Presentation by Laurent Schmitt, President of Rhodia Polyamide ...

1

Rhodia Analyst Day

September 5-6th, 2006

Polyamide - Rhodia Analyst Day - September 6th, 20062

Laurent Schmitt, President

September 6th, 2006

Rhodia Polyamide


Forward looking statements and Regulation G

The presentation today may include the display of some company data

that do not directly conform to generally acceptable accounting principles, or GAAP.

Management believes that the presentation of some non-GAAP data provides investors with additional insight into the ongoing

operations of the business.

These measures should not be viewedas an alternative to GAAP measures of performance.

Furthermore, these measures may not be consistent with similar measures provided

by other companies.

This presentation contains elements that are not historical facts, including,

without limitation, certain statements on future expectations and other forward-looking statements.

Such statements are based on management’s current views and assumptions and involve known and unknown risks and uncertainties

that could cause actual results, performance or events to differ materially

from those anticipated.

Copies of all recent filings, and additional information about Rhodia, are available through our web site:

http://www.rhodia.com


An organizational structure ready to take up Polyamide’s future challenges


A sustainable pillar of Rhodia

Polyamide Strategy: Focus on Intermediates, Engineering Plastics & Asia

Intermediates & Polymers: the Polyamide power

Engineering Plastics: the innovation force

Growing in Asia

Agenda


A sustainable pillar

of Rhodia


35% Group Net Sales 21% Group employees43% Group EBITDA

A key business in Rhodia

Performance Materials

Strengthen global leadership Expand in Asia

Functional Chemicals

Organics and Services

Grow throughinnovation

Take advantage of consolidation opportunities

Generatefree cash-flow

Novecare

Silcea

Eco Services

Organics

Energy ServicesPolyamide

Acetow


Recurring EBITDA

€ 243 million

Employees

4,000

Net Sales

€ 1,710 million

Industrial sites

14 plants in the world

N°2 in Polyamide

6.6

N°3 in Engineering

Plastics

2005

Rhodia Polyamide


Well spread product range & customer base

Nylon Intermediates

40%

44%

16%

35%

5%

Intermediates & Engineering Plastics (€m)

> 85% sales

Strong developing market

presence (€m)

Intermediatesexcept AA

AdipicAcid

EngineeringPlastics

Fibers

Others

Europe

Asia

SouthAmerica

North America

24%

760

279

592

5%

Non Nylon Intermediates (Phenol & solvents)

21%

361

268

414

21235%

16%

44%

79

421

An increase of 55%

in last 5 yrs


Auto

Electric & Electronics

Consumer & Industrial Goods

29%

7%

12%

Well-diversified final marketsfor Rhodia Polyamide

Clothing & shoes

Construction

Others

7%

26%

8%

Coatings & adhesives

11%


A complete polyamide chain

Engineering Plastics

Industrial Yarns

Technical &

Consumer Fibers

Textile Yarns

Polyamide

Nylon

salt

HMDAADN

PA 6.6

PA 6

KA-Oil

Cumene Phenol Cyclohexanol

Butadiene

Caprolactam

Cyclohexane

Solvents

Intermediates & Polymers

Nat Gas

Naphtha

Benzene

Propylene

Nat Gas

Benzene

Nat Gas

Benzene

Nat Gas

Nat Gas

Nat Gas HCN

Worldwide Brazil only

Ammonia

Adipic

acid

Raw materials

10% of sales

90% of sales


A worldwide industrial network

Manufacturing Plant

Application & Technology Development Centre

R&D centre

Worldwide Headquarter

Regional Headquarter

Paulinia

Santo Andre

Mississauga

Sao Paulo

Detroit

Jacarei

San Bernardo

Qingdao

Asia

Seoul

Shanghai

Onsan

EuropeNorth/Latin America

14 industrial sites worldwide

Chalampé

Valence

Belle-Etoile

Blanes

Gorzow

Lyon

Freiburg

Ceriano


Polyamide Strategy:

Focus on Intermediates,

Engineering Plastics & Asia


Our Polyamide Strategy

Focus on Intermediates The key step in the supply chain to ensure our competitive leadership position

Focus on Engineering Plastics The key segment to capture growth (+ 5%)

Expand in Asia The key region to capture growth (+ 5%)

Strengthen our leading worldwide position in Polyamide 6.6

To capture additional growth

To generate increased margins


PA 6.6: Our leading product with solid, sustainable margins

• Value added applications for a fast evolving market

• Unique technical properties vs PA 6- Higher temperature resistance of + 30°c- +15% higher dimensional stability- +20% to 30% higher mechanical properties

• We possess world renown process know-how & tools

• ADN is a key step for PA 6.6 production • ADN is a technology mastered by few players: High technological entry barriers

• Tight supply/demand balance

• Balanced raw material needs

• Benzene, butadiene, natural gas, naphtha


Rhodia is 2nd largest PA 6.6 producer

• 10 first producers : 80% of the market

• 4 major integrated PA 6.6 producers represent 60% of the market

• 5 producers of ADN

Include Rhodia discop & Invista’s fibers disposal

0.2

0.2

0.3

0.3

0.4

0.6

0.9

1.0

1.4

3.2 31%

14%

10%

9%

6%

4%

3%

3%

2%

2%0.2

0.2

0.2

0.4

0.3

0.8

1.4

0.1

0.2

0.9

0.2

0.3

0.2

0.1

0.3

0.1

0.5

0.3

1.8

0 0.5 1 1.5 2 2.5 3 3.5

Liao Yang

CSM

Radici

Kordsa

Asahi

BASF

Du Pont

Solutia

Rhodia

Invista

€ bn

Intermediates

EP

Fibers


Engineering Plastics & Asia: 2 high growth areas

In a worldwide Polyamide market of 6,000 Kt growing 2.4% p.a to 2010

ASIA2,365 KT

+ 5 % p.a

NORTH AMERICA1,885 KT

EUROPE1,635 KT(+0.8 %)

SOUTH AMERICA145 KT

Industrial Yarns1,085 KT(+2.2 %)

Staple Fibers430 KT(-2 %)

Carpet Yarns 1,010 KT(+1.1 %)

Engineering Plastics 2,000 KT

+5 % p.a

Textile Yarns1,505 KT(0.8 %) (+0.5 %)


Intermediates & Polymers:

the Polyamide power


A sustainable leadership

• Best in class competitive position in our key ADN technology

& in PA 6.6 intermediates

• Continuous industrial development to capture demand growth

• Tight supply/demand balance drives pricing power

• Innovative solutions for high value added specialty polymers


Continuous manufacturingimprovement towards excellence

• Best-in-class cost position:

• Best competitive technology for ADN – our key product • A completely integrated industrial chain with most competitive technology

• A worldwide industrial network with continuous manufacturing improvement towards excellence (SIX SIGMA Iso WCM)

Belle Etoile (France)HMDA, Nylon Salt, Polymers 6.6

Chalampé (France)ADN, HMDA, Ka-oïl, AA, Nylon Salt

Paulinia (Brazil)Phenol, cyclohexanol,AA, HMDA, Nylon Salt

Santo Andre (Brazil)Polymers 6.6

R&D Centers WorldwideLyon, Paris

Onsan (KOREA)AA, Nylon Salt, Polymers 6.6

R&D Centers and Application Laboratory (Brazil) Paulinia

Freiburg (Germany) Polymers 6.6

Blanes (Spain) Nylon Salt, Polymers 6.6


Industrial development to capture growth

Adipic Onsan2001

Polymer OnsanStart 2008

ADN Chalampé2000

PolymerFreiburg 2005

PolymerBlanès2006

Adipic Chalampé1999

PolymerBelle Etoile

1998

Polymer Brazil2002

HMDA plantPaulinia1999

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008


ADN demand Industry utilization rate

ADN: Tight supply vs demandset to remain – pricing power secure

94%

87%

86%

91%

89%

90%

91%

0

200

400

600

800

1000

1200

1400

1600

1800

1995

2002

2004

2006

2008

2010

2012

2014

2016

10%

20%

30%

40%

50%

60%

70%

80%

90%

100% • Tight supply vs demand balance for at least next 3 years

• Full capacity utilisation

• Maintenance shutdowns impact volume availability

• No new facilities announced (lead time 3 yrs)


Innovative new products with high value added

• Tailor made solutions of specialty polymers for enhanced customer performance

• Aging resistant polymers to avoid plastics yellowing

• Anti-UV protected polymer for yarns used for automotive

• Antistatic polymers to improve non-woven fibers spinning process

• Very high tenacity for Sewing threads

• Specialty polymers for high tenacity Airbag


Engineering Plastics:

the innovation force


Key segment to capture growth

• Key advantages vs other downstream activities:

• Stronger market growth at 5% p.a compared to 2% or less

• Lower capital intensity of at least 5 times

• A strong worldwide leadership built on:• A proven success story

• Excellence in innovative solutions

• Proven customer intimacy

• Highly competitive industrial base and geographical network


A strong worldwide leader

Automotive Electric & ElectronicsConsumer &

Industrial Goods

N°2 N°2N°1

ISO QS 9000ISO TS16949

ISO TS16949

ISO TS16949

ISO TS 14001

N°1

Rhodia’s Engineering Plastics


+ 18%

+ 7%

+ 5%+ 6%

0%

+ 4%

10.9%

9.6%

10.7%

2003 2004 2005

Market growth Rhodia EP growth Rhodia market share

A proven success story


Innovation is vital

• 30% of new products < 5 years old

• > 20 product ranges launched in 5 years

• R&D organization combining powerful know-how and proximity

• R&D Worldwide center in Lyon• R&D Tech centers in each zone• 8 Customer Support centers

• Creation of engineering plastics with high usage-value

• Safety increase• High performance• Comfort and design• Recyclability

CIG: Technyl® SIE&E: Technyl® flame retardant halogen and red phosphorous free

Automotive: Body panel, Technyl® Force, technological partnerships as Mucell…


Dedicated customer intimacy is key

• Meet customer needs through multi-disciplinary team organisations

• Support customers in their growth strategy

• Serve smaller customers through an efficient distribution network

• Simplify customer back office processes with E-tool integration

Re-engineered customer relationship management


• Doubling of average capacity per line in 5 years

• Site specialization per product line

Highly competitive industrial base and geographical network

Acquisition

Korea

1999

New plant

China

2006

New plant

Korea

2004

New plant

Canada

1999

Acquisiton

Poland

1999

De-bottlenecking

Poland

2001

Specialty products

acquisition

Poland

2002

De-bottlenecking

Italy

2003

De-bottlenecking

France

2005

De-bottlenecking

China

2005

1998 1999 2000 2001 2002 2003 2004 2005 2006


Growing in Asia


Adipic Onsan2001

Polymer OnsanStart 2008

Acquisition

EP Hyosung

Korea

1999

New Compounding

PlantShanghai

2006

New Compounding

Plant Onsan

2004

Manufacturing PlantApplication & Technology

Development Centre

R&D centreRegional Headquarter

Qingdao

Seoul

Shanghai

Onsan

Asia

A strong base in Asia well positionned for the future

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008


Rhodia, the Polyamide 6.6 champion


Jean-Claude Steinmetz, Vice-President

September 6th, 2006

Rhodia PolyamideAutomotive and Transportation Markets


Rhodia & the Automotive market

Polyamide as a key lever for Rhodia's offerto the automotive market

Other Rhodia key technologies

Perspectives

Agenda


Automotive market: long-lastingvehicle production growth

World light vehicle assembly

geographical repartition

World light vehicle assembly

2005-2010 growth per region

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Western Europe

Eastern Europe

USA

Asia except China & Japan

China

Japan

Mercosur

Others

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

2005 2008 2010

57%

43%

91%

7%+4% + 8%

+ 19%

+ 24%

WesternEurope

EasternEurope

USA

AsiaexceptChina & Japan

China

Japan

Mercosur

Others


New pre-requisites requested by auto makers & legislators

• Energy efficiency • Decrease the vehicle weight to reduce fuel consumption

• Emission reduction

• Reduce CO2 and Nox emissions

• Economics of Scarcity

• Find new fuel alternatives to reduce dependence on oil

• Sustainable development

• Increase car recyclability


Main markets

Automotive &

Transportation

Net Sales

> € 500 million

Core technologies

Engineering Plastics,

rare earth for catalysis,

silicas, additives

for lubricants

and coatings

Strong presencein growing regions

2005

Rhodia in the automotive market


Plastics: A continuous penetration in automotive

Automotive percentage of material utilization

23% 27% 31%

11%14%

17%

66%59%

52%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1990 2000 2010

Steel / Metal

Polymers

Other material


Confirmed by automakers

Source : Observatoire de l’Innovation Automobile

Elastomers

Ceramic

Glass

Aluminium

Composites 18%

Steel

Plastics

0% 10% 20% 30% 40% 50%

41%

19%

14%

3%

2%

1%

• Plastics as the major contributor of the evolution of the automotive industry for the last 10 years

• Question: "Over the last 10 years which types of materials have contributed the most to the evolution of the automotive industry" – 300 answers


Polyamide: an answer to decreasevehicle weight and reduce fuel consumption

Weight of vehicles + 30 to 80 % over the past 20 years

"Environmental gain"Reduced fuel consumption

0.6 liters per 100 km

100 kg of plastics per vehicleequivalent to

200 to 300 kg of metal

700

800

900

1,000

1,100

1,200

1,300

1,400

1,500

1970 1980 1990 2000 2010

Toyota Corolla

Ford Escort

VW Golf

• 10% weight reduction on a vehicle allows to save from 5 to 6% on fuel consumption

• For Western Europe, it means

• 12 millions of tons of oil saved per year

• 30 millions of tons of CO2 that are not rejected in the atmosphere per year


Polyamide: a way to face new fuel alternatives to reduce dependence on oil

• By increase of under-the-hood’s temperature profiles, the new fuel alternative will require some new materialevolution

• With a temperature resistance of 30°c above PA 6, PA 6.6 will more than ever become a key material under-the-hood

• Advantage of PA 6.6 vs PA 6• Barrier against other plastics substitution• New opportunities for PA 6.6


Polyamide: a solution to increase car recyclability

• PA 6 and PA 6.6 offer • Good property retention• No additional costs in processing• Versatility in applications

• Ideal material to fulfill automakers requests concerning the use of minimum recycle contents


Polyamide faces great perspectives in automotive

Option 22010 -> 11kg

873,000 T

2005 -> 9 kg : 576,000 T

Option 32010 -> 13kg

988,000 T

+ 54% + 72 %

Option 12010 -> 9 kg

684,000 T

2005 -> 63,000 000 vehicles2010 -> 76,000 000 vehicles

+ 21%

Natural automotive market growth

Perspective of plastic part gain in vehicle

Source: JD Powers


Double Rhodia’s business in this field by 2011

Rhodia Automotive strategy: Engineering Plastics

Means

• Extend strong under-the-hood positions to:

• Structural parts• Body panels

• Bring new technological solutions

allowing automotive market to gain productivity

• High flow plastic for enhanced productivity• MuCell technology


Rhodia Automotive strategy: Engineering Plastics

• Areas of research• Plastic’s flowability & dimensional stability• Composites• New processing technologies• Recyclability


CO2 and Nox emissions stake

• Over the next 30 years, CO2 emissions related to transportation

will increase by 43% despite all the efforts already underway

27%

39%

14%

14%

14,000

16,000

Mt

+43%

+29%

+13%

+8%

30%

39%

12%

12%

Transport

Power

Industry

Residential+ services

Source: IEA WEO

2002 2030


Leader thanks to a unique systemParticulate filters with the Eolys additive

= > 2 million of vehicles equipped

Rhodia’s particle filter & catalysis additives to reduce CO2 and Nox emissions

NOx

HC

CO

Leader in Rare Earth technology1 out of 3 catalytic converters worldwide

already contains Rhodia products= > 110 million of vehicles since 1995

Gasoline Engines

Particules

NOx

CO

Diesel Engines

PotentialPotential

• Sustained growth thanks to current & strengthening of environmental regulations

• Maintain market share through technology

PotentialPotential

• "Environmental gain" : -1 000 T of particles / year

=> Production more than doubled in the next 5 years

• New vehicles: 10 million cars with particle filters to be equipped by 2010 to respond to upcoming Euro V & Euro VI

=> Rhodia forecasts: minimum 5 million cars equipped with fuel-borne catalysts

• Retrofit: 4 to 5 million of potential for utility vehicles


Rhodia’s silicasto reduce fuel consumption

500 million tires

Incorporate silicas from Rhodia

=> 1/3 of all automobiles in Europe

reducereduce

resultresult

whilewhile

High performance silicas such as "Zeosil"

to replace carbon black in tires

Rolling resistance by 20%

Fuel savings of 5%

Improving safety

(road holding, braking)

Rhodia N°1

• Twice as large as nearest competitor

A highly promising market

• Silica current growth rate:

3 times greater than carbon black

• Recent statement of US government

about silica’s substitution of carbon black


A growth market for Rhodia

The automotive and transportation market is a fast-growing

market eager for innovation

The automotive and transportation market is a fast-growing

market eager for innovation

Rhodia owns key technologies to answer automotive

industry and legislators new needs

Rhodia owns key technologies to answer automotive

industry and legislators new needs

Over the next 5 years

Rhodia aims to double its sales in this market

Over the next 5 years

Rhodia aims to double its sales in this market

51

Rhodia Analyst Day

September 5-6th, 2006

Presentation by Laurent Schmitt, President of Rhodia Polyamide ...

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