4. Business overview
Members 1,720
Investments Program R$ 2.3 billion (2005-2009)
Tax Revenue R$ 1.6 billion/year
Gross Revenue R$ 5.3 billion/year
Production Capacity(million ton/year) 2.7 of petrochemicals and 1.9 of thermoplastics (PE + PP)
PE and PP domestic market share 40%
Export of plastic resins 400 kton/year, of which:
Asia
50% Latin
America
27%
Europe
10%
Africa
13%
Source: Quattor 2009 4
5. Business Priorities
Reach top quartile in Health, Safety and Environment performance
Maximize asset utilization
Implement operational improvement investment plan
Improve reliability and availability of feedstock supply
Agressive management of fixed and variable costs
Optimize working capital
Reinforce Polyethylene product portfolio (Chevron Phillips technology)
Optimize and invest in the innovation pipeline
Recover employees pride and motivation for working at Quattor
Prepare the organization for the future integration with Braskem
5
6. Simplified Structure – from 9 to 6 direct
Reports
PE
Polyethylene
Business
Estratégia, Marketing
e Supply Chain Rui Chammas
Armando Bighetti
Development
Carlos Fontes
Shareholders
Clients
Polypropylene
PP
Estratégia, Marketing
Carlos Fontes and
Integration People &
e Supply Chain
Planning Organization Frank definir
A Alcântara
Marcelo Nunes
Fernando Musa Eliana Granato
Patricia Maia
VPE – Unidade de Pol
Quattor CEO í
Luiz de Mendonça
Luiz de Mendonça
Basic Chemicals
Vinílicos
Celso Ferreira
Roberto Bischoff
6
10. Polypropylene
Footprint Polypropylene Sales per segment Share
Kton, 2010 Jan-Aug %
Distributers
Distribution 43.921 32%
BOPP 42.134 46%
Slurry Homo 115 kton/y Compounds 38.019 39%
Niche 32.749 32%
Camaçari
Caps 27.619 53%
RJ-1 Homo 300 kton/y Duque de Raffia 22.067 25%
Caxias
DU/Buckets 20.039 25%
Grande ABC
Electronics 18.879 35%
ABC-1 450 kton/y Non woven 14.925 15%
- Homo, Heco, Raco
Rigid packing 13.927 24%
Fibre 11.455 31%
875 kton/y Film 10.772 26%
• Largest Plant in Brazil (Mauá)
• Good geographic positioning
• Strong customer relationships
10
11. Polypropylene – new developments
Rectangular pail for paint packaging
Innovation: Steel replacement in water
based paints.
Target Sales: 4.6 kton/year
PP Car Seats
(To be launched)
Innovation: Customer support to minimize
car seats imports.
Target Sales: 1.5kton/year
11
12. Polyethylene
Footprint Polyethylene Sales per segment Share
Kton, 2010 Jan-Aug %
Bobbins 88.874 29%
Distribuition
Distribution 70.439 24%
Industrial Films 59.170 32%
Riopol HD/LL 540 kton/y Blow molding 30.474 15%
Bags 29.104 25%
Duque de
Caxias Special Films 10.727 10%
Grande ABC 3.619
EVA 12%
e Cubatão
Compounds 2.602 12%
ABC-1 LD 120 kton/y Injection 2.426 4%
ABC-2 HD/LL 230 kton/y Extrusion 873 3%
Cubatão LD 150 kton/y
Specialties 751 1%
Others 3.043 5%
1.040 kton/y
• 2 most recent investments in Brazil (CP and Riopol)
• Only gas based plants in Brazil
• Good geographic positioning
• High quality products
12
13. Polyethylene – new developments
New PE Grade for Fuel Tank
Innovation: Monomodal grade, by CPChem
technology
Target Sales: 21.6 kton/year
Plastic Sleepers (ties)
Innovation: Less weight due to injection
technology adopted, greater strength and
durability
Target Sales: 5.4 kton/year
New Metalocene PE Grade for Cast Film
Innovation: Better use of raw materials and
plant’s risks reduction
Target Sales: 43.2 kton/year
13
14. RioPol
Only gas based cracker, fully integrated with PE in Brazil
Significant cost advantage vs. Naphtha based plants
Good potential for debottlenecking and integration with COMPERJ
Provides operational know-how and expertise for Braskem’s
international projects
Vinmar contract restructured to create flexibility and improve
profitability
14
16. Feedstock
Sources of feedstock
% Feedstock Issues
Naphtha
50% • Significant volume with lower quality
• No infrastructure to import directly
Ethylene 100%
50%
LHR
• Full contract volume still not available
Braskem Quattor Ethane/Propane
• Mix
8% 10% • Full contract volume still not available
• Reliability
51%
Propylene 92%
Propylene
39% • Long distances by road
• Multiple sources in each site
• Reliability
Braskem Quattor
Propylene from refinery
Liquid (Naphtha)
Gas
Source: Basic petrochemicals business unit 16
18. High level diagnostic
ABC cracker debottleneck/LRH unit still not operational. PE new
plant with very limited ethylene availability
Focus on the capacity expansion program limited investment in
operational improvements and maintenance
Synergies from Quattor creation in early stages of capture
Company managed for short term cash generation, with limited
focus on profitability
Centralized decision making process
Some talent evasion during 2009
Difficult business situation impacted team motivation
18
19. Teams and structure
Early exchange of people to improve morale and accelerate changes (cultural and
operational), with some key positions being staffed with experienced Braskem
executives …
Celso Luiz T. Ferreira Frank Alcântara Henrique L. Schulz
Responsible for Responsible for Responsible for
Basic Petrochemical PP Business Industrial Basic
40 80 Business Petrochemical Business
Carlos Alfano Eduardo Tergolina Patrícia Maia
Responsible for Industrial Responsible for
Health, Safety and Responsible for PP People & Organization
Environment
Source: HR Quattor information – estimate 19
20. HSE - Health, Safety and Environment
Relevant improvement in all key indicators
Control wastewater Solid waste Water consumption Power consumption
M3/t Kg/ton M3/ton Gj/ton
1.72 3.82 4.27 15.7
12.2
0.97
1.87
3.81
Real YTD Real YTD Real YTD Real YTD
2009 2010 2009 2010 2009 2010 2009 2010
Fonte: Quattor HSE Information 20
21. HSE - Accidents Rate
Safety and accidents prevention have also been prioritized and a very high work
accident rate was reverted.
Accident Frequency Rate – SAF + CAF Recent Actions
Number of Events
Security
QB BU PP BU PE BU
Training of employees and
outsourced workers
Campaign to prevent
18.3
accidents with arms and
15.6 hands
Health
PCMSO Fulfillment
10.8
Preparation of Life Quality
6.3 Program
4.9 4.4 HSE excellence
Preparation of risk
management plans per plant
Real YTD Real YTD Real YTD
2009 2010 2009 2010 2009 2010
Source: Quattor HSE Information 21
22. IT – Formula Project
´
SAP implementation adapted to Braskem´s solution, minimizing implementation
risk and creating the base for a fast integration in the future
Separated Infrastructure and Systems
Braskem Formula solution implementation
3 years of stable operations
Braskem team learning experience
Integration process accelerator
SAP Go Live on August 1, 2010
Integration of processes with Braskem
Standardization of management model
Operational synergies catalyzer
Incorporation of new functionalities
SAP fully operational
22
23. Basic petrochemicals production
With investments in operational improvements, the Basic Petrochemical Unit has
been reaching successive records of production...
Ethylene production
Kton = production records
831 80%
669 Highlights
Actions contributing to production
77 86 86 80 97 96 increase:
74 74
Revamp of Olefins Unit in 2008
UPGR startup in 2010
Operational reliability program
Total Jan Feb Mar Apr Mai
May Jun Jul Aug YTD
2009 2010 2010 2010 2010 2010 2010 2010 2010 2010 Integrated operations with
second generation plants
Propylene production
Kton = production records Previous Production Records:
296
82% Ethylene: 80.9 ton, in
243 August/2009
Propylene: 29.1 ton, in
July/2009
30 32 30 30 34 34
27 27
Total Jan Feb Mar Apr Mai
May Jun Jul Aug YTD
2009 2010 2010 2010 2010 2010 2010 2010 2010 2010
Source: Business Unit Information % - YTD 2010 / Total 2009 23
24. Polymers production
... as well as in Polyethylene and Polypropylene Units
Polyethylene production
Kton = production records
83% Highlights
626
521 Actions contributing to production
increase:
78 Raw material availability at line III
61 67 69 73
54 60 60 Improved REDUC supply
Operational Reliability
Better alignment between cracker
Total Jan Feb Mar Apr Mai
May Jun Jul Aug YTD and second generation
2009 2010 2010 2010 2010 2010 2010 2010 2010 2010
Polypropylene production
Kton = production records
Highlights
586 71%
Actions contributing to production
417 increase:
DBN of ABC plant to 450 kton/year
55 50 60 56 47 53 58 DBN of DCX plant to 300 kton/year
39
Favorable production program,
with less transition of grids
Total Jan Feb Mar Apr Mai
May Jun Jul Aug YTD Improved REDUC supply
2009 2010 2010 2010 2010 2010 2010 2010 2010 2010
Source: Business Unit Information % - YTD 2010 / Total 2009 24
25. Capacity utilization
Significant improvement in asset utilization
Capacity utilization rate
% production / nominal capacity
Basic 85%
+ 14 %
71%
Total 2009 YTD 2010
Capacity utilization rate
% production / nominal capacity
PP +5% 77%
72%
Total 2009 YTD 2010
Capacity utilization rate
% production / nominal capacity
PE + 14 % 75%
61%
Total 2009 YTD 2010
25
27. Quattor synergies of R$ 400 million in EBITDA
as of 2012
R$ million
43
79
400
Investment of R$ 350 million
required to capture all
279 synergies
Financial synergy NPV
estimated in R$ 340 million
Industrial Logistics Supply EBITDA Synergies
Production mix Maximization of gains Joint management
Maximizing the from product of feedstock
value of all cracker distribution purchases
streams (domestic and export Renegotiation of
markets) third-party
Optimization of
inventories Optimization of agreements
(a)
transportation modes
Source: Braskem Recurring 27
28. Synergies: Example – Aromatics front
Detailed projects, showing the evolution from initial status to result after
synergies, as well as obtained gains
Before After
Braskem exports mixed Braskem sells mixed xylenes
Xylenes RS to xylenes in SE, reducing exports
Ortoxylenes SP Quattor sells xylenes in SE Quattor produces OX from
Imported OX xylenes, reducing OX imports
Braskem sells toluene in SE Braskem supplies Quattor with
Toluene Quattor uses toluene to BZ (exported before)
Sales versus produce Benzene Braskem exports toluene
Exports Quattor supplies toluene in SE
Braskem sells in SE Quattor sells products in SE
Aliphatic Solvent Quattor uses similar products Braskem uses them as
in the southeast as feedstock feedstock (with cost
region advantages over Quattor use)
Source: Quattor Economic Planning Information 28
29. Synergies: Example – Mix PP/PE
The reorganization of product types produced in each plant will provide efficiency
gains, through the rationalization of products and adequate use of assets
Product Grades
Polypropylene Polyethylene Total
Number of grades (%) Number of grades (%) Number of grades (%)
410 116
(-28%) 294
254 61
(-25%) 193
156 55
(-36%) 101
Before After Before After Before After
Source: Quattor Economic Planning Information 29
