Investor Presentaiton
2016 Braskem | Annual Report
US$
5.2
BILLION
invested in
the Mexican
Petrochemical
Complex
"A"
LIST
of CDP
Investor,
international
seal recognizes
companies
with standards
of excellence
in carbon
management.
capital in a greenfield project
abroad. In the fourth quarter,
the average operation rate of
the three polyethylene plants in
the Complex was 73%, reaching
97% in December. Polyethylene
production in Mexico totaled
443,000 tons in the year.
It is also important to note the
closing of the ten year contract
to purchase ethane imported
from the United States from an
affiliate of Enterprise Products.
The agreement is part of a
project to modernize and make
flexible the use of raw material
of the petrochemical plant in
Bahia, which predominantly
operates using naphtha. The
initiative, with an investment
of BRL 380 million, will enable
the production of up to 15% of
ethylene using ethane as raw
material. The new operation is
expected to begin in the second
half of 2017.
The prospects are promising
after we commissioned the
Ultra High Molecular Weight
Polyethylene (UHMWPE) plant in
La Porte, Texas, USA, in 2016, to
enable better customer service in
North America and Europe. The
plant was built from Braskem's
own technologies, enabling
production of this product,
which is eight times lighter than
steel and ten times more durable
than high density polyethylene
(HDPE), at a competitive cost.
Governance and Compliance
Illegal acts committed by former
members and agents of Braskem
were confirmed in 2016, based
on information disclosed in the
context of Operation Lava-Jato.
As the main interested party
clarifying the case, Braskem
acknowledged its responsibility
for those acts and regrets
past conduct. The internal
investigation process culminated
in the global agreement signed
with authorities in Brazil, the
United States, and Switzerland,
announced in December. Through
the Global Agreement, Braskem
agrees to pay the amount of
BRL 3.1 billion as a fine and
indemnity, and implement
improvements in its compliance
and internal control systems. This
commitment will be accompanied
by external monitors, appointed
by the Department of Justice
(DOJ), the Securities and
Exchange Commission (SEC),
and the Federal Public Prosecutor
(MPF - Ministério Público Federal)
for up to three years, to ensure
compliance with the terms of the
agreement.
At the end of 2016, as a result
of the full provisioning of the
resources established through
the Global Agreement to be paid
to Brazilian and international
authorities in the fourth quarter
of 2016, the Company posted a
consolidated net loss of BRL 729
million for the year, even after
retained earnings in the three
previous quarters.
It is important to remember that,
since the second quarter of 2016,
Braskem had already implemented
a wide revision project of its
Corporate Governance structure,
which aimed to implement a new
Compliance Program in order to
strengthen the responsible area
with direct report to Braskem's
Board of Directors and significantly
reduce the possibility of any
deviation of a similar nature to
those identified. In addition to the
initiatives already implemented
in 2016, the program presents
almost a hundred initiatives that
will also be carried out throughout
the course of 2017.
Sustainable Development
Braskem maintains a consistent
course of action to promote
sustainable development. We
are proud to be the first industry
in Brazil to join the "A" List
of CDP Investor in 2016, anView entire presentation