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 on which
they are made (March 31, 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.
2
3. Agenda
Plastic and the Petrochemical industry in Brazil
Braskem: World class Brazilian petrochemical
Value Creation to Shareholders
3
4. The History of Plastic
1839 Charles Goodyear discovers the vulcanization of rubber from latex
1862 Parkes presents its first products made of Parkesine – a compound
made of pulp nitrate, naphthalene and camphor.
(eg. pool ball)
1872 The discovery of PVC through the polimerization of vinyl cloride
catalized by sun light
1909 L. H. Baekeland announces the discoverty of a phenol resin
and registers the patent as Baquelite: first synthetic polymer.
4
5. The History of Plastic
1920 In the USA, Ford uses compounds made of phenolic resins
with fabric to produce car parts.
1937 Low density polyethylene was discovered, as a powder,
in England.
1954 G. Natta prepares isostatic polypropylene to be produced
by Montecatini in Ferrara (Italy) in 1957.
1954 High density polyethylene was created by Professor Ziegler
at Philips Petroleum.
1964 The copolymers of ethyl-acetate of vinyl (EVA) were
developped for sale.
5
6. The market for plastics
Pharmaceutical Food and Beverage
Hygiene and Cleaning
Textiles
Agribusiness Consumption Goods
Automotive White Goods
6
7. Petrochemical industry in South America
Braskem – Consolidated as the largest producer in the region
Regional Capacity 000 tons / year
6.1 million tons in total annual capacity of
chemical and petrochemical products
3,615
515 PVC
PP
580
PE
Eteno
1,230
1,400
1,135
700 1,060
670
630 625 561
1,280 540
150 130
700
520 520 500 476
85
Braskem Dow Copesul1 Rio Polímeros2 Ipiranga PQU / Unipar Suzano Solvay
1. Braskem controls Copesul together with the Ipiranga Group
2. Jointly controlled by Suzano, Unipar, Petroquisa and BNDES
Source: CMAI and Braskem 7
8. Agenda
Plastic and the Petrochemical industry in Brazil
Braskem: World class Brazilian petrochemical
Value Creation to Shareholders
8
9. Current Ownership (*)
Free-Float above 50%
ODEBRECHT NORQUISA PETROQUISA FREE FLOAT
48.6% 30.5% 25.4% 9.1% 10.0% 8.4% 16.0% 51.9%
29.5% 29.5% 100.0% 63.7% 100.0% 96.1%
POLIALDEN
% Voting Capital % Total Capital
Investments in affiliated companies
Controlling Shareholder
* On April 31, 2006
Source: Braskem 9
10. Strong platform for growth
A new approach to the Brazilian petrochemical sector
Oil exploration 1st Generation 2nd Generation 3rd Generation
Naphtha and Condensate Competitiveness
INTEGRATION
New dynamics in the value chain
10
11. Sales Diversification at Braskem
Market segmentation for Braskem’s resins in 2005
% of Revenues Perspectives for 2006:
OTHERS*
16%
Lingering of global economic
growth, led by China and India
COSMETICS AND FOOD AND BEVERAGES
PHARMACEUTICALS 33%
5% In Brazil:
AGRICULTURE
7% Gradual reduction in interest rates
Increase in public investments in
RETAIL infrastructure
9% Probable domestic demand boost
coupled with higher expected GDP
CONSUMER GOODS growth
CIVIL CONSTRUCTION
15% Increase in disposable income
15%
* Includes personal hygiene, infrastructure, electronics, auto parts and others
Source: Braskem and FIERGS/CEPAL 11
12. Braskem is the Market Leader
Strengthened with the acquisition of Politeno
Market-Share (Brazil) 2005
PVC PE (After the acquisition)
28%
36%
46%
55%
17% 18%
Braskem
Imports
PP Others
PE (Before the acquisition)
30%
42%
49% 52%
18%
9%
Source: Braskem 12
13. 1Q06 Highlights
Accumulated results for the last twelve months
R$ million
Net Revenues Net Income EBITDA
-7% -33% -33%
11,978 887 2,708
11,169
593 1,803
1Q05 1Q06 1Q05 1Q06 1Q05 1Q06
Impacts on EBITDA and CoGS – 1Q05 x 1Q06 R$ million
EBITDA CoGS
68 277
319
1,256 (70) 1,242
688
(457) 400 (221)
(111)
(107)
1Q O thers Raw FX Volu 1Q 1Q05 Price Volu 1Q06
FX
05 Price materials me 06 13
14. Revenue in constant growth
Challenging current scenario due to strong R$
Gross Revenue R$ million Gross Revenue US$ million
14,342 15,193 6,252
11,284 4,900
8,858 3,688
3,013
20% CAGR
28% CAGR
2002 2003 2004 2005 2002 2003 2004 2005
Net Revenue R$ million Net Revenue US$ million
11,607
11,044 4,775
9,191 3,771
6,991 3,008
2,375
18% CAGR
26% CAGR
2002 2003 2004 2005 2002 2003 2004 2005
Source: Braskem 14
15. Debt Profile
16 years of average debt maturity (April) and reduction in FX exposure
Net Debt (US$ MM) Net Debt / Ebitda* Types of Financing
TJLP
+12% +21% 24% CDI
28%
1,454 1,628
1.97 Pré
240 1.63
243 1%
40% Trade
1,211 1,388 1.67
1.36 Finance
US$
47%
7%
Dec 2005 Mar 2006 Dec 2005 Mar 2006
CVM 408 *LTM – last twelve months
Amortization Schedule R$ million
2,109
31%
810 Gross Debt
23% R$ 5,646 million
(em R$) 1,033*
19%
1,299 12% Average Maturity
8% 1,293
(em US$) 7% 9.3 years
1,103
666 726 444 381
03/31/2006 2006 2007 2008 2009 2010 2011...
Cash and cash 9 months
*Subordinated debentures, with payment of interest and principal scheduled for July 2007, fully
equivalents subscribed by the controlling shareholder
Source: Braskem 15
16. High levels of Corporate Governance
A Level 1 Company in BOVESPA since February 13th, 2003
Intention to move up to BOVESPA’s Level 2, in 2005
100% tag-along rights - in case of transfer of control - for all shareholders and
all classes of shares
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
Compliance with SOx by Dec 2005
Qualified, motivated and experienced
management
16
17. Braskem
Aiming at Sustainable Development
ECONOMICS
To ensure operational excellency and to develop Sustainable Products, using minimum natural
resources and competitive raw materials. To properly divulge to the interested parties and to
develop strategic alliances.
SOCIAL
To be recognized as a transformation agent in environmental awareness, in the development of
self-sustainable communities and in the creation of social responsible products. To promote quality
of life inside and outside of the company.
ENVIRONMENTAL
To be a reference in sustainable development through eco-efficiency, in the use of clean tecnologies
and in the use of renewable raw materials, by promoting environmental education and
influencing the production chain as a whole.
17
18. Social responsibility
Corporate Responsibility
Braskem is committed to the well being of its
surrounding communities through a number of
programs directed towards
Environmental education
Recycling of plastic waste
Social and cultural inclusion
First Brazilian company to sign the “International
Statement of Cleaner Production”, a United Nations
initiative in Environmental Protection
18
19. Safety and Environmental Concern
Safety performance in line with the best
petrochemical companies worldwide
All industrial plants are ISO 14001 certified
Continuous improvement in environmental
performance
6% reduction in water consumption
(~ to the consumption of 12,000 people per year)
27% reduction in liquid effluents
(~ to the sewage of 33,000 people per year)
39% reduction in industrial waste
(~ to the garbage of 21,000 people per year)
19
20. Agenda
Plastic and the Petrochemical industry in Brazil
Braskem: World class Brazilian petrochemical
Value Creation to Shareholders
20
21. Hight returns in the long-term and Liquidity
Performance above the main indexes and high liquidity
Braskem (BRKM5) confirmed its position as the 9th most liquid share in the
Ibovespa index, with a 3% share in the theoretical portfolio from May to August
2006.
1400
1200
1000
800 60% above
iBovespa
600 572
426
400 401
358
200
0
jun-05
jun-04
jun-03
aug-04
aug-05
aug-03
apr-04
dec-04
apr-05
dec-03
dec-05
oct-04
oct-05
apr-03
apr-06
dec-02
oct-03
feb-04
feb-05
feb-03
feb-06
Braskem Ibovespa IGC Petrochemical industry
Source: Braskem - Dec 2002 = 100
21
22. Payment of R$ 326 million to shareholders in 2005
60% increase when compared to 2004
Dividends and Interest on Equity R$ million Dividend Pay-out %
326 48
204 30
60% 60%
2004 2005 2004 2005
22
23. Strategy to grow with value creation
Expand production and sales Strengthen market leadership in
outside of South America, Brazil through consolidation in the
capturing value and creating a local market, capturing synergies
growth platform for the future
Internationalization Organic
Growth
Value creation
Enhancement of the Selective
Aromatics Chain Growth
Leverage aromatics production Consolidate market position in
chain by broadening its portfolio key products in Latin America
of products and services in the and guarantee competitive
local market sources of raw material
23
24. Growing investments: confidence in the future
R$ 900 million in investments to be made in 2006
Investments R$ million
16%
900
244 Capacity Increases
Equipment
202
142
Health, Safety & Environment
Capacity Increases 151
23
Equipment Technology
27 134
Health, Safety & Environment
27 Productivity
Technology 118
12
Productivity Quality and others
24 51
29 Others
Completed 1Q06 2006
24
25. Value creation to shareholders
A World-Class
Company
Strong platform for growth
• Best Practices
R$ 350 million per year in recurring synergies, already captured • Simplification
• Integration
R$ million
260
285
310
350
330
(2004)
• Compliance to
New Levels of
240
to SOx
208
Competitiveness
Mar/03 Jun/03 Sep/03 Dec/03 Mar/04 Dec/04 Target
5
Innovation &
Technology
Synergies
Braskem Business System
25
26. Braskem +
Significant acceleration in capturing productivity gains
R$ 270 million in productivity gains
captured by March 2006
Results Achieved by 1Q06 R$ million / year
420
360
270
218
+ 24%
Target by Achieved by Target by Target by
1Q06 1Q06 2006 2007
Annualized and recurring basis 26
27. Politeno’s Acquisition
One step forward in the consolidation of the Brazilian petrochemical
industry
Polyethylene Producer (PE) based in Camaçari – State of Bahia
Profile R$ 1 billion in Revenues in 2005
16% market-share in PE
2002 National Quality Award Winner
320 K tons of PE production in 2005
Tangible
Products with leading quality in numerous segments
Advantages Highly skilled staff with excellent operational and technical know-
how
Recognized competent technical assistance
A complementary portfolio of products
Solid relationship with the customer base in the Northeast of
Intangible Brazil
Advantages Dynamic business culture, focused on customers, quality and
results
Excellence in operations and processes
Source: Braskem
27
28. Growth and Competitiveness
New strategic internationalization opportunities
In light of the last developments in Bolivia, the studies
for the construction of a petrochemical complex in that
country are temporarily on hold
The opportunities already announced in
Venezuela are still under analysis
PP: El Tablazo, Venezuela: 400.000 tons/year, also
in partnership with Pequiven*
Brazil /
Bolivia
“Jose” Olefins Complex *
MOU signed with Pequiven (April, 2006). Detailing
should be concluded in 6 months;
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.
* To be presented to the Board of Directors 28
29. Share Buy-Back Program
An excellent investment for Braskem
Braskem has announced the implementation of a buy-back program to
repurchase common and class “A” preferred shares;
Repurchased shares are initially to be held in treasury, and may be
subsequently resold or cancelled;
Deadline for completion of the program is 6 months;
Up to 1,400,495 common shares (7.1% of free-float) and up to
13,896,133 class “A” preferred shares (8.25% of free-float)
Authorized brokerage firms: Credit Suisse, Itaú, UBS, Hedging-Griffo
and Ágora Senior.
Source: Braskem 29
30. An Unique Investment Opportunity
Market leadership in the region
Consistent operational performance
Solid financial structure
Ongoing competitive improvements: and
Structural market growth opportunities in the region
Greenfield projects in the region based upon access to competitive raw
materials
Innovation and technology as value driver
100% Tag Along to all shareholders
High Standards of Corporate Governance
30
