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Rhodia buys Feixiang Chemicals for $489m
Date:2010/12/9      View:813
 
French specialty chemical producer Rhodia on Monday announced the acquisition of Feixiang Chemicals in Zhangjiagang, Jiangsu province, for $489 million.

"This acquisition represents a unique opportunity for Rhodia to integrate specialty amines technologies and key intermediates of surfactants into its Novecare business portfolio," said Jean-Pierre Clamadieu, chairman and chief executive officer of Rhodia.

Insiders said the move will help the French company reinforce its position in the global specialty surfactants market.

"Through the integration, Rhodia is able to enhance its footprint in Asia, the world's fastest-growing region, to generate one-third of its global net sales," he said.

Rhodia will combine its formulation expertise and end-market applications know-how with Feixiang Chemicals' amines capabilities to reinforce its market for home and personal care, industrial cleaning, agrochemicals, oilfields and coatings.

In an exclusive interview with China Daily, Clamadieu said considerable funds will be spent to upgrade the factory after the acquisition, which has been renamed Rhodia Feixiang Specialty Chemicals Co Ltd.

"Although it has witnessed an annual 20 per cent increase of sales in the past five years, it still lags far behind Rhodia's technical requirements," he said.

"Funds are needed to enlarge its production capability and improve its environmental protection facilities."

According to Wang Weiyu, general manager of Rhodia Feixiang, an estimated 200 million yuan ($30 million) is expected to be injected annually into the new factory over the next decade. "But the plan has not been finalized," he said.

The merger is the last part of Rhodia's three-tier investment plan for the Chinese market this year, which included a high-performance silica plant launched in Qingdao, Shandong province, in October this year.

It spent 45 million euros ($60 million) to add more than 30 per cent of additional capacity to its global highly dispersible silica production network.

Also in October, Rhodia spent 20 million euros transferring its Wuxi plant in Jiangsu province to its new industrial platform in Zhenjiang, Jiangsu province, to produce chemicals for the perfumery industry.

The CEO said the next focus of investment will be placed on engineering plastics and polymers, adding that work is being done to map out an investment plan which is expected to be finalized in the first half of next year.

"Our presence in China is closely related to our new ambition to become a champion of profitable growth in the next three to five years," said Clamadieu.

Its aim is to generate an annual profit of more than 1 billion euros within the next three to five years, representing a growth of around 40 percent compared with 2010 expectations.
 
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