Meeting with Investors

March, 2012

Forward-looking Statements
This presentation contains forward-looking statements. These statements are not
historical facts and are based on managements 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 (December 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.

Agenda
Overview
The petrochemical industry
Braskem key differentiators
Looking forward: Accretive pipeline in the Americas
Brazil
International expansion
Renewable chemicals

Results
Priorities

Braskem: leader in thermoplastic resins production in the Americas

Leading presence in the Brazilian market: only
integrated petrochemical company in 1st and 2nd
generation
Dominant player of thermoplastic resins (PE+PP+PVC)
in South America
Largest PP producer in USA
Leader in sustainable chemicals (focus on renewable
raw materials)

28 facilities in Brazil, 5 in USA and 2 in

Germany
Naphtha, hybrid and gas based crackers

Petrobras as the main supplier in Brazil

(~70% of naphtha needs and 100% of gas
needs)

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

Latibex - 100% tag along
Market Cap of US$7 billion and EV of US$13 billion
(03/15/12)

1
W.Virginia

1
Philadelphia

3 Texas

Investment grade by all 3 global rating agencies:

1 naphtha cracker
4 PE
1 PP
1 PVC
1 chlorine-soda
R$ billion

2009

2010

2011

Net Revenue

22.6

27.8

33.2

EBITDA

3.2

4.1

3.7

Net Debt/EBITDA

2.67x

2.43x

3.20x

US$ billion

2009

2010

2011

Net Revenue

11.6

15.8

19.9

EBITDA

1.6

2.3

2.2

2.98x

2.56x

2.83x

Net Debt/EBITDA

2 PP
(Wesseling
and
Schkopau)

1 naphtha cracker
1 ethanol cracker
5 PE
2 PP

1 PVC
1 chlorine-soda

1 gas cracker
1 PP
1 PE
1 hybrid cracker
2 PP
3 PE

Industrial Assets

Agenda
Overview
The petrochemical industry
Braskem key differentiators
Looking forward: Accretive pipeline in the Americas
Brazil
International expansion
Renewable chemicals

Results
Priorities

Global additional capacity

Very small capacity addition in 2012
compared to potential additional
demand of 6 million ton/year

Limited/no further availability of

subsidized gas for new projects in
Middle East (2015/16) hybrid
crackers (naphtha/gas)

Iran sanctions could delay announced

investments (ethane as feedstock)

Ethylene: additional capacity

Million

7.3
6.5

7
6

5
4

China

Projects in U.S. are not sufficient to

disrupt the world supply and demand
balance

China will still be a net importer

Greenfield project: 4-5 years start-up

Most of the feedstock associated with

the new additional capacity is oil
price driven

Source: CMAI Mar/12

China

3.6
3.2

China

6.3

2.2

China

Iran

2
1

Iran

Iran

0
-1

2011

2012

Africa & India

2013
Europe & CIS

2014
M.East

2015
Americas

2016
Asia

Outlook for the petrochemical industry scenario remains

positive
Ethylene: Supply and Demand Overview
Operating Rate

84.9

85.2

87.4

87.5

87.4

89.6

163

167

89.2

173

CAGR 11-16: 3.3%

156
144

150

147

143
122
2010

131

125

2011

2012e
Demand

Global GDP: average growth of 3.4%

Demand should outpace capacity increase

higher operating rates
international spreads improvement

Emerging markets are the key drivers

Source: CMAI mar/12

150

156

CAGR 11-16: 4.5%

137

2013e

2014e

2015e

2016e

Nameplate Capacity

Agenda
Overview
The petrochemical industry
Braskem key differentiators
Looking forward: Accretive pipeline in the Americas
Brazil
International expansion
Renewable chemicals

Results
Priorities

A winning history. Consistent delivery of results: successful

trajectory of organic growth and acquisitions
Leadership in Brazil

Leadership in the Americas

Going Global
Dow PP Plants

Sunoco PP Plants

Capacity (kton/year)

PVC Expansion
200

Braskem (Aug, 2002)

Copene
Nitrocarbono
Proppet

OPP

Trikem

Polialden

1,765

1,765

1,865

1,910

2,341

1,200

1,280

1,280

1,280

1,280

2002

2003

2004

2005

2006

EBITDA 1 (US$ million)

*

Politeno
3,071

3,441

2,480

2,480

2007

2008

200

200

6,460

6,460

6,430

3,752

3,752

2009

2010

Green
Ethylene

7,680

Resins

3,752

3,752

Ethylene

2011

2012

CAGR: 19%

Pro-forma figures for 2009: Quattor+Braskem America

2.308

2.246

1.638

1.626
1.385

457

Market Cap
(US$ bi)

872

851

764

581

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

0.2

1.6

4.6

2.9

2.6

3.7

1.2

4.0

9.1

6.6
9

Braskem: unique position in the global industry

Braskem responsible for over 60% of the capacity share of thermoplastic resins* in South
America 65% market share in Brazil.

South America:
Second player has around
10% of Braskems capacity

W.Europe
# 29 players

North America
# 32 players

M.East
# 38 players

Capacity (000 Metric Tons)

Pequiven :

185

650

Petroken (LYB):

180

Ecopetrol:

548

Petroq. Cuyo:

130

Solvay Indupa:

541

PETROQUIM :

120

Polinter:

495

Propilven :

115

Mexichem:

416

Petro Dow:

42

Braskem: 5,510
PBB Polisur (Dow):

Source: Analysts reports, CMAI capacity list

N.Asia
~# 150 players
S.Asia
~# 40 players

South America
# 12 players

* PE, PP and PVC

40% Petrobras Energia; 50,5% Admire Trading Corp and 9,5% Panam SA

10

Brazilian demand: potential of further growth

Brazilian thermoplastic resins

Per-capita Consumption of PE, PP and

demand growth

PVC*

4,0%

6,1%

2,9%

CAGR: 5.8%
-0,3%
4,9
4,9

4,0

3,7

4,0

4,2
4,2

10,0%

7,5%

5,2%

kg/person

4,8
4,9

4,2
4,3

57

0,0%

47

-5,0%
-10,0%
20
-15,0%

3,7

66

Brazil

5,0%

22

23

23

2007

2008

2009

26

25

2010

2011e

34

-20,0%
2006
2006

2007
2007

2008
2008

2009
2009

2010
2010

Brazilian's thermoplastic demand (MMton)

Brazilian's thermoplastic demand (MMton)

2011
2011e

-25,0%
2006

USA

Europe

Japan

China

GDP (%)

Real appreciation
Subsidized ports PRS 72**

Source: Abiquim, Braskem, CMAI, Ipeadata and IBGE.

** Resolution Proposal of the Senate

11

Braskem is well positioned to capture emerging market potential

per-capita growth
Average Income (March 2002 = 100 basis)

Braskems sales profile: Consumer driven

207

220

2011

200
180
160

OTHERS

140
120
100
80
mar/02 jun/03

RETAIL

10%
5%

AGRIBUSINESS
set/04 dez/05 mar/07 jun/08

set/09 dez/10 Jan/12

AUTOMOTIVE

FOOD PACKAGING

30%

5%
6%

Average Income

CONSTRUCTION

14%

10%
11%

Higher income and wealth

distribution improvement stimulate
consumption demand in Brazil

Source: Abiquim, Braskem, CMAI, Ipeadata and IBGE

INDUSTRIAL

* Polyethylene, Polypropylene and Polyvinyl Chloride

9%

CONSUMER
GOODS

HYGIENE AND
CLEANING

12

Braskem: raw material diversification and higher co-products value

improving its cost position
Raw Material Profile*
Braskem 2015e 1

Braskem 2012

Braskem 2018e 2

4%

5% 16%

3%
33%
45%

1 Considering
2 Considering

Mexico Project
Comperj Project

52%
63%
78%
gas

naphtha

ethanol

*Based on ethylene capacity.

Naphtha crackers co-products

Sales volume (kton/year)

Net revenue (R$ million)

5,799
5,063
2,014

830

830

1,121

984

352

530
151

591

662

703

602

530
1,254 151
662

2006

2007

2008

2009 2006

Source: Braskem

149

332
204

Ethylene/Propylene

Butadiene

328 591

703

312 332
204
872
602

2010 2007

2011 2008

149
932

BTX

Ethylene/Propylene

2,853
352
1,084
358
1,254
1,411
2006
2009

Butadiene

3,654
3,054
1,121

984
1,472

1,931

3,077

1,202
328
342

312
725

932
1,510

872
1,457

1,361

2007
2010

2008
2011

2009

BTX

1,321

1,092

395

1,547

2,040

2,238

2010

2011
13

Innovation & Technology

Strengthening the value chain competitiveness
Structured resource base to support
Customer needs
More than 296 researchers
8 pilot plants + 24 laboratories + 2
technology centers
More than 400 patents filed worldwide

NEW DEVELOPMENTS
Polyethylene

Over R$ 390 million in R&D assets

Chamar visio neste slide

Grain bags

Water tanks

+ 5kton/y

+ 32kton/y

Geomembrane
+ 10kton/y

13% of resins revenues resulted from

new products launched in the past 3
years

PVC

Partnership with universities and R&D

centers in Brazil and abroad

Supporting the individual development of

each Customer
Boosting Customers competitiveness, while
ensuring sustainable growth
Strengthening Brazils plastics production
chain

Polypropylene

Strengthening the plastics

production chain

Roof Tiles

Windows

Building system

+ 120kton/y

+ 2kton/y

+ 30kton/y

Auto grade

Wash machine

Bags

+ 4kton/y

+ 6kton/y

+ 2kton/y
14

Government Initiatives
Supporting the competitiveness of the Brazilian Industry
Innovation Incentives:
Stimulate technological developments
Intensify industry's competitiveness in domestic and foreign markets

Government Incentives

Benefits

Exports: 3% credit on exports revenues (REINTEGRA)

Brasil Maior
Investment and
Innovation Incentives

BNDES/ FINEP*: attractive financing programs (below

Brazilian interest rate)
IPI: Warehouse goods and automotive industry: higher

product demand
Tax Benefit: between 60% to 80% of Innovation
Lei do Bem
Innovation Incentives

expenditures can reduce the companys tax base

Full depreciation and 50% IPI reduction: equipments
purchase dedicated to research

* Studies and Projects Financing - (Financiadora de Estudos e Projetos)

15

Agenda
Overview
The petrochemical industry
Braskem key differentiators
Looking forward: Accretive pipeline in the Americas
Brazil
International expansion
Renewable chemicals

Results
Priorities

16

Our strategy is based on 3 major drivers of growth

Key differentiators

Adding value to the current streams

Strategically positioned to capture the future

feedstock availability (pre-salt exploration: Comperj)

Committed to the competitiveness of the domestic

plastic chain

Brazil

International
Expansion

Sustainable
Chemicals

Expanding presence in countries with feedstock

advantage

Preferred partner to develop the industry in Latin

America

Ongoing project: Mexico Ethylene XXI

Largest biopolymer player in the world

Well positioned to capture ethanol advantage

Technological breakthrough in green: PE, PP and other

streams (under analysis)

To be the
global leader in
sustainable
chemicals,
innovating to
better serve
people

Innovation & Technology

17

Brazil
Adding value to the existing streams
PVC Expansion:
Sole integrated producer in the vinyls chain in the Brazilian market
Additional capacity of 200 kton/y in Alagoas (northeast complex) using
its current EDC surplus (intermediated product to produce PVC)
Start-up: May 2012
Construction: in the final phase. 80% of works completed
Capex of US$470 million and expected NPV of ~US$450 million
Investment to date: R$ 604 million (2010-2011)
Market-driven project: to supply the growing domestic demand of PVC
Demand increased 4% in 2011 with imports of 330kton/y
kton
21%
943
22%

1,081 25% 1,125

26%

29%

Scenario:

29%

Present
EDC
Exports

2009

2010

Producers' Domestic Sales

Future
Domestic Sales
PVC

2011
Imports

18

Brazil
Adding value to the existing streams
Butadiene Expansion:
Additional capacity of 100 kton/y in Triunfo (south complex) using its
current crude C4 surplus
Start-up: July 2012
Construction: 69% of the project completed, test phase
Capex of R$300 million
Investment to date: R$ 127 million
Product pre-sale agreements of ~R$200 million
Market-driven project: to meet the growing global demand for
butadiene
2011 prices vs. 2010 rose by 55%
Raw material for the manufacturing of rubber tires and
synthetic rubbers

Comperj
2011: conclusion of the first phase of the FEL1 (Front End Loading)
engineering process
2012: final detailing of the scope of the petrochemical project at
Comperj (FEL2), based on the definition by Petrobras of the
feedstock to be used

Scenario:

Present
Crude C4
Stream*

Future
Butadiene
100 kton/y

* Sporadic sales or return to the cracking process

2014e: definition on the development and installation of the project

and its approval by the Companys Board of Directors
19

International: Mexico
Feedstock diversification with competitive cost
Greenfield Project Ethylene XXI:
JV (65% Braskem and 35% Idesa)
Largest petrochemical complex in Mexico
World scale integrated project: 1 Mton/y of ethylene +
1Mton/y of PE

Ethylene XXI

Adding capacity to supply the local and growing market:

Current deficit: 1.1 Mton/y of PE (70% of total

demand supplied by imports)

Long term contract (20 years) with PEMEX-Gas, based on gas

price Mont Belvieu + discount

Start-up: 1st half 2015

Disbursement in 2011: R$ 191 million
Acquisition of equipment with long manufacturing
and delivery lead times was moved forward

Converters Profile
Mexico

Earthmoving works have begun

Brazil

Big; 4%

Capex of ~US$3 billion (70% debt and 30% equity)

Medium
12%

2012 Priorities:
Project Finance structuring and conclusion of the due
diligence

Small
24%

Big
27%

Micros
60%

Small
45%

Medium
28%

Starting construction of the industrial plants

Pre-marketing for Mexican clients
20

Sustainable chemicals
Strategic path forward for our Renewable Chemicals business
2nd Wave
Grow

1st Wave
Get to know the Market

Phases

We are
here

Leverage assets
and be pioneer

2010 - 2014

3rd Wave
Perpetuate

New capacities to increase

market positioning
and competitiveness

Sustainable growth to
consolidate PE and PP
Leadership

~2020

2015 - 2019

Capacity

Green
PE

200 kt Green PE
(Triunfo-RS)

Green
PP

30kt+ Green PP

Existent Technology

Technology
Improvement

Bio chemical route

Capacity

230 kt+

TBD

TBD

New capacities
Green PE
New capacity Green PP

Additional
Capacities
Bigger Capacities
Green PP

21

Green PE
Partnership with leading global companies reinforce sustainability
strategy
National and international market Leader ensure that
Braskems biopolymer adds value to their business and
sustainability strategy:

Danone
Faber-Castell
Johnson & Johnson
Estrela
Amsterdam Arena

Nestl
Natura
P&G
Chanel
Tigre

Braskem ranked as a Model Company in the 2011 Sustainability Guide by Exame

magazine

22

Agenda
Overview
The petrochemical industry
Braskem key differentiators
Looking forward: Accretive pipeline in the Americas
Brazil
International expansion
Renewable chemicals

Results
Priorities

23

2011 Highlights
Year performance
Average capacity utilization at crackers of 83%
Net revenue of R$33 billion (US$20 billion), up 19% (25%) from 2010
2011 EBITDA of R$3.7 billion, or US$2.2 billion

Power blackout
Higher supply of imported goods entering through subsidized ports + real appreciation
Capture of synergies from Quattor acquisition of R$400 million in annual and recurring EBITDA,
6% above initial expectation

Implemented in 2H12 of a program to reduce fixed costs, which neutralized the impacts from
inflation (IPCA) of 6.5%, wage increases and integration of the new assets
Partnership with Basf to supply propylene to the acrylic complex to be built in Bahia
Conclusion of 1st phase of engineering project for Comperj (FEL1)

Leadership in the U.S. polypropylene market

Braskem considered investment grade by 3 major risk-rating agencies
Dividend proposal of R$482 million
24

Uncertainties related to the global economy and imports limited

growth in the domestic resin market

Brazilian Thermoplastic Resins Market

Origin
Imports
- Resins
2011
of
Origin
of Imports
(PE+PP+PVC)

(million tons)
Others
15%

-1%

4.9

Argentina
22%

Europe
9%

North America
24%

Asia
17%

4.9

Imports accounted for

29% of domestic resin
market in 2011
Over 60% of imports
entered Brazil through
subsidized ports

Colombia
13%

Domestic Consumption growth not captured by

Brazilian industry
2010

2011 GDP

2011

2.7%
2011 Plastic goods volume 2011*
6.4%
2011 Plastic industry**
-1.5%
2011 Imports of converted plastics ***
7.5%

Source: IBGE/ Abiplast / Alice / Braskem estimates

* Brazilian demand for plastic goods (apparent consumption)

**Production from the plastic industry

***Imports volume of converted plastics

25

Attractive domestic market associated with the opportunistic

entrance through subsidized ports lead to an increase in the level of
imported material
TOTAL
DEMAND

4.2 MM ton

4.2 MM ton

4.9 MM ton

4.9 MM ton

Economic and Financial crisis - USA & Europe

Average FX

1.83

2.00

1.76

45%

51%

1.67

RESINS IMPORTS:
% through
Subsidized Ports

62%
+17%

113
7473

6767

4871
211
253

210
178
Kton 250
206

2Q10

71
64

206
234

113
67

67

86

+28%

6467

1,403

+15%
250

253
288

234
283

933
288

267

277

74

67

71

48
50
1Q1046 2Q1042 3Q1049 4Q1054 1Q11
2Q1139 3Q11
4Q11
3Q10
4Q10
1Q11 PVC2Q11
3Q11
4Q11
PE+PP
210

211

206

1Q10

2Q10

200

199

212

225

198

226

350

353

283

277

811267

401

1,197
284

199
3Q09

73
86

64%

323

320

73

67

250

253

234

3Q10

4Q10

1Q11

299

113
86

67

64

4Q09

PVC

153

158

150

158

175

159

178

1Q08

2Q08

3Q08

4Q08

1Q09

2Q09

3Q09

4Q09

PE+PP

267

288

283

2Q11

3Q11

4Q11

PVC

PVC: net importer market

Higher imports of manufactured products have impacted resins market

26

EBITDA Performance 2011 vs. 2010

The lower sales volume and BRL appreciation were partially
R$ million

offset by the better performance of basic petrochemicals and

the reduction in expenses.
FX impact
on costs

1,355
FX impact

(1,687) on revenue

4,055

136

221

3,742

Fixed Costs +
SG&A + Others

EBITDA
2011

( 338 )
( 332)

EBITDA
2010

Volume

Contribution
Margin

FX

27

Synergies from Quattor acquisition

In 2011, synergies amounted to R$400* million, 6% above the estimate of R$ 377 million
Synergies breakdown

Income statement breakdown

R$ million

R$ million

65

124

67
277

400

400

268
115
Industrial

Logistics

Supply

EBITDA Synergies

Revenue

COGS

SG&A + Fixed Costs

EBITDA Synergies

Full synergies of R$495 million in annual and recurring EBITDA should be captured in 2012

Better planning of export activities

Reduction in the number of grades

Integrated acquisition of feedstocks, such as naphtha and propylene

Better integrated planning of petrochemical complexes and 2nd generation plants (thermoplastic
resins)

Source: Braskem

* Annual and recurring

28

Strategy to lengthen debt profile and strong commitment to

maintaining liquidity
Gross Debt
by Category
Diversified
funding
sources
Brazilian and
Foreign Gov.
Entities
23%

Amortization Schedule(1)
(R$ million)
12/31/2011
Capital
Market
40%

*
1,125

22%

21%

Banks
37%

823
4,317
9%

8%

2,369
1,403

1,293

Dvida
Net Debt
Lquida
/ EBITDA
/ EBITDA

12%

12%
3,192

7%

3,295

8%

(US$(US$)
milhes)(US$)
Net Debt/EBITDA

3,221

Sep 11

1,908

1,822
1,134

2.32x
+22%

1,214

Dec 11
12/31/11
Cash

2012

2013

Invested in US$
Invested in R$

2014

2015

2016

2017/
2018

2019/
2020

(1)

2021
onwards

Does not include transaction costs

* US$600 million stand by

2.83x

Dvida
Net Debt
Lquida
/ EBITDA
/ EBITDA

Corporate Credit
Rating
Global Scale
(US$
(R$)
milhes)
Sep 11 Rating
Risk Agency

Outlook2.62x Reviewed on
+22%

Fitch

Braskems high liquidity ensures its cash and cash equivalents

cover the payment of obligations maturing over next 29 months

Considers US$600 million in stand-by loans

BBB-

Stable

S&P

BBB-

Stable

03/30/2011

Moodys

Baa3

Stable

03/31/2011

Dec 11

11/01/2011

3.20x

29

Natural Hedge: US dollar linked cash flow leads to a net debt ~70%
dollar-pegged
Braskem prices follow the international market:

100% of Revenues is linked to dollar...

... as well as approximately 80% of Costs

100 Basis:
1Q08

COGS 2011 (1)

120

Partially
dollar-pegged

100
80

60
40
20
0
1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11

International Resins Prices US$

Braskem Resins Prices US$

Braskem Financial Policy

Considering that operating cash flow is strongly correlated to the U.S. dollar:

Deprec / Amort Freight

3.7%
Others 6.3%
0.9%
Services
1.7%
Labor
3.2%
Other Variable
Costs
7.6%
Electric Energy
3.2%

Naphtha
48.6%

Natural Gas
2.6%

Gas as feedstock
22.2%

Totally dollarpegged

(1) Does not include naphtha resale and Quantiq costs

Short Term: The maintenance of minimum cash or hedge in U.S. dollar

should be sufficient to cover (i) the operating exposure (operating cash flow)
in U.S. dollar estimated for at least the next 6 months, and (ii) debt (principal
and interest) in U.S. dollar maturing within the next 12 months.
Long Term: Braskem must maintain a percentage of at least 50% of its net
debt denominated in U.S. dollar.
30

Capex
Investments totaled R$2.1 billion in 2011

Expected x Actual Investments

(R$ million)

R$ million
78
289

1,644

2,078
191

(36)

151

1,712

207
260

102

89
142

113
696

243

Mexico
HSE

145
Equipment Replacement
512

407

Capacity Increase - Brazil

469
343

391
94
278

84

35

280

305

Maintenance
Productivity
Others

Investments
2011e

Mexico

Capacity
Equipment
Increase - Brazil Replacement

Maintenance
Shutdown

Others*

Investments
2011

Investments
2012e

*Includes HSE, Productivity and Others investments

Main deviations from initially announced 2011 Capex:

Investments in Ethylene XXI - Mexico project due to the moving forward of earthmoving works and the advances made to
acquire equipment with long manufacturing and delivery lead-times;

Acceleration of PVC and Butadiene capacity expansion projects, in line with the Companys strategy to add value to existing
streams;

Higher spending on maintenance, due to the unscheduled shutdowns at plants in the Northeast and the moving forward of
the scheduled shutdown on one of the lines at Camaari.
31

Agenda
Successful trajectory of growth
The petrochemical industry
Braskem key differentiators
Looking forward: Accretive pipeline in the Americas
Brazil
International expansion
Renewable chemicals

Results
Priorities

32

Short-term scenario still challenging

Points of Concern
Volatility in naphtha and oil prices
Lack of clear strategy for tackling Europes sovereign debt crisis
and its impacts on world economic growth demand for
petrochemicals

Lengthy solution for subsidized ports problems

Potential Positive Factors
Scheduled shutdowns in USA and Asia
Positive signs from U.S. economy
Higher economic importance of emerging countries
- Growing demand for high value added products
plastics

Limited addition of new capacities in 2012 and

restocking trend in chain could lead to a recovery
in petrochemical spreads
Government
committed
to
increasing
the
competitiveness of Brazilian industrial producers
- Brasil Maior Plan (Reintegra)
- Combating imports
- Measures to control excessive BRL appreciation
Source: CMAI, Analyst reports

33

2012 Braskems priorities

Strengthening of the partnership with Clients and market share expansion
Ending of the VAT tax incentive (subsidized ports) and development of a Brazilian industrial policy
that reinforces the competitiveness of the national petrochemical and plastics chain
Expansion of Braskems competitiveness by capturing identified synergies, reducing fixed costs and
maximizing operating efficiency
Ensuring delivery of expansion projects on-time and on-cost, adding value to existing streams:
PVC (May/12) and Butadiene (July/12)
Finalizing project finance structure and advancing construction of Mexican greenfield project, with
startup expected in 2015

Further progress on engineering studies for Comperj (FEL2) and feedstock definition
Increasing Braskems leadership in renewable chemical
Maintaining liquidity and financial health in a scenario of global crisis
34

Meeting with Investors

March, 2012

Appendix

Braskem
Corporate Governance Principles
- Conglomerate;

- World leader in
E&P in deep
waters;

Minority
Shareholders

- More than 30-years

in the petrochemical
industry;
- Investment Grade by
Moodys and Fitch.

50.1% / 38.1%

0.0% / 5.5%

2.9% / 20.1%

47.0% / 36.0%

Voting Shares / Total Shares

- Present in the
industry as
investor, supplier
and client;

Governance

- Investment Grade
by all 3 Rating
Agencies.

Odebrecht as the controlling shareholder reinforces Braskems condition as a listed privately-owned company

Rules for choosing the CEO and Directors

Odebrecht appoints the Chairman, the CEO and the CFO;

Petrobras appoints the Vice-Chairman, as well as three options for Portfolio & Investment Director, one
to be selected by the CEO;

All the positions will be filled by highly qualified professionals with recognized competency for the
position.

Braskem Executive Directors in charge of operational issues and Companys Business Plan which shall be
approved by the Board

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.

37

Thermoplastic resins capacity Global ranking

Global capacity (kty)
10,664

10,616

930

9,472
5,696

4,659

2,150

6th

9,023
351

8,289

8th

7,680

7,544

710

2,904

6,490
3,169

1,729

3,935
7,322
5,075

4,920

8,289
2,273

5,768
3,035

SINOPEC

LyondellBasell

Exxon Mobil

1,705

SABIC

DOW

2,102

Braskem

Formosa

6,430
510

5,792

2,885

2,968

PVC
4,774

PP

2,715

PE

3,056

3,035

2,824

2,059

Ineos

Braskem w/ PP
Dow e w/ PVC
Expansion

PetroChina

Total PC

Americas capacity (kty)

1st
7,135

710

3,390

6,430
510
2,885

5,157

4,641

1,230

4,436
1,911

3,035

3,035

3,927

PVC
3,302

1,376

4,641
2,525

863

2,640
2,640

PP

2,292
2,292

1,063
Braskem

Source: CMAI, Braskem

Braskem w/ PP
Dow e w/ PVC
Expansion

Exxon Mobil

DOW

LyondellBasell

Formosa

Shin-Etsu

Chevron Phillips

1,741
815

1,620
440

926

1,180

Ineos

Total

PE

38

Global Ethylene and Resins supply/demand

Global Ethylene Supply/Demand (Mton/y)
154

131

125

2011e

137

2012e

2013e

176

171

166

162

158

143

2014e

Supply

150

2015e

156

2016e

Demand

Global Resins Supply (Mton/y)

Global Resins Demand (Mton/y)

CAGR 11-16
2.5%

CAGR 11-16
3.2%

234

240

248

224

57

55

57

54

56

63

66

69

93

95

99

105

108

113

2011e

2012e

2013e

2014e

2015e

2016e

214

207
51

PE
Source: CMAI, Mar 2012

76

73

PP

PVC

* Compounded Annual Growth Rate

78

189

206

179

198

171

43

36

38

41

44

40
56

59

65

53

62

51
76

80

84

89

93

97

2011e

2012e

2013e

2014e

2015e

2016e

163

PE

PP

PVC
39

Resins demand by region

Resins (PE, PP, PVC) Demand by region

2012e
China; 22%

2016e
North America;
17%

North America;
16%

China; 24%

South America;
5%

South America;
5%

Europe; 17%

Asia ex-China;
22%

Europe; 18%

Africa; 3%

Middle East;
12%

Asia ex-China;
22%

Africa; 3%

Middle East;
13%

According to CMAI the Brazilian demand for resins will represent 3% of global
demand in 2012

Source: CMAI 2011 estimates

40

Origin of Imports 2011

PVC

PE + PP
Others
2%

Others
21%

Europe
12%

Asia
15%

Asia
18%
Argentina
20%
North America
26%

Colombia
3%

Colombia
35%

Europe
2%

Argentina
26%

North America
20%

Polyolefins (PE and PP) and PVC

imports accounted for 29% of the
domestic market

Source: Abiquim, Braskem

41

Revenues breakdown

2011 Revenues
R$ 33,2 billion

7%
13%
38%

10%

26%

Polyolefins

Vinyls

Basic Petrochemicals

5%

International Business

Resale

Others + Quantiq

42

International sales Breakdown 2011

International sales ex-Resale (R$ 9,3bi)

Others
13%

Polyolefins
37%
International
Business
34%

BTX
9%

Ethylene +
Propylene; 4%
Butadiene; 3%

The Export Market (ex-resale) represents 30% of Companys Net Revenue

Source: Braskem

43

Polymers Export 2011

Polymers Export by region (R$3.7 bi)
Asia
23%

Africa
6%

North America
2%
Central America
1%

Europe
25%

South America
43%

Qualified
Sales
44

EBITDA Performance 4Q11 vs. 3Q11

EBITDA impacted mainly by the decrease in contribution margin
R$ million

caused by the lower spreads in international markets, which

were partially offset by lower expenses.

FX impact
on costs

785
940
( 58 )

(723)

FX impact
on revenue

119

718

Fixed Costs +
SG&A + Others

EBITDA
4Q11

62
(345 )

EBITDA
3Q11

Volume

Contribution
Margin

FX

45

Net Financial Result

R$ million

4Q11

3Q11

2011

2010

Net Revenues

8,710

8,686

33,176

27,829

718

940

3,742

4,055

(607)

(2.064)

(2,805)

(1,618)

Foreign Exchange Variation (FX)

(210)

(1.620)

(1,237)

405

Monetary Variation (MV)

(60)

(65)

(242)

(355)

(337)

(379)

(1,326)

(1,668)

FX Rate - final

1.88

1.85

1.88

1.67

Monetary Variation

+1.2%

+18.8%

+12.6%

-4.3%

EBITDA
Net Financial Result

Net Financial Result Excluding FX

and MV

46

Debt Market: Successful transactions guarantee a good portfolio of

outstanding bonds
Outstanding Bonds

Re-Opening of Braskem 5.75% Notes due in 2021

Outstanding Bonds

Maturity

Coupon
(% p.a.)

Yield **
(% p.a.)

US$84.3 million*

Jan/2014

11.750

2.866

US$65.3 million*

Jun/2015

9.375

4.072

US$130.7 million*

Jan/2017

8.000

5.239

US$500 million

Jun/2018

7.250

4.679

US$750 million

May/2020

7.000

5.067

US$500 million

Jul/2041

7.125

7.062

US$750 million +
US$250 million Retap

Apr/2021

5.750

5.026

Corporate Bond Year-to-Date (10 bps)

US$450 million +
US$250 million Retap

Perpetual

7.375

7.252

Re-Opening of Braskem 7.375% Perpetual Bonds

* Post Tender Offer expired in April, 20th

** Mid. As of Mar, 20th

Pricing Day: January 26th, 2012

Amount: US$250 million
Coupon: 5.750%
Yield: 5.750%

Transaction Highlights:
US$2.3 billion in demand from over 185 accounts. The transaction
was oversubscribed 9.2x
Re-opening executed at a yield 25 bps lower than the original
transaction

Lowest New Issue Concession for an Emerging Market

Pricing Day: February 9th, 2012

Amount: US$250 million
Coupon: 7.375%
Yield: 7.345%

Transaction Highlights:
US$1.6 billion in demand from over 150 accounts. The transaction
was oversubscribed 6.5x
Priced at 100.375% face value

Source: Bloomberg and Citibank

47

Covenants

Net Debt/ EBITDA

(US$ million)

Net Debt / EBITDA

(R$ million)

+22%

2.32x

Sep 11

+22%
3.20x

2.83x

2.62x

Dec 11

Sep 11

Dec 11

Facility

Amount in
Dec 11

Currency

Type

Contract
Date

Nippon Export and

Investment Insurance

US$14 MM

US$

Maintenance

Mar and
Sep/2005

Nippon Export and

Investment Insurance

US$200 MM

US$

Maintenance

Mar/2011

*The company is prevented from issuing any new debt for the period if it overcomes the 4.5x Net debt / EBITDA ratio.

Source: Braskem

48

 On July 27, Braskem acquired Dows

Polypropylene (PP) business,
expanding its PP capacity by 1,050
ktons/years
Braskem will pay US$323 million for
the business

1st

PP Capacity in the
U S market (kton/y)

Transaction:

PP Capacity in the
U S market (kton/y)

Acquisition of Dows Polypropylene Business

1,425

Leader in U.S. PP market, one of the worlds largest

PP consumers
Geographic diversification and global expansion of
industrial operations
Portfolio of complementary products

Focus on higher value-added products (co-polymers)

Access to U.S. propylene distribution chain

1,230

1,422

4th
1,180
1,230

920
1,180

4th
863
920

815
863

815

447

Braskem
Post
Transaction

Benefits and strategic drivers:

st
11,422

1,425

Lyondell
Basell

Braskem
Post
Transaction

Exxon
Mobil
Lyondell
Corp.
Basell

Total
Exxon
Mobil
Corp.

Braskem
Total

Formosa
Group

Braskem

Ineos
Formosa
Group

Conoco
Phillips

Ineos

Con
Ph

Value creation through potential synergies with the

current business

NPV near US$140 million

Greater presence in the European market

Proximity to new clients

Support to global leadership in biopolymers

PP is one of the worlds faster growing

thermoplastic resins
Fragmented markets in U.S. and Europe - potential
for future consolidation
49

Acquisition of Dow PP Business: Assets Profile

Wesseling, Germany
Capacity: 225 kty
Start-up year: 1998
Technology: SPHERIPOL

Freeport, Texas
Capacity: 320 kty
Start-up year: 2001
Technology: SPHERIPOL

Propylene

Long-term
propylene
contracts

505 kty

545 kty

Propylene

Seadrift, Texas
Capacity: 185 kty
Start-up year: 1985
Technology: UNIPOL

Schkopau, Germany
Capacity: 320 kty
Start-up year: 1991
Technology: UNIPOL

Merchant market
(synergy
opportunity)

Sources: Dow, CMAI

50

Braskem synergies with Dow PP business acquisition

Components of Synergies

Annual run-rate
synergies
between US$ 1820 million

Timeframe of
capturing the
synergies to be
disclosed after
closing the deal

NPV of synergies
expected to be around
$140MM

Portfolio
Optimization

Portfolio
optimization
and product
mix savings

Industrial

Quality &
reliability
improvements
at US assets

Procurement

Raw material
optimization

Logistics / Supply
Chain

Product
wheel in NA
& railcar
optimization

1-Time Costs

TOTAL

IT, closing
costs and
integration
costs *
51