Rhodia doesn't see itself as a target

By Caroline Jacobs

FRANKFURT (Reuters) - French specialty chemicals maker Rhodia (RHA.PA: Quote, Profile, Research, Stock Buzz) expects to remain independent and sees limited merger and acquisition moves in its part of the industry due to a lack of business overlaps and cost synergies.

"I don't see us as a takeover target," Chief Executive Jean-Pierre Clamadieu said at the Reuters Chemicals Summit in Frankfurt on Thursday.

"I don't see a strong movement of consolidation in this part of the industry," he said. "There is not a strong logic for concentration. Companies have very different portfolios."

The business overlap with rivals like Switzerland's Ciba (CIBN.VX: Quote, Profile, Research, Stock Buzz) and Clariant (CLN.VX: Quote, Profile, Research, Stock Buzz), Britain's ICI ICI.L and Germany's Degussa DGXG.DE, he said, was limited to 20 to 30 percent, so mergers would yield only limited synergy savings.

Rhodia is set for a return to net profit this year -- the first time in five years -- after a business overhaul that began in 2003 and included renegotiating credit lines with banks, asset sales, cost savings and two rights issues.

Clamadieu, who initiated and saw through the overhaul, stressed that Rhodia would be able to meet its targets without any additional asset disposals.

Its recurring earnings before interest, tax, depreciation and amortization (EBITDA) margin should exceed 13 percent in 2006 and 15 percent in 2008. The ratio of net debt to EBITDA should be below 2.9 this year and below 2.2 in 2008.

"We have a developed a plan and a strategy that is a stand-alone strategy, Clamadieu said.  Continued...