Braskem day   quattor presentation - luiz de mendonça
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Braskem day   quattor presentation - luiz de mendonça Braskem day quattor presentation - luiz de mendonça Presentation Transcript

  • QuattorLuiz de Mendonça 1
  • Agenda Quattor Basic Petrochemicals Polymers Feedstock Turning Quattor Around Synergies Questions 2
  • Agenda Quattor Basic Petrochemicals Polymers Feedstock Turning Quattor Around Synergies Questions 3
  • Business overview Members 1,720 Investments Program R$ 2.3 billion (2005-2009) Tax Revenue R$ 1.6 billion/year Gross Revenue R$ 5.3 billion/year Production Capacity(million ton/year) 2.7 of petrochemicals and 1.9 of thermoplastics (PE + PP) PE and PP domestic market share 40% Export of plastic resins 400 kton/year, of which: Asia 50% Latin America 27% Europe 10% Africa 13%Source: Quattor 2009 4
  • Business Priorities Reach top quartile in Health, Safety and Environment performance Maximize asset utilization Implement operational improvement investment plan Improve reliability and availability of feedstock supply Agressive management of fixed and variable costs Optimize working capital Reinforce Polyethylene product portfolio (Chevron Phillips technology) Optimize and invest in the innovation pipeline Recover employees pride and motivation for working at Quattor Prepare the organization for the future integration with Braskem 5
  • Simplified Structure – from 9 to 6 direct Reports PE Polyethylene Business Estratégia, Marketing e Supply Chain Rui Chammas Armando Bighetti Development Carlos FontesShareholders Clients Polypropylene PP Estratégia, Marketing Carlos Fontes and Integration People & e Supply Chain Planning Organization Frank definir A Alcântara Marcelo Nunes Fernando Musa Eliana Granato Patricia Maia VPE – Unidade de Pol Quattor CEO í Luiz de Mendonça Luiz de Mendonça Basic Chemicals Vinílicos Celso Ferreira Roberto Bischoff 6
  • Agenda Quattor Basic Petrochemicals Polymers Feedstock Turning Quattor Around Synergies Questions 7
  • Basic petrochemicalsFootprint Basic Petchems Production - ABC Production - DCX 2009 2010 (ytd) 2009 2010 (ytd) Kton/y Kton/y Kton/y Kton/y Ethylene 493 411 338 257 Duque de Caxias Grande ABC Propylene 249 203 47 40 Benzene 228 162 - - Butadiene 58 51 - -• Significant cost advantage in ABC from new LRH unit• Significant cost advantage in DCX from gas and integration with PE• Hydrocarbon resins 8
  • Agenda Quattor Basic Petrochemicals Polymers Feedstock Turning Quattor Around Synergies Questions 9
  • Polypropylene Footprint Polypropylene Sales per segment Share Kton, 2010 Jan-Aug % Distributers Distribution 43.921 32% BOPP 42.134 46%Slurry Homo 115 kton/y Compounds 38.019 39% Niche 32.749 32% Camaçari Caps 27.619 53%RJ-1 Homo 300 kton/y Duque de Raffia 22.067 25% Caxias DU/Buckets 20.039 25% Grande ABC Electronics 18.879 35%ABC-1 450 kton/y Non woven 14.925 15%- Homo, Heco, Raco Rigid packing 13.927 24% Fibre 11.455 31% 875 kton/y Film 10.772 26% • Largest Plant in Brazil (Mauá) • Good geographic positioning • Strong customer relationships 10
  • Polypropylene – new developments Rectangular pail for paint packaging Innovation: Steel replacement in water based paints. Target Sales: 4.6 kton/year PP Car Seats (To be launched) Innovation: Customer support to minimize car seats imports. Target Sales: 1.5kton/year 11
  • Polyethylene Footprint Polyethylene Sales per segment Share Kton, 2010 Jan-Aug % Bobbins 88.874 29% Distribuition Distribution 70.439 24% Industrial Films 59.170 32%Riopol HD/LL 540 kton/y Blow molding 30.474 15% Bags 29.104 25% Duque de Caxias Special Films 10.727 10% Grande ABC 3.619 EVA 12% e Cubatão Compounds 2.602 12%ABC-1 LD 120 kton/y Injection 2.426 4%ABC-2 HD/LL 230 kton/y Extrusion 873 3%Cubatão LD 150 kton/y Specialties 751 1% Others 3.043 5% 1.040 kton/y • 2 most recent investments in Brazil (CP and Riopol) • Only gas based plants in Brazil • Good geographic positioning • High quality products 12
  • Polyethylene – new developments New PE Grade for Fuel Tank Innovation: Monomodal grade, by CPChem technology Target Sales: 21.6 kton/year Plastic Sleepers (ties) Innovation: Less weight due to injection technology adopted, greater strength and durability Target Sales: 5.4 kton/year New Metalocene PE Grade for Cast Film Innovation: Better use of raw materials and plant’s risks reduction Target Sales: 43.2 kton/year 13
  • RioPol Only gas based cracker, fully integrated with PE in Brazil Significant cost advantage vs. Naphtha based plants Good potential for debottlenecking and integration with COMPERJ Provides operational know-how and expertise for Braskem’s international projects Vinmar contract restructured to create flexibility and improve profitability 14
  • Agenda Quattor Basic Petrochemicals Polymers Feedstock Turning Quattor Around Synergies Questions 15
  • Feedstock Sources of feedstock % Feedstock Issues Naphtha 50% • Significant volume with lower quality • No infrastructure to import directlyEthylene 100% 50% LHR • Full contract volume still not available Braskem Quattor Ethane/Propane • Mix 8% 10% • Full contract volume still not available • Reliability 51%Propylene 92% Propylene 39% • Long distances by road • Multiple sources in each site • Reliability Braskem Quattor Propylene from refinery Liquid (Naphtha) GasSource: Basic petrochemicals business unit 16
  • Agenda Quattor Basic Petrochemicals Polymers Feedstock Turning Quattor Around Synergies Questions 17
  • High level diagnostic ABC cracker debottleneck/LRH unit still not operational. PE new plant with very limited ethylene availability Focus on the capacity expansion program limited investment in operational improvements and maintenance Synergies from Quattor creation in early stages of capture Company managed for short term cash generation, with limited focus on profitability Centralized decision making process Some talent evasion during 2009 Difficult business situation impacted team motivation 18
  • Teams and structure Early exchange of people to improve morale and accelerate changes (cultural and operational), with some key positions being staffed with experienced Braskem executives … Celso Luiz T. Ferreira Frank Alcântara Henrique L. Schulz Responsible for Responsible for Responsible for Basic Petrochemical PP Business Industrial Basic 40 80 Business Petrochemical Business Carlos Alfano Eduardo Tergolina Patrícia Maia Responsible for Industrial Responsible for Health, Safety and Responsible for PP People & Organization EnvironmentSource: HR Quattor information – estimate 19
  • HSE - Health, Safety and Environment Relevant improvement in all key indicators Control wastewater Solid waste Water consumption Power consumption M3/t Kg/ton M3/ton Gj/ton 1.72 3.82 4.27 15.7 12.2 0.97 1.87 3.81 Real YTD Real YTD Real YTD Real YTD 2009 2010 2009 2010 2009 2010 2009 2010Fonte: Quattor HSE Information 20
  • HSE - Accidents Rate Safety and accidents prevention have also been prioritized and a very high work accident rate was reverted. Accident Frequency Rate – SAF + CAF Recent Actions Number of Events Security QB BU PP BU PE BU Training of employees and outsourced workers Campaign to prevent 18.3 accidents with arms and 15.6 hands Health PCMSO Fulfillment 10.8 Preparation of Life Quality 6.3 Program 4.9 4.4 HSE excellence Preparation of risk management plans per plant Real YTD Real YTD Real YTD 2009 2010 2009 2010 2009 2010Source: Quattor HSE Information 21
  • IT – Formula Project ´SAP implementation adapted to Braskem´s solution, minimizing implementationrisk and creating the base for a fast integration in the future Separated Infrastructure and Systems Braskem Formula solution implementation 3 years of stable operations Braskem team learning experience Integration process accelerator SAP Go Live on August 1, 2010 Integration of processes with Braskem Standardization of management model Operational synergies catalyzer Incorporation of new functionalities SAP fully operational 22
  • Basic petrochemicals production With investments in operational improvements, the Basic Petrochemical Unit has been reaching successive records of production... Ethylene production Kton = production records 831 80% 669 Highlights Actions contributing to production 77 86 86 80 97 96 increase: 74 74 Revamp of Olefins Unit in 2008 UPGR startup in 2010 Operational reliability program Total Jan Feb Mar Apr Mai May Jun Jul Aug YTD 2009 2010 2010 2010 2010 2010 2010 2010 2010 2010 Integrated operations with second generation plants Propylene production Kton = production records Previous Production Records: 296 82% Ethylene: 80.9 ton, in 243 August/2009 Propylene: 29.1 ton, in July/2009 30 32 30 30 34 34 27 27 Total Jan Feb Mar Apr Mai May Jun Jul Aug YTD 2009 2010 2010 2010 2010 2010 2010 2010 2010 2010Source: Business Unit Information % - YTD 2010 / Total 2009 23
  • Polymers production ... as well as in Polyethylene and Polypropylene Units Polyethylene production Kton = production records 83% Highlights 626 521 Actions contributing to production increase: 78 Raw material availability at line III 61 67 69 73 54 60 60 Improved REDUC supply Operational Reliability Better alignment between cracker Total Jan Feb Mar Apr Mai May Jun Jul Aug YTD and second generation 2009 2010 2010 2010 2010 2010 2010 2010 2010 2010 Polypropylene production Kton = production records Highlights 586 71% Actions contributing to production 417 increase: DBN of ABC plant to 450 kton/year 55 50 60 56 47 53 58 DBN of DCX plant to 300 kton/year 39 Favorable production program, with less transition of grids Total Jan Feb Mar Apr Mai May Jun Jul Aug YTD Improved REDUC supply 2009 2010 2010 2010 2010 2010 2010 2010 2010 2010Source: Business Unit Information % - YTD 2010 / Total 2009 24
  • Capacity utilizationSignificant improvement in asset utilization Capacity utilization rate % production / nominal capacity Basic 85% + 14 % 71% Total 2009 YTD 2010 Capacity utilization rate % production / nominal capacity PP +5% 77% 72% Total 2009 YTD 2010 Capacity utilization rate % production / nominal capacity PE + 14 % 75% 61% Total 2009 YTD 2010 25
  • Agenda Quattor Basic Petrochemicals Polymers Feedstock Turning Quattor Around Synergies Questions 26
  • Quattor synergies of R$ 400 million in EBITDA as of 2012 R$ million 43 79 400 Investment of R$ 350 million required to capture all 279 synergies Financial synergy NPV estimated in R$ 340 million Industrial Logistics Supply EBITDA Synergies Production mix Maximization of gains Joint management Maximizing the from product of feedstock value of all cracker distribution purchases streams (domestic and export Renegotiation of markets) third-party Optimization of inventories Optimization of agreements (a) transportation modesSource: Braskem Recurring 27
  • Synergies: Example – Aromatics front Detailed projects, showing the evolution from initial status to result after synergies, as well as obtained gains Before After Braskem exports mixed Braskem sells mixed xylenesXylenes RS to xylenes in SE, reducing exportsOrtoxylenes SP Quattor sells xylenes in SE Quattor produces OX from Imported OX xylenes, reducing OX imports Braskem sells toluene in SE Braskem supplies Quattor withToluene Quattor uses toluene to BZ (exported before)Sales versus produce Benzene Braskem exports tolueneExports Quattor supplies toluene in SE Braskem sells in SE Quattor sells products in SEAliphatic Solvent Quattor uses similar products Braskem uses them asin the southeast as feedstock feedstock (with costregion advantages over Quattor use)Source: Quattor Economic Planning Information 28
  • Synergies: Example – Mix PP/PE The reorganization of product types produced in each plant will provide efficiency gains, through the rationalization of products and adequate use of assets Product Grades Polypropylene Polyethylene Total Number of grades (%) Number of grades (%) Number of grades (%) 410 116 (-28%) 294 254 61 (-25%) 193 156 55 (-36%) 101 Before After Before After Before AfterSource: Quattor Economic Planning Information 29
  • Synergies: Example – PE Mix Plant Allocation Future utilization % PE1L1 PE1L2 PE2 PE3PEBD PE3PEL PE4AUTO PE4TUB PE4SPH 105 kton 132 kton 120 kton 153 kton 220 kton 75 kton 140 kton 357 kton 99 kton 132 kton 120 kton 150 kton 217 kton 60 kton 133 kton 257 kton 95% 100% 100% 98% 99% 80% 95% 72% PE5SPH PE5SLU PE6TUB DCXL1 DCXL2 ABCPEBD ABCCHEV ABCCUB 150 kton 399 kton 165 kton 272 kton 266 kton 110 kton 240 kton 137kton 54 kton 304 kton 149 kton 211 kton 182 kton 89 kton 237 kton 135 kton 36% 76% 90% 78% 68% 81% 99% 99%Source: Quattor Economic Planning Information 30
  • Agenda Quattor Basic Petrochemicals Polymers Feedstock Operational Turnaround Synergies Questions 31