Rhodia | Strategy and Financial Highlights Information from ICIS

Edited from “Focus”, half-year report 2009, annual report 2008 and website

Rhodia states that it “demonstrated a remarkable resilience” in 2008, a year in which it says saw “many ups and downs” in the prevailing economic conditions. Despite an unprecedented increase in the cost of raw materials and energy, the company says it was able to maintain its margins.

“The last quarter [of 2008] was marked by a fall in demand in almost all markets and regions where we operate, but we responded very quickly and limited the impact by adapting our production rates. We are determined to pursue our strategy of profitable growth, with caution but with conviction,” says chairman and chief executive officer, Jean-Pierre Clamadieu.

Rhodia says that it is currently facing a significant slowdown in a number of its sectors, such as the automotive and construction industries. Its objective is to get through the difficult period. A key priority is being given to generating cash flow.

This involves adjusting its production rates to reflect changes in demand and reducing costs to the absolute minimum. The company is being “extremely selective” in terms of managing its investments, so it can concentrate its resources on projects with the strongest potential for improving performance.

On top of these measures, it wants to improve the productivity of its enterprises and functions. It aims to strengthen its competitive position throughout its businesses and it expects structural initiatives to reduce costs by around €150m/year from 2011.

“I am convinced that Rhodia’s future is dependent upon truly sustainable development. Rhodia has a long history of success on this topic and was one of the first chemical companies to take up the fight against global warming. We are mobilising a large part of our innovation capacity to ensure that our facilities meet the highest environmental standards,” says Clamadieu.

Rhodia believes that customer demand for cleaner, more energy-efficient products and processes that are better for people’s health is “always on the increase”. Rhodia has developed a range of technologies that make it possible to cut vehicle fuel consumption and reduce vehicle emissions, develop low-energy light bulbs and efficiently manage the product life cycle of sulphuric acid.

“This strategic position is proving particularly relevant today, especially in Europe and the US where government agencies have chosen to encourage investment in the most eco-friendly sectors and technologies,” says Clamadieu.

Strategy

Rhodia's ongoing strategy focuses on its “pursuit of profitable growth”, based on three priorities: sustainable development; targeted acquisitions; and innovation.

Sustainable development - driving growth with 30% of its sales generated from products that satisfy new sustainable development requirements

“We are responding swiftly and effectively to our customers' demands for more sustainable solutions,” says Clamadieu.

Targeted acquisitions – this includes strengthening its leadership positions in growing markets. The acquisition of the McIntyre Group in early 2009 is said to illustrate the company’s desire to continue to expand in its priority markets.

“This acquisition illustrates our desire to continue to expand in our priority markets through targeted external growth initiatives. We grasped this opportunity so the company can strengthen its position in the cosmetics and detergent markets, which are less affected by fluctuations in the economic climate,” says Clamadieu.

“McIntyre will be an excellent complement to Novecare, one of our main platforms for growth. The resulting synergies will have an almost immediate effect, with the profitability of the acquired activities expected to double over the long term,” continues Clamadieu. 

Innovation - both in the solutions and products offered to its customers as well as improving its manufacturing processes.

Rhodia states that its strategy is underpinned by continuing its development in high-growth areas where the company already has a significant presence. It currently has a longstanding presence in Europe, North America, Asia and Latin America, with 43% of its sales originating in high growth markets.

Outlook

Looking ahead, Rhodia believes it is “well-positioned” to face the significant business challenges and it will remain focused on free cash flow generation for the full year.

“We are looking to the future with confidence. We remain focused in our pursuit of profitable growth in close collaboration with our customers. We continue to innovate, taking advantage of prospects for growth in emerging countries where we have a strong presence. And we are building on our expertise in chemistry to achieve truly sustainable development,” concludes Clamadieu.

Please see: INSIGHT: AkzoNobel and Rhodia accentuate the positive and Interview: More R&D for chems to beat global warming - Rhodia CEO on ICIS news.

ICIS Chemical Business magazine has unveiled the ICIS Top 100 Chemical Companies, with rankings based on 2008 sales.

A PDF of the ICIS Top 100 Chemical Companies is available for download on ICIS connect.

See the article and analysis of the ICIS Top 100 on ICIS news.

Financial highlights: Rhodia, year ended 31 December

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Rhodia Company Structure

Rhodia is a global specialty chemicals manufacturer. It holds key technologies in applications chemistry, with surfactants, polymers, high-performance silicas and rare earth-based specialties; in specialty materials and services, with adipic acid, polyamide engineering plastics and sulphuric acid regeneration; and in fine chemicals, with pharmaceutical active ingredients and ingredients for flavours and fragrances. Rhodia had previously become an independent company in October 1999 when Rhone-Poulenc divested the remainder of its holdings in Rhodia.
More about Rhodia Structure

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