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Braskem SA 6-K 2007
Provided by MZ Data Products
 
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 

 
FORM 6-K
 
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16
OR 15D-16 OF THE SECURITIES EXCHANGE ACT OF 1934

For the month of March, 2007

(Commission File No. 1-14862 )

 

 
BRASKEM S.A.
(Exact Name as Specified in its Charter)
 
N/A
(Translation of registrant's name into English)
 


Rua Eteno, 1561, Polo Petroquimico de Camacari
Camacari, Bahia - CEP 42810-000 Brazil
(Address of principal executive offices)



Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F ___X___       Form 40-F ______

Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(1). _____

Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(7). _____

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes ______       No ___X___

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- _____.




Acquisition of the Petrochemical Assets of The Ipiranga Group 
José Carlos Grubisich
March 2007 


 

   Forward-lookingStatements  

 


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.


Forward-looking statements included in this presentation speak only as of the date they are made (December 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


 

 

   Our Vision  

 


To become
 Latin America's leader 
in thermoplastic resins 
  To rank amongst the 
TOP 10 global
 
petrochemical 
companies in market
 
capitalization 

3


 

   Strategic Drivers 
    Growth with value creation

 

 

Expand  production and
sales
outside of South
America,  becoming a
global leader in PP
 

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

 
 
Leverage  Braskem's
production chains and
Brazil's
  alternative
sources of raw materials
by
broadening its
portfolio of products and
services
  Consolidate  market 
position
in key products
in Latin America and
guarantee  competitive
sources of raw material

4


 

   Strategic Drivers 
    Main projects

 

 

  • Implementation of an International distribution network
  • Investment opportunities in the Americas
 
  • Politeno's acquisition
  • Acquisition of the Petrochemical Assets of the Ipiranga Group (Ipiranga and Copesul)
  • Debottleneckings in PE and PVC
  • New PP plant in Camaçari
 
 
  • Capacity increases in isoprene and paraxylene
  • Converging from MTBE to ETBE
  • Hidrocarbonic resins
  • Green polymers
 
  • Petroquímica Paulínia
  • Venezuela Projects:
    • PP plant
    • Jose Olefins Complex - 1st and 2nd generation

5


 

   Braskem 
    The largest petrochemical company in Latin America 

 

 

Gross Revenue    Net Revenue    EBITDA 
US$ 9.9 
Billion
 
  US$ 7.8 
Billion
 
  US$ 1.4 
Billion
 

  NetDebt / Ebitda    Assets   
  2.6 x    US$ 10.3
Billion
 

Note: Unaudited pro-forma 2006 figures

6


 

   Braskem 
    Consistent improvement leveraged by the acquisition 

 


* Pro forma - includes Ipiranga and Copesul's figures for 2006

7


 

   The Transaction 
    Step by step 

 

 

STAGE  1  Ultrapar acquires the stake of the controlling shareholders 
   
STAGE 2  Tag along to ordinary shares from CBPI, DPPI and RIPI 
   
STAGE 3  Tender offer for the delisting of Copesul 
   
STAGE 4  Ultrapar incorporates preferred shares of CBPI, DPPI and RIPI 
   
STAGE 5  Ultrapar hands over the petrochemical assets to Braskem / Petrobras

8


 

   The Transaction 
    Step by step - Braskem's   financial  effort 

 

 

STAGE   1  Braskem disbursement : US$ 309 million 
Liabilities (100%) : US$ 532 million
 
Management of the assets
 
 
STAGE 2  Braskem disbursement : US$ 131 million 
 
STAGE 3  Braskem disbursement : US$ 413 million 
Petrobras disbursement : US$ 275 million 
 
STAGE 4  Ultrapar holds 100% of CBPI, DPPI and RIPI total capital 
 
STAGE 5  Ultrapar hands over 60% of IQ stake to Braskem and 40% to Petrobras 
Braskem disbursement : US$ 279 million
 

9


 

   Braskem
    Potential to  increase  multiples  (EV/EBITDA)

 

Acquired Asset
+ Debt
US$
2,415 MM
 
Acquisition
EBITDA
(Ipiranga
+ 55% of Copesul)
US$
390 MM


* Analysts' average for 2007

Source: Citigroup, JP Morgan and Bear Stearns

10


 

   Ipiranga Petroquimica  Profile 
    Complementary businesses

 

 

   • Leader in HDPE: 38% market share

   • Capacity utilization rate in 2006:       

         • 89% for PE             

         • 81% for PP 

    • More than US$ 300 million in exports - around 40% of total volume   

   • Production technology in PP: Spheripol (same as in Petroquímica Paulínia)

   • Production technology in PE (HDPE): Hostalen - the only one in Brazil 

    • Technology & Innovation Center - 7 new resins launched in 2006 

 
5 units 550 kt de PE 
180 kt de PP
 
 
Net Revenue: R$ 2 billion 
 
Ebitda: R$ 184 million 

11


 

   Copesul Profile 
     Integration coupled  with  opportunity  of  capturing  synergies 

 

 

   • 2nd Largest raw material unit in Latin America 

   • 85% of ethylene and 100% of propylene supplied to Ipiranga and Braskem

   440 kt of aromatics production capacity 

   • 58% of imported raw material - naphtha and condensate 

   • Storage capacity of naphtha/condensate - 2 times larger than Braskem 

     More than US$ 300 million in exports - around 15% of total volume -
       50% in Latin
 America 

 
Production: 1.25 million t of ethylene 
                      0.6 million t of propylene
 
 
Net Revenue: R$ 6.4 billion 
 
Ebitda: R$ 1.1 billion 

12


 

    Braskem:   Increased  scale  with  improved  profitability 

 



Largest Petrochemical Company in Latin America

* Unaudited pro-forma figures

13


     Braskem:  even  more  strengthned  position  of  leading  producer  in  the region ...  

 

  • More than 10 million tons of petrochemical and chemical products in 2008, with 5.6 being of ethylene and resins.

Source: CMAI and Braskem 2007

14


    coupled with industry leadership for all the resins 

 

 

Source: Braskem/ Brazilian Association of Chemical Industry - 2006

15


    Braskem: positioned among the largest petrochemical 
  companies in the world
 

 

  • Braskem's Ebitda is the 7th highest in the world among petrochemical companies*

*Braskem estimates. 2005 results only in petrochemical businesses of mentioned companies

16


    Braskem: Improvement of the quality of the business

 

  • Strengthening of partnership with Petrobras

  • Improved profitability and EBITDA

  • Expansion of product portfolio, consolidating the leading position in its respective segments

  • Combination of product portfolio, specially in HDPE

  • Client base expansion and supply of value-added services based on Innovation & Technology structure

  • Full integration between 1st and 2nd generation, leading to improved competitiveness

  • Greater operational flexibility

  • Improvement of the supply chain management

    • Greater flexibility when acquiring naphtha

17


     Braskem 
  Solid financial
  structure:  financial  leverage  almost  intact 

 

  • Increased scale combined with a more robust balance sheet boosts growth and internationalization opportunities
US$ million Braskem
Financial
Efforts
Net Debt
(1) (2)
EBITDA
(1)
Net Debt /
Ebitda (x)
12/31/2006   2,111 764 2.76
STAGE 1 731 2,842 1,394 2.04
STAGE 2 131 2,973 1,394 2.13
STAGE 3 413 3,386 1,394 2.43
STAGE 5 279 3,665 1,394 2.63

 

(1) unaudited pro-forma 2006 figures
(2) Does not include
changes in working capital
Stage 1 includes debt assumption of US$ 422 million

18A


    Braskem 
  Solid financial
 structure: financial leverage almost intact 

 

  • Increased scale combined with a more robust balance sheet boosts growth and internationalization opportunities

                                   

Fitch confirms BB+ Positive Outlook for Braskem

"Fitch expects the company to be able to increase significantly free
cash flow generation, which would allow a significant improvement
in credit metrics needed for Braskem´s rating to migrate to an
Investment Grade category."

 

18B


    Capture of Synergies 
  Efficient model to capture
 synergies 

 

• Commercial

    - Complementary products portfolio, especially HDPE - Client base integration

    - Export contracts optimization

• Industrial

    - Operational flexibility - Shared maintenance services

    - Improvement in energy efficiency

• Fiscal and tax optimization

• Supply chain

    - Gain of scale in procurement

    - Logistic optimization

• Competitive management model with potential to improve quality and productivity through the exchange of best practices

• Possibility of new DBN's in the Southern Complex

19


    Synergies potentialized by new investment opportunities 
    in the Southern Petrochemical Complex 

 



Capacity increase in  
PP and PE
 Copesul capacity
 increases
 
Investments of around
 R$ 700 million 

20


    Braskem: next steps in the implementation of its strategy 
  of Growth with Value Creation
 

 


(1) JV with Petrobras
(2) JV with Pequiven
Source: Braskem

21


    Growth with value creation 

 

  • Consistent strategy since the creation of Braskem: proven implementation capacity

  • Larger scale leverages growth and internationalization projects already identified

  • Strengthened leadership position in thermoplastic resins markets in Latin America

  • Full integration between 1st and 2nd generations with increase in competitiveness

  • Strong growth potential within next 5 years: production capacity may increase from 10 to 14 million tons, including the 90% increase in the resins production capacity from current 3.1 to 5.8 million tons

  • Consolidation of the partnership model with Petrobras

  • Solid financial structure preserved

  • 100% tag-along for all shareholders and best corporate governance practices
Social and environmental responsibility

22



Acquisition of the Petrochemical Assets of The Ipiranga Group José Carlos Grubisich

March 2007 



SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: March 22, 2007

  BRASKEM S.A.
 
 
  By:      /s/      Carlos José Fadigas de Souza Filho
 
    Name: Carlos José Fadigas de Souza Filho
    Title: Chief Financial Officer

 

FORWARD-LOOKING STATEMENTS

This press release may contain forward-looking statements. These statements are statements that are not historical facts, and are based on management's current view and estimates offuture economic circumstances, industry conditions, company performance and financial results. The words "anticipates", "believes", "estimates", "expects", "plans" and similar expressions, as they relate to the company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.


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