2 enzymatic steps

TraditionalFermentation

Sugar

MetabolicEngineering

Sugar

‘Old Route’ New Route PenicilliumPenicilliumchrysogenumchrysogenum

Cephalexin process: 65% less energy and materials, 50% lower cost

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EnzymesCarbo

hydrates

CargillADM

AbengoaRoquette

Biofuels

Food/feed/pharma products via biotechnology

Food / FeedPharma

Fermentationorganism

NovozymesDaniscoBASF

LeSaffreLallemand

DSM

DSM frontrunner in chemical sector in implementing biotechnology

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EnzymesCarbo

hydrates

DSM unique in combination yeast and enzymes

CargillADM

AbengoaRoquette

BiofuelsYeast

NovozymesDanisco

VereniumDSM

LeSaffreLallemand

DSM

RenewableResources

Yeasts are enzymes crucial for 2nd generation biofuels

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• DSM’s yeast and enzyme technologies is unique combination

• New robust enzymes-mix able to break down biomass more efficiently

• Advanced yeast strain capable of converting C6 / C5 sugars into bio-ethanol

DSM frontrunner in 2nd generation bio-fuel technologies

DSM announced breakthroughs in biofuels

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EnzymesCarbo

hydrates Yeast

Oil Chemistry Polymerization

Bio-fuels

Materials

Replacing chemistry by biotech

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Bio-fuels

MaterialsChemistry Polymerization

EnzymesCarbo

hydratesFermentation

organism

Chemistry/Enzymology

Polymerization

Bio-fuels

BioChemicals

BioPolymersBioMaterials

Many new opportunities from the combination

Resulting in a broad range of innovative bio-based opportunities

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Biomaterials: three approaches

• Drop in solutions: Replacing existing oil/gas based building blocks by green molecules:• Bio-succinic acid in existing

market• Bio-ethylene

• Iso-functional replacementsSame functionality, different Molecule: • Bio-succinic acid in new

applications: PBS polyester or replacement of adipic acid

• New functionalitiesSpecific functionalities:• For instance in biomedical

Example: green Toyota (clear targets on bio-materials)

Biomaterials as accelerator for sustainable solutions

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• High market potential• High return on investment• Intrinsically better for environment• Fast to the market• Not competing with high capital

intensive sector (recent capex)• High certainty of technological

success• High technological spin-off

Down to earth: understand nature’s design, don’t try to change

Selection criteria of high potential bio-solutions

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Where do we stand in the white biotech race?

Numerous projects ready for (commercial) launch

Valu

eVa

lue

C18+

CommercialDevelopmentFeasibility

C3

C2

C4

C5+

C18+

CommercialDevelopmentFeasibility

C3

C2

C4

C5+

Ethanol

IsosorbideIsosorbide

Succinic acid

Lactic AcidLactic Acid1,3 Propanediol1,3 Propanediol

3-HP3-HPGlycolsGlycols

FumaricFumaricPHAsPHAs

CaprolactamCaprolactamAdipic AcidAdipic Acid

EthyleneEthylene

Chain Length

Long chain diacids/diols ( plants oilseeds) 2017+Long chain diacids/diols ( plants oilseeds) 2017+

Butanol (non-ABE)Butanol (non-ABE)

Citric Acid

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Solvents Coatings and pigments

Pharmaceuticals

PlasticizerFood

Freezing point depression agents

Renewable thermoplastics - PBS Pyrrolidones

Polyurethane1,4 BDO/THF

Huge additional market potential for bio-succinic

Example: bio succinic acid production at DSM

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Why bio succinic acid?

Producing succinic acid via biological routes has several advantages:1. Lower environmental impact

1. No use of fossil fuels (crude oil), bio-renewable feedstocks2. Absorbs instead of emits CO2

3. Cost proposition allows for high volume green chemicals and materials

2. New biobased & biodegradable applications feasible1. Production of ‘green’ plastics like PBS (for a.o. agricultural films)2. Biobased fibers for clothing3. Biobased resins (e.g. polymer of bio-succinic acid and isosorbide])

PerformanceMaterials

Pharma ChemicalSynthesis

Nutrition Biotech MaterialsSciences

√ √√√√√

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European alliance: DSM - Roquette (F)

• Replacing oil-based succinic acid with biobased succinic acid:

– More cost effective– GHG emissions reduction of

>60%• Collaboration DSM – Roquette• DSM: White Biotechnology• Roquette: demo plant in France

Sheet: courtesy of Roquette

Demonstration plant in France operational since 2010

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• For SMC and BMC applications• 55% bio-based - highest bio-based content on the market • No compromise on processing standards and product performance• From under-body shields to Class-A exterior body panels

• Supports automotive industry's sustainability targets• Palapreg® ECO P55-01 is commercially available

DSM’s new bio-based Composite Resin

Example: Palapreg® ECO

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• Bio-based & high performance• Polyamide with excellent

mechanical properties. • Very good resistance to

automotive coolant, fuels, salts (eg calcium chloride) oils and greases

• 100 % carbon neutral from cradle to gate

• Replacing conventional plastics or metal

• Commercially available: Q1 2011

DSM’s new bio-based Engineering Plastic

Example: EcoPaXX™

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Summary: DSM in leading position

• Understanding market needs:• Knowing the customer (needs)• Knowing the end-markets

• DSM has the unique combination• Enzymes & Yeasts• Chemical competences• Polymerization competences• Biotech competences

• Building on strong biotech base

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℡ (+31) 45 578 2864(+31) 10 45 90275

e-mail: investor.relations@dsm.cominternet: www.dsm.com

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