6th annual latam ceo conference itau bba (inglês)
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6th Annual Latam CEO 6th Annual Latam CEO 6th Annual Latam CEO Conference ItauBBA
May 2011
6th Annual Latam CEO Conference ItauBBA
May 2011
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.
The forward-looking statements in this presentation are valid only on the date they are
made (March 31, 2011) 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.
2
Braskem: Leader in PE, PP and PVC production in the Americas
�Dominant market share in South America, with 69% of the Brazilian market
� Strong growth track record with attractive project pipeline in Brazil, Latin America and Sustainable chemicals (focus on renewable raw materials)
� Listed in 3 stock exchanges: BM&FBovespa, NYSE and Latibex - 100% tag along
� Investment grade rating by S&P and Moody’s
�Market Cap (05/12/2011) – US$ 11.2 billion
� EV – Net debt March 2011 – US$ 17.1 billion � 3 PP
�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 (70/30)
� Petrobras as the main supplier in Brazil (~70% of naphtha needs and 100% of gas needs)
Financial Highlights
Industrial Assets
� 1 gas cracker� 1 PP� 1 PE
� 1 naphtha cracker� 2 PP� 3 PE
� 1 naphtha cracker� 1 ethanol cracker� 5 PE� 2 PP
� 1 PVC� 1 Chlorine-soda
�1 naphtha cracker� 4 PE� 1 PP� 1 PVC�1 Chlorine-soda
2010 LTM 2011∆
R$ billion Consolidated Consolidated
Net Revenue 27.8 28.6 + 2,9%
EBITDA 4.1 4.1 -
Net Debt/EBITDA 2.43x 2.37X - 2,5%
Financial Highlights
Potential Short term Upside
� Synergies:
- Additional EBITDA – R$ 495 million on a recurring basis as of 2012, out of which R$ 377 million in 2011
� Expectation of cycle recovery as of 2012
3
Agenda
� The Petrochemical Industry
� Vision and Growth pipeline
� South America and Brazil: an unique global position
Global competitiveness: gas x naphtha
� Final considerations
� Global competitiveness: gas x naphtha
� Recent financial performance
4
Agenda
� Vision and Growth pipeline
� The Petrochemical Industry
� South America and Brazil: an unique global position
� Final considerations
� Global competitiveness: gas x naphtha
� Recent financial performance
5
“BECOME THE GLOBAL
SUSTAINABLE CHEMICAL
LEADER, INNOVATING
Strategic Vision
LEADER, INNOVATING
FOR BETTER SERVE THE
PEOPLE”.
6
3 Main growth/value drivers
�Brazil
�The country will need a new thermoplastic plant per year until 2020
�Gas supply from pre-salt exploration can bring competitiveness to the new
projects in Brazil
�Internacionalization
�Latin America and US as good alternatives for future competitive feedstock�Latin America and US as good alternatives for future competitive feedstock
supply
�Partnerships with local players to develop local industry at competitive gas
prices
�Sustainable Chemicals
�Initial focus in renewable raw materials with no changes for customers in
terms of investments and applications
�Partnerships to enter other avenues in green products
7
Brazil – adding value to the Vinyls chain
PVC Expansion
�Operational start-up : May 2012
�Expansion of 200 kton/y in PVC capacity in Alagoas, using EDC (1st
intermediate product in the PVC chain) currently exported
�Investments of US$470 million
�Expected NPV ~US$450 million
�Total of R$149 million invested in 2010 and 2011 in the project
�Expected disbursement of R$380 million in 2011
�Long term financing from BNDES (up to R$525 million) and from BNB
Industrial Assets
New Projects
2006 2007 2008 2009 2010
Imports
Domestic Sales
748
950982857
1,119
17%
31%26%34%19%
Source: Braskem
�Long term financing from BNDES (up to R$525 million) and from BNB(R$ 200 million) at very competitive costs
�Support for Brazil’s infrastructure projects
�Brazil currently imports ~30% of its needs
PVC Domestic Demand (kton)
8
Brazil – adding value to the cracker chain
Butadiene�Operational start-up : 2013
�Capacity: 100 kton/y
Polybutadiene SBR
Styrene Butadiene Rubber
SSBR
Solution SBR
NBR
Acrylonitrile Butadiene
Rubber
TR
Thermoplastic Rubber
Source: Braskem
�Capacity: 100 kton/y
�Location: Triunfo (Rio Grande do Sul)
� Investments of R$300 million
�Pre-sales contracts have been firmed, receiving ~US$127 million of
payments in advance
�Raw material for the manufacture of rubber tires and synthetic rubbers
Industrial Assets
New Projects
�Tighter market balance sustaining higher prices
� Light feedstock expansion limiting the availability of C4 supply
� In 2010, butadiene prices increased by 50% from 2009
�Continuous consumption growth
� Higher demand from emerging markets
� Recovery of the mature markets
Attractiveness worldwide
9
Brazil – potential capacity expansion projects
PEPEPEPE
� ~ 130 kton/y through DBNs adding LDPE, HDPE and LLDPE in Bahia, Rio de Janeiro and São Paulo (southeast of Brazil)
2013 2013 -- 201520152013 2013 -- 20152015 2016 2016 -- 201820182016 2016 -- 20182018
PVCPVCPVCPVC� Greenfield adding ~250
kton/y in the northeast of Brazil
� COMPERJ – from 1.1 to 1.5 million tons of ethylene
PPPP
� ~ 100kton/y through DBNs in Rio Grande do Sul (south of Brazil) and São Paulo (southeast of Brazil) or 300 kton/y through a greenfieldproject
10
Sustainable Chemicals
Green PP
2013
�Successful track record for
�Innovation in bioplasticmarket
�Production integrated with
Development
�Partnerships for the development of competitive technologies
Green PE
2010 – started
up in 4Q10
�Successful track record for implementing projects: term and costs
�Capture of 2.5t CO2/t PE
�Partnership with Customers
�Production integrated with green propylene
�Capture of 2.3t CO2/t PP�Cooperation agreement with
Cenpes (Petrobras Research Center)
�Development of other cracks streams to sustainable chemicals
�PE integrated project study
Braskem becomes a global leader in
biopolymers
11
Access to competitive feedstock The Ethylene XXI Project (Mexico)
Mexico: Ethylene XXI Project
�Operational start-up: January 2015
�JV between Braskem (65%) and the Mexicangroup IDESA (35%) for the purchase of ethanefrom PEMEX
�Integrated project: 1 Mton/y of ethylene and1 Mton/y of PE
�Fixed Investment: US$ 2.5 billion over 5 years�Fixed Investment: US$ 2.5 billion over 5 years(project finance – 70% debt/30% equity)
�Expected NPV over US$ 3 billion
�Strategic partnership with Ineos and LyondellBasell for PE plants technologies
�Technip was selected as the technology supplierfor the ethylene cracker
�Financial Advisor hired: Sumitomo Bank
�Structuring of the participation of ECAs andMLAs1 – already received over US$ 6 billion inletters of interest
Source: Braskem 1 Export Credit Agency (ECA) and Multilateral Agency (MLA) 12
Proj. EXXI in 2014
�Currently deficit above 1.1 Mton (2010) - ~70% of the market – being supplied by
US players
�Estimated deficit in 2015 (project start-up): 1.7 Mton
�Annual Growing rate foreseen: 4.5 % (Period: 2010-2025)
Mexican Polyethylene Market
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
1,0 1,0 1,0 1,0 1,0 1,0 1,0 1,0 1,0 1,0 1,0
1,1 1,1 1,1 1,2 1,1 1,0 1,1 1,1 1,3 1,4 1,5
0,7 0,8 0,9 1,0 1,1 1,2 1,3 1,4 1,5 1,6 1,7
-
0,5
1,0
1,5
2,0
2,5
3,0
3,5
4,0
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 Ethylene XXI Deficit
13
Converters Profile
Mexican Converters Industry
�3,500 plastics converters
� 84% small and micro companies
� More than 5 Mton of plastics conversion, with 1.8 Mton of Polyethylene
� Main application: Packaging (48% market)
�Sales to distributors: Braskem ≠ Pemex
Converters Profile
Total: 3,500 ConvertersTotal: 3,500 Converters
Big
4% Medium
12%
Small
24%
Micros
60%
14
Unique pipeline of growth in the Americas
� Green PE – already operational
� Ethylene XXI - Mexico(+ 1,000 kton/y ethylene and + 1,000 kton/y PE)
� Butadiene (100 kton/y)
� Brownfield/Greenfield expansion projects in Brazil: PE and PP assets
� Comperj – integrated complex in Rio de Janeiro (southeast Brazil)
� New Biopolymers Plants in Brazil –integrated project (1st and 2nd
generation)
Consolidated Project Pipeline
� 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
operational(+ 200 kton/y ethylene)
� PVC Expansion (+ 200 kton/y)
� Butadiene (100 kton/y)
� Green PP(+ 30 kton/y ethylene/ propylene)
generation)
� Peru(~1,000 kton/y ethylene/PE)
� Venezuela – under revaluation
Source: Braskem
Consolidated Project Pipeline
15
Structured resource base to support customer needs:
� Over R$ 330 million in R&D assets
� More than 190 researchers
� 8 pilot plants
� More than 400 patents filed worldwide
Innovation & Technology
Innovation and Technology Center
�Strenghtening the value chain competitiviness
PP
Coffee Bags
� Partnership with universities and R&D centers in Brazil and abroad
� 12% of Polymer Business Unit revenues results from new products launched
in the past 3 years
PE
BIOPOLYMERSInnovation pipeline
NPV: ~US$ 510 millionPP
PVCPVC
Doors
PE
Rotomolded Manhole
16
Innovation & Technology
PP - NEW PP WASHING MACHINES
Partners: Electrolux and Colormaq
Innovation: Steel and PET replacement in
washing machine body part (lower cost and
weight)
Target Sales: 6 kton/year
PP - LOW VOC AUTOMOTIVE GRADE
Partner: Lyondell-Basell Brazil
Innovation: High performance grade for
automotive compounds.
Target Sales: 4 kton/year
PE - LARGE ROTOMOLDED WATER TANKS PE - GRAIN BAGS
PP
Partner: Fortlev
Innovation: Fiberglass tank replacement
Target Sales: 32 kton/year
PVC - PVC WINDOWS
Partners: Claris, Primeira Linha, Veka and
Weiku
Innovation: Increase PVC window profile
application in the market
Target Sales: 2 kton/year
Partner: Pacifil
Innovation: Lower cost and faster installation
with flexible silos for grain storage
Target Sales: 5 kton/year
PVC - PVC ROOF TILES (To be launched)
Partners: Not disclosed now due to secrecy
agreement
Innovation: Asbestos and Clay roof tiles
replacement
Target Sales: 120 kton/year
17
Agenda
� Vision and Growth pipeline
� The Petrochemical Industry
� South America and Brazil: an unique global position
� Final considerations
� Global competitiveness: gas x naphtha
� Recent financial performance
18
Ethylene: Operating rate 1Q11
Overview 1Q11
� Naphtha prices following oil volatility
� Unscheduled shutdowns and better market
demand in the mature markets
� Chinese economy once again presented
growth above market estimates
� Competitive gas prices bring advantage to
US players
MM ton
Outlook on the global petrochemical industry
83
91 92
78
86
8081
89 88
74
83 81
50
60
70
80
90
0
5
10
15
20
Europe N. America Asia M. East World Braskem
1
2
Source: CMAI, Parpinelli Tecnon
US players
Outlook
� Scheduled maintenance shutdowns in
Europe and Asia
� Upward price trend of resins and basic
petrochemicals, following higher costs
� Continuous instability in Middle East
operations
� Stronger global demand
Ethylene: Supply and Demand Balance
MM ton
83.5 83.986.3
88.790.7 91.3
0
50
100
150
200
2010 2011e 2012e 2013e 2014e 2015e
Capacity Demand Operating Rate (%)
19
Europe N. America Asia M. East World Braskem
Capacity 1Q11 Operating rate 1Q11 (%) Operating rate 4Q10 (%)
1 Impacted by the scheduled maintenance shutdown in Bahia’s cracker for 52 days.2 Impacted by the power blackout that occurred on February 4 in all states in Brazil's Northeast
Demand growth shall overcome new capacity additions
EthyleneDemand
CAGR 10-154.4%
Supply
CAGR 10-152.8%
Asia
Africa
Middle East
Europe
6,521
2,805
4,5146,090
9,010
6.7% 3.4%
5.2%4.5% 4.4% 4.3%
6.8%
3.2%2.3% 2.6%
4.0%
2.1%
Capacity(MM ton)
Source: CMAI, March/2011
� Limited additional capacity until 2015
� No new investments announced motivated by financial crisis
� Sanctions in Qatar restrict investments in petrochemicals
� No further availability of cheap gas for new projects
� Greenfield projects: 4-5 years to startup
Europe
Americas
Closures
Postponed/Delayed
Supply Growth %
Demand Growth %
20
2,067 743 962
(1,282) (1,227)(699) (150)
529
468
490
3,229
1,816
1,200
2,545
375
400
550
3,216
2,652
3,774
2,805
2,462
2010 2011 2012 2013 2014 2015
-19% Delayed
3,8143,423
3,417
9,010
Agenda
� Vision and Growth pipeline
� The Petrochemical Industry
� South America and Brazil: an unique global position
� Final considerations
� Global competitiveness: gas x naphtha
� Recent financial performance
21
South America:Second player hasaround 10% of Braskem’scapacity
North America# 32 players
W.Europe# 29 players
Braskem: unique position in the global industry
Braskem responsible for over 60% of the capacity share of thermoplastic resins* in South America – 69% market share in Brazil.
Source: Analysts reports, CMAI capacity list
capacity
South America# 12 players
* PE, PP and PVC
M.East# 38 players
N.Asia~# 150 players
S.Asia~# 40 playersBraskem: 5,510
Ecopetrol: 548
Mexichem: 416
PBB Polisur: 650
Pequiven: 185
Petro Dow: 42
Petroken: 180
PETROQUIM: 120
Petroquímica Cuyo: 130
Polinter: 495
Propilven: 115
Solvay Indupa: 541
Capacity (000 Metric Tons)
22
Brazil: strong potential growth
2010 Market Share Brazilian’s thermoplastic demand (PE, PP, PVC) X GDP Growth%
69%
26%
5%
Braskem
Others
Imports
Estimate: Resins Demand ~ 2.0x GDP
-0.6%
7.5%
4.5%1.0%
15.0%
10.0%2x GDP
Source: Abiquim, Braskem, CMAI, Ipeadata and IBGE.
Per-capita Consumption of PE, PP and PVC (kg/person)
Brazil:
18 17 19 18 20 21 22 23 25
2002 2003 2004 2005 2006 2007 2008 2009 2010
6558
46
31
USA Europe Japan China
2009 2010 2011e 2012e 2013e 2014e 2015e
Brazilian GDP (Growth %) Demand Growth (2x GDP) %
23
� Origin of Imports in 1Q11
(PE, PP and PVC) � Braskem’s Sales Profile – 1Q11
Domestic market performance
32%5%
5%
11%
AGRIBUSINESS
RETAIL
OTHERS
FOOD PACKAGING
North America
27%Asia
Europe
12%
Others
11%
Source: Abiquim, Braskem 24
Americas account for 67% of imports
� Imports represented 27% of the
domestic market
9%
9%9%
13%
7%AUTOMOTIVE
CONSUMER
GOODS
HYGIENE AND
CLEANINGINDUSTRIAL
CONSTRUCTION
27%
Argentina
25%
Colombia
14%
Mexico
1%
Asia
10%
Agenda
� Vision and Growth pipeline
� The Petrochemical Industry
� South America and Brazil: an unique global position
� Final considerations
� Global competitiveness: gas x naphtha
� Recent financial performance
25
US ethane-based industry to remain more competitive than naphtha based producers
Source: CMAI 26
Preference for light feed (ethane) and refineries low utilization rates to shorten co-products supply worldwide
U.S. Shale Gas Advantange does not benefit all...
• Relative cost advantage accrues to the integrated
and gas basis contracted products
• Lower Btu values mean that lower feedstock and
eletricity prices are a potential but not a certainty –
market forces prevail
Global Base Chemical and PlasticsWeighted Average Earnings Before Interest & Taxes
Segment Contribution – U.S. Dollars per Metric Ton
Source: CMAI
• Differentiated natural gas results in lower
generation of C4s and aromatics in steam crackers –
may change trade volumes
A comparison of
some of the products
impacted by the
difference in natural
gas values vs. Oil
prices MO
DE
RA
TE
AD
VA
NT
AG
E
HIG
HLY
AD
VA
NT
AG
E Polyethylene
EthyleneOxide
Derivatives
MEG, Amines, Alpha Olefins
Chlorine & Caustic Soda
VinylsEDC / VCM
Styrenics
NO
AD
VA
NT
AG
E Refinery Products
BTX
Propylene(Methanol)
Relative Advantage Due to Natural Gas
27
Potential benefits for Braskem in this scenario
Increased polymers competitiveness:
• gas-based projects; and
• increasing price scenario for co-products
(reducing naphtha based costs)
1,070
1,628
408 497 459 284505
165 265 395391
920498
867 801824
1.181
2006 2007 2008 2009 2010
Co-products Revenue (US$)
Propylene Butadiene BTX
1,655 1,499
2,605
Source: Braskem
8%
92%
Braskem
13%
17%
67%
3%
Braskem Post-Acquisitions
24%
15%58%
3%
Braskem 2015*
33%
13%
51%
2%
Braskem 2018**
Naphtha and Condensate Gas
EthanolRefinery Propylene
*Considering Mexico Project
**Considering Comperj Project
Raw Material Profile
Propylene Butadiene BTX
28
Agenda
� The Petrochemical Industry
� Vision and Growth pipeline
� South America and Brazil: an unique global position
� Final considerations
� South America and Brazil: an unique global position
� Global competitiveness: gas x naphtha
� Recent financial performance
29
Recent Financial Performance
1,638
2,308 2,354
2009 2010 LTM 2011
EBITDA (US$ million)
+40,9%
+2,0%
Exports
Net Revenue (million of US$)
11,620
15,833 16,620
2009 2010 LTM 2011
+36,3%
+5,0%
23% 26% 28%
30
Exports 23% 26% 28%
2002 2003 2004 2005 2006 2007 2008 2009 2010
2,965 3,045 3,145 3,1903,621
5,551
10,21210,412
5,921
Nominal Capacity (kton)
Resins
Ethylene
Green Ethylene
EBITDA (US$ million)
457 581
871 851 764
1,626
1,337
1,638
2,308 2,354
2002 2003 2004 2005 2006 2007 2008 2009 2010 LTM 2011
R$ million
EBITDA performance: 1Q11 vs. 1Q10
� Brazilian real appreciation and the increase in raw
material price were offset by higher prices of resins and
basic petrochemicals.
244
4
FX impact
on costs 284
FX impact
on revenue(401)
31Source: Braskem
910 11778
29 15
919
EBITDA
1Q10
Contribution
Margin
Others FX Power
Blackout Cost
Volume Fixed Costs
SG&A
EBITDA
1Q11
( )
( )
( )( )
Leverage decrease and Braskem’s ratings raised to investment grade
2,389 1,3811,847
1,891
2,598
501
570*
2,89011%
10%
15% 15%
8%
10% 10%
21%
Amortization Schedule(1)
(R$ million)
03/31/2011
� Gross debt pegged to dollar: 64%
32
Call of US$200 million in perpetual bonds issued in 2006, with
coupon of 9% p.a.. Issue of US$750 million in bonds with maturity
in 2021 destined for short and medium term debt pre-payment,
with less atractive costs..
Agency Rating Outlook Date
Moody's Baa3 Stable 3/31/2011
S&P BBB- Stable 3/30/2011
Fitch BB+ Positive 1/11/2011
Moody's Aa2.br Stable 3/31/2011
S&P brAAA Stable 3/30/2011
Fitch AA (bra) Positive 1/11/2011
Corporate Credit Rating
Global Scale
National Scale
2,389 1,381
1,202
1,891
1,054
1,314 1,300
2011 2012 2013 2014 2015 2016/
2017
2018/
20192020
onwards03/31/11
Cash
8%
(1) Does not include transaction costs
Invested in US$
Invested in R$
* Stand by of US$ 350 million
� Gross debt pegged to dollar: 64%
� Net debt pegged to dollar: 79%
Synergies from Quattor acquisition totaling R$75 million in 1Q11
EBITDA 2011*: R$377 millionEBITDA 1Q11*: R$75 million
7524
19
R$ million
377
82
61
R$ million
* Annual and RecurringSource: Braskem 33
Identification of new opportunities, efficient and rapid implementation of initiatives to capture synergies
� Integrated planning for industrial units
� Centralized maintenance plan assets strategy
� Optimization of freight and gains in distribution and storage
� Joint purchase of materials for industrial operations
� Fiscal gains and lower cost of debt
32
7524
Industrial Logistics Supply EBITDA Synergies
234
Industrial Logistics Supply EBITDA Synergies
Agenda
� The Petrochemical Industry
� Vision and Growth pipeline
� South America and Brazil: an unique global position
� Final considerations
� South America and Brazil: an unique global position
� Global competitiveness: gas x naphtha
� Recent financial performance
34
Outlook and Priorities
Petrochemical market:
� Naphtha price impacted by the oil price volatility
� Global petrochemical scenario marked by recovery, but oversupply is still expected for 2011, improving from2Q11. Mitigating factors:
� Operational instability, delays on the startup of new plants, scheduled shutdowns in Europe and Asia and tradesanctions imposed on Iran;
� Higher prices of resins and basic petrochemicals;
� Strong demand from emerging countries like China, India and Brazil.
Braskem’s priorities:
35
� Strengthening of the Brazilian petrochemical and plastics production chain
� To follow the domestic resins’ market growth: 9-10% in 2011 and regain the market share
� Ensure capture of identified synergies
� Adding value through the acquired assets
� Quattor: continue improvement in its operational efficiency
� Braskem America: return above capital employed
� Maintaining liquidity and financial health
� Growth Project
– PVC Alagoas expansion
– Project Ethylene XXI in Mexico, which is based in competitive raw material
– To define Comperj’s configuration with Petrobras
– Expand the use of renewable feedstock
� Maintain the leadership in sustainable chemicals
6th Annual Latam CEO 6th Annual Latam CEO 6th Annual Latam CEO Conference ItauBBA
May 2011
6th Annual Latam CEO Conference ItauBBA
May 2011
AppendixAppendix
Ownership Structure Leveraging relationship with Petrobras
50.1% / 38.2%
MinorityShareholders
47.1% / 35.8%
Voting Shares / Total Shares
0.0% / 5.9% 2.8% / 20.1%
- World leader in E&P in deep waters;
- Present in the industry as investor, supplier and client;
- Investment Grade by all 3 Rating Agencies.
- Conglomerate;
- More than 30-years in the petrochemical industry;
- Investment Grade by Moody’s and Fitch.
Source: Braskem
• Odebrecht as the controlling shareholder reinforces Braskem’s condition as a listed privately-owned
company
• Sole vehicle for petrochemical investments of both shareholders, Braskem has the right:
- to lead all petrochemical investments identified by Petrobras;
- if not of its interest, has the right to commercialize such products.
Go
ve
rna
nce
38
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 (
kto
n/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
8th
12th
Ca
pa
city
in th
e A
me
rica
s (
World
Ca
pa
city
(kto
n/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
39
Global Ethylene and Resins supply/demand
Global Ethylene Supply/Demand (Mton/y)
133 143 148 150 153 156 161
112 119 123
130 135 141 147
2009 2010 2011e 2012e 2013e 2014e 2015e
Supply
Demand
Source: CMAI, March 2011
Global Resins Supply (Mton/y) Global Resins Demand (Mton/y)
* Compounded Annual Growth Rate
2009 2010 2011e 2012e 2013e 2014e 2015e
67 71 75 79 83 88 92
45 48 51 54 57 61 64 32 34 37 39 41 43 45
2009 2010 2011e 2012e 2013e 2014e 2015e
144
173163154
200182
191
CAGR* 09-15
5.7%
82 90 93 95 98 99 103
55 61 65 67 70 71 73
43 46 50 51 52 52 53
2009 2010 2011e 2012e 2013e 2014e 2015e
PVC
PP
PE
181
214207229
219 223
CAGR* 09-15
4.0%
197
40
Resins demand by region
2010 Resins (PE, PP, PVC) Demand by region
Africa
3%
Europe
18%
China
27%
Source: CMAI 2010 estimates
North America
17%
South America
6%Middle East
6%
Asia ex-China
23%
The Brazilian demand for resins represents 3% of global demand
41
86% 87%78% 83% 80% 85%
94% 93%
2009 2010 2009 2010 2009 2010 2009 2010
Ethylene Polyethylene Polypropylene PVC
63%71%
83% 89% 94%
4Q09 1Q10 2Q10 3Q10 4Q10
Capacity utilization rates were positively impacted by the improvement of Quattor’s assets
Braskem consolidated operating rates %%
Quattor - Ethylene
� Raw material supply regularization, in the Southeast and Rio de Janeiro complex, gradually increased
the operating rates of Quattor’s assets:
� RJ unit presented a record rate of 93% in the last quarter of the year
� Continuous operational improvement of existing assets (record production rates in the south
complex)
� Scheduled maintenance shutdown at Bahia’s cracker in the 4Q10 had a higher influence in the PVC
production, partially impacting the average operating rate of PE and PP
*2009 data does not include Quattor expansion of 200 kton
2009 2010 2009 2010 2009 2010 2009 20104Q09 1Q10 2Q10 3Q10 4Q10
Source: Braskem 42
Fuel 4%
Others 19%
Net Revenue by Product (1)
2010
Revenues breakdown – 2010
Resins
53%
Ethylene 4%
Propylene 4%
Butadiene 4%
BTX 8%
Cumene 2%
ETBE 2%
Source: Braskem
1 Does not include naphtha/ condensate/crude oil processing and distributor sales
* Benzene, Toluene, Paraxylene and Orthoxylene
43
2010 COGS breakdown
Naphtha , 53.1%
Other Variable
Costs, 7.2%
Labor, 3.1%
Services, 1.5%
Others, 0.9%
Deprec / Amort,
7.0%
Freight, 3.9%
COGS 2010 (1)
Source: Braskem
Gas as
feedstock, 16.9%
Electric Energy,
4.3%
Natural Gas,
2.4%
(1) Does not include naphtha / condensate / crude oil processing
and Quantiq costs
44
Exports Destination – 2010
Europe
15%
Asia
6%
Others
1%
Exports 2010
Source: Braskem
The Export Market represents 26% of Company’s Net Revenue.
45
N. America
44%
C. America
6%
S. America
28%
� Contribution margin was positive impacted by the
higher sales volume and the improvement in resin-
naphtha spread. FX impacted by the appreciation in
Brazilian real.
R$ million
1,979
FX impact
on costs 2,089
FX impact
on revenues(3,140)
EBITDA performance: 2010 vs. 2009
**2009 non-recurring effect amounts R$135 million*SG&A: R$244 million of non-recurring expenses in 2010
3,181
523
1,051
441 135
4,055
EBITDA
2009
Volume Contribution
Margin
FX Fixed Costs
SG&A
Non recurring
effect 2009
EBITDA
2010
( )
( ) ( )
* **
Source: Braskem46
EBITDA performance: 1Q11 vs. 4Q10
R$ million� Higher resins and basic petrochemical prices didn’t
offset the increase in raw material cost and Brazilian
real appreciation. Sales volume, seasonally lower, were
negatively impacted by the unscheduled maintenance
shutdown in the northeast plants.
1,074
71
FX impact
on costs 62
FX impact
on revenue(87)
Source: Braskem 47
8178
35 25 7
919
EBITDA
4Q10
Fixed Costs
SG&A
Contribution
Margin
Power
Blackout Cost
Volume FX Others EBITDA
1Q11
( )( ) ( )
( )
( )
Debt Profile Mar/11
Foreign Gov.
Entities
1%
Brazilian Gov.
Entities
26%
Capital Market
38%
Gross Debt by Category
CDI
9%
BRL - PRE
7%
USD-POS
TJLP
19%
Gross Debt by Index
Source: Braskem48
Banks
35%
38%
USD-PRE
55%
USD-POS
9%
Outstanding Bonds & Outstanding Ratings
Outstanding Bonds MaturityCoupon
(% p.a.)
Yield **
(% p.a.)
US$84.3 MM * Jan/2014 11.750 2.8
US$65.3 MM * Jun/2015 9.375 3.4
US$130.7 MM * Jan/2017 8.000 4.6
US$500 MM Jun/2018 7.250 5.1
US$750 MM May/2020 7.000 5.5
US$450 MM Perpetual 7.375 6.8
US$750 MM Apr/2021 5.750 5.5
Agency Rating Outlook Reviewed in
Fitch Ratings BB+ Positive 01/11/2011
S&P BBB- Stable 03/30/2011
Moody’s Baa3 Stable 03/31/2011
Corporate Credit Rating – Global Scale
* Post Tender Offer expired in April, 20th
Source: Braskem / Bloomberg49
** As of May, 13th
Covenants
2.43x 2.37x
Dec 10 Mar 11
(R$ million)
-2%
2.56x 2.52x
Dec 10 Mar 11
(US$ million)
-2%
Net Debt/EBITDA
Source: Braskem
Facility Amount* Mar 11 Currency Type
Senior Notes R$ 500 MM R$ 500 MM R$ Issuance
Nippon Export and
Investment InsuranceUS$80 MM US$33 MM US$ Maintenance
EPP (Export Pre-Payment) US$725 MM US$400 MM US$ Maintenance
*The company is prevented from issuing any new debt for the period if it overcomes the 4.5x Net debt / EBITDA ratio.
50
Dec 10 Mar 11 Dec 10 Mar 11