Kemira buys Rhodia's industrial additives business

03 September 2003 10:36  [Source: ICIS news]

LONDON (CNI)--Finnish pulp and paper chemicals group Kemira has bought Rhodia's industrial additives business including the French specialty company's plant at Sausheim in Alsace, northeast France.

The two companies said Wednesday that the business had sales last year of Euro16m ($17.6m) including approximately Euro2m from a toll manufacturing agreement with Rhodia.

Neither Kemira nor Rhodia would disclose financial details of the deal, which was completed on Tuesday. However, it is understood that Kemira has paid less than half turnover for the business, which provides products and services mainly for the pulp and paper sector.

Rhodia explained that industrial additives production is not a core technology for its performance products for multifunctional coatings (PPMC) division.

The division has withdrawn from the pulp and paper markets and is focussing on the manufacture of performance latex products and aliphatic isocyanates for paints, coatings and adhesives applications.

Rhodia added that the divestment was in line with its strategy to divest non-strategic assets that are inconsistent with its business model based on the cross-fertilisation of technologies and the delivery of high-value added solutions to customers.

Kemira said the acquisition will make it a major supplier of process chemicals to the pulp and paper industry in Continental Europe. It will give Kemira a broader product offering in Europe, including defoamers, deinking chemicals, and deposit control and dispersing agents, explained the company.

The Sausheim near Mulhouse plant will act as a gateway for Kemira's products to Continental Europe, according to Juhani Lindholm, executive vice president of Kemira's pulp and paper chemicals business. He told CNI that it will also help Kemira to transfer its current technologies from North America, and thus strengthen the synergies of the Vinings and Vulcan acquisitions. He added that the production technology will enable Kemira to start producing its new water-based, high-temperature defoamers in Europe.

"Investment-wise this is a small step for us, but when we think of all the opportunities the acquisition brings, we are taking a big step towards a wider product and service offering in Continental Europe," said Lindholm.

By: Neil Sinclair
+44 20 8652 3214

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