ANNUAL REPORT 2018

As the world’s sixth-largest thermoplastic resin producer and leading biopolymer producer, we believe in the power to transform of chemistry and plastics and in their responsible use to improve people’s lives.
As such, in 2018, we remained focused on the evolution of our products, services and processes and simultaneously challenged ourselves to take important steps in imagining and creating a company increasingly oriented to the future.

This Annual Report provides information for the period from January 1 to December 31, 2018 and was prepared in accordance with the Global Reporting Initiative (GRI) Standards: Core Option

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About Braskem

41 industrial units
Operations in 4 countries: Brazil, United States, Mexico and Germany
16 commercial offices
Clients in over 100 countries
8.008* team members *Excludes interns
Free cash flow of R$7.1 billion, 187% higher than in 2017
Annual production of nearly 20 million Ton/year of thermoplastic resins and other chemical products

Sustainability
as part of the strategy

Braskem sees sustainable development as a way to do business that considers the needs of all stakeholders, now and in the future.

And how are we addressing this enormous challenge? In 2018, we stayed focused on acting and thinking sustainably, which produced important advances.

Highlights 2018

Review of the Global Sustainable Development Policy

Based on three pillars – more sustainable operations and services, a portfolio of more sustainable products and solutions for a more sustainable life – the policy establishes the priorities and aspects to be considered in planning and work dynamics in all areas of Braskem.

Circular Economy

In 2018, we defined and announced our commitment to drive the Circular Economy in the plastic converters production chain. The documents establishes eight key initiatives that range from investments in new bio-based resins to participating in industry commitments to promote the reuse, recycling and recovery of all plastic packaging by 2040. Another work front is seeking solutions to end the improper disposal of plastic waste in the environment, especially in marine environments. On this front, Braskem joined the global initiative “Alliance for the End of Plastic Waste,” which has set a target to invest US$1.5 billion over the next five years, and the Plastics Industry Forum – For a Clean Ocean, which was created by the Plastics Social and Environmental Institute (Plastivida) and the Oceanographic Institute of the University of São Paulo (USP).

Recognized practices

The continuous efforts to strengthen our positive environmental and social impacts and to control any adverse effects led, in 2018, to Braskem being named a LEAD Company by the UN Global Compact and include in the Change the World List of Fortune magazine, which recognizes the companies that most drive positive impacts through their actions. In early 2019, Braskem was featured in “The Sustainability Yearbook” published by RobecoSAM, a global sustainability consulting firm.

Sustainable Development Macro Goals

Our business strategy is aligned with the 10 macro goals with targets set for 2020 and is linked to the 17 Sustainable Development Goals (SDGs) of the United Nations. The results are accompanied regularly by Braskem’s Board of Directors. See below the status of our progress on each one:

Safety

Be a reference in the world chemical industry in chemical, occupational and process safety.

% of achieved goals

2016
 
99%
2017
 
98%
2018
 
98%
2020
 
100%

Financial results

Be one of the world’s three largest thermoplastic resin producers, and guarantee profitability levels that sustain the perpetuity of the business and its investment grade rating from the three main international rating agencies.

% of achieved goals

2016
 
73%
2017
 
73%
2018
 
73%
2020
 
100%

Post-consumer solutions

Be one of the world’s five largest sellers of polyvinyl chloride and polypropylene with recycled content among the petrochemical companies that manufacture polyolefins. And become a relevant driver of growth in plastic recycling in Brazil, supporting the achievement of the targets of the Packaging Industry Agreement.

% of achieved goals

2016
 
1%
2017
 
1%
2018
 
2%
2020
 
100%

Local development

Reach an "excellent" level of reputation in the Citizenship Dimension of the RepTrak® Pulse, demonstrating recognition by local communities and society in general for the contributions made to improving human development.

% of achieved goals

2016
 
86%
2017
 
81%
2018
 
75%
2020
 
100%

Water efficiency

Be a reference in the use of water resources in the global chemical industry in water consumption and water reuse.

% of achieved goals

2016
 
96%
2017
 
100%
2018
 
97%
2020
 
100%

Climate change

Be one of the world’s best large chemical producers in terms of greenhouse gas emissions intensity, maintaining the use of renewable feedstocks.

% of achieved goals

2016
 
93%
2017
 
100%
2018
 
99%
2020
 
100%

Developing solutions

Be recognized as a company that supports its Clients in the development of environmental and social solutions in Chemistry and Plastics, achieving a “strong” level of reputation through its products and services.

% of achieved goals

2016
 
85%
2017
 
91%
2018
 
97%
2020
 
100%

Strengthening practices

Be a reference in Brazil's business community for contributing to Sustainable Development. And be a global reference in the industry for contributing to Sustainable Development.

% of achieved goals

2016
 
91%
2017
 
94%
2018
 
92%
2020
 
100%

Renewable resources

Be a leading producer of chemicals and thermoplastic resins made from renewable feedstocks. And remain the world’s largest producer of thermoplastic resins made from renewable feedstock.

% of achieved goals

2016
 
82%
2017
 
82%
2018
 
100%
2020
 
100%

Energy efficiency

Be one of the world’s best chemical producers in energy consumption intensity and a major consumer of renewable energy.

% of achieved goals

2016
 
85%
2017
 
85%
2018
 
62%
2020
 
100%

Meet the details of each macro goal in: http://www.braskem.com.br/sustainable-strategy

Governance
& Compliance

The perpetuity of our business is closely linked to ethics and integrity. As such, Braskem’s initiatives in governance and compliance are aligned with market demands and continually reinforced.

Highlights 2018

  • Independent monitorship

    Conclusion of the second year of the monitorship and submission of the report, which was filed with the U.S. Department of Justice (DOJ).

  • Team

    37 team members of 5 nationalities, 10 more than in 2017.

  • Rulemaking documents

    The Internal Controls department created 13 new documents and reviewed 120 documents.

  • Training

    • 8.275* Team Members received training in compliance.
    • Launch of training programs for partners focusing on the Code of Conduct for Contractors.
    • Training program on Investigation administered to members of the Compliance Committee and Ethics Committee.
    • Training program on Anti-corruption administered to members of the Board of Directors and Audit Board.
    *Includes interns
  • Compliance Program

    95% of all actions implemented in the program’s pillars of prevention, detection and remediation.

  • Integrity indicators

    Improvement in the integrity indicators of Instituto ETHOS, with an overall score of 8.7, above the industry average of 6.7.

Business performance

A highlight of the period was the record-high free cash flow, despite the challenging external scenario.

Highlights 2018

  • Free cash flow

    R$7.1 billion, 187% higher than in 2017

  • EBITDA

    R$11.3 billion

  • Digital transformation

    Creation of the Braskem 5.0 Program to align the business challenges with new technologies and processes, such as Industrial Internet of Things, Virtual Reality applied to Industry, Robotic Process Automation, Data-Lake Analytics and more.

  • Brazil

    3.4 million tons of resin* and 2.9 million tons of chemicals
    1.3 million tons of resin* and 571,000 tons of chemicals exported
    *PE, PP and PVC

    United States & Europe

    1.9 million tons

    Mexico

    799,000 tons

  • Geographic and feedstock diversification

    Braskem’s Board of Directors approved the incorporation of a new company in India to capture new growth and sales opportunities.

    Construction of Braskem’s new PP plant in the United States reached 48.3% completion at the end of 2018, with investments of US$382 million already realized.

Innovation

Incorporated into Braskem’s business model and strategy, innovation is key to developing solutions that can transform people’s lives. As such, every year we update our investments in people and infrastructure, which are key factors for creating an environment with the capacity to drive innovation.

Innovation in numbers

  • 307 team members dedicated to the topic
  • 2 Technology & Innovation Centers (Brazil and United States)
  • 2 Technical Centers focusing on polymers (Mexico and Germany)
  • 1 Process Technology Development Center (Brazil)
  • 1 Renewable Chemicals Research Center (Brazil)
  • 7 pilot plants
  • 27 new resin grades added to the portfolio in 2018
  • 308 projects for developing new products and processes
  • 34 new patent applications and 152 extensions
  • 282 patents granted
  • 59,000 tests conducted for 420 Clients at the Technology & Innovation Center in Brazil
  • 16,000 tests conducted for 75 Clients at the Technology & Innovation Center in the United States
innovative products and solutions

Stakeholders

As a people-oriented company, we believe it essential to create value for all our stakeholders.

Team members

Supporting the development of people and creating an environment that fosters their professional and personal growth are key aspects of Braskem’s People & Organization strategy.

Highlights 2018

BeUx: an open invitation

Defining Braskem’s value proposition led to a series of initiatives developed collaboratively by team members from all countries in which the company operates. The flexibilization of the workplace and the integration and sharing of corporate spaces are examples of actions implemented through this process that strengthens the relationship of trust between professionals, while paving the way for new experiences.

Diversity & Inclusion Program

With five work fronts – Women, LGBTQI+, Blacks, Socially Vulnerable People and People with Disabilities – in 2018, the program carried out various actions in Brazil focused on raising awareness on the topic and mobilizing people. In the United States, 2018 was the first year of implementing the local diversity strategy, with the creation of a committee dedicated to the topic and training programs administered at all sites.

Recognition

Braskem was recognized by Love Mondays as one of the 50 companies most loved by team members and interns, by Cia de Talentos as one of the Dream Companies for Young Professionals, and by Você S/A as one of the Best Companies for Launching a Career.

Communities

Our positioning is based on maximizing Braskem’s positive social and environmental impacts, building lasting relationships and contributing to the sustainable development of local communities.

Highlights 2018

Private Social Investment (PSI)

Em 2018 foi realizada a revisão da nossa estratégia com o objetivo de ampliar a conexão com o negócio e com a Política Global de Desenvolvimento Sustentável da Braskem. O novo modelo considera três causas prioritárias: consumo e pós-consumo sustentável, inovação e empreendedorismo sustentável e desenvolvimento local.

  • PSI projects: 42
  • Total investment*: R$20.8 million
  • Beneficiaries*: around 200,000 people
*PSI + donations

Volunteer Program

Focusing on communities located near Braskem’s industrial sites, the program, which aims to improve quality of life, made progress on important indicators in 2018:

  • 222% increase in volunteer participation
  • 82% more initiatives
  • 70% growth in donations
  • 251% more hours dedicated by volunteers

Ser+

The program works to promote the social inclusion and socioeconomic development of recyclable material collectors and cooperative members. In 2018, Ser+ supported 37 picking centers and co-ops, which resulted in a 26% increase in the monthly income of the project’s beneficiaries, or more than twice the target.

Plastianguis

Conducted in Mexico, the event promotes recycling and educates the community on how to identify and separate plastic waste, which is exchanged for coins called PlastiPesos. The coins are used to purchase cleaning products and food at prices subsidized by Braskem. In 2018, the drive benefitted 800 households and collected 28 tons, 304% more than in the previous year.

Partnership with The Franklin Institute

In 2018, Braskem became an official partner of The Franklin Institute, one of America’s largest and preeminent centers of science, technology, education and development to foster initiatives in the area through programs such as “Color of Science,” “Women in Science” and “Introduce a Girl to Engineering.”

Suppliers

An essential component of our operations, Braskem’s Suppliers are managed on a decentralized basis in aspects such as cost analysis, product and service quality, compliance with the Code of Conduct for Contractors and Health, Environment and Safety requirements. The Due Diligence process and tools such as the Supplier Radar and Supplier Evaluation Score support the management of Braskem’s 4,636 registered suppliers.

Highlights 2018

Global suppliers

Identification of opportunities for development in its Suppliers with a global presence and contractual tools that allow for capturing synergies while simultaneously respecting the needs of each country.

Sustainable sourcing

Implementation of the Sustainable Procurement tool, which improves the assessment of social and environmental risks in the technical assessment phase of bid processes. The project, which is supported by the Getúlio Vargas Foundation (FGV), helps the various procurement areas to incorporate sustainability criteria into their decision-making process. In 2018, a pilot project was launched for industrial services and inputs, with the next steps including validation by leaders and the Legal and Compliance areas.

In 2019, the project will be rolled out in procurement categories with high socioenvironmental impact.

Recognition

In 2018, Braskem was the Brazilian highlight in the CDP Supply Chain ranking, which recognizes companies that best engage their supply chains to adopt new approaches for climate change and water management.

Logistics

Braskem made progress on a series of projects for transforming processes, customer service and strengthening global actions for better management practices. To ensure that all partners are up-to-date on Braskem’s processes in Health, Environment and Safety, we periodically conduct meetings and audits. Another work front is Braskem’s participation in a series of initiatives related to traffic safety:

  • “Transportadora da Vida,” of the Freight Carrier and Logistics Companies Trade Union
  • “Olho Vivo na Estrada,” of Brazilian Chemical Manufacturers’ Association (ABIQUIM) in partnership with the Brazilian Chlorine Manufacturers' Association (ABICLOR), which works to prevent unsafe attitudes in the transportation of hazardous products, with actions to raise awareness benefitting over 800 people in 2018.
  • “Na Mão Certa” program, of Childhood Brasil, which works to protect children and recognized Braskem, for the third straight year, for its actions.

Clients

We work with our clients and value chains to develop new products and solutions that are more efficient and have high recycling and reuse potential.

Highlights 2018

PICPlast

The Plastics Chain Incentive Plan (PICPlast) is a Braskem initiative in partnership with the Brazilian Plastics Industry Association (ABIPLAST) to support exports of plastic goods, foster competitiveness and innovation in the converter industry and promote the benefits of plastics. In 2018, PICPlast held another edition of PlastCoLab, an interactive space accessible by the public to show how plastics, combined with innovation, technology and responsibility, can transform the future.

Wecycle

Braskem’s platform to support businesses that increase the value of post-consumer plastic waste and strengthen the recycling chain carried out various projects during 2018 involving partnerships with clients, recyclers, cooperatives and companies that own consumer goods brands.

Government

Our operating model is based on open dialogue and a commitment to management guided by ethics.

Highlights 2018

Issues on our agenda with the government include an ICMS tax incentive granted by the State of Alagoas under the Alagoas State Integrated Development Program (Prodesin), as a result of Braskem’s US$500 million investment in the new PVC plant built in 2012 at the Marechal Deodoro Industrial District. In 2018, the amount calculated was R$81.9 million, which was allocated to the fiscal incentive reserve, in accordance with Article 195-A of Federal Law 6,404/76.

Health, environment
& safety

Since its creation, Braskem always has sought to continually improve the safety, efficiency and sustainability of production processes

  • Global management

    Global rollout of Intelius, Braskem’s new Integrated Management System.

  • Investments:

    Investment in HES improvements amounted to R$145.4 million, around 14% higher than in 2017.

  • Product safety:

    100% of products and services were subjected to analysis with regard to health and safety impacts.

  • Water efficiency:

    Braskem was one of the 27 companies to figure on CDP A List for the second straight year in the ranking of the Carbon Disclosure Program.

    26.3% of the water used in Braskem operations came from reuse processes. At units in the ABC region of Greater São Paulo, 97% of the water consumed is recycled water.

  • Energy efficiency:

    A commitment was signed to invest in the purchase of electricity from wind power under a 20-year agreement, which will support the expansion of the EDF Renewables wind complex in Bahia and consequently the development of the state’s renewable energy sector. The initiative will reduce Braskem’s emissions by 325,000 tons over the period.

    Another energy efficiency project is the modernization of the power system of the ABC Petrochemical Complex in São Paulo, which involves an investment jointly with Siemens of R$600 million. The modernization will reduce energy consumption and CO2 emissions, while improving the safety and reliability of processes.

  • Climate change:

    Braskem was one of the 126 companies to figure on the A List of the ranking of the Carbon Disclosure Program (CDP).

    For the seventh straight year, Braskem was selected as a component of the Carbon Efficient Index (ICO2) of the São Paulo Stock Exchange (B3).

    For the eighth straight year, Braskem obtained Gold classification in the Brazilian GHG Protocol Program.

Recognitions

CDP WATER

For the second straight year, we featured on the Water A List of the ranking compiled by the Carbon Disclosure Program (CDP), figuring among the 27 companies that achieved maximum scores.

CDP Climate

We were one of the 126 companies featuring in the Climate Change A List of the CDP ranking.

CDP Supply Chain

In 2018, we were featured as the Brazilian highlight in the CDP Supply Chain ranking. For the first time, we were named to the Supply A List and, for the second time, to the Supplier Climate A List.

Change the World

We featured on Change the World list compiled by Fortune magazine as one of the companies that most promote positive impacts through their actions.

GHG Protocol

For the eighth straight year, we were classified in the Gold category of the Brazilian GHG Protocol Program.

Logo Love Mondays

We featured among the 50 Brazilian companies most loved by their employees according to Love Mondays.

Logo Cia de Talentos

Based on a survey of over 70,000 people, we received the Dream Career Award in the Young Professionals category.

Logo Você S/A

We were elected one of the Best Companies to Launch a Career by the magazine Você S/A.

ICO2

We were selected for the seventh straight year as a component of the Carbon Efficient Index (ICO2) of the São Paulo Stock Exchange (B3).

Out and Equal

In 2018, we won the Excellence Out and Equal Award for our actions to promote the inclusion of LGBTQIA+ people.

RobecoSAM

In early 2019, Braskem was featured in “The Sustainability Yearbook” published by RobecoSAM, a global sustainability consulting firm.

Previous reports

Read the reports for previous years: