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Rhodia’s China Strategy

Chemical Week has an excellent article, China Drives Rhodia’s Asia Strategy, detailing Rhodia’s activities in China, where the company recent opened a new plant dedicated to tire silicas. In addition to its Chinese expansion, Rhodia is planning an expansion of silica capacity at its plant in Chicago Heights, Illinois, possibly by next year, and is considering building a new silica plant, possibly in Eastern Europe.

The Qingdao plant increases Rhodia’s worldwide capacity for highly dispersible silica by more than 30%, to 300,000 m.t./year and it is the company’s fifth plant for those products. The others are at Chicago Heights, IL; Collonges, France; Incheon, Korea; and Livorno, Italy. The new plant helps Rhodia to meet estimated annual demand growth of 9% for highly dispersible silica used in energy-efficient tires. Growth is expected to accelerate over the next five years to double-digit rates “that will last for some time,” Clamadieu says. “High-performance silica for tires is Rhodia’s single most promising innovation.”

The Qingdao unit will initially export its product to Japan and Korea because environmental legislation has created major markets in those countries for energy-efficient tires. But all of the plant’s output is expected eventually to be consumed in China. Demand in China for highly dispersible silica is, for the moment, relatively small. “But we believe that Asia will become the biggest market worldwide within 3-5 years with China becoming the biggest single market accounting for almost 40% of Asian demand,” says Leo Sun, Silica Asia general manager. China is the world’s biggest automotive market, having doubled in size over the last three years to overtake the U.S., and each of the leading tire manufacturers has production in China.

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