Martek Biosciences part of Dutch conglomerate's vision
Royal DSM's CEO says Martek innovations will help drive growth
Feike Sijbesma is head of multinational DSM, a major vitamin maker and the company that bought Martek Biosciences of Columbia in Februrary for $1.1 billion. (Baltimore Sun photo by Jed Kirschbaum / June 10, 2011)
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He had spoken to the entire company, a couple of hundred Martek employees. He had met with top executives. Somewhere in between, he squeezed in lunch. Several times before, Sijbesma had visited Martek during the 15 or so years the two companies had done business together.
But this month was the first time Sijbesma had come to the Maryland campus as the company's new leader.
In February, Royal DSM bought Martek for $1.1 billion. The deal was a huge success story for Martek, which started as a quirky science experiment in the mid-1980s by scientists who wanted to study the effects of algae on humans in spaceflight.
More than two decades later, Martek has grown to dominate a significant niche in the United States with its infant formula nutritional supplement. But Asia and Europe are still left to conquer. Martek and Royal DSM believe there's a bigger worldwide market for the infant formula supplement, as well as other uses for its supplements in different foods.
Sijbesma's vision for Royal DSM involves complex, yet complementary, science. Royal DSM makes products designed to improve human nutrition, such as vitamins and supplements, as well as pharmaceuticals. But the company also has a deep expertise in another area: It makes materials used in automobiles, on wind turbine blades, on solar panels, in fiber-optic cables and in medical devices implanted in humans.
The Dutch conglomerate got its start a century ago as a state-owned coal company. But in recent years it has recast itself as a life sciences and performance materials company — an uncommon combination. Sijbesma, chief executive and chairman of Royal DSM, recently met with The Baltimore Sun to explain how Martek will be part of the global company.
What made your company decide to buy Martek?
DSM has a long-standing relationship [with Martek]. We are a company in which biotechnology plays an important role. We were in collaboration and knew each other. Instead of collaboration, why not get together? It's an excellent fit.
What brought you to the United States this month?
I'm frequently in the U.S. with our U.S. businesses. We have 33 locations, 4,000 people in life sciences and material sciences [in the United States]. We're visiting some of those locations, our U.S. headquarters in New Jersey and Martek here in Maryland.
The second thing I do on trips like this are investor relations. I was in Boston and New York, in meetings with investors. And I give interviews, like this one, with magazines and newspapers. Increasingly, I see a lot of people are interested in the DSM storyline.
We're not a well-known company. We're 9 billion [in] euro sales, that's $12 billion. We have 23,000 people globally; most of our business is as supplier to Kraft, PepsiCo, Pfizer, General Motors — those kinds of companies.
What changes in food and diets do you see DSM being part of?
I think there's a lot of need to change the food composition here in the U.S. Fifty percent of the pharmaceutical industry is treating diseases that mankind has developed in the last 30 years by its lifestyle and by its food patterns. I think there's a lot to be improved in food. To make food healthier, more science behind it is needed.
What's your vision for Martek in three to five years?
Martek has a substantial part of its sales in the U.S. The infant formula in the United States is more enriched than the infant formulas in Asia and Europe. I see a lot of growth for Martek for selling their products in Europe and Asia. There, Martek has no sales network, but DSM has [one] in those regions. So Martek can use the DSM sales force to sell their products globally.
Martek has this algae technology platform, which is very interesting. We are now investigating how we can combine the algae technology of Martek with our microbe technology into biofuels. There's another growth angle for Martek.
Do you see staffing levels changing over the years at Martek?
I would like to grow more in the U.S. Martek is contributing to that. Martek employs mainly American people, which adds to a nationality balance [for DSM]. I'm happy with the people at Martek being Americans. I see that as an asset. I have no intentions to take the technology away and further develop it in Europe.
People are sometimes fearful of big companies and the things they produce, especially when it involves biotechnology. Do you ever encounter any skepticism from the public?
No, no, the food business that we developed and the life science business, they're not from a big chemical machine. We acquired a lot of companies, like Martek. We acquired a lot of skills and knowledge and expertise. It's not a bunch of weirdos who started moving into this field. We are not a bulk chemical company anymore. ... Many materials companies we compete with don't have any understanding of FDA control, and we do. We are unlocking a lot of new growth fields where we can contribute to society.
You've talked in the past about the coming evolution of our society from a fossil carbon-based economy to one that's based on biology and life sciences. What do you mean by this?
We started 150 years ago with digging coal out of the ground, and later on with oil and natural gas. Five hundred years from now, we'll live again like we used to live, with materials off of the land, but with different technologies. When will this switch start to happen? I believe we are further than midway. New technologies now are starting to make inroads: solar, wind, bio. DSM and Martek [are] in the midst of this huge societal change.