Rhodia's F&F Operations Optimizes Manufacturing

14 July 2003 00:00  [Source: ICB Americas]

Fresh from a recent reorganization this year, the flavors and fragrances (F&F) business of Rhodia SA is moving forward with a modest investment plan as the company, like other suppliers in the F&F market, faces greater price pressures from an increasingly concentrated customer base.

"The flavors and fragrances industry is experiencing interesting times," says Sebastien Meric, global business director for the flavors and fragrances business unit at Rhodia. "For sure, we are seeing increased concentration of our customer base in the F&F market, more so on the fragrance side than the flavors side. In turn, there is increased pricing pressure on raw material suppliers."

Reflecting those price pressures, Rhodia announced price increases of between 5 and 10 percent for a range of products including diphenols and their derivatives as well as salicylic acid and its derivatives affecting several flavors and fragrances ingredients. These compounds, based on phenol, are key products in Rhodia's F&F operations. Rhodia's F&F operations are part of the company's recently organized Perfumery, Performance and Agro Enterprise (PPA), which was formed in January 2003. The F&F business unit is the largest in the Rhodia PPA Enterprise, accounting for roughly $145 milllion of the enterprise's $480 million in sales in 2002.

Rhodia has been focused on optimizing its manufacturing operations for key F&F ingredients-including vanillin of which it is the world's largest producer-as well as for coumarin and salicylic acid and its derivatives.

Rhodia gained a manufacturing presence for vanillin in China in 2000 by acquiring the Chinese company Xuebao Fine Chemicals and then forming a new subsidiary, Ruohai Fine Chemicals, located in Haining City, China. Ruohai Fine Chemicals produces roughly 1,500 tons of vanillin per year from guaiacol supplied by Jade Fine Chemicals Ltd., a joint venture between Rhodia and Ube Industries. Through Jade Fine Chemicals Ltd., Rhodia manufactures catechol-based guaiacol in Wuxi, China, using a chlorine-free process for making guaiacol. Guaiacol is a key intermediate for making vanillin.

Rhodia plans to start up an isobornylcyclohexanol (IBCH) plant in Wuxi, China, on the back of its guaiacol unit, which will reinforce Rhodia PPA's position in this sandalwood note.

The Wuxi facility is Rhodia PPA's third production site for vanillin. It also manufactures vanillin in Baton Rouge, La., and Saint-Fons, France. In addition to synthetic vanillin, Rhodia manufactures a bio-based vanillin product, Rhovanil Natural, with a fermentation process using ferulic acid from rice bran at its facility in Melle, France. The product was launched in Europe in 2000 and is now being promoted globally. It meets US and European conditions for natural status.

Rhodia has roughly 45 percent of the global 20,200 metric ton-per-year world market for vanillin, with 9,000 tons of global annual capacity, according to Menlo Park, Calif.-based SRI Consulting. About 55 percent of the global production for vanillin is sold in food applications, with the remainder used in cosmetics, personal care, detergent and perfumery, notes SRI Consulting.

Vanillin pricing has been recently pressured as demand, except in China, remains sluggish. "Overall global growth is around 3 percent, with the strongest growth area being China," says Rhodia's Mr. Meric. "Growth in the US and European markets for vanillin has been essentially flat," he adds.

With demand modest, pricing is pressured and vanillin pricing is at recent historical lows. Vanillin is tracking at between $10 to $12 per kilogram, with certain premium grades at $13 to $15.

In another move, Rhodia is increasing capacity of cyclopentanone by debottlenecking at its production facility in Melle, France. The expansion is expected to come on line in the first quarter of 2004. Rhodia is also evaluating further investment plans in this area. Cyclopentanone is a fragrance intermediate used to make lactones and methyl dihydrojasmonates.

This is part of a three-phase debottlenecking project for Rhodia to increase cyclopentanone production capacity. Two years ago, Rhodia invested  2 million ($2.3 million) to increase cyclopentanone production capacity at Melle by 40 percent.

Last year Rhodia consolidated its worldwide production of coumarin and salicylaldehyde at Saint-Fons, France, and closed a plant at New Brunswick, N.J., because of growing pressure from low-priced competition, particularly from China. Coumarin is most widely used as a fragrance ingredient, but can also be used in flavoring tobacco. Salicylaldehyde is the pre-cursor for coumarin.

In another move, Rhodia has optimized a new process for converting aldehydes to carboxylic acids using oxygen as the oxidizing agent rather than hypochlorite, thereby giving chlorine-free products. It has been used to produce vanillic acid from vanillin. The new oxidation process uses air as the primary oxidant and water as the solvent, rather than relying on conventional oxidation processes that use sodium chlorite. Commercial quantities of vanillic acid are being produced at Rhodia's Clamecy site, south of Paris, and the firm is already supplying customers. The acid is used in the flavor and fragrance industry and also in pharmaceuticals and agrochemicals. Orthovanillic acid, veratric acid, isovanillic acid and piperonic acid are other potential targets for this technology.-Patricia Van Arnum

ICIS Copyright © Reed Business Information 2009

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