Braskem, in partnership with Pequiven, announces the creation of companies to install the most modern and competitive integrated petrochemical project of the Americas in Venezuela, the Jose Industrial Complex. The announcement of the formation of these companies will be made this Thursday, 13, in Caracas, during a meeting between the presidents of Venezuela, Hugo Chávez Frias, and Brazil, Luiz Inácio Lula da Silva.

This initiative is a landmark in the strategic alliance between Braskem and Pequiven with the investment of nearly US$ 3.5 billion in two petrochemical units that will be as competitive as the best plants in the world. It is also a decisive step by Braskem in its internationalization strategy with the objective of becoming one of the ten main petrochemical companies in the world.

Polipropileno del Sur - Propilsur will be responsible for building and operating a polypropylene unit with capacity for 450 thousand tons/year integrated to a propane dehydrogenation unit, which permits greater integration and operational flexibility to the project. With this new scope, the investment is estimated to total nearly US$ 900 million. Propilsur is expected to start operations in the second semester of 2010.

Polietilenos de America - Polimerica will be responsible for the construction and operation of an ethylene cracker from natural gas with capacity for 1.3 million tons/year of ethylene, integrated to the production of 1.1 million tons/year of polyethylene, which will be carried out in three units: high density polyethylene, low density polyethylene and linear low density polyethylene. This integrated project is estimated to cost US$ 2.6 billion and is expected to start operations in the second semester of 2012.

The companies will be controlled equally by Braskem and Pequiven and production will be destined to the Venezuelan market and for export to Europe, United States and the western coast of South America.

"Shareholder agreements, including the bases for supplying raw materials, define a fundamental landmark in the installation of one of the most competitive petrochemical projects in the world, and an important step in Braskem’s strategy to become one of the ten main petrochemical companies in the world," says José Carlos Grubisich, company president. "These projects represent a decisive step in improving Braskem’s competitiveness," says Grubisich.

The shareholder agreement and the agreement to create the companies will soon be appreciated by the Braskem Board of Directors. The bases signed by the shareholders meet the criteria of global scale, updated technology and access to competitive raw materials, thus permitting to position the companies within the first quartile petrochemical production cost in the world.

Besides that, Braskem and Pequiven have defined a model of corporate governance that is aligned to the best international practices, guaranteeing equal rights to the partners in management and equal representation in the Board of Directors where all the decisions shall be made in consensus with the shareholders.

The contracted financial advisor has already started to contact multi-lateral agencies, export credit agencies, development banks and private banks and he is structuring a loan worth 70% of the total investment by means of project finance and the remaining 30% will come from equal contributions by the partners.