18 April 2005 00:01 [Source: ICB]
Rhodia will continue as sole supplier of intermediates and polymers to Nylstar, the polyamide textile yarns joint venture (jv) it has with Italian partner Snia, after majority ownership transfers to RadiciFibres, a spokeswoman confirmed.
RadiciFibres, the synthetic fibres division of Italian family owned Radicigroup, which signed a letter of intent with Rhodia and Snia earlier this month (see ECN 11 April), is expected to gain 70-80% of the enterprise. No money will change hands, but RadiciFibres will assume a proportionate amount of Nylstar’s debt.
‘We have a long-term contract and will continue with the present contract in terms and conditions,’ said the Rhodia spokeswoman, who declined to specify terms.
The new jv between Radicigroup and Nylstar marks the first step in Rhodia’s eventual exit from the textiles business, analysts suggest; a move already made by the rest of Europe’s major chemical companies.
Snia began attempts to sell its stake in Nylstar several years ago, but put plans on hold while the jv was restructured.
In an interview last month, Rhodia chief executive Jean-Pierre Clamadieu said Nylstar could operate best in the hands of a dedicated player.
Colin Purvis, director general of the European man-made fibres association CIRFS said: ‘The [fibres] market is highly fragmented. It has been under severe margin pressure for many years and this is increasing because of imports from China which make it difficult for a publicly quoted chemical company to make an adequate return for its shareholders.’
Nylstar made a €133.8m loss before interest and tax in 2003 on total revenues of €460m.
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