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S E P T E M B E R , 2 4 , 2 0 2 0
DELTA DAY
NEW POLYPROPYLENE (PP) PLANT IN THE UNITED STATES
PUBLIC
DISCLAIMER ON FORWARD-LOOKING STATEMENTS
This presentation includes forward-looking statements.These forward-looking statements are not solely historicaldata, but rather reflect the targets and expectations ofBraskem’s management. The terms “anticipate,”“believe,” “expect,” “foresee,” “intend,” “plan,”“estimate,” “project,” “aim” and similar terms are used toindicate forward-looking statements. Although we believethese forward-looking statements are based onreasonable assumptions, they are subject to various risksand uncertainties and are prepared using the informationcurrently available to Braskem.
This presentation is up-to-date as of September 24, 2020,and Braskem does not assume any obligation to update itin light of new information or future developments.
Braskem assumes no liability for transactions orinvestment decisions taken based on the information inthis presentation.
PUBLIC
AGENDA
IntroductionRoberto Simões (CEO)
Delta PresentationMark Nikolich (Olefins & Polyolefins North America VP)
Delta FinancialsPedro Freitas (CFO)
Closing RemarksMark Nikolich (Olefins & Polyolefins North America VP)
Q&A
3PUBLIC
PUBLIC
IntroductionRoberto Simões (CEO)
5
2010
2011
2012
2016
2017
Beginning of Braskem'sinternationalization process with the acquisition of Sunoco’s Polypropylene (PP) business and I&T center (1 MMt/y)
Acquisition of DOW’s PP business, (+550 kta in US)
Acquired upstream propylene purification units at Marcus Hook
Signed landmark PDH¹ offtake agreement with Enterprise Products
Expansion of Marcus Hook plant (+60 kta)
Startup of a new Ultra High Molecular Weight Polyethylene (UHMWPE - UTEC) production plant, producing UTEC with a Braskem proprietary technology
Start up of Delta, a world-class PP production facility
2020
Braskem America History - Main Milestones
The start up of Delta, a world-class PP production facility is a major milestone in Braskem's global growth strategy
Strengthening PP leadership in
North America
Source: Braskem. Note (1): PDH stands for Propane Dehydrogenation.
Braskem America was formed in 2010 and since then, has invested and grown the business
PUBLIC
6
Braskem America - Business Model
Source: Braskem. Note (1): PDH stands for Propane Dehydrogenation. PUBLIC
In the US, Braskem America purchases propylene from suppliers and produces PP, a second generation thermoplastic resin
End users
Third-parties
Propylene
PP Plants(non-integrated)
PP (Customers)(3rd Generation)
Plastic Converters
Finished products
Suppliers*
1 ton of propylene produces ~1 ton of PP
*Redundancy of supply and flexibility via a variety of propylene sources such as PDH’s¹, refineries and crackers.
7
Source: Braskem. Note (1): UHMWPE stands for Ultra High Molecular Weight Polyethylene PUBLIC
Braskem America is the largest PP producer in North America with a modern Innovation & Technology Center supporting our clients
Braskem America – At a Glance
• North American PP market leader;
• Six PP plants (including Delta): four in Texas (La Porte, Oyster Creek and Seadrift), one in Pennsylvania (Marcus Hook) and one in West Virginia (Neal);
• Total PP production capacity: increasing from 1.6 MMt/yr to 2.1 MMt/y after Project Delta
• A UTEC (UHMWPE¹) plant in La Porte, Texas, specialtywith applications in various markets;
• A modern I&T Center in Pittsburgh, Pennsylvania, which plays a critical role in our ability to deliver leading-edge polymers to our clients;
• Regional headquarters in Philadelphia, Pennsylvania.
NEAL, WV240 kt/yearTechnology:
Spheripol
PHILADELPHIA, PAHeadquarters
MARCUS HOOK, PA414 kt/year
Technology: Unipol
PITTSBURGH, PAInnovation &
Technology Center
DELTA - LA PORTE, TX450 kt/year
Technology: Unipol
LA PORTE, TX354 kt/year
Technology: Spheripol
OYSTER CREEK, TX336 kt/year
Technology: Spheripol
SEADRIFT, TX227 kt/year
Technology: Unipol
LA PORTE, TXUHMWPE¹ plant (UTEC)
8
Delta supports Braskem’s feedstock and geographic diversification strategic objectives
Source: Braskem PUBLIC
AmbitionStrategic Objectives
Productivity and Competitiveness
Feedstock and Supplier Diversification
Geographic Diversification
People, Innovation, Governance and Reputation
Capital Allocation / Financial Discipline
Braskem as a first quartile operator
Reach balance between liquid base and gas base, increasing flexibility
Increase global capacity, with operations outside Brazil representing
more than 50% of EBITDA
Recognition of Braskem as a global, sustainable, innovative and people-
centered company
Maintenance of its strong liquidity position
A SAFE performance is and will always be the focus of Braskem's operations, being aPERPETUAL AND NON-NEGOTIABLE VALUE IN OUR STRATEGY
Highlights:
• Delta contributes in terms of feedstock and geographic diversification for Braskem;
• Braskem progresses toward a more balanced feedstock profile between gas and oil based sources;
• Delta has the potential to contribute in increasing the share of operations outside Brazil in Braskem´s results;
• Thus, additional investment in the United States is a natural step in our strategy.
PUBLIC
Delta Presentation Mark Nikolich (Olefins & PolyolefinsNorth America VP)
10
Delta is a world-class PP production facility that reinforces our PP leadership position in the region
Source: Braskem PUBLIC
New PP Plant in the United States
Capacity: 450kta +
Total investment: US$750 MM
Location: Braskem America’s largest facility
Proximity/Connectivity to propylene supply
Upgraded olefins and utility systems, alsobenefiting existing PP and UTEC lines on site
Lower operating costs (synergy with existing site)
Ability to produce full portfolio of PP grades
UNIPOL/GRACE Technology
Proven PP technology with more than 50operating lines in 18 countries licensed around theglobe
Braskem has vast experience with the technology,currently operating 3 lines in US and 1 in Germany
Safety record: 0.65/million hours
11
Propylene availability has been growing in NAM due to PDH capacity additions, supporting competitive feedstock for PP producers
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NAM Propylene Production NAM Propylene Trade Balance - Net Trade
(MMton)(MMton)
There are several propylene suppliers in the region, with diverse production alternatives (PDH¹, refineries, crackers and metathesis)
2016
15.8
2012
15.7
2013 2014 2015 2017
15.5
2022e
15.9
2021e
16.016.3
2020e
14.9
16.1
20192018
15.8
16.7
15.8
+1.2(+8%)
PDH Refinery CrackersMetathesis
-0.1
-0.3
2015 20182012
-0.5
-0.1
2013
0.0
2014
-0.2
2016 2017
-0.3
2019
-0.4
2020e
-0.3
2021e
-0.3
2022e
0.1
Imports Exports Net Trade
Source: External Consulting Firms. Note (1): PDH stands for Propane Dehydrogenation.
12
Source: External Consulting Firms PUBLIC
In NAM, several PP capacity shutdowns have taken place since the last start up in US
• No new PP capacity additions in the region since 2008
• Shutdowns of 1.4 million tons of PP capacity between 1991-2015
• New Braskem PP plant will be the first one to startup in the region since 2008
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 … 2020
Last start-up in US
5 shutdowns
6 shutdowns
Last start-up in Mexico
3 shutdowns
2 shutdowns
2 shutdowns
1 shutdown
1 shutdown
9,345
Shutdowns 1991-2015
1,492
Existing Capacity
Start-up of new Braskem PP plant in US
Industry Addition/Closing of capacities in North America North America PP Capacity
(Million Tons)
13
Source: External Consulting Firms. Note (1): DBN stands for Debottlenecking PUBLIC
The expectation is that PP operating rates remain healthy and imports will be reduced
NAM PP Capacity AdditionNAM PP Market
Domestic Demand (MMt) and Operating Rate (%) (Kt)
274
-110 -57
12 143
124 69 298411
-575
95
144152
201920142012 2013 201720162015 2018
298287
0 66
411
2020 2021 2022
-301
107218
Braskem Other Players
Excluding Delta, start up of new PP plants in US expected only for 2022 onwards
Consulting Firms split Delta's capacity
addition in 2020/2021
Domestic Demand expected to grow ~4.2% in the next years (2020-2022) with reduced reliance on imports
88%81%
91%85% 87% 84%
90%87% 85% 83% 82% In 2019/2020, other players additions are
DBNs¹, not new plants
Operating Rate (%)
2014 20162012 2013 2015 2017 2018 2019 20212020 2022
8,07,1 7,2 7,3
7,8 7,8 8,1 7,8 7,5 7,7 8,1
4,2%
Domestic Demand
14
US PP-Propylene Spread (US$/t)
US PP-Propylene spread should remain healthy, even after the startup of new PP capacities
Source: External Consulting Firms. Note (1) USG stands for US Gulf PUBLIC
859 759986
820 702872 887
1,5631,515
1,883
1,332
2,088 2,159
1,4611,423 1,5711,852
1,1891,489
1,3361,511 1,399
US PP-Propylene Spread Propylene USG¹PP USG¹
551 573 595 564
702585
663 669 634 639
512
201620132012 20192014 2015 2017 2018 2020 2021 2022
Capacity Addition
Potential start up of other new PP plants
in US 2022+Start-up of new PP
plant in US
15
Source: Braskem PUBLIC
The new PP plant in the United States will replace imports in the North America domestic market and will scale up regions exports
Braskem will position the new facility's domestic production capabilities to not only replace imported polypropylenevolumes in the North American domestic market, but also to scale up our exports supporting structural globaldemand with existing global clients
• International preparation for global exports
Set up new Charleston Export Hub for export orientedbusiness
Leverage Global Supply Chain and Client Base withBraskem’s units in Europe, Brazil and Asia office
Qualified 100 kta of opportunities in PAC and Europe
Export Capabilities
Asia
• Domestic Preparations
Leveraged 130 kta of Brazilian PP imports as seed volume
Prequalified grades equivalent to 250 kt of annual demand
Connected to all major suppliers (5 pipelines)
Leveraged across existing SG&A
16
Video of the new PP plant in the United States
PUBLIC
Delta FinancialsPedro Freitas (CFO)
18
Braskem committed approximately $750 million in investment towards the design and construction of the new facility
Source: Braskem. Note (1): EPC stands for Engineering, Procurement and Construction.
CAPEX Disbursement (US$ million)
16 2233 24
15
110
132
95
36
117
63
33
16
3 3
2015 2018
2
2020e2016 2017
17
2019
210
13
2020 YTD
25
3 6
167173
124
57
OthersConstructionEngineering Procurement
The Linde Group served as the lead EPC¹contractor bringing significant EPC¹ experiencewith the UNIPOL Process Technology
The investment was funded with the support of ECAs (Export Credit Agencies) Euler Hermes and Nexi.
Total investment in project Delta isapproximately US$750 million (less than 10%over schedule/budget);
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US$225 MM US$225 MM
19
Modelling Steps Suggestion
Source: Braskem Note (1): Based on External Consulting Firms. It considers catalyst, utilities, total fixed costs and local logistics.
Net Revenue(US$ MM)
COGS(US$ MM)
SG&A(US$ MM)
• Production (Kt) Production Capacity (kt) x Operating Rate (%);
• Sales Volume (Kt) Same as production, selling PP both in the domestic market and also exporting;
• Sales Price (US$/t) PP US International Reference (US$/t) and exports depends on the region;
• For modelling simplification, SG&A could be projected as a % of Net Revenue, which should be low, because the new facility leverages the existing infrastructure in La Porte, Texas (a range of 2-3% of Net Revenue).
• Feedstock Consumption (Kt) Production (Kt) x 1.01 (yield);
• Feedstock Cost (US$ MM) Feedstock Consumption (Kt) x Propylene US International Reference (US$/t);
• Cost ex-Feedstock (US$ MM) Polymerization Cost1 per unit (~US$200/t) x Production (Kt);
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Modelling Delta's contribution to the company's results should be simple, given the characteristics of its business model
PUBLIC
Closing RemarksMark Nikolich (Olefins & PolyolefinsNorth America VP)
21
• Delta reinforces Braskem America's leading position in North American PP market and as the third largest PP producer in the world;
• The investment highlights Braskem America's capability to execute large-projects and our commitment as a PP supplier not only today, but also in the next decades;
• First quartile project safety performance and excellent execution (cost and schedule) in challenging environment;
• Our expectation is that the ramp-up process will take place through 2020 and, in 2021, the plant is expected to operate at its name plate production capacity;
• In terms of ESG, Delta was developed directly in-line with Braskem's commitment to sustainability and attention to eco-indicators;
• Finally, the start up of Delta is a major milestone, further enhancing Braskem's ability to differentiate and deliver product to meet our clients' specific needs.
Closing Remarks
PUBLIC
22
Thank you Delta Project Team!
Delta Project team ground breaking in 2017
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Q&A
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