Company News

Market optimism influences Solvay's takeover of Rhodia

Christian Jourquin, CEO of Solvay, said that the companies have a shared vision to create a new group to achieve their goals and to double their earnings to EUR2 billion under the Solvay banner. The company also said there will not be any major downsizing.

Solvay has its strengths in high performance speciality polymers like soda ash, caustic soda and hydrogen peroxide while Rhodia's is in speciality materials like silica and rare earths, consumer products and engineering plastics like nylons.

The company also said it will concentrate on growth in emerging markets, which already generate 40% of sales for the combined group. While Solvay will gain knowledge of the Chinese market, Rhodia can leverage its new parent's strength in markets such as Russia and Thailand.

Flush with funds as a result of a restructuring exercise (it sold its pharmaceuticals business and fuel tank blow moulder Inergy to focus on chemicals and plastics as well as reduced its costs by EUR65 million/year by laying off 800 staff), Solvay turned to Rhodia after being outbid by US chemicals supplier DuPont for Danish food ingredient maker Danisco this year. The company had sales of EUR7 billion last year.

Rhodia, meanwhile, has 14,000 employees worldwide and generated sales of EUR5 billion last year.

In related news, Solvay has announced plans to integrate Solvay Advanced Polymers, Solvay Padanaplast, Solvay Solexis and SolVin PVDC into a single business unit known as Solvay Specialty Polymers. It will represent 15% of the group's total sales and will be headquartered in Bollate, Italy, employing more than 2,500 people across 26 locations throughout North and South America, Asia and Europe.