Rhodia in talks to buy chlorine supplier Chloralp

02 November 2004 14:15  [Source: ICIS news]

PARIS (CNI)--Rhodia confirmed on Tuesday that it is negotiating to buy Chloralp, the company which supplies chlorine feedstock to its Pont-de-Claix toluene di-isocyanate (TDI) plant in the south of France.

A spokeswoman for French specialty chemicals company Rhodia told CNI that an offer had been made to Chloralp's parent company, US-based Laroche Industries.

She declined to disclose details of the bid but confirmed that it had been made following a major disagreement with Chloralp over the terms under which it supplies chlorine and the reliability of supplies.

Chloralp, which has its chlorine production facilities at Pont-de-Claix, stopped delivering chlorine to Rhodia on 14 October after demanding substantial revisions to its supply contract. It claimed that the contract, which dates back to 1997, could only be fulfilled at a loss. It is also understood that Chloralp asked Rhodia to write off an undisclosed amount of debt.

Supplies of chlorine were resumed on 28 October after Rhodia took legal action against Chloralp, the Rhodia spokeswoman said. Under the terms of a court ruling, Rhodia also agreed to make a deposit of Euro41m ($52m) pending a final resolution of the dispute.

Rhodia said its approximately 120 000 tonne/year TDI plant, which is owned by US chemical company Lyondell, was shut for approximately two weeks in October during which a routine maintenance turnaround was brought forward from November.

The chlorine supply problems at Pont-de-Claix were reflected in financial results from Rhodia's performance products for multifunctional coatings business, which managed only to breakeven in the third quarter this year after a Euro8m loss from TDI activities.

Ironically, Rhodia used to own 50% of Chloralp but sold its stake to partner Laroche about five years ago.

(Neil Sinclair in London contributed to this story.)

By: Doris Leblond
+44 20 8652 3214

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