Braskem occupied a prominent position among petrochemical companies that took advantage of growth opportunities provided by the global economic crisis in 2009. Braskem demonstrated it had adjusted its cost and capital structure to face the sector's downturn and was able to make use of the crisis scenario to make important acquisitions. Besides its strategic agenda, a focus on maintaining operating efficiency allowed Braskem to significantly improve its performance, reaching an EBITDA of R$ 2.5 billion and an EBITDA margin above 16%, one of the highest in the global petrochemical sector for the period.

After an initial period highlighted by strong retraction in domestic and international consumption due to the economic crisis, which pushed Braskem to operate its factories at 55% of nominal capacity until the end of January, the Brazilian thermoplastic resin market closed 2009 with a growth in demand of 1% compared to the year before. The recovery intensified in the second semester with a growth of 18% compared to the first semester. Imports continued having an important share in the Brazilian market, 22%, due to price volatility in the international market and a reduction in demand in developed countries, besides the appreciation of the real all year long.

In face of this scenario, Braskem’s domestic PP sales grew 9% over last year, driven by the recovery of some sectors of the economy, such as the automobile, white line, disposable and toy segments, among others. On the other hand, domestic PE and PVC sales fell 2 and 8%, respectively. In the aggregate for thermoplastic resins, the volume sold in the domestic market was practically in line with 2008, reaching 2.2 million tons. Also taking into account the export market, total volume of resins sold increased 10%.

"The recovery of the Brazilian market in 2009 and the perspectives for strong growth in the domestic economy for 2010 portray a favorable scenario for developing Braskem’s businesses this year. With economic normalcy holding firm, the expectation for the petrochemical industry is positive for the first months of 2010. But it is important to remember that the announcement of new capacities, mainly from the Middle East and Asia, is much greater than growth in global demand, which should once again pressure sector profitability," says Bernardo Gradin, president of Braskem.

Braskem’s consolidated gross revenues were R$ 19.5 billion in 2009, compared to R$ 23.8 billion in 2008, an 18% decrease. Likewise, Braskem’s consolidated net revenues were R$ 15.2 billion in 2009, 18% below the R$ 18.5 billion in revenues recorded the year before. This reduction is mainly explained by the level of basic petrochemical resin prices, significantly lower than the previous year when raw material price increases drove international prices of these products.

In 2009, net revenue from exports reached US$ 2.1 billion (27% of total net revenues), a 7% drop in relation to the year before. The reduction in international prices once again influenced this performance since exported volumes of basic petrochemicals and resins increased 67% and 29%, respectively, between those periods.

Braskem’s net profits in 2009 reached R$ 917 million, a 3.4 billion increase in relation to the R$ 2.5 billion in losses in 2008. Although adherence to Refis had a negative impact on net profits of around R$ 638 million in 4Q09, good operating performance and the real’s appreciation over the dollar drove the recovery in company results.

By maintaining its commitment with capital discipline and making investments with returns that exceeded the cost of capital, Braskem's operating investments totaled R$ 894 million in 2009. Of that sum, R$ 183 million was used for the Green PE project to install the unit to make ethylene out of ethanol (renewable raw material), which will permit industrial scale production of 200 kt/year of the Green Polymer. Works are advanced in relation to the timetable and the plant is scheduled to start operations in the 3Q10.

Another highlight is the R$ 43 million investment made in converting the MTBE Unit into ETBE at the Basic Petrochemical Unit in Bahia. Its importance is underscored in face of the use of renewable raw material (ethanol). The plant started operations in June 2009.

In the strategic area, the incorporation of Petroquímica Triunfo in the first semester and the acquisitions of Quattor and Sunoco Chemicals at the beginning of 2010 broadened Braskem’s competitiveness and size. The purchase of Quattor strengthened the Brazilian petrochemical company and moved it up to eighth in the ranking of the sector’s global companies, while the acquisition of Sunoco positioned it as the third largest producer of polypropylene in the world.

As part of Braskem’s internationalization program, it is worth noting the decision to develop a new integrated project to produce 1 million ton/year of ethylene and polyethylene in Mexico, in association with the Idesa Group, one of that country’s main petrochemical companies. With projected investments of US$ 2.5 billion, the project should begin operations in 2015.
In relation to the investments under study in Venezuela, Braskem and Pequiven decided to assess a new model for the Propilsur and Polimerica joint venture petrochemical projects due to the new reality of the international credit market and better alternatives for raw material supplies. With regard to the polypropylene project by the mixed company, Propilsur, Venezuela’s state-owned oil company, PDVSA, presented an alternative for supplying raw material, propylene, from the Paraguaná Refinery Complex in the state of Falcón. With this proposal, Pequiven and Braskem are assessing the feasibility of changing the project’s conception and location. Likewise, they agreed to postpone developments related to the mixed company, Polimérica’s, polyethylene project for one year to assess even more competitive alternatives for the project.

 "Braskem has taken important steps to achieve its strategic vision of being among the top 5 petrochemical companies in the world, always committed to sustainable development, driving a dynamic that brings valorization opportunities to the sector’s entire production chain and favoring investments needed to accompany Brazil’s economic growth projected for coming years," concludes Gradin.