Form 20-F 2005

Evolution in 2004
Charges for new measures represented €163 million in new measures corresponding mainly to:
the implementation of a Group reorganization plan for €56 million: This plan mainly involves a reduction in the number of
enterprises from 17 to 9, a reduction in headquarter costs and the reorganization of shared services into support functions
mainly in France. This reorganization resulted in the loss of 1,325 jobs including around 572 jobs in France;
industrial restructuring plans for €97 million including:
- the plan for the Polyamide unit for €18 million concerning mainly the closure of the Engineering Plastics site at
Maioli in Taiwan as well as the reorganization prior to the disposal of the textile production site at Castellaccio in Italy,
- the plan for the Organics unit, relating to productivity improvements and the refocusing of the product portfolio by closing
or selling sites. This plan which involves all production sites at this unit totals €20 million,
- the plan for the Rhodia Pharma Solutions unit in England concerning the Annan, Dudley and other North American sites
for €19 million,
- the Coatis plan, relating to the closure of the Lille site planned at the end of 2005 and the reorganization of other European
sites for €12 million.
Utilizations of provision relating to employee expenses represented €(106) million and mainly corresponded to expenditures
for the reorganization plans in 2003 (€(51) million) and 2004 (€(39) million).
These utilizations mainly concern the following plans:
€(61) million in France, corresponding mainly to the functional support plan launched at the end of 2003 and industrial
reorganization plans, including the costs for the closure of the Rouen tri-polyphosphate production unit and streamlining
costs for the sites of the Organics unit;
€(17) million in North America, corresponding, in particular, to expenditures for administrative productivity measures initiated
at the end of 2003;
€(16) million in the UK mainly relating to the costs for the closure of the Whitehaven and Clayton sites as well as industrial
reorganizations undertaken at the Pharma Solutions unit in 2003.
29.4. Environment
Rhodia periodically assesses its environmental liabilities and future possible remediation measures.
As indicated in Note 3, this provision is calculated based on future discounted cash flows.
The discount rates used at December 31, 2005 are set up by geographical area based on inflation and risk-free interest rate
(government bonds) over the probable term of the remediation obligations related to the sites.
5 years 10 years 20 years
France 1.50% 1.50%
UK 2.25% 2.00%
U.S. 2.00% 2.00%
Brazil 5.25%
At December 31, 2005, provisions related to environmental risks totaled €232 million, compared with €207 million
December 31, 2004.
F-62 Form 20 - F 2005 - Rhodia