The ratings on France-based chemicals company SPCM S.A. reflect the group's aggressive leverage, limited product diversification, and industry competition. These negative factors are partially offset by main unit SNF's world market leadership in specialty and intermediate water treatment polymers, adequate liquidity, and growth prospects. Sales for the year ended March 31, 2007, reached about €900 million with EBITDA of €100 million, resulting in an 11% EBITDA margin. SPCM's weak business profile reflects: EBITDA sensitive to volatile raw materials prices, the supply/demand balance, and competition. SNF remains highly exposed to the volatile prices of propylene. Competition was strong several years ago but has been milder in recent quarters, particularly because of higher demand and limited new capacities. SNF also competes on
