Paris, November 6, 2008

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Third quarter 2008 results

Rhodia confirms its strong pricing power

and full year objectives

Key highlights

· Another quarter of strong pricing power: +14% fully offsetting record raw material and energy inflation as well as a negative forex impact

· Good level of demand across businesses compensating for first signs of slowdown in Polyamide

· Recurring EBITDA⁽¹⁾ at €168 million driven by strong performance in Novecare, Silcea, Eco Services and Acetow

· Net Profit Group Share up 24% year-on-year to €56 million

· Net Debt reduction reflecting completion of Isocyanates divestment

· Long-dated maturity financial resources

· Confirmation of 2008 guidance

“In the third quarter, Rhodia confirmed once again its strong pricing power which allowed the Group to offset not only record raw material and energy cost increases, but also the negative foreign exchange impact," commented Rhodia Chairman and Chief Executive Officer Jean-Pierre Clamadieu.

“We are continuously deliveringon our commitments.Our leading competitive positions supported by our focused portfolio strategy, our balanced geographical presence, the diversity of the markets we serve and our healthy financials, give us confidence in the potential of our businesses going forward. We therefore confirm our 2008 financial objectives."

Summary income statement

(1) Before restructuring and other operating income and expenses

(2) Like for like: at constant scope and currency conversion

(3) Defined as “net cash provided by operating activities” before margin call plus “non recurring refinancing cash costs” minus Capital Expenditure

1. Strong pricing fully offset cost rises and negative transactional forex impact

Net Sales rose by 6.3%⁽¹⁾ to €1,224 million, driven by a 13.7% positive impact from price increases in local currencies. A sustained good level of demand was registered across businesses compensating for first signs of slowdown in Polyamide. As anticipated, volumes were also affected by Q3-Q4 CER phasing. The transactional foreign exchange impact was (2.6)%.

RecurringEBITDA⁽¹⁾ stood at €168 million versus €174 million in Q3 2007. The (3.4)% decline was mainly due to volume phasing impact of CERs, while negative effect from lower volumes in Polyamide were mostly offset by good performance in other Enterprises, particularly Novecare. Price increases of €158 million fully offset both a €(139) million increase in raw material and energy costs as well as a transactional foreign exchange impact of €(17) million. Fixed costs were under control and decreased by €9 million.

Operating Profit⁽¹⁾ amounted to €87 million versus €104 million in the third quarter of 2007, essentially reflecting the change in recurring EBITDA.

The Financial Result was stable at €(44) million compared to the third quarter 2007.

The Net Profit Group Share increased 24% from €45 million in the third quarter of 2007 to €56 million in the third quarter of 2008, reflecting the capital gains from the Isocyanates divestment.

Earnings per Share rose 25% to €0.55 from €0.44 a year earlier.

(1) Like for like: at constant scope and currency conversion

2.Free Cash Flow affected by temporarily negative Working Capital variance

Working Capital stood at 14.6% of total sales versus 13.6% a year earlier. The €87 million increase in Working Capital versus the end of the second quarter of 2008 can be attributed to the strong price rises impacting both receivables and inventories, as well as the continued effect of the deployment of the SAP based system in Rhodia’s USA operations which should be normalized by end of 2008.

Due to the continuous selective investment policy, Capital Expenditure decreased from €83 million in the third quarter of 2007 to €71 million in the third quarter of 2008.

The temporary increase in Working Capital weighed on the Free Cash Flow, which amounted to

€(69) million.

Consolidated Net Debt decreased to €1,451 million on September 30, 2008 versus €1,570 million on June 30, 2008, benefiting from €224 million of proceeds from divestments completed in the third quarter of 2008.

3. Overview by Enterprise

Polyamide

Rhodia Polyamide serves the automotive, electricals, electronic components, sportswear and leisure markets. Its expertise in the polyamide chain has allowed it to develop activities upstream in intermediates and polymers and downstream in engineering plastics.

Rhodia Polyamide continued its price-over-volume strategy. While volumes in Europe were impacted by the slowdown in the automotive and textile markets, the Enterprise implemented further price increase initiatives: those offset close to 90 % of rises in raw material and energy costs, in particular for Butadiene. US competitors holding available volumes due to the slowdown in their domestic market benefited from favorable currency and natural gas costs.

The decline in the US Dollar against the Brazilian Real and the Euro led to a negative transactional forex impact of €(11) million year-on-year.

In October, Rhodia Polyamide launched plans to optimize its European production and research & development resources, as first step of a broader program aimed at cutting costs by about €40 million per year by 2010.

Novecare

Rhodia Novecare provides high-performance products and solutions to a wide range of industries including cosmetics, detergents, agrochemicals and oil, as well as industrial applications.

Rhodia Novecare, nearly doubled its EBITDA year-on-year. This record quarter reflects the Enterprise’s reinforced pricing power and a strong growth momentum in the oilfield and agro markets.

Silcea

Rhodia Silcea produces high performance silicas, rare earth-based materials and diphenols to serve the automotive emissions reduction, tire, lighting, electronics, flavours & fragrances markets.

Rhodia Silcea registered overall good volumes. This was particularly true for silicas for low rolling resistance tires. The Enterprise demonstrated that its pricing power could offset most raw material and energy cost increases.

Silcea was impacted by a €(2) million negative transactional forex effect.

Energy Services

Rhodia Energy Services is in charge of the Group’s energy supply and the management of Rhodia’s projects related to the reduction of greenhouse gas emissions.

Carbon Emission Reduction (CER) sales reflected the expected Q3-Q4 phasing. Recurring EBITDA of €28 million was generated from CERs, versus €39 million in the third quarter of 2007.

The cogeneration business is traditionally slow in the third quarter.

Rhodia expects to generate slightly more than 13 million tons of CERs for the full year 2008.

Acetow

Rhodia Acetow is a global producer of filter tow, mainly used for making cigarette filters.

Rhodia Acetow was able to increase its selling prices and thus, offset rises in raw material and energy costs.

Acetow confirms its target to decrease its forex transactional exposure by 50 % by the end of 2008.

The Enterprise’s ongoing cost competitiveness program, launched in the fourth quarter of 2007, has also started to record progress.

Eco Services

Rhodia Eco Services offers sulphuric acid regeneration services to chemical manufacturers and oil refiners in North America.

Rhodia Eco Services enjoyed good pricing power. This allowed the Enterprise to offset the €(5) million impact on EBITDA resulting from the hurricanes in the USA. The non cash negative forex conversion impact amounted to €(3) million.

In the coming months, Rhodia Eco Services’ strong pricing power should continue.

4. Outlook

The Group is pro-actively adjusting to the challenging economic environment with aggressive cost competitiveness plans and a strong focus on cash management.

Combined with those actions, its performance year-to-date and the proven resilience of its portfolio allow the Group to confirm its 2008 full year objectives:

· Recurring EBITDA should be within 5% of the level achieved in 2007

· Earnings per Share should increase versus 2007

· Net Debt should be further reduced compared to the end of 2007, supported by a solid Free Cash Flow generation in the fourth quarter of 2008.

After the massive impact of raw material and energy inflation as well as adverse currency fluctuations on the Group’s EBITDA over the last nine months, Rhodia is observing a favorable inflexion point at the end of the third quarter 2008. This structurally positive effect should gradually materialize in the Group’s accounts, starting early 2009.

Safe Harbor for forward looking statements

This press release 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.

Rhodiais an international chemical company resolutely committed to sustainable development.As a leader in its businesses, the Group aims to improve its customers’ performance through the pursuit of operational excellence and its ability to innovate. Structured around six Enterprises, Rhodia is the partner of major players in the automotive, tire, electronics, perfume, health & beauty and home care markets.The Group employs around 15,000 people worldwide and generated sales of €4.8billion in 2007.Rhodia is listed on Euronext Paris.

Upcoming events

Rhodia’s fourth quarter and annual 2008 results will be published onFebruary 25, 2009.

Contacts

Media Relations

Rita Hillig +33 (0)1 53 56 64 04

Lamia Narcisse +33 (0)1 53 56 59 62



Investor Relations

Maria Alcon +33 (0)1 53 56 64 89

Loic Harrari +33 (0)1 53 56 64 80

Results Fact Sheet : Q3 & YTD Sept '08

(1) Recurring EBITDA margin excluding CERs 11.8% vs 12.4% in Q3 ‘07 and 12.1% vs 13.6% in YTD Sept ‘07

	Net Sales			Recurring EBITDA			Operating Profit
€ million	Q3* ‘07	Q3* ‘08	Variation	Q3* ‘07	Q3* ‘08	Variation	Q3* ‘07	Q3* ‘08
RHODIA	1,187	1,224	3.1%	179	168	(6.1)%	105	87
POLYAMIDE	494	465	(5.9)%	68	38	(44.1)%	43	11
NOVECARE	227	260	14.5%	25	43	72.0%	14	31
SILCEA	179	193	7.8%	33	30	(9.1)%	20	19
ENERGY SERVICES	60	43	(28.3)%	41	35	(14.6)%	40	27
ACETOW	112	112	-	20	20	-	13	12
ECO SERVICES	57	90	57.9%	22	19	(13.6)%	18	16
CORPORATE & Others	58(1)	61(1)	5.2%	(30)	(17)	43.3%	(43)	(29)

	Net Sales			Recurring EBITDA			Operating Profit
€ million	YTD* Sept ‘07	YTD* Sept ‘08	Variation	YTD* Sept ‘07	YTD* Sept ‘08	Variation	YTD* Sept ‘07	YTD* Sept ‘08
RHODIA	3,595	3,637	1.2%	571	523	(8.4)%	345	295
POLYAMIDE	1,484	1,436	(3.2)%	210	150	(28.6)%	111	74
NOVECARE	717	735	2.5%	88	101	14.8%	60	71
SILCEA	547	577	5.5%	109	92	(15.6)%	77	60
ENERGY SERVICES	144	147	2.1%	124	126	1.6%	117	113
ACETOW	327	338	3.4%	62	57	(8.1)%	40	35
ECO SERVICES	165	217	31.5%	58	52	(10.3)%	46	42
CORPORATE & Others	211(1)	187(1)	(11.4)%	(80)	(55)	31.3%	(106)	(100)

⁽¹⁾ including intercompany sales elimination

* Unaudited

Results Fact Sheet : Q3 ‘08

* Unaudited

Results Fact Sheet : YTD Sept ‘08

* Unaudited

Results Fact Sheet : Quarterly results

€m	Q1* ‘07	Q1* ‘08	Q2* ‘07	Q2* ‘08	H1** ‘07	H1** ‘08	Q3* ‘07	Q3* ‘08	Q4* ‘07	H2* ‘07	FY* ‘07
RHODIA
Net Sales	1,186	1,186	1,222	1,227	2,408	2,413	1,187	1,224	1,186	2,373	4,781
Recurring EBITDA	196	168	196	187	392	355	179	168	187	366	758
Rec. EBITDA margin	16.5%	14.2%	16.0%	15.2%	16.3%	14.7%	15.1%	13.7%	15.8%	15.4%	15.9%
Operating Profit	125	93	115	115	240	208	105	87	77	182	422
POLYAMIDE
Net Sales	481	476	509	495	990	971	494	465	491	985	1,975
Recurring EBITDA	67	52	75	60	142	112	68	38	70	138	280
Rec. EBITDA margin	13.9%	10.9%	14.7%	12.1%	14.3%	11.5%	13.8%	8.2%	14.3%	14.0%	14.2%
Operating Profit	42	29	26	34	68	63	43	11	45	88	156
NOVECARE
Net Sales	243	235	247	240	490	475	227	260	214	441	931
Recurring EBITDA	30	28	33	30	63	58	25	43	21	46	109
Rec. EBITDA margin	12.3%	11.9%	13.4%	12.5%	12.9%	12.2%	11.0%	16.5%	9.8%	10.4%	11.7%
Operating Profit	23	19	23	21	46	40	14	31	11	25	71
SILCEA
Net Sales	185	189	183	195	368	384	179	193	189	368	736
Recurring EBITDA	36	27	40	35	76	62	33	30	29	62	138
Rec. EBITDA margin	19.5%	14.3%	21.9%	17.9%	20.7%	16.1%	18.4%	15.5%	15.3%	16.8%	18.8%
Operating Profit	26	16	31	25	57	41	20	19	16	36	93
ENERGY SERVICES
Net Sales	43	52	41	52	84	104	60	43	58	118	202
Recurring EBITDA	52	53	31	38	83	91	41	35	57	98	181
Operating Profit	47	50	30	36	77	86	40	27	48	88	165
ACETOW
Net Sales	102	113	113	113	215	226	112	112	114	226	441
Recurring EBITDA	20	20	22	17	42	37	20	20	21	41	83
Rec. EBITDA margin	19.6%	17.7%	19.5%	15.0%	19.5%	16.4%	17.9%	17.9%	18.4%	18.1%	18.8%
Operating Profit	12	13	15	10	27	23	13	12	2	15	42
ECO SERVICES
Net Sales	52	57	56	70	108	127	57	90	53	110	218
Recurring EBITDA	14	13	22	20	36	33	22	19	12	34	70
Rec. EBITDA margin	26.9%	22.8%	39.3%	28.6%	33.3%	26.0%	38.6%	21.1%	22.6%	30.9%	32.1%
Operating Profit	10	9	18	17	28	26	18	16	8	26	54
CORPORATE & OTHERS
Sales & intercompany sales eliminations	80	64	73	62	153	126	58	61	67	125	278
Recurring EBITDA	(23)	(25)	(27)	(13)	(50)	(38)	(30)	(17)	(23)	(53)	(103)
Operating Profit	(35)	(43)	(28)	(28)	(63)	(71)	(43)	(29)	(53)	(96)	(159)

* Unaudited

** Reviewed by auditors

Consolidated income statements as of September 30, 2008

* Unaudited

Consolidated balance sheets as of September 30, 2008

* Unaudited

* Unaudited

Consolidated statements of cash flows as of September 30, 2008

* Unaudited

(1) The margin call agreements are standardised credit risk reduction contracts, which are concluded with the clearing house of an organised market or bilaterally by private contract with a counterparty