Braskem’s strategic goal is to meet the needs of its clients in the chemicals and plastics value chain in a sustainable way and maximize the return on the capital invested by its shareholders, with a focus on PE, PP, PVC, basic chemicals and renewable and recycled products.
In this sense, the Company has clearly defined the following strategic pillars, which are:
- Productivity and Competitiveness: improvements in the existing operations, focusing on operating efficiency and excellence, sales and logistics effectiveness, and leadership in costs
- Diversification: diversifying its feedstock and supplier profile to reduce volatility in its results and mitigate risks related to feedstock supply, as well as diversifying geographically to ensure access to regional opportunities and to protect operations against local political and economic risks
- Sustainability: operating in alignment with the United Nations Sustainable Development Goals producing a portfolio of renewable and recycled products, improving people’s lives by creating sustainable solutions through chemicals and plastics
Guided by its strategic pillars, Braskem’s growth is made possible by its innovation, people, corporate culture and corporate governance. The Company believes that its main growth avenues are concentrated in (i) renewables, (ii) recycling; and (iii) existing businesses with productivity and competitiveness.
Braskem has various projects to support each of its growth avenues, which include:
1. Grow in Renewables:
The Company is committed to achieving 1.0 million tons of green PE production capacity by 2030 and is working to reach this goal through potential strategic and financial partnerships.
In this sense, the following projects stand out:
Project to expand green ethylene production capacity in the Triunfo Petrochemical Complex in Rio Grande do Sul
Expansion of the current green ethylene production capacity from 200 kta to 260 kta using feedstock made from sugarcane ethanol.
Project to build a new green ethylene plant in Thailand (MOU with SCG Chemicals)
Execution of a memorandum of understanding with SCG Chemicals to conduct feasibility studies for a joint investment in a green ethylene plant in Thailand.
Project for joint licensing of green ethylene technology (partnership with Lummus Technology)
Partnership to develop and license Braskem’s technology to produce green ethylene. The partnership will bring complementary expertise to accelerate Braskem’s commitment to reach 1.0 million tons of green PE production capacity by 2030, extend the geographic reach of green ethylene production technology globally, and accelerate the use of bioethanol to chemicals and plastics.
2. Grow in Recycling:
One of the Company’s goals is to increase its sales volume of recycled products. By 2025, Braskem’s goal is to expand its portfolio to reach 300,000 tons of thermoplastic resins and chemical products with recycled content and 1.0 million tons of thermoplastic resins and chemical products with recycled content by 2030.
Additionally, the Company is working to prevent 1.5 million tons of plastic waste from being sent to incineration, landfills, or deposited in the environment by 2030. In this sense, the following projects stand out, which are mainly related to working through partnerships with other companies in our value chain to strengthen mechanical and advanced recycling globally:
Project for the construction of the first advanced recycling unit in Brazil
In partnership with Valoren, construction of the first advanced recycling unit in Brazil, with the objective of chemically transforming, through the pyrolysis process, plastic waste into circular feedstock.
3. Grow the Existing Businesses with Productivity and Competitiveness:
The Company will continue to invest in existing businesses to maintain productivity and competitiveness, focusing on operational efficiency and excellence, optimizing sales and logistics, leadership in costs and competitive advantages through client relations. The highlights on this front are the Transform For Value Program and the following projects:
Project to build an Ethane Import Terminal in Mexico
Construction of an ethane import terminal in Mexico, allowing total independence from a single supplier, in addition to enabling the expansion of approximately 20% of Braskem Idesa’s PE (ethane-based) production capacity.
Transform For Value Program
The Transform for Value (TFV) Program ended 2021 on pace to capture approximately US$277 million/year¹ in initiatives that reached more advanced stages of maturity. The accumulated capture in 2021 of these initiatives totaled about US$154 million.
During the first quarter (1Q22), there was little variation in the rate of capture, ending the quarter reaching the mark of US$245 million/year¹. The accumulated capture in 1Q22 of these initiatives totaled approximately US$62 million, which shows a significant evolution of the program when compared to the same quarter of last year. The rate of capture represents, mostly, a direct impact on the company’s EBITDA, which can occur in four ways: increase in net revenue, reduction of variable costs, reduction of fixed cost or reduction of SG&A. The table below shows the breakdown of the capture rate of US$245 million/year¹ achieved in the first quarter of 2022, by type of impact on EBITDA and region:
About one third of the capture rate value of US$ 245 million/year¹ can be associated with Digital Transformation initiatives, which make relevant use of digital technologies in their scopes, such as: automation and instrumentation, new software and systems, advanced analytics, machine learning, cloud services, among others.
In addition, other initiatives in more preliminary phases, such as planning or execution, under the management of the areas² that make up the scope of the program, added approximately US$401 million/year to the pipeline’s potential to be captured by 2023.
As already anticipated, the normalization of the petrochemical scenario impacted the quantification of initiatives. In addition, the gradual reduction in efficiency began to impact the values of initiatives that reached a more advanced stage of maturity (stage 5 – completed). However, these negative impacts were partially offset by the identification of new opportunities to capture value and the advancement of relevant initiatives to stages 4 & 5 – progress that should intensify throughout the year with the new crop of initiatives that entered the pipeline in this first quarter of 2022.
For 2022, the Company’s objective is to move forward with the program’s activities, reaching a capture of recurring gains in the amount of approximately US$302 million/year¹ in initiatives in more advanced stages.
¹ Considering only initiatives in stage 4 (Run-rate), when measurements of gains could vary as actions advance, and in stage 5 (Concluded), after stabilization and/or the internal audit.
² Transformation Office, Digital Center, Energy, Continuous Improvement and Competitiveness & Productivity (C&P) CAPEX