2. Forward-looking Statements
This presentation contains forward-looking statements. Such statements are not
statements of historical facts, and reflect the beliefs and expectations of Braskem’s
management. The words “anticipates”, “wishes”, “expects”, “estimates”, “intends”,
“forecasts”, “plans”, “predicts”, “projects”, “targets” and similar words are intended
to identify these statements. Although Braskem believes that expectations and
assumptions reflected in the forward-looking statements are reasonable based on
information currently available to Braskem’s management, Braskem cannot guarantee
future results or events.
Forward-looking statements included in this presentation speak only as of the date they
are made (March 31, 2007), and the Company does not undertake any obligation to
update them in light of new information or future developments.
Braskem shall not be responsible for any transaction or investment decisions that are
taken based on information included in this presentation.
2
3. Our Vision
Ipiranga /
Copesul
2007
Politeno
2012
2006
Turnaround
2002
To rank amongst the
TOP 10 global
To become petrochemical
Latin America’s leader companies in market
in thermoplastic resins capitalization
3
4. Strategic Drivers
Opportunities for Growth with Value Creation
• Start-up of overseas • Politeno acquisition
commercial • Acquisition of the
operations and Petrochemical assets of
distribution network Internationalization Organic Growth the Ipiranga Group
• Investment (Ipiranga and Copesul)
opportunities in the • Debottleneckings in PE
Americas and PVC
• New PP plant in
Value Creation Camaçari
Enhancement of the
Brazilian Production Selective Growth
Chains
• Capacity increases in • Petroquímica Paulínia
isoprene and paraxylene
• Projects in Venezuela:
• Conversion of MTBE to ETBE
•PP plant
• Hydrocarbon resins
•Jose Olefins Complex –
• Green polymers 1st and 2nd generation
4
5. A Unique Investment Opportunity
Upcoming Compelling
Opportunities Market Outlook
for Value
Creation
Ipiranga Solid
Acquisition Business Model
5
7. Brazil: a growing and dynamic market for thermoplastic resins
With high historical growth rates…
Overall Market Consumption for Polyethylene, Polypropylene and PVC
3,741
3,440
Thousands of tons
3,064
3,014 9%
2,829
2,529
2,135
1,596
7%
CAGR *
1993 1995 1997 1999 2001 2003 2005 2006
* Compound Annual Growth Rate
Source: Brazilian Chemical Industry Association - Abiquim 7
8. Brazil: a growing and dynamic market for thermoplastic resins
…and strong elasticity to the GDP growth
Annual Growth Rates – Brazil (1994 through 2006) %
Elasticity: 2.4x
GDP growth 9.1
6.8
6.1
5.7
Polypropylene
Polypropylene
2.9 Resins
Polyethylene
Polyethylene
PVC
PVC
GDP
Source: Braskem and Abiquim 8
9. Brazil: a growing and dynamic market for thermoplastic resins
Braskem: Solid and consistent growth
Gross Revenue US$ million Exports US$ million
6,893 1,382
6,252
4,900
959
3,688
710
3,013
617
23% 415
CAGR 35%
CAGR
2002 2003 2004 2005 2006 2002 2003 2004 2005 2006
Source: Braskem. Figures do not consider the effects of the acquisition of Ipiranga. 9
10. Braskem: consumption-driven player with a strong customer basis
Differentiated position to benefit from the growth
of the Brazilian market
Market segmentation for Braskem’s resins in 2006
% of Revenue
Outlook for 2007:
OTHERS *
PACKAGING FOR FOOD – Sustained global economic
growth
20%
24%
AUTOMOTIVE
3% – In Brazil:
COSMETICS AND
3% • Gradual reduction in interest
PHARMACEUTICALS
8%
rates
17%
RETAIL CONSUMER GOODS • Increase in investments in
(NON-DURABLE) infrastructure
8% 17%
AGRICULTURE • Growth in domestic demand
coupled with higher expected
CONSTRUCTION GDP growth
• Increase in available income
* Includes personal hygiene, infrastructure, electronics and others
Source: Braskem 10
11. Brazil: a growing and dynamic market for thermoplastic resins
Solid demand growth for thermoplastic resins
Demand growth approximately 1.2 million tons for the next 4 years
Market growth (k ton)
Growth 2007-2010 (k ton)
315 282 303
300 264
200
100 243
0
530
2007 2008 2009 2010
391
mn ton
4.8
5
4.5
4.2
4.0
4 3.7 +8%
3
PVC
7.2% CAGR
2
PP
1
PE
2006 2007 2008 2009 2010
Domestic sales + imports
Source: Braskem and LCA consultancy 11
13. Braskem: Solid business model based on competitive
integration in the Value Chain
Level of integration reaches 80% for ethylene and 85% for propylene
COMPETITIVE INTEGRATION
Extraction 1st generation
1st generation 2nd generation
2nd generation 3rd generation
3rd generation
Value Added
Naphtha
Condensate
Competitiveness
Raw materials Basic petrochemicals Thermoplastic resins Plastic Converters
Market Cost Technological
Leadership Competitiveness Autonomy
#1 Petrochemical Integration Know-How
Company in Latin with Scale
America
13
14. Braskem: Cost Competitiveness
Leading producer in the region with scale surpassing
all other players
More than 10 million tons of petrochemical and chemical products in 2007,
5.6 million of which ethylene and resins
000 t / ano
Production Capacity 000 tons / year
5,570
515 PVC
760 PP
PE
1,815
Ethylene
1,400
2,480
1,060
700
700 685 620 561
540
120 160
700 520 476
500
85
Braskem Dow Rio Polímeros Suzano Unipar / PQU Solvay Triunfo
Source: CMAI and Braskem 2007 14
15. Braskem: Market leadership in Brazil
Number 1 petrochemical company in the region
PE % PP %
16% 8%
51%
47% 37% 41%
OTHERS
IMPORTS
PVC % PE + PP + PVC %
7% 12%
40% 53% 46%
42%
Source: Braskem / Brazilian Chemical Industry Association – Mar 07; Braskem´s market share before acquisition of Ipiranga 15
16. ja
n/
ja 05
n/ fe
05 v/
fe 0
v/
0 m 5
100%
m 5 ar
126%
ar /0
100%
152%
/0 ab 5
ab 5 r/
r/ 0
0 m 5
m 5 ai
/0
ai
/0 ju 5
ju 5 n/
n/ 05
05 ju
ju l/0
l/0
ag 5
ag 5 o/
o/ 05
05 se
se t/
t/
0 0
Source: CMAI / Braskem
ou 5 ou 5
t/0 t/
05
no 5 no
v/ v/
0 0
de 5 de 5
z/ z/
05 05
ja ja
n/ n/
06 06
fe fe
v/ v/
0 0
m 6 m 6
ar ar
/0 /0
ab 6 ab 6
r/
0 r/
0
m 6 m 6
ai ai
/0 /0
ju 6 ju 6
n/ n/
06 06
ju
ju
PVC - Ásia (CMAI) Base 100
l/0
l/0
PVC - Braskem (MI) Base 100
ag 6
o/ ag 6
PE: International and Braskem
06 o/
se 06
t/
PVC: International and Braskem
0 se
t/
ou 6 0
t/0 ou 6
no 6 t/
06
v/ no
0 v/
de 6
z/
0
06 de 6
ja z/
n/ 06
07 ja
fe n/
v/ 07
0 fe
m 7
PEAD - Ásia (CMAI) Base 100
v/
ar 0
PEAD - Braskem (MI) Base 100
/0 m 7
7 ar
/0
101%
140%
7
Base 100
Base 100
167%
127%
Braskem: Strong pricing power
ja
n/
05
fe
v/
05
m
ar
142%
/0
100%
ab 5
r/
0
m 5
Spreads over international prices above 30%
ai
/0
ju 5
n/
05
ju
l/0
ag 5
o/
05
se
t/
PP
05
PE
ou
t/
0
PVC no 5
v/
05
de
z/
05
ja
n/
06
fe
v/
06
m
ar
/0
ab 6
r/
0
m 6
Spreads over Asian prices
ai
/0
ju 6
n/
06
ju
l/0
PP: International and Braskem
ag 6
+ 38%
o/
+ 32%
+ 33%
06
se
t/
0
ou 6
t/
0
no 6
v/
06
de
z/
0
ja 6
n/
07
%
fe
v/
07
m
PP - Ásia (CMAI) Base 100
ar
Base 100
/0
PP - Braskem (MI) Base 100
7
March 2007
126%
168%
16
17. Braskem: Innovation and Technology as key drivers for
Value Creation
Over US$ 160 million in R&D assets
171 researchers
8 pilot plants
151 patent registrations filed
Extended knowledge network with
Universities
20% of sales come from new products
launched over the last 3 years
17
18. Braskem: Innovation and Technology
New frontiers of development
Nanotechnology
– 1st Brazilian petrochemical company to file a patent
– 4 patents already filed
– 1st product launched in November 2006: new PP grade
Green Polymer
– Manufacture of resins based on renewable sources of raw
material (sugar cane)
– Technology to convert ethanol into ethylene already in
place
– Biopolymer: biodegradable green polymer
18
20. A new step in the restructuring of the Brazilian
Petrochemical Industry
March 19th, 2007
5 plants Production
730 kt of resins 1.2 mn tons of Ethylene
Leadership in HDPE 2nd largest cracker
40% Market Share in Latam
20
21. Braskem: Acquisition of Ipiranga Group´s Petrochemical
Business
Largest petrochemical player in Latin America
Gross Revenue Net Revenue EBITDA
US$ 9.9 bn US$ 7.8 bn US$ 1.4 bn
US$ 6.9 bn US$ 5.4 bn US$ 760 mn
Net Debt / Ebitda Debt / Equity Assets
2.6 x 53 / 47 US$ 10.3 bn
2.7 x 59 / 41 US$ 7.5 bn
Note: 2006 Figures consolidating Ipiranga and Copesul are unaudited and proforma 21
22. Braskem: Acquisition of Ipiranga Group´s Petrochemical Business
Financial leverage practically intact after the acquisition
Transaction multiple of 6.2 x before synergies
Acquired Assets US$ Acquisition US$
EBITDA (Ipiranga
+ Debt 2,415 mn + 55% of Copesul) 390 mn
EV/EBITDA
Comparable
6.5 Companies Average:
6.0 6.0 6.0 5.75
5.0 4.9
15%
Discount
Dow Nova Lyondell Huntsman Georgia Gulf Braskem
Chemicals Chemical 2007*
* Analysts’ average for 2007
Source: Citigroup, JP Morgan and Bear Stearns 22
23. Braskem: Acquisition of Ipiranga Group´s Petrochemical Business
Strengthening of our competitive advantages unlocks
potential synergies
Improved profitability and EBITDA with
potential increase in cash flow
Expansion of product portfolio, consolidating
our leading position in all respective segments,
mainly HDPE
Client base expansion and supply of value-
added services based on Innovation &
Technology structure
Full integration between 1st and 2nd
generation, leading to improved
competitiveness
Increased operational flexibility
Improvement of supply chain management
– Increased flexibility with naphtha supply
Strengthening of the partnership with
Petrobras
23
24. Braskem: Acquisition of Ipiranga Group´s Petrochemical Business
Strengthened market leadership
More than 50% of market share in all resins
PE % PP %
30%
39%
53% 52%
37% 17% 41%
9%
OTHERS
IMPORTS
PVC % PE + PP + PVC %
30% 33%
53% 52%
53%
17% 42% 15%
Source: Braskem/Abiquim 2006 24
25. Braskem: Acquisition of Ipiranga Group´s Petrochemical Business
Synergies: Experienced management team with proven
implementation capacity
Commercial
– Complementary product portfolio, especially HDPE
– Integration of client base
– Optimization of export contracts
Industrial
– Operational flexibility
– Shared maintenance services
Fiscal and tax optimization
Supply chain
– Scale gains in procurement
– Optimization of logistics
Competitive management model with potential to improve
quality and productivity through the exchange of best practices
Possibility of new DBN’s in the Southern Complex
25
26. Braskem: Solid Financial Structure
Adequate indebtedness profile with financial leverage practically
intact after the acquisition
AMORTIZATION SCHEDULE Net Debt / EBITDA (LTM)
03/31/2007 - (R$ million) 2.72
“BB+”
2.51 2.63
Ratings of Braskem
Gross debt: 5,800 -8%
Outlook from Stable to Positive
Net debt: 4,205 “Fitch expects the company to be able to increase
significantly free cash flow generation, which
would allow a significant improvement in credit
Dec 06 Mar 07 Pro- metrics needed for Braskem´s rating to migrate to
Braskem´
1,596 an Investment Grade category.”
category.”
forma**
26%
812 Average term: 17 years
13% 12%
1,162* 12% 9%
8% 8%
6%
6% 724 718
784 675
462 543
372 449
366 331
03/31/07 2007 2008 2009 2010 2011/ 2013/ 2015/ 2017/ Perpetuals
Cash and cash 2012 2014 2016 2018
equivalents *Subordinated debentures fully subscribed by the controlling shareholder with payment of interest and principal in July 2007.
Invested in R$ **Unaudited pro-forma figure for 2006 considering the acquisition of Ipiranga
Invested in US$
Source: Braskem 26
27. A Unique Investment Opportunity
Upcoming
Opportunities
for Value
Creation
27
28. Braskem: Opportunities for Value Creation
Resin production capacity growth in Brazil …
Petroquímica Paulínia: PP Plant
– JV with Petrobras
– Total investment of R$ 734 million
– Production capacity
• +350 k ton / year
Alagoas – Location
Bahia • Paulínia, State of São Paulo
Paulínia
– Start-up in 2Q08
Projects being considered for future
implementation:
– DBN
PVC +150 k ton / year
PE +100 k ton / year
– Greenfield
PP Bahia +300 k ton / year
Source: Braskem (2006)
28
29. Braskem: Opportunities for Value Creation
…combined with investments in the lowest feedstock cost country
in the region…
Venezuela
PDA’s signed
Cornerstone laid on 04/16/07
JVs to be created by the end of 07
Two projects in the Jose Complex:
– 50/50 Braskem and Pequiven
– Capital structure: 30% equity, 70% debt
– Project finance non-recourse – multilaterals, ECAs
and development banks
PP Plant*
– Production capacity of 450 kton / year
– Investments of US$ 370 million
– Start-up in 2009
– Propylene at competitive prices
Jose Olefins Complex*
– 1.3 million tons of ethylene
– 1.1 million tons of PE
– Total investment of US$ 2.5 billion
– Start-up in 2011
– Natural gas at competitive prices
* To be presented to the Board
29
30. Braskem: Opportunities for Value Creation
…will result in an 80% production capacity increase for
thermoplastic resins...
Camaçari
Camaç
300
Venezuela 5.5
1,100 (2) million
Camaçari
Camaç
150
100 665
Venezuela (2)
(1)
450
Paulínia
Paulí
3.1 350
million
1,860
515
515
760
3,015
1,815
Braskem Current 2008 2009 2010 2011 2012
(1) JV with Petrobras Polyethylene Polypropylene PVC
(2) JV with Pequiven
Source: Braskem 30
31. Braskem: Opportunities for Value Creation
…within a lower production cost structure derived from access to
diversified sources of raw materials on a competitive basis
2006 2012
Venezuela
Camaçari - BA Camaçari - BA
Paulínia - SP
Triunfo - RS Triunfo - RS
34%
100% 57%
9%
Naphtha Feedstock from Refinery Natural Gas
Source: Braskem 31
32. Braskem: Opportunities for Value Creation
Commitment to Sustainability and high standards
of Corporate Governance
100% tag-along rights for all shareholders
Part of BOVESPA’s Corporate Sustainability Index - ISE
BOVESPA Level 1 Company with commitment to migrate to Level 2
SOX early adopter - June 2006
Four of eleven Board members are independent
Existing committees
– Ethics Committee
– Enhanced Fiscal Council
– Finance & Investment
– People & Organization
Braskem environment project in Alagoas / Brazil
– Strategy & Communication
Code of Conduct: sets values, principles and practices governing corporate behavior
Long-term incentive plan tied to stock performance
All plants ISO 14000 certified: excellence in HSE
32
33. Braskem: Growth with Value Creation
Regional market leader in the production of PE, PP and PVC: organic growth and
consolidation
Greenfield projects in the region to guarantee access to competitive raw
materials: selective growth
Strong growth potential in the next 5 years:
– Total production capacity will increase from 6 to 10 million tons
– Production of resins will increase from 3.1 to 5.5 million tons
Solid financial structure coupled with capital discipline
Innovation and technology as key drivers for value creation
Access to competitive sources of renewable raw materials
Consolidation of the partnership model with Petrobras
100% tag-along for all shareholders and best corporate governance practices
Social and environmental responsibility
33
