Rhodia to Idle Silica Capacity

Earlier today, this blog reported on Rhodia’s announcement regarding current market conditions and their effect on the company’s 2008 results. The announcement indicated that, in response to these conditions, Rhodia Silcea would be temporarily idling some of its production plants.

As a followup to that announcement, Notch has learned that Rhodia will idle all of its precipitated silica plants for a period of one to two weeks over the Christmas holidays to avoid building up excess inventory due to weak demand from the tire industry. The program will include all of its precipitated silica plants. including one in the US, two in Europe, two in Asia, and two in South America. A source at the company described demand from both the tire and MRG sectors as extremely depressed, while non-rubber markets for silica (such as dentifrice and food) are soft but not quite as depressed. Rhodia’s project to build a new silica plant in China is still moving forward, with startup scheduled for year-end 2009.