Presentation braskem day - nyse

New YorkNew YorkOctoberOctober 2323rdrd, 2006, 2006

JosJoséé Carlos GrubisichCarlos Grubisich

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DisclaimerForward looking statementsDisclaimerForward 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 on

which they are made (June 30, 2006), 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.

SustainabilitySustainability

Competitive PositioningCompetitive Positioning

Business StrategyBusiness Strategy

Growth with Value CreationGrowth with Value Creation

Sustainability

Competitive PositioningCompetitive Positioning

Business Strategy

Growth with Value Creation

5

Braskem’s key figuresLargest petrochemical company in Latin AmericaBraskem’s key figuresLargest petrochemical company in Latin America

Gross Revenue*

US$ 6.5 biUS$ 6.5 bi

* Last twelve months (LTM) as of June 30, 2006

Ebitda*

US$ 660 miUS$ 660 mi

Total Assets

US$ 7 biUS$ 7 bi

Net Debt / Ebitda*

2.97 x2.97 x

Debt / Equity

57 / 4357 / 43

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US$ millionGross Revenue

Braskem’s key figuresSignificant and consistent improvementBraskem’s key figuresSignificant and consistent improvement

Source: Braskem

US$ millionEBITDA

2002

3,013

2003

3,688

2004

4,900

2005

6,252

28%CAGR

2002

457

2003

581

2004

871

2005

851

23%CAGR

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33rdrd generationgenerationExtractionExtraction 11stst generationgeneration 22ndnd generationgeneration11stst generationgeneration 22ndnd generationgenerationExtraction 3rd generation

COMPETITIVE INTEGRATION

Value AddedValue Added

CompetitivenessCompetitiveness

Braskem’s key strategic driversSolid business model based on competitive integration in the value chain

Braskem’s key strategic driversSolid business model based on competitive integration in the value chain

#1 #1 PetrochemicalPetrochemicalCompany in Company in LatinLatin

AmericaAmerica

MarketMarketLeadershipLeadership

Integrationwith Scale

Integrationwith Scale

Cost Cost CompetitivenessCompetitiveness

Know-HowKnow-How

TechnologicalTechnologicalAutonomyAutonomy

NaphthaNaphtha

CondensateCondensate

Thermoplastic resins Plastic ConvertersRaw materials Basic petrochemicals

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Market leadership in the region as a key driver for Value CreationStrengthened with the acquisition of Politeno

Market leadership in the region as a key driver for Value CreationStrengthened with the acquisition of Politeno

Market-Share in Brazil – 1H06

Source: Braskem 1H06

%PVC

%PP

%PE After the acquisition

%PE Before the acquisition

BRASKEM

IMPORTS

OTHERS

18%

52%30%

39%

17%44%

7%

39%54%

7%

51%42%

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Cost Competitiveness as a key driver for value creation Largest Producer in the regionCost Competitiveness as a key driver for value creation Largest Producer in the region

6.1 MM tons in total annual capacity of petrochemical and chemical products

Source: CMAI and Braskem 2006

Ethylene

PVC

PE

PP

1,135

Copesul1

520

540

1,060

Rio Polímeros

550

150

700

Ipiranga

500

130

630

Unipar / PQU

85

476

561

Solvay

685

Suzano

000 tons / yearProduction Capacity

1. Braskem jointly controls Copesul with the Ipiranga Group

Braskem

1,280

1,230

580

515

3,605

700

700

1,400

Dow Triunfo

160

10

Captured by June, 2006

297

Operational reliability

Variable Cost

Utilities Production

Raw Material Yield

Fixed Cost

29%

28%

19%

12%

7%

5%

Target

420

Note: Annualized and recurring basis

Cost Competitiveness as a key driver for value creation Increased Efficiency and productivity with Braskem +Cost Competitiveness as a key driver for value creation Increased Efficiency and productivity with Braskem +

R$ MM / year

Others

R$ 359 million gains already captured by Sept’06.

Remaining initiatives under implementation could lead to the conclusion of the project one year

ahead of schedule.

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A new integrated management system encompassing all business processes

Cost Competitiveness as a key driver for Value Creation More streamlined operations with Fórmula BraskemCost Competitiveness as a key driver for Value Creation More streamlined operations with Fórmula Braskem

R$ 130 million invested in the project

Successfully implemented in October 2006

Expected NPV of R$ 260 million

Commercial Supply Chain

Maintenance Financial

28%

Operations Projects

23%19%

16%

8%6%

Expected Savings

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Technology as a key driver for value creationKnow-how and competencies leveraging Braskem’s differentiation in the value chain

Technology as a key driver for value creationKnow-how and competencies leveraging Braskem’s differentiation in the value chain

US$ 158 million in assets

171 researchers

141 patent registrations filed

7 pilot plants

Global technology agreement with BASELL

US$ 25 million of value created with technology supplied to Petroquímica Paulínia

11% of the resins sold in 2005 were launched in the last two years

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Higher Value Added PlasticPlastic is increasingly replacing other materials

Recently developed special resins

Technology as a key driver for value creationNew markets and products developed in partnership with ClientsTechnology as a key driver for value creationNew markets and products developed in partnership with Clients

Substitution of glass by polyethylene in the cream cheese bowls

Replacement of polystyrene by polypropylene in small cups for coffee

Asbestos substitution in concrete reinforcement for roof tiles

Thermoplastics liners (UHMWHDPE) for trucks

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Technology as a key driver for value creationNew frontiers of developmentTechnology as a key driver for value creationNew frontiers of development

Nanotechnology– 1st Brazilian Petrochemical company to file a patent

– 3 patents already filed

– 1st product to be launched in November 2006: new PP grade

Green Polymer– Manufacturing of resins based on renewable sources of raw material (sugar

cane)

– Technology to convert Ethanol into Ethylene and propylene already in place

– Biopolymer: biodegradable green polymer

Sustainability

Competitive Positioning

Business StrategyBusiness Strategy


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Our Strategic Intent Growth with value creationOur Strategic Intent Growth with value creation

2012

2002

To rank amongst the TOP 10 global petrochemical

companies in market capitalizationTo become

Latin America’s leaderin thermoplastic resins

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Growth with value creationGrowth with value creation

Strengthen market leadership in Brazil through consolidation in the local market, capturing synergies

Expand production and sales outside of South America, capturing value and creating a growth platform for the future

Organic GrowthOrganic Growth

Selective GrowthSelective GrowthEnhancement of the Enhancement of the Aromatics Chain Aromatics Chain

InternationalizationInternationalization

Value Creation

Consolidate market position in key products in Latin America and guarantee competitive sources of raw material

Leverage aromatics production chain by broadening its portfolio of products and services in the local market

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Source: Abiquim

Organic GrowthDynamic and fast growing domestic marketOrganic GrowthDynamic and fast growing domestic market

PE PVC PP Resins

+12%

+7%

+18%

+13%

Consumption growth in BrazilPolyethylene, Polypropylene and PVC

Strong increase in domestic consumption in 2006

Ton (000) 3,436

2005

1,601

1993

3,156

2002

2,834

1999

7%CAGR

8M06 Compared to 8M05

2,293

1996

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Merger of Polialden into Braskem– Approved on May 31, 2006, it completed the integration process

that was originally designed when Braskem was created

Politeno’s Acquisition– Over US$ 100 million in estimated synergies

– Main advantages for Braskem• 80% ethylene integration in the Camaçari complex

• 360 K tons additional production capacity for PE

• A complementary portfolio of products and customer base

Braskem is prepared to play an active role in the consolidation Braskem is prepared to play an active role in the consolidation of the of the petrochemical sector in Brazilpetrochemical sector in Brazil

Organic GrowthConsolidation as an opportunity for value creationOrganic GrowthConsolidation as an opportunity for value creation

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Organic GrowthIncreasing PP capacity using competitive raw materialOrganic GrowthIncreasing PP capacity using competitive raw material

Petroquímica Paulínia

– JV with Petrobras

– Total investment of U$ 310 million

– Additional Capacity• +350 k ton / year

– Location• Paulínia, State of São Paulo

– Provisional environmental license recently obtained

– Start-up in 1Q08

Source: Braskem (2006)

PaulíniaPaulínia

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Organic Growth700 k ton of potential capacity additionsOrganic Growth700 k ton of potential capacity additions

Projects being considered for future implementation:

– DBN

– Greenfield


BahiaBahia

AlagoasAlagoas

PVC +150 k ton / year

PE +100 k ton / year

Ethylene +150 k ton / year

PP Bahia +300 k ton / year

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Selective Growth Ensuring access to competitive feedstockSelective Growth Ensuring access to competitive feedstock

Jose Olefins Complex*– MOU signed with Pequiven (April, 2006);– Estimated investments between US$ 1.5

and US$ 2.5 billion– 1.2 million tons/year natural gas-based

cracker, integrated with the production of polyethylene and other second generation products

– Mobilization of a working group for the project with the start up of a branch office in Venezuela

PP Plant in El Tablazo*– JV with Pequiven– Production capacity of 400 kton / year– Investments of US$ 370 million

* To be presented to the Board

Venezuela

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Selective GrowthA new competitive integrated Petrochemical Complex in VenezuelaSelective GrowthA new competitive integrated Petrochemical Complex in Venezuela

Our project will leverage on infrastructure already available in the Jose Industrial Complex

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Enhancement of aromatic chainAdding value through existing production streamsEnhancement of aromatic chainAdding value through existing production streams

Isoprene debottlenecking(November 2006)– Investment: US$ 29 Million– Additional Capacity: + 9 k ton / year (+50%)– Rate of Return: 49%– Location: Camaçari, State of Bahia

Paraxylene capacity increase, combined with a potential downstream project to produce PTA

ETBE production as an alternative to MTBE


BahiaBahia

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InternationalizationStrengthening our presence in key international marketsInternationalizationStrengthening our presence in key international markets

ArgentinaBuenos Aires

VenezuelaCaracas

EuropeRotterdam

USADelaware Asia*

Shanghai

Closer relationship with international customers

Direct sales through local distribution

Export margins increase

Exports surpassUS$ 1 billion

* Future

% of net revenue

415

617710

959

2002 2003 2004 2005 2006e

~1,200

1H1H613613

23%23% 25%25% 19%19% 20%20% 24%24%

1H061H06

US$ million

30%CAGR

SustainabilitySustainability


Business Strategy


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High levels of Corporate GovernanceHigh levels of Corporate Governance

Level 1 Company in BOVESPA with commitment to migrate to Level 2

100% tag-along rights

SOx Early Adopter - June 2006

Code of Conduct: sets values, principles and practices governing corporate behavior

Pre-established corporate policies:– Trading of securities– Financial management – Insurance and Guarantees– Health, Safety and Environment

Four independent members at the Board

Existing committees– Enhanced Fiscal Council– Finance & Investment– People & Organization– Strategy & Communication

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Braskem’s Human CapitalOver 3,000 employees proud of their workplaceBraskem’s Human CapitalOver 3,000 employees proud of their workplace

Strong Culture values– Transparent communication– Self-development– Entrepreneurship– Results driven approach– Profit Sharing

Talent atraction & retention – Trainee Program: 26 trainees in 2006 and 24 in 2005. Latest selection included over 18,000

candidates– Internship Program: 94 interns in 2006 and 100 in 2005. Latest selection included over 12,000

people

MBA Braskem: 70 leaders post graduated in a program developed in partnership with Fundação Getúlio Vargas (SP) focused on the petrochemical business

One of the best places to work in BrazilOne of the best places to work in Brazil((ExameExame –– Brazilian magazine)Brazilian magazine)

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Social responsibilityStrong commitment with surrounding communitiesSocial responsibilityStrong commitment with surrounding communities

Corporate Responsibility– Braskem is committed to the well being of its

surrounding communities through a number of programs directed towards

• Environmental education• Social inclusion• Cultural promotion

Braskem follows the guidelines from:– ILO (International Labor Organization)– OECD (Organization for Economic Co-Operation

and Development)– UN’s Global Compact and the UN Millennium

Development Goals

Investments of R$ 10 million in social projects in 2005

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Environmental Responsibility1st Brazilian company to sign the “International Statement of Cleaner Production”

Environmental Responsibility1st Brazilian company to sign the “International Statement of Cleaner Production”

Safety performance in line with the best petrochemical companies worldwide– 0.3 accident with lost workday per million man hour– 1.1 accident with/without lost workday per million man hour

All industrial plants are ISO 14001 certified

Continuous improvement in environmental performance – 2% reduction in water consumption

(~ to the consumption of 12,000 people per year)

– 11% reduction in liquid effluents (~ to the sewage of 33,000 people per year)

– 13% reduction in industrial waste (~ to the garbage of 21,000 people per year)

Sustainability


Business Strategy

Growth with Value CreationGrowth with Value Creation

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Commitment to Grow with Value CreationCommitment to Grow with Value Creation

Market leadership in the region for PE, PP and PVC: Organic Growth and Consolidation

Strong growth potential over the next 5 years: from 6 to 9 million tons production capacity, which includes doubling resins from 2.3 to 4.7 million tons

Greenfield projects in the region aimed at securing access to competitive feedstock: Selective Growth

Solid financial structure coupled with Capital Discipline: Capital Expenditures in line with depreciation and amortization

Additional cash generation through competitiveness improvement programs:

Innovation and technology as a key value driver

100% tag along to all shareholders and high standards of corporate governance

Social and environmental responsibilitySocial and environmental responsibility

New YorkNew YorkOctoberOctober 2323rdrd, 2006, 2006

JosJoséé Carlos GrubisichCarlos Grubisich