Sales: EUR 5.53 billion (US$5.2 billion) (1999)
Stock Exchanges: Euronext Paris New York
Ticker Symbol: RHA
NAIC: 325412 Pharmaceutical Preparation Manufacturing; 325212 Synthetic Rubber Manufacturing; 325110 Paint and Coating Manufacturing; 325611 Soap and Other Detergent Manufacturing; 31311 Fiber, Yarn, and Thread Mills; 311942 Food Extracts (Except Coffee, Meat) Manufacturing
One of the world’s leading specialty chemicals companies, Rhodia SA—the former chemicals and fibers & polymers units of Rhône-Poulenc (now Aventis) spun off in 1998—is repositioning itself for the 21st century. The company’s global operations, with nearly 150 manufacturing facilities in more than 25 countries and sales in more than 150 countries, produce chemical products in six primary divisions. The Industrial Products division produces rubber, silicon, paint, paper, and construction materials, such as reinforced concrete. In the Consumer Products division, the company produces an array of food additives; ingredients for cosmetics, soaps, and other bath and beauty products; and products for laundry and other detergents. The company’s Organics division produces ingredients for pharmaceutical products (the company is the world’s leading producer of acetylsalicylic acid and second largest producer of paracetamol) as well as perfumes and other synthetic products. The company’s Services and Specialties division creates rare earth-based and other products for diverse uses, such as catalytic converters and materials for the automobile industry.
Rhodia’s Polyamide division creates textiles, threads, plastics, and fibers for a wide variety of uses, ranging from automobile engine and other parts to materials for sportswear and other clothing. Since 2000 Rhodia has been dismantling its sixth division, the Polyester division, as the company has begun a process of selling off its French and Brazilian polyester production facilities. At the same time, Rhodia has boosted its global reach with the acquisition of Albright & Wilson, a leading British chemicals group, which is expected to add some EUR 1.2 billion to the company’s annual sales (which topped EUR 5.5 billion in 1999). Rhodia is quoted on both the Euronext Paris and New York stock exchanges.
Founding a French Chemicals Empire in the 19th Century
When Rhodia S.A. was created in 1998, it already boasted nearly 150 years of history. The company’s origins follow two threads dating back to the middle of the 19th century. The first of these was the founding of a small factory producing dyes, tanning agents, and other products for textile companies based in the Lyon region of France in 1956. That company’s founders, Marc Gilliard and Jean Marie Cartier, later joined with Pierre Monnet of Switzerland, whose company, Pierre Monnet et Cie, founded in 1868, specialized in synthetic dyes based on tar and other materials. The newly enlarged company became Gilliard, Monnet et Cartier, keeping the city of Lyon as the location of its headquarters.
By then, the second of the two threads that were eventually to become the chemicals and manufacturing giant Rhône Poulenc—which would emerge as France’s largest company in the 20th century—had already established its own modest origins. In 1858, Etienne Poulenc bought an apothecary in Paris, adding his name to the billing to form the company Wittmann et Poulenc Jeune. Poulenc quickly turned to producing his own products, branching out into chemicals and supplies for the nascent photographic industry, as well as adding apothecary and pharmaceutical products. With the entry of his brothers into the firm, Poulenc’s company was renamed Poulenc Frères, before becoming a public company in 1900. At the time, the company expanded its name to become Les Etablissements Poulenc Frères.
Both Poulenc Frères and Gilliard, Monnet et Cartier were at the forefront of developments in what was rapidly becoming the modern era of medicine and medical treatment. At the end of the 19th century, the Gilliard, Monnet et Cartier company, which had begun more and more to invest in the research, development, and production of new chemical products, chose to emphasize its growing interest by changing its name to the Société Chimique des Usines de Rhône in 1895. The company also went public at this time.
Meanwhile, among Poulenc Frères’ accomplishments were a number of significant breakthroughs, such as its introduction of arsenobenzol, one of the earliest successful treatments of the hitherto incurable syphilis. Around this time, Société Chimique des Usines de Rhône reinforced its concentration on its own chemical and pharmaceutical products when it exited its original textile dyes market. At this time, Société Chimique des Usines de Rhône also introduced a new brand name to denote a number of its chemical products—Rhodia.
World War I gave both companies a vast testing ground for their pharmaceutical products, as they developed new drugs and compounds to treat the wounds of the French war casualties. After the war, the Société Chimique des Usines de Rhône attempted to enter a new market, that of perfume manufacturing. For this venture, the company used the Rhodia brand name. Facing pressure, however, from its German competitors, which had already begun to dominate the chemicals industry in Europe by then, Société Chimique des Usines de Rhône decided to refocus its production entirely on specialty chemicals by the 1920s.
The end of that decade saw the birth of what was to become not only France’s leading chemicals company, but the largest among all French companies. In 1928, the Société Chimique des Usines de Rhône and Les Etablissements Poulenc Frères merged to form the Société des Usines Chimiques Rhône Poulenc. Shortly after, the company became the first French company to begin mass production of the revolutionary new drug penicillin, discovered in 1928.
An Independent Chemicals Giant for the 21st Century
The period following World War II marked an era of steady growth for Rhône Poulenc, as the company established not only its French dominance, but a worldwide reputation as well. The company’s operations expanded throughout the world, including the United States, where the company established the subsidiary Rhodia Inc. The U.S. operations only took the name of the French parent in 1978, when it became Rhône Poulenc Inc.
During this period, Rhône Poulenc actively pursued a program of growth by acquisition, making a number of significant purchases to help consolidate the French chemicals and pharmaceuticals industry, including the 1956 addition of Theraplix, first established in 1931. In 1961, the company changed its name, becoming Rhône Poulenc S.A. The 1960s saw another addition to the company in the form of the acquisition of the Institut Mèrieux. By the end of the decade, Rhône Poulenc had solidified its leadership in the French market and had built up a position as the number three chemicals group in Europe.
If Rhône Poulenc’s post-World War II growth had mirrored that of the French economy, the company continued to follow the same pattern as the French and worldwide economies slipped into a prolonged recession in the 1970s. Suffering from the ailing economic situation, Rhône Poulenc also made a number of strategic errors, such as granting the United States marketing rights for its highly successful drug Thorazine to rival Smith-Kline. Most important, Rhône Poulenc had long enjoyed its position behind France’s high tariff barriers, effectively barring its international competition. The tariff barriers were taken away in the 1970s, and Rhône Poulenc suddenly found itself in head-to-head competition with an array of foreign companies, including several giant American and German chemicals and pharmaceuticals firms.
By the end of the decade, Rhône Poulenc was struggling and, in the early 1980s, posted losses of more than US$500 million. At the time, the public company came under a new attack; the rise to control of the Socialist government under François Mitterand had been won in part because of its promise to nationalize a number of key French industries. Mitterand made good on that promise in 1982, when Rhône Poulenc was taken over by the French government. Placed in charge of the newly nationalized company was Loïk Le Floch-Prigent, who was given the task of restructuring the ailing group. Le Floch cut back on the number of employees, eliminated a number of the company’s struggling business units and subsidiaries, and by the mid-1980s had succeeded in bringing Rhône Poulenc back into the black.
Le Floch—who went on to head the French-owned oil company Elf—turned over the leadership of the rejuvenated Rhône Poulenc to Jean-René Fourtou in 1986. Fourtou continued Le Floch’s transformation of the company, slashing some 20 subsidiaries, while going on an international spending spree to add 30 new companies, including the agricultural chemicals division of Union Carbide in 1986, Germany’s Nattermann, and the industrial chemicals business from Stauffer in 1987. Fourtou’s attention had turned especially to the United States, where Rhône Poulenc had picked up some 18 acquisitions.
Using the core skills and technologies of Rhodia worldwide, we will grow and succeed by building profitable businesses that satisfy the evolving needs of our customers, challenge our employees, serve the public, and establish our company as a recognized and respected market leader.
In 1990, the big got bigger when the French government gave Rhône Poulenc 35 percent of the country’s number three pharmaceuticals group, Roussel-Uclaf. In that same year, Rhône Poulenc merged its own pharmaceuticals operations with that of the United States’ Rorer—developer of Maalox and other drugs—to form Rhône Poulenc Rorer, in which Rhône Poulenc held some two-thirds of the shares. Meanwhile, Rhône Poulenc itself was teaming up with rival Merck & Co. to develop a series of children’s vaccines in the early 1990s. The company also was pursuing its expansion in the booming Asian economies with the series of new factories serving the plastics and chemicals industries.
The company by then was able to look forward to a return to the private sector, as a new government led by Jacques Chirac promised to reverse the nationalization policies of the exiting Mitterand-led government. Rhône Poulenc was returned to the private sector in 1993. The company next began to expand into new areas of development, particularly the growing market for biotechnology products, techniques, and equipment. In 1993, Rhône Poulenc bought 37 percent of Applied Immune Sciences. The following year, the company acquired Fisons, a manufacturer of treatments for asthma and allergic reactions based in the United Kingdom.
After Rhône Poulenc and Merck joined together to spin off their animal healthcare products operations into the new company Merial, the French chemicals and pharmaceuticals giants prepared to get even bigger. The increasing globalization of the world’s marketplace caused Rhône Poulenc to seek out a partner with which to counter the expansion moves of its largest U.S. and European competitors. The company found that partner in the German company Hoechst AG, as the two companies announced their intentions to merge to form Aventis in 1999.
As part of the process leading to the Aventis merger, Rhône Poulenc decided to spin off two of its divisions, its Chemicals division and its Fibers & Polymers division, to form a new separate company, Rhodia S.A. Rhodia S.A. was created in 1998 and some 30 percent of Rhodia was sold on the Paris and New York stock exchanges in 1999. Placed in charge of Rhodia was CEO Jean-Pierre Tirouflet, who led Rhodia on a restructuring of the assets inherited from Rhône Poulenc. Among the company’s divestitures was its titanium dioxide operations, sold off in 1997, and the company began to prepare for an exit from the polyester market, shutting down a number of its European polyester production facilities. Meanwhile, the company unveiled an ambitious investment program to support its expansion drive in the Asia Pacific region. As Tirouflet told Chemical Week, the new company started business with “a business portfolio that’s more balanced and able to withstand cycles.”
The year 1999 marked a turning point for the company, as parent Rhône Poulenc sold off its position, setting Rhodia free as an independent company. In that year, also, Rhodia made a bold expansion move when it won a takeover battle for the United Kingdom’s Albright & Wilson. That company, founded in 1851 and, from the late 1970s to mid-1990s, a subsidiary of Tenneco Inc. of the United States, had grown into one of the world’s largest producers of phosphates and other phosphorus-based products, with sales of more than EUR 1.2 billion. The company’s purchase price was an estimated US$850 million.
In July 2000, Rhodia once again made acquisition headlines when it reached agreement to purchase ChiRex, a U.S.-based fine chemicals specialist. That acquisition, for a price of nearly US$550 million, established Rhodia as a world leader in that fast-growing chemicals specialty. The company’s debt ratio topped 130 percent with the acquisition, pushing down the company’s stock price, however, so Rhodia might have placed itself in a delicate position. As the specialties chemicals industry continued to consolidate at the beginning of the new century, industry observers began to question whether Rhodia’s low stock price might not make it an attractive target for a takeover attempt.
Consumer Products; Organics; Industrial Products; Services and Specialties; Polyamide.
Bayer AG; Ciba Specialty Chemicals Corporation; Clariant Ltd.; Imperial Chemical Industries PLC; SKW Trostberg AG.
- Gilliard and Carrier company is founded.
- Wittmann et Poulenc Jeune is founded.
- Pierre Monnet et Cie is founded.
- Gilliard, Monnet et Cartier is reformed as Société Chimique des Usines.
- Les Etablissements Poulenc Frères is formed.
- Rhodia trademark and brand name is first used.
- Poulenc and Société Chimique des Usines merge to form Rhône Poulenc.
- U.S. subsidiary Rhodia Inc. is formed.
- Théraplix is acquired.
- Company name is changed to Rhône Poulenc S.A.
- Institut Mérieux is acquired.
- Rhodia Inc. changes name to Rhône Poulenc Inc.
- Rhône Poulenc is nationalized.
- U.S. drugs unit is merged with Rorer to form Rhône Poulenc Rorer.
- Rhône Poulenc is privatized.
- Rhône Poulenc (soon to be renamed Aventis) combines chemicals and polymers units to form Rhodia S.A., which is later spun off as a public company.
- Rhodia acquires Albright & Wilson; Aventis sells its shares in Rhodia.
- Rhodia acquires U.S.-based chemicals firm ChiRex.
David, Christian, “Jean-Pierre Tirouflet, génie de la finance monte en graine,” L’Expansion, October 7, 1999, p. 22.
Halpern, Nathalie, “Rhodia lance une OPA sur l’americain ChiRex pour 3.8 milliards de francs,” Les Echos, July 25, 2000, p. 9.
Hunter, David, “Rhodia Works on Its Winners,” Chemical Week, November 11, 1998, p. 96.
Young, Andrew, “Rhodia Wins Battle for Albright,” Reuters, May 13, 1999.
"Rhodia SA." International Directory of Company Histories. . Encyclopedia.com. (April 24, 2019). https://www.encyclopedia.com/books/politics-and-business-magazines/rhodia-sa
"Rhodia SA." International Directory of Company Histories. . Retrieved April 24, 2019 from Encyclopedia.com: https://www.encyclopedia.com/books/politics-and-business-magazines/rhodia-sa
Encyclopedia.com gives you the ability to cite reference entries and articles according to common styles from the Modern Language Association (MLA), The Chicago Manual of Style, and the American Psychological Association (APA).
Within the “Cite this article” tool, pick a style to see how all available information looks when formatted according to that style. Then, copy and paste the text into your bibliography or works cited list.
Because each style has its own formatting nuances that evolve over time and not all information is available for every reference entry or article, Encyclopedia.com cannot guarantee each citation it generates. Therefore, it’s best to use Encyclopedia.com citations as a starting point before checking the style against your school or publication’s requirements and the most-recent information available at these sites:
Modern Language Association
The Chicago Manual of Style
American Psychological Association
- Most online reference entries and articles do not have page numbers. Therefore, that information is unavailable for most Encyclopedia.com content. However, the date of retrieval is often important. Refer to each style’s convention regarding the best way to format page numbers and retrieval dates.
- In addition to the MLA, Chicago, and APA styles, your school, university, publication, or institution may have its own requirements for citations. Therefore, be sure to refer to those guidelines when editing your bibliography or works cited list.