Company Rakes In Profits After Shift From Chemicals To Environmental Solutions

A Dutch company that all but abandoned the chemical industry in favor of an environmentally conscious approach is reaping rising profits and sharp stock price increases.

Fortune this week chronicled the decade-long journey of DSM under Feike Sijbesma, a biologist who took over as chief executive of the then-bulk chemical giant and promptly refocused on planet-friendly initiatives.

Sijbesma said that he believed the world needed solutions to poverty and climate change more than it needed more chemical facilities. He also found that employees would rather work for a company that sought to make a difference.

"They are proud if they can say, 'Our company is changing the world, making the world cleaner, the food healthier,'" Sijbesma told the magazine.

DSM sold off its chemical and pharmaceutical businesses and, in subsequent years, made 25 new acquisitions. In addition, the company linked half of executive compensation to its sustainability goals.

Now focused on materials and nutrition, the company's revenues remain below the levels seen under the old regime. But profits -- especially of late -- are on the rise, and the company's stock price is up 61 percent over Sijbesma's tenure.

The company's human and animal nutrition business, in particular, saw sales nearly double during that span. DSM also continues to push the envelope in a variety of industries, from a product to curb the gases produced by cattle herds to a state-of-the-art ethanol plant in Iowa.

DSM officials conceded that the company needs to stay profitable to keep the lights on, and executives previously acquiesced to shareholder demands to streamline its operations and cut costs.

But Sijbesma told Fortune he is focused on the company's legacy rather than its particular earnings levels.

“People will forget those numbers," he said.