All business groups of DSM fine-tuned their own individual innovation practices in 2007 with a focus on formulating their innovation strategy, filling their pipelines and/or rejuvenating their portfolios. In addition, the most important development projects have been listed in a Top 50 of projects, which are expected to generate the main part of the €1 billion in innovation-related sales targeted for 2010 and which all have projections that show considerably higher margins than DSM’s traditional portfolio.

In 2007, DSM filed more than 350 new patent applications, leading to a total of over 14,000 patents. DSM further strenghtened its Intellectual Property position in the emerging economies. In India, for example, DSM filed 20% more patent applications in 2007 compared to 2006.

To strengthen its interaction with leading industry and technology experts DSM established several scientific advisory boards in 2007, plus a DSM Chair of Innovation Management at RSM Erasmus University in Rotterdam, the Netherlands.

In 2007 DSM increased its focus on exploring cross-cluster opportunities between its Life Sciences and Materials Sciences activities based on the unique position of being able to combine a broad range of in-house capabilities in the fields of biotechnology, pharmaceuticals, chemistry and materials science.

A good example of the combination of competences was the opening of a state-of-the-art process flavors plant in China in May 2007. This was an important milestone in a program in which extrusion technology developed by DSM Engineering Plastics was applied to process yeast extracts, enabling the addition of new ingredients in an innovative way and allowing for variable process conditions, resulting in an extended product offering for process flavors.

Many other, still early-phase synergy projects were initiated. These include bio-based materials for which the materials-science competences are being combined with DSM’s expertise in white biotechnology and the development of a fermentative production process for caprolactam.

DSM’s combined skills in various market and technological areas also form the basis for the Biomedical, Specialty Packaging, Personalized Nutrition and White Biotechnology Emerging Business Areas which are highlighted in the section on the DSM Innovation Center.

The DSM Innovation Center was set up in 2006 to support the achievement of the DSM innovation targets as set out in Vision 2010 –Building on Strengths. This includes the targets related to the overall additional sales objective of €1.0 billion from innovation-related sales in 2010, an extended technology base, an improved innovation process, an innovation-oriented culture and the establishment of long-term growth platforms.

The DSM Innovation Center comprises an Innovation Program Office, Corporate Technology, Intellectual Property, Licensing and Venturing, the Business Incubator, four Emerging Business Areas and Base-of-the-Pyramid activities.

In 2007 the DSM Innovation Center initiated a further enhancement of DSM’s innovation capabilities and competences. In addition, the efficacy of the innovation resources was enhanced by actively sharing best practices throughout the organization and setting up action plans in cooperation with the various business groups to improve certain areas.

The Emerging Business Area programs, set up within the DSM Innovation Center to secure DSM’s long-term innovative growth, found themselves in various stages of development at the end of 2007. These Emerging Business Areas optimally combine expected social and technological trends with DSM’s current market strongholds and technology positions.

In Specialty Packaging and Personalized Nutrition the first concepts were patent-protected and venturing investments were carried out. In the area of White Biotechnology DSM set up an internal program and engaged in discussions with premier partners complementing DSM’s skills in life sciences, chemistry and materials in this field. One of the early concrete results was a decision to join the €100 million French BioHub program, in which several life-science companies work together aiming to develop new materials with specific performance characteristics from renewable feedstocks.

DSM’s efforts in White Biotechnology are also aimed at the development of technology to convert specifically those plant materials that are not suitable for use in the food chain. These could be agricultural residues such as stems and leaves but also non-edible plants that can be grown on pasture land. DSM is working on converting the bulk of the plant into fuels or other chemicals rather than just the part suitable for food, as is the case with current technology. Successful commercialization will among other things require extensive programs for developing new fermentation organisms that produce biofuels and biochemicals and for selecting an appropriate set of plant-hydrolyzing enzymes.

In Biomedical the first medical coatings sales were realized at several key medical-device customers. In addition, the public/private partnership Biomedical Materials, co-initiated by DSM, will receive €45 million in funding from the Dutch government and started a 5-year €90 million program. Furthermore, Dyneema Purity^® achieved considerable growth. Initial efforts in developing polymer platforms and technology for drug delivery were started.

Apart from the selected Emerging Business Areas, the DSM Innovation Center started working on identifying potential new Emerging Business Areas to ensure that innovation in the company remains aligned with future needs.

Within the Business Incubator, the Functional Coatings program resulted in the successful launch of ®claryl picture glass in various European countries. To extend the technology/IP platform in this area, DSM acquired a novel nanoparticle invention from the University of Sheffield (UK). The licensing deal included a long-term research collaboration between DSM and the University of Sheffield through which both parties will benefit from potential new developments.