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CORRESP
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[Simpson
Thacher & Bartlett LLP letterhead]

April 8, 2005

Division of Corporation
Finance

U.S. Securities and Exchange Commission

450 Fifth Street, N.W.

Washington, D.C. 20549-0410

Attention:  Ms. Nudrat Salik

  Re:

  Rockwood Holdings, Inc.

  Registration Statement on Form S-1

  Filed February 11, 2005

  File No. 333-122764

Dear
Ms. Salik:

On behalf of Rockwood
Holdings, Inc. (the “Company”), we are providing the following responses
to the comments contained in the comment letter from the Staff of the
Commission dated April 7, 2005, relating to the Company’s Registration
Statement on Form S-1 (the “S-1”) and the Form 10-K for the year ended
December 31, 2004 (the “Form 10-K”) of Rockwood Specialties Group, Inc.
(“Group”).  For convenience of
reference, the text of the comments in the Staff’s letter has been reproduced
in bold herein.

Note
8.  Taxes on Income, page F-23

1.                                       We note your response to
prior comment 4.  Your response indicates
that your projected future taxable income is sufficient positive evidence to
counteract negative evidence created by your cumulative losses in recent
years.  We believe that since you have
suffered recent losses, realization of deferred tax assets is difficult to
support if it is primarily dependent on a forecasted, but not yet demonstrated
turnaround to operating profitability.
Because of the weight given to recent cumulative losses, we do not
believe that you have demonstrated that you have positive evidence of
sufficient quality and quantity to counteract the negative evidence associated
with cumulative losses in recent years.

As of December 31,
2003, the Company continued to believe, based on the weight of the available
evidence, that no valuation allowance was required for the deferred tax asset
recognized related to the U.S. Federal net operating loss carryforwards for the
reasons set forth in the response letters dated March 23, 2005 and April 1,
2005.  The Company respectfully informs
the Staff that it continues to believe that its position is supported by positive
objectively verifiable evidence of sufficient quality and quantity to

counteract the
negative evidence presented by the cumulative losses.  Furthermore, the Company believes that its
results of operations for the six months ended June 30, 2004, during which it
generated positive taxable income, solidly demonstrated its ability to generate
operating profitability.

The National
Office of the Company’s independent auditors, Deloitte & Touche LLP, has
reviewed the Company’s analysis supporting management’s judgment regarding the
realization of the net operating loss carryforwards and concluded that the
Company’s judgment that the positive evidence outweighed the negative evidence
was reasonable and in accordance with SFAS 109, Accounting
for Income Taxes.

The Company
respectfully requests an opportunity to discuss this matter with the
Staff.  In particular, the Company would
welcome the opportunity to explain why it was appropriate for it to adjust
future taxable income to factor in an increase in sales of environmentally
advanced chemical alkaline copper quaternary (“ACQ”).  Specifically, ACQ offers wood preservation
efficacy similar to chromated copper arsenate (“CCA”), but unlike CCA, contains
neither chrome nor arsenic.  In February
2002, the Environmental Protection Agency announced a voluntary decision by CCA
manufacturers to amend their registrations for CCA to limit use of CCA-treated
lumber in most residential settings.  In
March 2003, the EPA formally amended the registrations for CCA prohibiting,
effective December 31, 2003, CCA treatment of wood for use in most residential
settings.  This amendment resulted in the
conversion of approximately 90% of the water-borne preservative use in the
United States from CCA to ACQ at the end of 2003.  Given the scope of the conversion, the
amendment was a transformative event for the Company’s Performance Additives
segment and the industry as a whole.

At the time of the
February 2002 announcement, the Company had already been selling its ACQ
chemicals in the United States for nine years.
Consequently, it had a broad understanding of the customers, demand and
margins.  Based on this market knowledge,
the Company assessed the size of the future market and decided to invest $8.2
million in capital expenditures to increase its capacity for producing
ACQ.  Management requested Board of
Director approval of this investment at the time of the voluntary amendment in
February 2002 ¾ in advance of the formal EPA amendment
in March 2003 and related effective date in December 2003 ¾
because management knew the manufacturing facility had to be fully operational
by the end of the third quarter 2002 to meet the seasonal demand during the
2003 transition year that management expected, based on its market knowledge.  To enable the Company to respond to this
critical change in the Company’s business, the Company’s Board of Directors
approved this significant capital expenditure at its February 6, 2002 meeting.

In considering the
evidence of future income presented by the expected ACQ income, the Company
analyzed the monthly sales of ACQ during the twelve months ended December 31,
2003.  The data (on both a dollar and
volume basis) showed that the conversion from CCA to ACQ was occurring precisely
as the Company expected and that its expectations of future sales of ACQ were
reasonable.  Specifically, there was a
steady increase during the first seven months of 2003, a seasonal decrease
during the subsequent

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four months (which,
at the lowest level, was still above the highest levels achieved in 2002), and
a significant increase during December 2003 (in connection with the effective
date).  Furthermore, the Company knew
that the major retailers of treated wood, such as Home Depot and Lowe’s, had
not yet begun their conversion to ACQ products and would do so starting in
January 2004, after the effective date.
Based on the expected strong growth in sales of ACQ, the Company set its
2004 budget, including management bonus targets.  The Company is providing to the Staff as a
supplement to this letter a detailed presentation of the Company’s analysis of
the impact of the ACQ substitution on its future taxable income.

The Company
believes that it has applied the guidance required by SFAS 109 in its
consideration of future taxable income and other available evidence in
assessing the realization of U.S. jurisdiction net operating loss
carryforwards.  In summary, the Company’s
consideration of future U.S. taxable income was projected based on its
three-year annualized cumulative historical book loss (significant negative
evidence).  In considering future taxable
income at the time of its assessment, the Company did not adjust annualized
historical book losses to reflect its expectations regarding growth in demand,
margins and market penetration, all of which support the investment of capital
within its businesses, because it did not believe they would constitute a
source of verifiable positive evidence.
As noted in the April 1, 2005 response letter, the Company’s 2003
projection of future taxable income, prepared for purposes of evaluating
realization of its U.S. tax net operating loss carryforwards, schedules out the
following sources of taxable income (loss):

  ($ in millions)

  U.S. jurisdiction
  historical three-year cumulative book loss

  ($127.0

  )

  Reduced by 2001
  restructuring charge upon KKR acquisition

  9.7

  Reduced by 2003 debt
  refinancing costs

  38.3

  Budgeted improvements in
  operations and lower financing costs

  —

  Total

  (79.0

  )

  Three-year annualized
  historical net loss

  ($26.3

  )

  Origination and reversal
  of PIK interest on loans (not deductible)

  $

  19.6

  Net effect of ACQ product
  sale increases recognized in the first two

  months of 2004, scheduled without adjustment for projected

  growth to be realized from plant expansion and full market

  effect of EPA changes (steady state extrapolation of historical

  data)

  $

  27.0

  Annualized projected U.S.
  taxable income

  $

  20.3

In summary, the Company
continues to believe, based on the weight of the available evidence described
above, that no valuation allowance was required in the U.S. jurisdiction for
the net deferred tax asset recognized at December 31, 2003.

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Note
11.  Stock-Based Compensation, Page F-29

2.                                       We note
your response to prior comment 9.  In
order to understand what information was provided to and considered by DLJMB in
determining that the $500 per share was a reasonable price, please address the
following:

·
Please tell us what specific
financial information was given to DLJMB when negotiating the price of $500;

·
Please provide us with a summary of
the forecasts given to DLJMB, which should include sales, gross profit,
operating income, and net income;

·
Please tell us whether the forecasted
results of operations for the year ended December 31, 2004 were consistent with
the actual results of operations for the year ended December 31, 2004.  Please explain any significant differences; and

·
Please tell us whether there have
been any significant changes to your forecasts since providing them to
DLJMB.  If so, provide us with a summary
of your most recent forecasts, which should include sales, gross profit,
operating income, and net income, and explain any significant differences.

As noted in the
April 1, 2005 response letter, the Company respectfully informs the Staff that
prior to its investment, DLJMB performed extensive business, financial and
legal due diligence on Rockwood and participated in the due diligence of the
Dynamit Nobel businesses.  In total,
DLJMB was given a tremendous volume of information over several months.  This information included, but was not
limited to, historic Rockwood sales and Adjusted EBITDA on a consolidated and
segment basis for 2001, 2002 and 2003, which the Company is providing as a
supplement to this letter.  The Company
is also providing as a supplement to this letter a summary of the combined
forecast representing the expected impact as a result of the Dynamit Nobel
acquisition that was developed in conjunction with DLJMB.  The supplements are excerpts from the Board
of Directors meeting held in December 2003 and the model for the combined
company as of May 2004, respectively.

Forecasted results
of operations for the year ended December 31, 2004 were consistent with the
actual results of operation for this period.
For example, the Company forecasted 2004 pro forma combined Adjusted
EBITDA of $498.0 million.  Actual 2004
pro forma combined Adjusted EBITDA was $520.0 million.  However, $7.0 million of this $520.0 million
was generated by the Johnson Matthey pigments and dispersions business the
Company acquired on September 1, 2004, and therefore should be excluded for
purposes of evaluating the consistency between forecasted results of operations
and actual results of operations.  In
summary, actual Adjusted EBITDA was only $15.0 million more than forecasted, or
3.0% higher, and most of that increase is attributable to currency
fluctuations.

Subsequent revisions
of the Company’s forecasts reflect the Company’s acquisition of the Johnson
Matthey pigments and dispersions business, the Groupe Novasep combination and
currency adjustments (earlier forecasts used €1.00=$1.20 and revised forecasts
use €1.00=$1.30).  However, these adjustments did not result in significant changes to
the forecast.  The Company respectfully
informs the Staff that its

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forecast for 2005
through 2009 are, in fact, in line with the Company’s 2004 forecast, except as
noted above.

3.                                       We note your response to
prior comment 10.  Your response
indicates that you believe your common stock value increased from $500 per
share at November 30, 2004 to a range of $850 to $1050 in an approximately four
month period primarily due to your decision to pursue an initial public
offering in the United States.  Though
the AICPA’s Practice Aid on the “Valuation of Privately-Held-Company Equity
Securities Issued as Compensation” indicates that it may be appropriate to
assume an increase in value due to marketability provided by an initial public
offering, it is not clear how you determined that a 70% to 100% increase in
value is a reasonable estimate.  Please
further advise.

With respect to
the reasonableness of the increase in fair value from $500 per share at November 30, 2004 to the currently
expected $850 to $1,050 per share in an initial public offering, the Company
will first address why it continues to believe the fair value at November 30,
2004 was $500 per share and then address why it continues to believe the fair
value upon the successful completion of its initial public offering,
approximately six months later, will be $850 to $1,050 per share.

A Deloitte &
Touche LLP valuation specialist has reviewed the Company’s valuation
considerations and methodologies and concluded that the Company’s determination
of fair value using a retrospective valuation as of November 30, 2004 was
reasonable.  In addition, the National
Office of Deloitte & Touche LLP has been involved in discussions and
reviewed certain of the Company’s responses on this matter.

$500.  The Company continues to believe
that the fair value of its common stock was $500 per share during the Fall 2004
when it sold shares of common stock and granted options to purchase common
stock to members of its management and certain other employees.  As noted in the March 18, 2005 and April 1,
2005 response letters, at the time the shares of common stock were sold and the
stock options were granted, the Company’s Board of Directors believed that the
$500 per share price paid by DLJMB provided overwhelming evidence of the fair
value.  At $500 per share, with a
combined enterprise value of $3,848.4 million, $513.0 million in pro forma LTM
Adjusted EBITDA and 1,471,693 shares outstanding, the Company was valued at
7.5x pro forma LTM Adjusted EBITDA at July 31, 2004 (the date of consummation
of the Dynamit Nobel acquisition).

The Company
respectfully informs that Staff that it further believed that the fair value
did not change from July 31, 2004 to November 30, 2004 primarily because all
indicia of fair value were neutral or negative.
Specifically, among other things, (a) the operations and prospects of
the Company had not changed in any material respect since the consummation of
the acquisition; (b) the Company’s performance was below budget, despite strong
performances by the historic Rockwood businesses, because the acquired Dynamit
Nobel businesses failed to meet budgeted Adjusted EBITDA; (c) pro forma LTM
Adjusted EBIDTA was essentially flat (increasing only 1.4%) from July 31, 2004

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to November 30,
2004; and (d) the Company’s net debt levels increased 8.7% from July 31, 2004
to November 30, 2004, decreasing the residual equity value.  In addition, as a result of the acquisition
of the Johnson Matthey pigments and dispersions business on September 1, 2004,
the Company strengthened its European revenue base, further solidifying its
market profile as a European business.
Accordingly, the Company believes that it continued to be valued at 7.5x
pro forma LTM Adjusted EBITDA throughout this period.

$850
to $1,050.  The Company continues to believe that the
increase in fair value expected in connection with a successful completion of
its initial public offering (currently expected to occur approximately six
months after the sales of common stock and grants of stock options were
substantially completed) is reasonable.
Per the AICPA technical practice aid paragraph 113, “The ultimate IPO
price itself is generally not likely to be a reasonable estimate of the fair
value for pre-IPO equity transactions of t