Rhodia Makes Major Investments in Singapore, China

02 October 2000 00:00  [Source: ICB Americas]

By Eleanor Van Savage

Specialty chemical producer Rhodia is focusing its business activity on Asia-Pacific with plans to spend $8.6 million to expand its regional technical center in Singapore while initiating several new invest- ments in China. The company expects to invest approximately $50 million per year over the next few years on various investments in Asia.

The technical center in Singapore, which is managed by Rhodia's Asia-Pacific headquarters located there, is involved with research and development for many ingredients geared toward consumer products, including shampoos, creams and lotions, detergents and food. In addition, technologies developed in Europe and the US will be tested for Asian consumption. These cover a range of surfactants, polymers and polysaccharide derivatives.

In China, Rhodia has been building its aroma chemicals and rare earth businesses. Last month, it acquired the existing business of Xuebao Fine Chemicals Co. Ltd., a vanillin manufacturer, in Haining City, Zhejiang province. Rhodia's new subsidiary, Ruohai Fine Chemicals Co., Ltd., plans to produce and market vanillin to local and Asian markets.

The vanillin subsidiary will produce about 1,000 tons of high quality vanillin annually from guaiacol produced at Rhodia's joint venture, Jade Fine Chemicals, in China. Jade began production of catechol-based guaiacol last January in Wuxi, Jiangsu province, becoming the first company to produce chlorine-free guaiacol for domestic and import markets, according to the company.

In addition, Rhodia is developing its rare earth activities in China. It has formed a joint venture between a subsidiary, Rhodia Rare Earths, and two Chinese partners, Beijing Founder Group Co. Ltd., and Liyang Licheng Economic General Industrial Co. Ltd. The venture will combine the assets of Liyang's rare earth manufacturing plant, in Jiangsu province, near Shanghai, with Rhodia's technology.

The rare earth concern will develop high-tech products for the electronic, automotive, chemicals and glass markets. Initially, these products will be marketed to overseas markets and to downstream markets in China.

Rhodia hopes that the recently acquired businesses will deliver a major boost to the company's Asia-Pacific earnings, a spokes-person says.

Asia accounted for 11 percent of Rhodia's 1999 sales of á5.53 billion ($4.48 billion). Europe was the largest market (53 percent), followed by North American (22 percent) and Latin America (14 percent).

Rhodia recently revised its overall earnings downward for 2000 as a whole due to raw material price increases, citing in particular a 30 percent increase in oil prices this summer.

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