Rhodia Expands in China, Acquires Feixiang Chemicals

Rhodia has announced plans to acquire Feixiang Chemicals, China’s leading producer of amines and surfactants. The acquisition will enable Rhodia to integrate specialty amine technologies into its Novecare business portfolio. The combination of Rhodia’s formulation expertise and end-market applications with Feixiang Chemicals specialty amines capabilities will reinforce Rhodia’s position in specialty surfactants for the home and personal care, agrochemicals, oilfield and industrial markets.

“This acquisition is a key step in the implementation of Rhodia’s profitable growth strategy. Through the integration of Feixiang Chemicals, Rhodia significantly strengthens its leadership positions in the surfactant business, while enhancing its footprint in the world’s fastest growing region,” said Jean-Pierre Clamadieu, chairman and CEO, Rhodia. “We aim to double the size of the acquired business within the next five years. Following the completion of this acquisition, Rhodia will generate around one third of its net sales in Asia.”

Headquartered in Zhangjiagang near Shanghai, Feixiang Chemicals Feixiang Chemicals is one of the leading companies in the Asia-Pacific area, producing, developing and selling the full range of fatty amines and specialty amines. It employs approximately 650 people. The company has demonstrated its ability to drive top line growth—average of 20% per year—while enhancing its profitability over the past five years.

The acquisition price is based on an enterprise value of $489 million for
100% of the company. The current majority owner will retain 12.5% of the capital over the next two years. The deal is expected to be finalized in the second half 2010.

Rhodia Novecare, with net sales of €827 million in 2009, provides high-performance products and solutions to a wide range of industries including cosmetics, detergents, agrochemicals and oil, as well as coating and industrial applications. Rhodia Novecare holds leading positions in the surfactants, phosphorus derivatives, natural polymers, synthetic polymers and monomers technologies, and eco-friendly oxygenated solvents markets.

Structured around six enterprises, Rhodia is the partner of major players in the automotive, electronics, flavors and fragrances, health, personal and home care markets, consumer goods and industrial markets. The group employs around 13,600 people worldwide and generated sales of €4.03 billion in 2009.