Braskem, the leading company in the thermoplastic resins industry in Latin America and third-largest resin producer in the Americas, announces it will deactivate its PET unit by the end of 2008.

In May 2007, Braskem announced the deactivation of its DMT production unit and the temporary suspension of its PET production, both of which are located in the Camaçari Petrochemical Complex.

At the time, a study was initiated to assess the possibility of resuming PET production based on a new technological approach that would ensure competitive costs for Brazil’s polyester chain.

The results of the studies indicated that reactivating PET production on a competitive basis was not viable. For this reason, Braskem decided to deactivate the unit, terminating the Company’s activities in this business. The decision was grounded in Braskem’s focus on prioritizing investments that provide the Company with returns above the cost of capital and that are aligned with its business strategy.

This decision will result in the constitution of an accounting provision (with no cash impact) of approximately R$125 million.

The deactivation of the PET unit in Camaçari will not lead to any dismissals. Moreover, Braskem will ensure the supply of PET resin until, at least, April 2009, or as long as inventories last, to all its clients through an agreement signed with M&G Polímeros Brasil S.A. During this period, Braskem will maintain its current sales policy for this product, including technical support, in order to assure service
excellence for all of its clients.