Obligation Braskemia 8% ( USP18533AK80 ) en USD

Braskemia

100 % ▼

Bresil

USP18533AK80 ( en USD )

8% par an ( paiement semestriel )

26/01/2017 - Obligation échue

Prospectus brochure de l'obligation Braskem USP18533AK80 en USD 8%, échue

100 000 USD

275 000 000 USD

P18533AK8

Braskem est le plus grand producteur de polymères des Amériques, intégré verticalement de la production de canne à sucre à la fabrication de résines plastiques.

L'Obligation émise par Braskemia ( Bresil ) , en USD, avec le code ISIN USP18533AK80, paye un coupon de 8% par an.
Le paiement des coupons est semestriel et la maturité de l'Obligation est le 26/01/2017

O F F E R I N G M E M O R A N D U M
US$275,000,000
Braskem S.A.
(Incorporated in the Federative Republic of Brazil)
8.00% Notes due 2017
The notes will bear interest at the rate of 8.00% per year. Interest on the notes is payable on January 26 and
July 26 of each year, beginning on January 26, 2007. The notes will mature on January 26, 2017.
The notes may, at the option of Braskem, be redeemed, in whole but not in part, at 100% of their principal amount
plus accrued interest and additional amounts, if any, upon the occurrence of specified events relating to Brazilian tax
law, as set forth in this offering memorandum. See "Description of the Notes--Redemption."
The notes will be senior unsecured obligations of Braskem, ranking equal in right of payment with all of its other
existing and future senior unsecured debt.
Application has been made to list the notes on the Official List of the Luxembourg Stock Exchange and to trade
them on the Euro MTF Market of that Exchange. The notes are expected to be designated as eligible for trading in The
PORTAL Market.
Investing in the notes involves risks. See "Risk Factors" beginning on page 13.
The notes have not been registered under the U.S. Securities Act of 1933, as amended, or the Securities Act, or
any state securities laws. Accordingly, the notes are being offered and sold only to qualified institutional buyers in
accordance with Rule 144A and outside the United States in accordance with Regulation S. Prospective purchasers that
are qualified institutional buyers are hereby notified that the seller of the notes may be relying on the exemption from
the provisions of Section 5 of the Securities Act provided by Rule 144A. For a description of certain restrictions on
transfer of the notes, see "Notice to Investors."
The notes are not being offered to the public within the meaning of Directive 2003/71/EC of the European Union,
and this offering is not subject to the obligation to publish a prospectus under that Directive.
Price 99.154% plus accrued interest, if any from September 26, 2006
The initial purchasers expect to deliver the notes to purchasers on or about September 26, 2006.
ABN AMRO
Citigroup
September 19, 2006

TABLE OF CONTENTS
Page
Incorporation by Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
iv
Presentation of Financial and Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
v
Forward-Looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
vii
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24
Exchange Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
25
Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26
Selected Financial and Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
28
Management's Discussion and Analysis of Financial Condition
and Results of Operation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
35
Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
58
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
60
Principal Shareholders and Related Party Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
62
Description of the Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
65
Form of the Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
80
Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
84
Notice to Investors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
89
Enforcement of Civil Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
91
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
92
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
94
Independent Accountants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
94
Available Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
94
Listing and General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
95
Index to Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-1
You should rely only on the information contained in this offering memorandum. We have not
authorized anyone to provide you with different information. None of Braskem and the initial purchasers
is making an offer of the notes in any jurisdiction where the offer is not permitted. You should not assume
that the information contained in this offering memorandum is accurate as of any date other than the date
on the front of this offering memorandum.
Unless otherwise indicated or the context otherwise requires, all references in this offering memorandum to
"Braskem," "our company," "we," "our," "ours," "us" or similar terms refer to Braskem S.A. and its consolidated
subsidiaries and jointly controlled companies.
This offering memorandum has been prepared by us solely for use in connection with the proposed offering
of the notes described in this offering memorandum. This offering memorandum is personal to each offeree and
does not constitute an offer to any other person or to the public generally to subscribe for or otherwise acquire
notes. Distribution of this offering memorandum to any person other than the prospective investor and any
i

person retained to advise such prospective investor with respect to its purchase is unauthorized, and any
disclosure or any of its contents, without our prior written consent is prohibited. Each prospective investor, by
accepting delivery of this offering memorandum, agrees to the foregoing and to make no photocopies of this
offering memorandum or any documents referred to in this offering memorandum.
The initial purchasers make no representation or warranty, express or implied, as to the accuracy or
completeness of the information contained in this offering memorandum. Nothing contained in this offering
memorandum is, or shall be relied upon as, a promise or representation by the initial purchasers as to the past or
future. We have furnished the information contained in this offering memorandum.
Neither the U.S. Securities and Exchange Commission, or the SEC, any state securities commission nor any
other regulatory authority, has approved or disapproved the notes nor have any of the foregoing authorities
passed upon or endorsed the merits of this offering or the accuracy or adequacy of this offering memorandum.
Any representation to the contrary is a criminal offense.
The notes are subject to restrictions on transferability and resale and may not be transferred or resold except
as permitted under the Securities Act and applicable state securities laws pursuant to registration or exemption
therefrom. As a prospective purchaser, you should be aware that you may be required to bear the financial risks
of this investment for an indefinite period of time. See "Plan of Distribution" and "Notice to Investors."
The notes have not been, and will not be, registered with the Brazilian Securities Commission (Comissão de
Valores Mobiliários), or CVM. The notes may not be offered or sold in Brazil, except in circumstances that do
not constitute a public offering or distribution under Brazilian laws and regulations.
The notes may not be offered or sold in or into the United Kingdom except in circumstances that do not
constitute an offer to the public within the meaning of the Public Offers of Securities Regulations 1995. All
applicable provisions of the Financial Services and Markets Act 2000 must be complied with in respect of
anything done in relation to the notes in, from or otherwise involving the United Kingdom.
The Luxembourg Stock Exchange takes no responsibility for the contents of this offering memorandum,
makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for
any loss howsoever arising from or in reliance upon the whole or any part of the contents of this offering
memorandum.
In making an investment decision, prospective investors must rely on their own examination of the company
and the terms of the offering, including the merits and risks involved. Prospective investors should not construe
anything in this offering memorandum, as legal, business or tax advice. Each prospective investor should consult
its own advisors as needed to make its investment decision and to determine whether it is legally permitted to
purchase the notes under applicable legal investment or similar laws or regulations.
This offering memorandum contains summaries believed to be accurate with respect to certain documents,
but reference is made to the actual documents for complete information. All such summaries are qualified in their
entirety by such reference. Copies of documents referred to herein will be made available to prospective
investors upon request to us or the initial purchasers.
ii

NOTICE TO NEW HAMPSHIRE RESIDENTS
NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A
LICENSE HAS BEEN FILED UNDER RSA 421-B WITH THE STATE OF NEW HAMPSHIRE NOR
THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN
THE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE
THAT ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE AND NOT
MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR
EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE
SECRETARY OF STATE HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATION
OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY OR
TRANSACTION. IT IS UNLAWFUL TO MAKE OR CAUSE TO BE MADE TO ANY PROSPECTIVE
PURCHASER, CUSTOMER OR CLIENT ANY REPRESENTATION INCONSISTENT WITH THE
PROVISIONS OF THIS PARAGRAPH.
iii

INCORPORATION BY REFERENCE
We are incorporating by reference into this offering memorandum the following information contained in
our annual report on Form 20-F for the year ended December 31, 2005, or our 2005 Form 20-F, which we filed
with the SEC on June 23, 2006:
·
the information under the caption "Introduction" on pages 3 through 5 of our 2005 Form 20-F;
·
the information contained in "Item 3: Key Information" on pages 7 through 21 of our 2005 Form 20-F;
·
the information contained in "Item 4: Information on the Company" on pages 22 through 71 of our 2005
Form 20-F;
·
the information contained in "Item 5: Operating and Financial Review and Prospects" on pages 72
through 116 of our 2005 Form 20-F;
·
the information contained in "Item 6: Directors, Senior Management and Employees" on pages 116
through 128 of our 2005 Form 20-F;
·
the information contained in "Item 7: Major Shareholders and Related Party Transactions" on pages 129
through 137 of our 2005 Form 20-F;
·
the information contained in "Item 8: Financial Information--Legal Proceedings" on pages 137 through
143 of our 2005 Form 20-F;
·
the information contained in "Item 11: Quantitative and Qualitative Disclosures About Market Risk" on
pages 172 through 176 of our 2005 Form 20-F; and
·
the consolidated financial statements of our company and Copesul--Companhia Petroquímica do Sul, or
Copesul, including the reports thereon, contained on pages F-2 through F-128 in our 2005 Form 20-F.
Incorporation by reference of those portions of our 2005 Form 20-F means that (1) those portions of our
2005 Form 20-F that we incorporate by reference are considered part of this offering memorandum, and (2) we
can disclose important information to you by referring to those portions of our 2005 Form 20-F that we
incorporate by reference.
The information in those portions of our 2005 Form 20-F is an important part of this offering memorandum.
Our 2005 Form 20-F contains important information about our company and our results of operations and
financial condition.
Any statement contained in the portions of our 2005 Form 20-F that are incorporated by reference herein
will be deemed to be modified or superseded for purposes of this offering memorandum to the extent that a
statement contained herein modifies or supersedes that statement.
You should read "Available Information" for information on how to obtain our 2005 Form 20-F or other
information relating to our company.
iv

PRESENTATION OF FINANCIAL AND OTHER INFORMATION
All references herein to the "real," "reais" or "R$" are to the Brazilian real, the official currency of Brazil.
All references to "U.S. dollars," "dollars" or "US$" are to U.S. dollars.
On September 18, 2006, the exchange rate for reais into U.S. dollars was R$2.145 to US$1.00, based on the
selling rate as reported by the Central Bank of Brazil (Banco Central do Brasil), or the Central Bank. The selling
rate was R$2.164 to US$1.00 at June 30, 2006, R$2.341 to US$1.00 at December 31, 2005, and R$2.350 to
US$1.00 at June 30, 2005, and the commercial selling rate was R$2.654 to US$1.00 at December 31, 2004 and
R$2.889 to US$1.00 at December 31, 2003, in each case, as reported by the Central Bank. The real/U.S. dollar
exchange rate fluctuates widely, and the selling rate at September 18, 2006 may not be indicative of future
exchange rates. See "Exchange Rates" for information regarding exchange rates for the Brazilian currency since
January 1, 2000.
Solely for the convenience of the reader, we have translated some amounts included in "Summary--
Summary Financial and Other Information," "Capitalization" and elsewhere in this offering memorandum from
reais into U.S. dollars using the selling rate as reported by the Central Bank at June 30, 2006 of R$2.164 to
US$1.00. These translations should not be considered representations that any such amounts have been, could
have been or could be converted into U.S. dollars at that or at any other exchange rate. Such translations should
not be construed as representations that the real amounts represent or have been or could be converted into U.S.
dollars as of that or any other date.
Financial Statements
We maintain our books and records in reais.
Our unaudited condensed consolidated interim financial information at June 30, 2006 and for the six months
ended June 30, 2006 and 2005 are included in this offering memorandum.
We prepare our consolidated financial statements in accordance with accounting practices adopted in Brazil,
or Brazilian GAAP, which are based on:
·
Brazilian Law No. 6,404/76, as amended by Brazilian Law No. 9,457/97 and Brazilian Law
No. 10,303/01, which we refer to collectively as the Brazilian Corporation Law;
·
the rules and regulations of the CVM; and
·
the accounting standards issued by the Brazilian Institute of Independent Accountants (Instituto dos
Auditores Independentes do Brasil--IBRACON).
Brazilian GAAP differs in certain respects from accounting principles generally accepted in the United
States, or U.S. GAAP. For a discussion of certain differences relating to these financial statements, see note 31 to
our audited consolidated financial statements included in our 2005 Form 20-F and note 27 to our unaudited
condensed consolidated interim financial information included in this offering memorandum.
Consistent with Brazilian GAAP, our unaudited condensed consolidated interim financial information at
June 30, 2006 and for the six months ended June 30, 2006 and 2005 have been prepared in accordance with CVM
Instruction No. 247/96, as amended by CVM Instruction Nos. 269/97, 285/98 and 319/99, which we refer to
collectively as Instruction 247. Instruction 247 requires our company to proportionally consolidate jointly
controlled companies that are not our subsidiaries, but which we jointly control with one or more other
shareholders.
Prior to April 6, 2006 (the date of the Politeno acquisition described under "Recent Developments"), we
proportionally consolidated the results of Politeno Indústria e Comércio S.A., or Politeno, in our consolidated
v

financial statements. As a result of the Politeno acquisition, we have fully consolidated Politeno's results of
operations and cash flows in our consolidated statement of operations and cash flow accounts for the period
beginning on April 6, 2006 and have fully consolidated Politeno's assets and liabilities in our consolidated
balance sheet at June 30, 2006.
Market Share and Other Information
We make statements in this offering memorandum about our market share in the petrochemical industry in
Brazil and our production capacity relative to that of other petrochemical producers in Brazil and Latin America.
We have made these statements on the basis of information obtained from third-party sources that we believe are
reliable. We have calculated our Brazilian market shares with respect to specific products by dividing our
domestic net sales volumes of these products by the total Brazilian domestic consumption of these products as
estimated by the Brazilian Association of Chemical Industry and Derivative Products (Associação Brasileira de
Indústrias Químicas e de Produtos Derivados). We derive information regarding the production capacity of other
companies in the Brazilian petrochemical industry and the estimated total Brazilian domestic consumption of
petrochemical products principally from reports published by the Brazilian Association of Chemical Industry and
Derivative Products. Although we have no reason to believe that any of this information is inaccurate in any
material respect, neither we nor the initial purchasers have independently verified the production capacity,
market share, market size or similar data provided by third parties or derived from industry or general
publications.
Production Capacity and Sales Volume
As used in this offering memorandum:
·
"production capacity" means the annual projected capacity for a particular facility, calculated based
upon operations for 24 hours each day of a year and deducting scheduled downtime for regular
maintenance; and
·
"ton" means a metric ton, which is equal to 1,000 kilograms or 2,204.62 pounds.
Rounding
We have made rounding adjustments to reach some of the figures included in this offering memorandum. As
a result, numerical figures shown as totals in some tables may not be arithmetic aggregations of the figures that
precede them.
vi

FORWARD-LOOKING STATEMENTS
This offering memorandum contains forward-looking statements. Some of the matters discussed concerning
our business operations and financial performance include forward-looking statements within the meaning of the
Securities Act or the U.S. Securities Exchange Act of 1934, or the Exchange Act.
Statements that are predictive in nature, that depend upon or refer to future events or conditions or that
include words such as "expects," "anticipates," "intends," "plans," "believes," "estimates" and similar
expressions are forward-looking statements. Although we believe that these forward-looking statements are
based upon reasonable assumptions, these statements are subject to several risks and uncertainties and are made
in light of information currently available to us.
Our forward-looking statements may be influenced by factors, including the following:
·
general economic, political and business conditions in our company's markets, both in Brazil and
abroad, including demand and prices for petrochemical products;
·
interest rate fluctuations, inflation and exchange rate movements of the real in relation to the U.S.
dollar;
·
the cyclical nature of the Brazilian and global petrochemical industries;
·
competition;
·
prices of naphtha and other raw materials;
·
actions taken by our major shareholders and other shareholders with options or convertible securities
entitling them to acquire significant numbers of our shares;
·
our ability to obtain financing on satisfactory terms;
·
changes in laws and regulations, including, among others, those affecting tax and environmental
matters;
·
decisions rendered in pending major tax, labor and other legal proceedings; and
·
other factors identified or discussed under "Risk Factors."
Our forward-looking statements are not guarantees of future performance, and our actual results or other
developments may differ materially from the expectations expressed in the forward-looking statements. As for
forward-looking statements that relate to future financial results and other projections, actual results will be
different due to the inherent uncertainty of estimates, forecasts and projections. Because of these uncertainties,
potential investors should not rely on these forward-looking statements.
We undertake no obligation to publicly update any forward-looking statement, whether as a result of new
information, future events or otherwise.
vii

SUMMARY
This summary highlights information presented in greater detail elsewhere in this offering memorandum.
This summary is not complete and does not contain all the information you should consider before investing in
the notes. You should carefully read this entire offering memorandum before investing, including "Risk Factors"
and our condensed consolidated interim financial information, and our consolidated financial statements
included in our 2005 Form 20-F. See "Introduction" included in our 2005 Form 20-F and "Presentation of
Financial and Other Information" for information regarding our consolidated financial statements, exchange
rates, definitions of technical terms and other introductory matters.
Braskem
We are the leading petrochemical company in Latin America, based on average annual production capacity
in 2005. We are also the second largest Brazilian-owned private sector industrial company, based on net sales
revenue in 2005. We recorded net income of R$625.8 million in 2005 on net sales revenue of R$13,075.1
million. We produce a diversified portfolio of petrochemical products in our 14 plants in Brazil and have a
strategic focus on polyethylene, polypropylene and polyvinylchloride, or PVC. We were the first Brazilian
company with integrated first and second generation petrochemical production facilities.
We have grown over the past five years primarily as the result of the integration of the operations of six
Brazilian petrochemical companies: our company, which was formerly named Copene Petroquímica do Nordeste
S.A.; OPP Química S.A., or OPP Química; Polialden Petroquímica S.A., or Polialden; Trikem S.A., or Trikem;
Proppet S.A., or Proppet; and Nitrocarbono S.A., or Nitrocarbono. We have merged with all of these companies.
Our business operations are organized into four business units, which correspond to our principal production
processes and products:
·
Basic Petrochemicals, which accounted for R$7,226.7 million, or 53.5%, of the net sales revenue of all
segments, including net sales to our other business units, and had an operating margin of 12.4% in 2005;
·
Polyolefins, which accounted for R$3,919.0 million, or 29.0%, of the net sales revenue of all segments
and had an operating margin of 14.1% in 2005;
·
Vinyls, which accounted for R$1,794.1 million, or 13.3%, of the net sales revenue of all segments and
had an operating margin of 24.5% in 2005; and
·
Business Development, which accounted for R$569.0 million, or 4.2%, of the net sales revenue of all
segments and had an operating margin of 1.2% in 2005.
We believe the integration of the operations of the companies that formed our company has produced, and
will continue to produce, significant synergies and cost savings from reductions in taxes, procurement and
logistics expenses, general and administrative expenses and other operating expenses.
Basic Petrochemicals Unit
At December 31, 2005, our Basic Petrochemicals facilities had one of the largest average annual production
capacities of all first generation producers in Latin America. Our Basic Petrochemicals Unit produces a broad
range of basic petrochemicals, including:
·
olefins, such as ethylene, polymer and chemical grade propylene, butadiene, isoprene and butene-1; and
·
aromatics, such as benzene, toluene, para-xylene and ortho-xylene.
1

The products of our Basic Petrochemicals Unit are used primarily in the manufacture of second generation
petrochemical products, including those manufactured by our other business units.
The operations of our Basic Petrochemicals Unit are conducted at facilities located in the petrochemical
complex located in Camaçari in the State of Bahia, which we refer to as the Northeastern Complex.
Polyolefins Unit
At December 31, 2005, our polyolefins production facilities had the largest average annual production
capacity of all second generation producers of polyolefins products in Brazil and elsewhere in Latin America.
Our Polyolefins Unit produces:
·
polyethylene, including low density polyethylene, or LDPE; linear low density polyethylene, or LLDPE;
high density polyethylene, or HDPE; and ultra high molecular weight polyethylene, or UHMWP; and
·
polypropylene.
Approximately three-fifths of our Polyolefins Unit's sales volume in 2005 was derived from the sale of
polyethylene products, and the remainder was derived from the sale of polypropylene products.
In 2005, we had an approximate 30% share of the Brazilian polyethylene market and an approximate 42%
share of the Brazilian polypropylene market, based on sales volumes.
We manufacture a broad range of polyolefins products for use in consumer and industrial applications,
including plastic films for food and industrial packaging; bottles, shopping bags and other consumer goods
containers; automotive parts; and household appliances.
Our polyolefins products are manufactured in facilities located in the Northeastern Complex and in the
petrochemical complex located in Triunfo in the State of Rio Grande do Sul, which we refer to as the Southern
Complex.
Vinyls Unit
We are the leading producer of PVC in Brazil, based on sales volumes in 2005. At December 31, 2005, our
PVC production facilities had the largest average annual production capacity of all second generation producers
of PVC in Latin America.
Our Vinyls Unit is the only vertically integrated producer of PVC in Brazil. Our PVC production is
integrated through our production of chlorine and other raw materials. Our Vinyls Unit also manufactures caustic
soda, which is used by producers of aluminum and paper; ethylene dichloride, or EDC; and chlorine, which we
use to manufacture EDC. Approximately two-thirds of our Vinyls Unit's net sales revenue in 2005 was derived
from the sale of PVC products.
In 2005, we had an approximate 55% share of the Brazilian PVC market, based on sales volumes.
PVC is a versatile polymer, and global production volume of PVC is the second highest among all
commercial plastics. We manufacture a broad range of PVC resins used in the manufacture of pipes and fittings,
laminated products, shoes, sheeting, flooring, cable insulation, electrical conduit, packaging and medical
applications.
Our vinyls products are manufactured in facilities located in the States of Bahia, Alagoas and São Paulo.
2