When going gets rough, reinvent

The Dutch company Royal DSM N.V. is an example of a global giant that has been able to change its business identity.

The "DSM" in the name stands for "Dutch State Mines," but that's about the only remnant of its 1902 beginnings as a state-owned coal-mining company.

After World War II, the company expanded into the industrial chemicals business and wound up jettisoning its mining operations. Privatized by the Netherlands in 1989, Royal DSM management sensed the need for another change, said Feike Sijbesma, its current chairman and CEO.

Between 2000 and 2010, Royal DSM remade itself again into a life- and materials-sciences firm to reduce its dependence on petroleum. The company sold its petrochemicals unit to Saudi Arabian Basic Industries Corp. for about $2 billion in 2002 and then bought the vitamins business of Roche Group for about $2.2 billion in 2003.

By 2010, DSM's latest transformation was largely complete. With 2010 sales of of 9.05 billion euro ($11.59 billion), the company had become a big supplier to large companies in the pharmaceutical and food industries as well as a provider of "performance materials" - lighter weight, made from renewable sources - to automakers, electronics firms, and other customers.

Under Sijbesma, Royal DSM has continued to acquire companies - 11 in the last two years, including Kensey Nash Corp., an Exton biomaterials company, for $334 million in May.

For a Philadelphia region that has seen a number of acquisitions of life-sciences firms in recent years, followed by jobs cuts and office closures, the purchase of Kensey Nash may have caused trepidation among its 325 employees.

However, as Sijbesma described Royal DSM's strategy from a Kensey Nash conference room in late October, it was clear that the Philadelphia-area operations are likely to expand.

Christophe Dardel, president of DSM Biomedical Inc., said the region is "a great place to be" with a lot of life-sciences startups. Royal DSM employs 5,000 in the U.S.

Kensey Nash may have had only $90 million in net sales for its last fiscal year, but its regenerative medicine products used by surgeons in spinal and other types of surgery are expected to be in demand in countries with aging populations.

In fact, Exton is now the headquarters of DSM Biomedical, which got its start in the United States with Royal DSM's acquisition of Berkeley, Calif.-based Polymer Technology Group Inc. in 2008.

Sijbesma doesn't pine for the coal and chemicals businesses his firm has shed.

"As Darwin taught us, if the world changes, you need to adapt in order to fit in the changed environment," Sijbesma said.