Rhodia Takes First Step to Re-Focus Portfolio with Divestiture of Food Ingredients Business

PARIS, Feb 13, 2004 -- Following the receipt of an acceptable offer by the Danish company Danisco, Rhodia (NYSE: RHA) announced today that the two companies have entered into exclusive negotiations concerning the sale of Rhodia's food ingredients business. The business includes the cultures, hydrocolloids and food safety products activities.

The two parties expect to reach an agreement shortly. The transaction would be finalized during the second quarter of 2004, after consultations have been held with employee representatives and legal authorizations received.

The food ingredients business, which has few synergies with other Rhodia businesses, generated sales of 211 million euros in 2003 and includes 860 employees.

The divestiture marks the first step in Rhodia's plans to re-focus its business portfolio and will contribute significantly to debt reduction.

Rhodia confirms the objective announced October 30 to achieve 700 million euros from divestitures by the end of 2004.

Rhodia is one of the world's leading manufacturers of specialty chemicals. Providing a wide range of innovative products and services to the consumer care, food, industrial care, pharmaceuticals, agrochemicals, automotive, electronics and fibers markets, Rhodia offers its customers tailor-made solutions based on the cross-fertilization of technologies, people and expertise. Rhodia subscribes to the principles of Sustainable Development communicating its commitments and performance openly with stakeholders. Rhodia generated net sales of 5.5 billion euros in 2003 and employs 23,000 people worldwide. Rhodia is listed on the Paris and New York stock exchanges.

Danisco develops and produces food ingredients, sweeteners and sugar. The Group employs approx. 8,000 people in some 40 countries and reported net sales of DKK 16.6 billion in 2002/03. Danisco's broad product portfolio includes emulsifiers, stabilisers, flavours and sweeteners such as xylitol and fructose. The majority of these ingredients are produced from natural raw materials and contribute, for instance, to improving the texture in bread, ice cream, yoghurt and other products. Danisco is also one of the largest and most efficient sugar producers in Europe.

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