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Page 1: Apresentação para investidores   btg pactual latin american ceo conference

Meeting with Meeting with InvestorsInvestorsInvestorsInvestors

Page 2: Apresentação para investidores   btg pactual latin american ceo conference

Forward-looking Statements

This presentation contains forward-looking statements. These statements are not

historical facts and are based on management’s objectives and estimates. The

words "anticipate", "believe", "expect", "estimate", "intend", "plan", "project",

"aim" and similar words indicate forward-looking statements. Although we believe

they are based on reasonable assumptions, these statements are based on the

information currently available to management and are subject to a number of

risks and uncertainties.

2

risks and uncertainties.

The forward-looking statements in this presentation are valid only on the date

they are made (June 30, 2010) and the Company does not assume any obligation

to update them in light of new information or future developments.

Braskem is not responsible for any transaction or investment decision taken based

on the information in this presentation.

Page 3: Apresentação para investidores   btg pactual latin american ceo conference

Agenda

� Braskem

� A global player

� Acquisitions: opportunities and challenges

� Project pipeline: growth with value creation

� Braskem consolidated

3

� The petrochemical industry

� Final considerations

Page 4: Apresentação para investidores   btg pactual latin american ceo conference

Agenda

� Braskem

� A global player

� Acquisitions: opportunities and challenges

� Project pipeline: growth with value creation

� Braskem consolidated

4

� The petrochemical industry

� Final considerations

Page 5: Apresentação para investidores   btg pactual latin american ceo conference

Braskem overview

Industrial Assets

� Leading thermoplastic company in the Americas

� Diversified portfolio of petrochemical products, with focus on PE, PP and PVC

� Annual capacity of 6,460 kton

� 31 facilities in Brazil and USA

� Naphtha and gas based crackers

� 3 PP

� 1 PVC� 1 Chlorine-soda

5

� 1 gas cracker� 1 PP� 1 PE

� 1 naphtha cracker� 2 PP� 3 PE

Source: Braskem

� Naphtha and gas based crackers

� Petrobras as the main supplier in Brazil

� Attractive project pipeline in Latin America

� Listed in 3 stock exchanges: BM&FBovespa, NYSE and Latibex

� 100% tag along

� Key Financials LTM 2Q10

� Net Revenue: R$ 24.8 billion

� EBITDA: R$ 3.8 billion

� 1 naphtha cracker� 1 ethanol cracker� 5 PE� 2 PP

� 1 naphtha cracker� 4 PE� 1 PP� 1 PVC�1 Chlorine-soda

Page 6: Apresentação para investidores   btg pactual latin american ceo conference

2020

Polialden

Ipiranga, Copesul and Paulínia

Petroquímica Triunfo

Track record of success with clear objectives

Acquisitions Quattor + Sunoco

Leader in Latin America

Leader in the Americas

2010Politeno

54% capacity increase

80% capacity increase

Acquisitions

Organic Growth

Resins Capacity (kton/y)

1,821

520

2,341

2,185

1,410

3,595

2,185

4,275

6,460

20022006

2007

Polialden

6

2.76x2.76x 2,89x2,89x 3.23x3.23x

Net Debt/EBITDA (US$)

2.98x2.98x

Aft

er

R$

3.7

4 b

i c

ap

ita

l in

cre

as

e and d

isb

urs

em

en

t o

f Q

ua

tto

r a

nd

Su

no

co

a

cq

uis

itio

ns

2006

20032004

2005

20082009

2010OPP Trikem

Politeno

2.84x2.84x2Q10

Source: Braskem

Page 7: Apresentação para investidores   btg pactual latin american ceo conference

Leader in the Americas and a top 8 global player in resins capacity

4th

1st

Ca

pa

city

in th

e A

me

rica

s (

kt/

y)

3,035

4,077 4,200

2,525 1,995 2,311

2,915 1,230 627

1,731

1,090

822 875

510

510

1,210

2,340

PVC

PP

6,460

4,827

3,595

4,256

3,082

2,340 2,3111,915

5,307

950

Lyondell Basell

ExxonMobil

SINOPEC Dow Formosa SABIC Ineos Braskem post

operations

Total IPIC Reliance PetroChina Braskem

10,914

9,3118,668

7,749 7,284 7,1096,541 6,460

4,681 4,564 4,303 4,079 3,595

transactions 7

8th

12th

Ca

pa

city

in th

e A

me

rica

s (

World

Ca

pa

city

(kt/

y)

Braskem post

transactions

Exxon Mobil

Dow Lyondell Basell

Braskem Formosa Shintech Chevron Philips

Quattor Sunoco

2,525 1,995

1,050

2,311

1,040 950

2,340 PP

PE

Page 8: Apresentação para investidores   btg pactual latin american ceo conference

1,626

1,337

1,642

2,132

Consistent growth

CAGR: 21%

EBITDA 1 (US$ million)

10,212CAGR: 19%

Nominal Capacity (kton)

Resins

Ethylene

19.1%19.3%

23.1%

18.0%

14.1%

16.9%

13.5%

14.4%15.5%

2002 2003 2004 2005 2006 2007 2008 2009 LTM

2010

457 581

871 851 764

1,337

EV/

EBITDA

EV

(US$ bi)

8

Source: Braskem 1 Pro-forma figures for 2009 and 1Q10: Braskem + Quattor + Sunoco

2.4 3.9 5.8 4.2 4.7 7.6 5.1 7.5 13.4

5.2x 6.7x 6.6x 5.0x 6.2x 4.6x 3.8x 4.8x 6.3x

2002 2003 2004 2005 2006 2007 2008 2009

2,965 3,045 3,145 3,190 3,621

5,5515,921

Supported by higher production, market leadership, successful sales policies and industry consolidation

8

Page 9: Apresentação para investidores   btg pactual latin american ceo conference

Agenda

� Braskem

� A global player

� Acquisitions: opportunities and challenges

� Project pipeline: growth with value creation

� Braskem consolidated

9

� The petrochemical industry

� Final considerations

Page 10: Apresentação para investidores   btg pactual latin american ceo conference

Quattor acquisition

Camaçari

MauáPaulínia

Duque de Caxias

PP HOMO/COPO (1979)Capacity: 115 ktyTechnology: Slurry Shell

Bah

ia Opportunities

� Asset concentration in Southeast (~70% Brazilian resin consumption);

� Optimization of logistics distribution related to reduction in external storage;

� Diversified RM matrix – balance between naphtha-natural gas;

� Joint administration of raw material agreements;

� Renegotiation of service and insurance

Cracker (2005)Capacity: 520 kty ethyleneTechnology: ABB Lummus –

ethane/propane

HDPE/LLDPE (2005)Capacity: 540 kty

Rio

de J

an

eir

o

10

Cracker (1972)Capacity: 700 kty ethylene*Technology: ABB Lummus

(naphtha)

LDPE/ EVA (1972)Capacity: 120 ktyTechnology: HP Autoclave

HDPE/ LDPE (2008)Capacity: 240 kty Technology: Slurry – Chevron Phillips

LDPE (1965)Capacity: 140 kty Technology: Tubular

PP HOMO/COPO (2003)Capacity: 450 ktyTechnology: Spheripol

São

Pau

lo

Triunfo

Paulínia Caxias

*200 kty expansion effectively coming online in 2010

� Renegotiation of service and insurance contracts;

� Unification of production and maintenance practices;

� Unification of Technology and Innovation centers;

� Reduction of working capital costs;

� Tax and logistical synergies;

� Organizational restructuring.

Challenges

� Stability of raw material supplies;

� Integration of cultures.

Capacity: 540 kty Technology: Gas phase - Unipol

Rio

de J

an

eir

o

PP HOMO/COPO (1992)Capacity: 310 ktyTechnology: Bulk – Lipp

Acquisition disbursement: R$647.3 million

Page 11: Apresentação para investidores   btg pactual latin american ceo conference

Quattor - key indicators

R$ million 1Q10 2Q10

Net Revenue 1,220 1,425

Operating rate (%) 1Q10 2Q10

Ethylene 71%(1) 83%(1)

PE 61% 76%

Operational Indicators

Financial Indicators

11

Net Revenue 1,220 1,425

EBITDA 107 214

EBITDA Margin 8.8% 15.0%

Main impact on operational profit in 2Q10

� Increase in operating rates with better stability of raw material supply: supply from Mauácomplex normalized in May 2010

(1) Considering the 200 kty expansion

Outlook as of 2H10

� Cabiúnas and Reduc refineries normalized operation enabled Riopol to have the best monthly operating rates in July: 86% for ethylene and 77% for PE;

� Petrobras’ commitment to normalize supply to enable Riopol to operate at full capacity by October 2010.

Page 12: Apresentação para investidores   btg pactual latin american ceo conference

400

79

43

Quattor synergies of R$ 400(a) million in EBITDA as of 2012R$ million

� Investment of R$ 350 million required to capture all

279

Industrial Logistics Supply EBITDA Synergies

12

� Production mix

� Seizing the cracker streams

�Optimization of inventories

�Maximization of gains from product distribution (domestic and export markets)

�Optimization of modes

� Joint management of feedstock purchases

� Renegotiation of third-party agreements

required to capture all synergies

� Financial synergy NPV estimated in R$ 340 million

(a) RecurringSource: Braskem

Page 13: Apresentação para investidores   btg pactual latin american ceo conference

Braskem America (former Sunoco)

Marcus Hook, PA� 1 PP

R&T Center

Pittsburgh, PA

Neal, WV� 1 PP

Opportunities

� Global-scale, state-of-the-art assets –technology and age similar to Brazil’s polypropylene (PP) assets;

� Development of a global production base;

� Consolidation of industrial assets;

� Competitive costs for some 70% of raw materials;

13

La Porte, TX� 1 PP

materials;

� Platform for greenfield projects in Latin America.

Challenges

� Knowledge of North American distribution market;

� Add value to supplier ⇔ client chain (substitute distributor);

� Highly disperse market;

� Resumption in demand vs. uncertainty of economic recovery.

R$ million 1H09 1H10

Net Revenue 764 1,109

EBITDA 88 106

Financial Indicators

Acquisition disbursement: US$350 million

Page 14: Apresentação para investidores   btg pactual latin american ceo conference

Agenda

� Braskem

� A global player

� Acquisitions: opportunities and challenges

� Project pipeline: growth with value creation

� Braskem consolidated

14

� The petrochemical industry

� Final considerations

Page 15: Apresentação para investidores   btg pactual latin american ceo conference

“BECOME THE GLOBAL

SUSTAINABLE CHEMICAL

LEADER, INNOVATING FOR

Strategic Direction

LEADER, INNOVATING FOR

BETTER SERVE THE

PEOPLE”.

15

Page 16: Apresentação para investidores   btg pactual latin american ceo conference

Green Polyethylene

� First Green Plastic Certified in the World� Location: Triunfo – RS

� Capacity: 200 Kton/y

� Startup: September 2010

� Investment: R$ 488 million

� Consumption of 460,000 m³ of ethanol per year

� 75% of the ethanol supply is already contracted

� Demand 3x higher than the installed capacity

POLYETHYLENE

� Main Clients and Partners� Demand 3x higher than the installed capacity

����Partnership in R&D – Renewable Polymers

���� Green PE trading in Asia

16

Page 17: Apresentação para investidores   btg pactual latin american ceo conference

BRAZIL

Expansion with increased competitiveness

PVC Expansion

Operational start-up : 1st half 2012

• Expansion of 200 kton/y in PVC capacity in Alagoas

• Investments of US$470 million

• Expected NPV ~US$450 million

• Disbursements already in 2Q10

• Support for Brazil’s infrastructure projects

17Source: Braskem

Industrial Assets

New Projects

Projects with Petrobras

• Support for Brazil’s infrastructure projects

• Braskem participation in Suape Project (textile

complex) and Comperj (1st and 2nd Generation)

under analysis.

Comperj and Suape

Page 18: Apresentação para investidores   btg pactual latin american ceo conference

LATIN AMERICA

Expansion with increased competitiveness

Mexico: Ethylene XXI Project

Operational start-up: early 2015

• JV between Braskem (65%) and the Mexican group IDESA (35%) for the purchase of ethane from PEMEX

• Integrated project: 1 Mty of ethylene and 1 Mty of PE

• Investment estimated at up to US$2.5 billion over 5 years (project finance)

18

years (project finance)

• Financial Advisor hired: Sumitomo Bank

• Structuring of the participation of ECAs and MLAs1

Industrial Assets

New Projects

Projects with Petrobras

Source: Braskem 1 Export Credit Agencie (ECA) and Multilateral Agencie (MLA)

Page 19: Apresentação para investidores   btg pactual latin american ceo conference

� Currently deficit above 1.1 MM ton (2010)

� Estimated deficit in 2015 (project start-up): 1.7 MM ton

� Annual Growing rate foreseen: 4.5 % (Period: 2010-2025 )

Mexican Polyethylene Market

3.1 3.2 3.3 3.4 3.5

3.5

4.0

Polyethylene Mexican Market

0.4 0.5 0.5 0.5 0.6 0.7 0.7 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8

1.1 1.1 1.1 1.2 1.1 1.0 1.1 1.1 1.3 1.4 1.5 1.7 1.8 1.9 2.0 2.1 2.2 2.3 2.4 2.5 2.6 2.7

1.5 1.6 1.7 1.7 1.6 1.7 1.8 1.9

2.0 2.2

2.3 2.5 2.6 2.7 2.8 2.9 3.0 3.1 3.2

-

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

MM

ton

/ye

ar

Supply Deficit Demand

19

Page 20: Apresentação para investidores   btg pactual latin american ceo conference

Converters Profile

Mexican Converters Industry

� 3,500 plastics converters

� 84% small and micro companies

� More than 5 MM ton of plastics conversion, with 1.8 MM of Polyethylene

� Main application: Packaging (48% market)

� Sales to distributors: Braskem ≠ Pemex

Micros

60%

Pequenas

24%

Médias

12%

Grandes

4%

Big

Medium

Small

Converters Profile

Total: 3,500 ConvertersTotal: 3,500 Converters

20

Page 21: Apresentação para investidores   btg pactual latin american ceo conference

Consolidated project pipeline

� Green PE(+ 200 kty ethylene)

� Ethylene XXI - Mexico(+ 1,000 kty ethylene and + 1,000 kty PE)

� Propilsur – Venezuela

� PeruProj. (+ 600 to 1,000 kty ethylene/PE)

� Polimerica – Venezuela(+ 1,300 kty ethylene and + 1,000 kty PE)

� Suape

21

� Resin Capacity CAGR for 2010-2015: +4.3% p.y.

� Diversification of raw materials and world-class assets

� Fiscal discipline

� Excellent track record of projects execution

2010 - 2012 2013 - 2015 Projects under evaluation

(+ 200 kty ethylene)

� PVC Expansion (+ 200 kty)

� Propilsur – Venezuela(+ 300 kty PP)

� Suape

� Comperj

Source: Braskem

Page 22: Apresentação para investidores   btg pactual latin american ceo conference

Investments in 2010 amount to R$1.6 bi

InvestmentsR$ million

10

360

3556

Quattor

Quantiq

VenezuelaBraskem America

1,617

22

Industrial Assets

New Projects

Projects with Petrobras

Source: Braskem

44

20821

61

101

317

8

52

63

192

251

254

7

7210

1197

1S10 2010e

Quantiq

Equipment Replacement

Capacity Increase / PVC Alagoas

Maintenance

Mexico

Others

Productivity

Green PE

621

Page 23: Apresentação para investidores   btg pactual latin american ceo conference

Agenda

� Braskem

� A global player

� Acquisitions: opportunities and challenges

� Project pipeline: growth with value creation

� Braskem consolidated

23

� The petrochemical industry

� Final considerations

Page 24: Apresentação para investidores   btg pactual latin american ceo conference

Braskem consolidated

2009 LTM Jun/10

R$ billion Consolidated Consolidated

Net Revenue 21.5 24.8

EBITDA 3.2 3.8

Net Debt/EBITDA 3.46x 2.84x

# Plants: 29 29

Financial Indicators:

Potential for margin gains

�Stabilization in raw material supplies;

�Margin equalization Braskem (17%) vs. Quattor(12%) in 1H10;

�Substitution of 1H09 by 1H10

1,995

3,035

1,090

1,965

510

510

PVC

PP

PE

24Source: Braskem

3,595

6,46080% Capacity

Increase

Listed on three stock exchanges: BM&FBovespa, NYSE and Latibex

Industrial Assets

# Plants: 29 29

Page 25: Apresentação para investidores   btg pactual latin american ceo conference

Raw material matrixDiversification to compete globallyRaw Material Profile* (2009)

13%

18%

69%

24%

15%58%

3%

Braskem Post-Acquisitions* Braskem Post-Projects*

Implementation of Project Pipeline**

46%

14%

92%17%

56%

8%

37% 30%

25

�More balanced and diversified supply of raw materials

�Competitive natural gas price vs. international reference prices

(1) Ethane, Propane and HLR; (2) Naphtha and condensate*Based on resin-production capacity. Sunoco buys propane directly** Considering the Mexico Project and Green PE

Propane

�USGC reference to competitive prices

Natural Gas

� 100% Petrobras supply with competitive prices versus international prices

Ethanol

Naphtha / Condensate

� ~70% of naphtha supplied by Petrobras with competitive price formula

� 30% direct imports from various international suppliers

Quattor Sunoco Braskem

Liquid (2) Refinery propylene Gas (1)

Ethanol

Page 26: Apresentação para investidores   btg pactual latin american ceo conference

Strong cash generation and competitive margins

Key Indicators2Q10

(A)

1Q10

(B)

2Q09

(C)

Change

(A)/(B)

Change

(A)/(C)

Net Revenue 6,539 6,272 4,996 4% 31%

EBITDA 1,042 909 735 15% 42%

EBITDA Margin 15.9% 14.5% 14.7% 1.4 p.p. 1.2 p.p.

R$ million

� Strong cash generation mainly due to the improvement on Quattoroperational performance

� Productivity gains already reflecting on 2nd quarter

Financial Result2Q10

(A)

1Q10

(B)

2Q09

(C)

Change

(A)/(B)

Change

(A)/(C)

Net Financial Result (575) (880) 1,379 -35% -142%

Foreign Exchange (FX) and Monetary Variation (MV) (216) (374) 1,666 -42% -113%

Financial Result excluding FX and MV (359) (506) (287) -29% 25%

Interest Expenses / Revenues Net (165) (129) (153) 28% 8%

Tax Assets and Liabilities (40) (287) (30) -86% 34%

Others (155) (90) (105) 71% 47%

26Source: Braskem

reflecting on 2 quarter result

� Focus on capturing synergies

� Significant improvement on results after financial crisis

Page 27: Apresentação para investidores   btg pactual latin american ceo conference

Demand stability in 2Q10 reflects sectors good performance

Apparent Consumption (Kton)

4,048 4,173 4,2914,720

+10%

1H10

27Source: Abiquim, Braskem estimates, Tendência Report, IBGE, Anfavea

Food

Retail

Hygiene and Cleaning

Agribusiness

Consumer Goods

Construction

Automotive

Electric and Electronic

Relevant

Moderate

Low / Retraction

Domestic demand performance

by sector:

2007 2008 2009 2010e

Page 28: Apresentação para investidores   btg pactual latin american ceo conference

Historical Prices

PE prices evolution (100 basis) PP prices evolution ( 100 basis)

80

90

100

110

120

130

apr/09 09

aug/09

oct/09

dec/09

feb/10

apr/10 10

aug/10

80

90

100

110

120

130

140

apr/09 09

aug/09

oct/09

dec/09

feb/10

apr/10 10

aug/10

28

International Market Brazilian Market International Market Brazilian Market

� Resins prices show signs of recovery in the international market

� Recovery expected already in August

Source: CMAI

apr/09

Jun-09

aug/09

oct/09

dec/09

feb/10

apr/10

Jun-10

aug/10

apr/09

Jun-09

aug/09

oct/09

dec/09

feb/10

apr/10

Jun-10

aug/10

Page 29: Apresentação para investidores   btg pactual latin american ceo conference

Market trend

Braskem consolidated sales evolution of Braskem consolidated sales evolution of thermoplastic resins thermoplastic resins (1)(1) –– Brazilian marketBrazilian market

3Q10 trend in the Brazilian market3Q10 trend in the Brazilian market

Volume Price Revenue Cost

PP

PE

Resins sales evolution (kton)

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10

29

PE

PVC

Resins sales evolution (kton)

Source: Braskem estimates and ABIQUIM. (1) 2009 and 1Q10 pro forma data.

Page 30: Apresentação para investidores   btg pactual latin american ceo conference

Leverage ratio falls below 3x for the first time since the acquisition

In R$ million (06/30/10)

Gross Debt: 14,384

Net Debt: 10,909

Average Term: 8.2 years

64% of debt is pegged to USD

* After capital increase of R$3.74 bi anddisbursement of Quattor and Sunoco acquisitions3,475

3.12x2.84x

Mar 10 Jun 10

Net Debt / EBITDA

(million of R$)

-9%3.23x

2.84x

Mar 10 Jun 10

Net Debt / EBITDA

(million of US$)

-12%

30Source: Braskem

disbursement of Quattor and Sunoco acquisitions

2014

2.278

584

1.8891.731

2.346 2.346

1.296 1.299 1.3151.631

1.197

2010 2011 2012 2013 2015 2016/

2017

2018/

20192020

onwards06/30/10

Cash

4%

13%12%

16%

9% 9%

12%

Invested in US$

Invested in R$

16%

9%

Page 31: Apresentação para investidores   btg pactual latin american ceo conference

-

BB+

BB

BB-

stable

RATINGRATING

Ba1

Ba2

Ba3

-

+BBB-Ba3

Jan/09

Mar/09

+May/09

Jan&Feb/10

Post-Acquisitions

Braskem: Ratings confirmed after acquisition

Investment Grade

The acquisitions:‣ Strengthened strategic positioning;‣ Increased # of plants, sites and geographic diversification;

Upgrade Conditions:‣ Maintenance of high liquidity (cash or equivalents - stand-by) above R$3 billion. Cash above R$3 billion sinceDec/2008.‣ Capitalization of Braskem as pre-condition for acquisition.Shareholder movements;‣ Successful integration with capture of synergies andincrease in cash generation;‣ Decrease in Net Debt/EBITDA ratio expected to 2.5x. Infirst post-acquisition quarter we already reduced this ratiofrom 3.46x to 3.12x. In 2Q10 we reduced to 2.84x.

Source: Braskem

Braskem Ratings (National Scale) Braskem Ratings (Global Scale)

S&P AA+ / Stable Outlook

Moody’s Aa2.br / Stable Outlook

Fitch AA / Stable Outlook

S&P BB+ / Stable Outlook

Moody’s Ba1 / Stable Outlook

Fitch BB+ / Stable Outlook

BB-

B+

Ba3

B1

2009 2010

‣ Increased # of plants, sites and geographic diversification;‣ Diversification of raw material mix;‣ More disciplined and less volatile domestic market ;‣ High governance standards;‣ Petrobras participation.

from 3.46x to 3.12x. In 2Q10 we reduced to 2.84x.

31

Page 32: Apresentação para investidores   btg pactual latin american ceo conference

Agenda

� Braskem

� A global player

� Acquisitions: opportunities and challenges

� Project pipeline: growth with value creation

� Braskem consolidated

32

� Final considerations

� The petrochemical industry

Page 33: Apresentação para investidores   btg pactual latin american ceo conference

Outlook on the global petrochemical industryEthylene: Operating rate 1H10

Industry at 1H2010

� Producers already responded to the demand slowdown in 2Q10 by reducing the operating rates

� Competitive cost base allows the US to operate at higher rates than other regions

� Braskem back to operate at a rate above world average in 2Q10

79

8683

7781

89

0

5,000

10,000

15,000

20,000

Europe N. America Asia M. East World Braskem

Capacity 2Q Operating rate 2Q10 (%)

000 ton

84

90 89

8286

84

33Source: CMAI

above world average in 2Q10

Global Scenario

� New capacity additions can lead to the closing down of non competitive assets on a permanent basis, especially in Europe and US

� Global economic outlook volatility versus petrochemicals demand

� Expectation of improvement in the industry profitability as of 2H11

Ethylene: Supply and Demand Balance

000 ton

83.880.4

83.1

87.0 88.490.5

0

50,000

100,000

150,000

200,000

2009 2010e 2011e 2012e 2013e 2014e

Capacity Demand Operating Rate 2010e (%)

Capacity 2Q Operating rate 2Q10 (%)

Operating rate 1Q10 (%)

Page 34: Apresentação para investidores   btg pactual latin american ceo conference

2010 Ethylene capacity additions

Region CompanyAdditional

Capacity 2010Start up

Effective Capacity 2010*

Middle East Morvarid PC 334 2Q10 208

Middle East RLOC 975 2Q10 / 3Q10 650

Middle East Kayan 300 4Q10 300

Middle East Petro-Rabigh 325 1Q10 325

Middle East SHARQ 1,100 2Q10 800

Middle East Yansab 433 1Q10 108

Middle East Borouge 700 3Q10 650

Asia Baotou Shenhua 100 3Q10 100

Asia CNOOC & Shell PC 150 2Q10 150

� New players are located in Middle East (38%) and Asia (59%)

� Feedstock matrix of the new capacities:51% naphtha and 49% gas

� Delays already reduced in 18% the start up of new

34

Asia CNOOC & Shell PC 150 2Q10 150

Asia Dushanzi PC 667 2009 667

Asia Fujian Ref & Chem 533 2009 533

Asia Panjin Ethylene 450 2Q10 305

Asia Secco 150 2009 150

Asia Shenyang Paraffin 87 2009 87

Asia SINOPEC/SABIC Tianjin PC 1,000 1Q10 / 3Q10 750

Asia ZRCC 750 2Q10 750

Asia JX Nippon Oil & Energy Corp. 220 3Q10 220

Asia LG Chem 75 2009 75

Asia YNCC 33 2009 33

Asia Shell Chemical 667 2Q10 667

Asia MOC 675 2Q10 675

Asia PTT Polyethylene 917 3Q10 500

Others 275 275

TOTAL 10,916 8,978

Source: CMAI / Parpinelli / Braskem Analysis

-18%

18% the start up of new capacity for the year

� A demand growth of 4.5 million tons of ethylene is expected in 2010, up by 4% compared to 2009

� Delays and learning curve from the commissioned plants shall positively impact the 2010 supply/demand balance

* Estimated data. Does not consider the plants operating rates and possible additional delays.

Page 35: Apresentação para investidores   btg pactual latin american ceo conference

Brazil’s macroeconomic outlook

Annual real GDP growth

• Brazil’s economy is still relatively closed, with exportscorresponding to 14% of GDP, distributed amongvarious trade partners.

• Strong external solvency ratings and floating exchangerate system curbed speculation against the BRL duringthe crisis.

• Brazil’s banking system is well capitalized and highlyregulated.

4,5%

3,5%

4,7%

6,1%

1,3%

-0,2%-0,2%

7,8%

4,5% 4,5% 4,6%

4,4% 4,3% 4,3%5,2%

-1,0%

0,0%

1,0%

2,0%

3,0%

4,0%

5,0%

6,0%

7,0%

8,0%

9,0%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

35

Average monthly income (March 2002 = base 100)

regulated.

• Household consumption corresponds to 61% of GDP,while government consumption corresponds to 20%.GDP is highly influenced by consumer behavior, whichhas been driven by growth in average income levels.

• Brazil is still an unleveraged economy, but withgrowing access to credit (the ratio of available creditto GDP is currently 45% and is expected to increase to49% in 2010), which ultimately spurs consumption.

Real GDP On August 2010 On December 2009

Source: Santander

80

100

120

140

160

180

Rendimento MédioAverage Income

Page 36: Apresentação para investidores   btg pactual latin american ceo conference

63

57

Brazil: Dynamic MarketStill-low per-capita consumption

Per-capita consumption of PE, PP and PVC (kg/person)

Brazil:

63

57

41

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

PE PP PVC

11.1

16.616.215.414.513.612.5

22.221.920.2

18.018.717.517.816.1

22.7

9.6

41

28

* Compound annual growth rate 36Source: CMAI, IBGE, Abiquim, Braskem

Brazil:

5.4%CAGR

22.2

41

28

Page 37: Apresentação para investidores   btg pactual latin american ceo conference

13%

9%3%

6%

Consumer driven Braskem’s domestic sales breakdown in 1H10

CONSUMER GOODS AUTOMOTIVE

HYGIENE AND CLEANINGCOSMETICS AND PHARMACEUTICALS

4%

28%

6%14%

3%4%

4%

5%2%

Source: Braskem / Abiquim 37

FOOD PACKAGING

RETAIL

CONSTRUCTION

AGRIBUSINESS

ELECTRIC AND ELECTRONIC

INDUSTRIAL

CHEMICALS AND AGROCHEMICALS

OTHERS

INFRASTRUCTURE

Page 38: Apresentação para investidores   btg pactual latin american ceo conference

Market development

BUBBLEDECK

Construction of light slabs using polypropylene spheres.

Project developed with Unipac and Toyota-Tsusho. Flooring that allows water permeability.

Substitutes concrete wells for a rotation-molded structure. Support from CNO and partners Asperbras, Fortlev and Brinquedos Bandeirante

Agro-machinery

Parts for tractors, harvesters and tools migrating to PE rotational molding.

38

CROSSWAVE

TRAVELING BLOCK

New washer molds, with PP cabinets (replacing steel) in final validation stage.

Substitution of asbestos by PP fibers with fiber-cement reinforcement.

FIBER-CEMENT

Manholes

Large Tanks

Substitution of fiberglass tanks for volumes greater than 2,000 l.

Plastic silos for grain storage. Partnership with Suzuki.

Silo Bags

Page 39: Apresentação para investidores   btg pactual latin american ceo conference

Agenda

� Braskem

� A global player

� Acquisitions: opportunities and challenges

� Project pipeline: growth with value creation

� Braskem consolidated

39

� Final considerations

� The petrochemical industry

Page 40: Apresentação para investidores   btg pactual latin american ceo conference

0

5

10

15

20

25

30

35

jan-02 jan-03 jan-04 jan-05 jan-06 jan-07 jan-08 jan-09 jan-10

Pr/share BRKM5 Performance

+

Why Braskem?

Consolidated (R$ billion) 2Q10 Multiple

EBITDA LTM 3.8 3.8

Synergies to 2012 4.2

Market Capitalization 13.3 18.8

EV 24.2 29.7

EV/EBITDA 6.3x 7.0x**

Price per share 16.6* 23.6

Proj. NPV to 2012 > R$1.12 bi

Value added by projects to jan-02 jan-03 jan-04 jan-05 jan-06 jan-07 jan-08 jan-09 jan-10

R$ US$

� Largest thermoplastic resin producer in the Americas

� Leader of important projects in Latin America with

competitive raw materials

� Emerging consumer market with potential per-capita growth

as additional driver

� Above-peer profitability

� Access to one of the world’s largest consumer markets

following the U.S. acquisition

� Successful trajectory of organic growth and acquisitions

� Shareholders hold long-term view with strategic synergies

for growth and value creation

� Leader in green chemicals

� Huge potential for value creation

� EBITDA increase

� EV/EBITDA multiple below

peers’ multiple (6-7x)

40

*BRKM5 as of 9/29/10 ** Peer Multiple 2010.

Source: Bloomberg.

Value added by projects to

share price 1.40

Page 41: Apresentação para investidores   btg pactual latin american ceo conference

Meeting with Meeting with InvestorsInvestorsInvestorsInvestors

Page 42: Apresentação para investidores   btg pactual latin american ceo conference

AppendixAppendixAppendixAppendix

Page 43: Apresentação para investidores   btg pactual latin american ceo conference

125130 133

143 146 146151 154

114 111 111 115121

127133

140

Global Ethylene supply/demand

Global ethylene supply / demand (Mton/y)

2007 2008 2009 2010 2011 2012 2013 2014

Supply

Demand

43Source: CMAI, June 2010 * Not considering additional delays and shutdowns

Page 44: Apresentação para investidores   btg pactual latin american ceo conference

78 79 83 90 92 93 97 99

49 51 5560 64 64 66 68

41 44 4547 49 51 51 52

PVC

PP

PE

168

215209205198182173

219

Global Resins supply/demand

Global Resins (PE, PP, PVC) Supply (Mton/y)

2007 2008 2009 2010 2011 2012 2013 2014

69 66 67 71 75 79 83 88

44 43 44 47 50 53 57 6035 32 32 34 37 39 41 43

PVC

PP

PE

149

181172161

152143141

191

2007 2008 2009 2010 2011 2012 2013 2014

4444Source: CMAI, June 2010

Global Resins (PE, PP, PVC) Demand (Mton/y)

Page 45: Apresentação para investidores   btg pactual latin american ceo conference

Resins demand by region

2010 Resins (PE, PP, PVC) Demand by region

Africa

3%

Europe

18%

China

27%

45Source: CMAI, June 2010

North America

17%

South America

6%Middle East

6%

Asia ex-China

23%

The Brazilian demand for resins represents 3% of global demand

Page 46: Apresentação para investidores   btg pactual latin american ceo conference

Ownership Structure Leveraging relationship with Petrobras

(1) Does not include shares held in treasury

% Capital Votante % Capital Total

Petrobras*47,0% 35,8%

Outros (1)

2,9% 20,2%

Odebrecht*50,1 % 38,3%

BNDESPAR0,0% 5,5%

46Source: Braskem, as of August 31, 2010.

• Potential for operational synergies with refineries and partnership with Petrobras R&D Center

• Alliance to strengthen Brazil’s petrochemical value chain

– Access to competitive raw materials

– Improved value chain competitiveness

• Corporate governance standards: Shareholders’ agreement

Leveraging relationship with Petrobras: NOC alliance

Page 47: Apresentação para investidores   btg pactual latin american ceo conference

Corporate Governance post acquisition

� Odebrecht as the controlling shareholder, with all results fully consolidated,reinforcing Braskem’s condition as a publicly traded private company;

� Braskem executives entrusted with the Company’s management and business plan,approved by a simple majority of the Board of Directors;

� Sharing of strategic decisions, with consensus approval by Board of Directors, includingfor:– divestments greater than 10% of long-term assets– acquisitions greater than 30% of long-term assets

� Board of Directors with 11 members, out of which 1 is independent:� Board of Directors with 11 members, out of which 1 is independent:– Odebrecht nominates Chairman of the Board, CEO and CFO– Petrobras nominates Vice Chairman of the Board, the Chief Investments and Portfolio

Officers

� Investment decisions based on objective criteria for returns and profitability, such asproject IRR and NPV.

� Clear financial policy that stipulates the strict conditions, with derivatives used solelyfor hedging;

� Being the sole vehicle for petrochemicals investments gives Braskem the right to:

- Act as the leader for all investments identified by Petrobras that are of interest toBraskem;

- If not interested, the right to sell the products.47

Page 48: Apresentação para investidores   btg pactual latin american ceo conference

92%84% 89%

81% 76% 83% 83% 79% 81%95% 98%

87%

Ethylene Polyethylene Polypropylene PVC

Increase in Quattor capacity operating rate positively impacted 2Q10

Braskem consolidated operating rate %%

**

2Q09 1Q10 2Q10 2Q09 1Q10 2Q10 2Q09 1Q10 2Q10 2Q09 1Q10 2Q10

48

� Quattor better performance:

� 12 pp growth in ethylene operating rate – 83% in 2Q10 versus 71% in 1Q10

� 15 pp growth in PE operating rate – 76% in 2Q10 versus 61% in 1Q10

� Crackers and 2nd generation plants, in general, show recovery of operating level in 2Q10

� Scheduled shutdown in Camaçari affected PVC operating rate in 2Q10

* 2009 data does not include the 200 kton expansion in QuattorSource: Braskem

Page 49: Apresentação para investidores   btg pactual latin american ceo conference

World indicative ethylene cash costs

49Source: CMAI

Page 50: Apresentação para investidores   btg pactual latin american ceo conference

Revenues breakdown – 2Q10

BTX* 8%

Cumene 3%

ETBE 2%

Fuel 4%Others 7%

Net Revenue by Product(1)

(2Q10)

50Source: Braskem

Resins 62%

Ethylene 5%

Propylene 4%

Butadiene 4%

BTX* 8%

1 Does not include nafta/ condensate/crude oil processing and QuantiQ sales

* Benzene, Toluene, Paraxylene and Orthoxylene

Page 51: Apresentação para investidores   btg pactual latin american ceo conference

COGS breakdown – 2Q10

Other Variable

Costs 6.9%

Labor 3.5%

Services 1.7%

Others 1.0% Deprec / Amort

6.3%

COGS 2Q10 (1)

51Source: Braskem

Naphtha 56.6%

Gas 16.8%

Electric Energy

4.6%

Natural Gas 2.5%

Costs 6.9%

1 Does not include naphtha / condensate / crude oil processing and costs of

Quantiq

Page 52: Apresentação para investidores   btg pactual latin american ceo conference

Exports Destination – 2Q10

North

America 44%

Europe 16%

Asia 6% Others 1%

Exports Destination (2Q10)

52Source: Braskem

America 44%

Central

America 6%

South

America 27%

The Export Market represents 32% of Company’s Net Revenue.

Page 53: Apresentação para investidores   btg pactual latin american ceo conference

213

(5) (12) (20) (43)

1,042

FX Impact

on Revenue

FX Impact on

Costs

-38

26

R$ million

EBITDA Trends 1Q10 Pro Forma vs. 2Q10

The better domestic prices through May, following the

international market, offset the higher raw material prices in

2Q10

909

(12) (20) (43)

EBITDA1Q10

ContributionMargin

Volume FX Fixed Costs +SG&A

Others EBITDA2Q10

53Source: Braskem

Page 54: Apresentação para investidores   btg pactual latin american ceo conference

Outstanding Bonds & Outstanding Ratings

Outstanding BondsOutstanding Bonds MaturityMaturityCoupon Coupon

(% p.a.)(% p.a.)

Yield * Yield *

(% p.a.) (% p.a.)

US$250 MM Jan/2014 11.750 3.8

US$250 MM Jun/2015 9.375 4.6

US$275 MM Jan/2017 8.000 5.6

US$500 MM Jun/2018 7.250 5.9

US$750 MM May/2020 7.000 6.0

US$150 MM Perpetual 9.750 9.5

54

US$150 MM Perpetual 9.750 9.5

US$200 MM Perpetual 9.000 8.9

US$450 MM Perpetual 7.375 7.4

AgencyAgency RatingRating OutlookOutlook Reviewed inReviewed in

Fitch Ratings BB+ Stable 03/02/2009

S&P BB+ Stable 05/28/2009

Moody’s Ba1 Stable 05/21/2009

Corporate Credit Rating Corporate Credit Rating –– Global ScaleGlobal Scale

* As of September, 30th

Source: Braskem / Bloomberg

Page 55: Apresentação para investidores   btg pactual latin american ceo conference

Covenants

Net Debt / EBITDA

< 4.5X2.84

Jun 10

Net Debt / Ebitda (x)Net Debt / Ebitda (x)

2.84

Jun 10

RATIORATIO

R$R$US$US$

55

FacilityFacility Amount*Amount* Jun 10Jun 10 CurrencyCurrency TypeType

2010 and 2011 2010 and 2011 DebenturesDebentures

R$800 MM R$500 MM R$ Incurrence*

2014 Medium Term 2014 Medium Term NotesNotes

US$250 MM R$250 MM R$ Incurrence*

Nippon Export and Nippon Export and Investment InsuranceInvestment Insurance

US$80 MM US$49 MM US$ Maintenance

EPP (Export PreEPP (Export Pre--Payment) Payment)

US$725 MM US$625 MM US$ Maintenance

*The company is prevented from issuing any new debt for the period if it overcomes

the 4.5x Net debt / Ebitda ratio.

Source: Braskem

Page 56: Apresentação para investidores   btg pactual latin american ceo conference

Applied Innovation and technology to strengthen value chain competitiveness

Focus on product and application development

� 18% of resin sales derive from products developed in the last three years

� Focus on clients’ end users

Structured resource base to support client needs

� Over US$ 330 million in R&D assets

� More than 190 researchers

� 8 pilot plants

� More than 260 patents filed worldwide

� Partnership with universities and R&D centers in

56

56

users

Targeted initiatives for breakthrough technology

� Intelligent packaging

� Renewable products

Source: Braskem

� Partnership with universities and R&D centers in

Brazil and abroad

Page 57: Apresentação para investidores   btg pactual latin american ceo conference

Sustainable Development:

A way of doing businesses to satisfy all stakeholders, today and in the future

Results

Sustainable development

ResponsibeResponsibe

CareCare

2002 Public Commitment

2005, 2006, 2007, 2008, 2009

ISO 14.001*

OHSAS 18.001**

Acknowledgements

57

Page 58: Apresentação para investidores   btg pactual latin american ceo conference

Effluents(m3/t)

2.712002

1.232009

-54%

Brazil CI: 2.8

Water Consumption(m3/t)

5.492002

4.022009

-27%

World CI: 27.8

Total Recordable Cases Accidents Rate(employees and contractors – 1.000.000 mh)

5.122002

0.882009

-83%

Strong Improvement since 2002

Health, Safety and Environmental Results

2008 Brazilian Chemical Industry data (Abiquim 2009)2007 World Chemical Industry data (ICCA, 2009)

2009

Solid & Liquid Residues (kg/t)

9.932002

2.762009

-72%

Brazil CI: 2.8

Brazil CI: 11.9

2009

Energy Consumption (GJ/t)

11.962002

11.222009

-6%

World CI: 27.8

Brazil CI: 7.4

2009

Lost Time Cases Accidents Rate(employees and contractors – 1.000.000 mh)

0.852002

0.182009

-79 %

World CI: 3.9

Brazil CI: 11.8

58Source: Braskem