Francisco de Assis Esmeraldo, president

Instituto do PVC - São Paulo, Brazil

Vinyl Players

BraskemBraskem

Carbocloro

Solvay Indupa

Petco

Pequiven

Solvay Indupa

Braskem

Source: CMAI, Braskem

BRAZIL

ARGENTINACHILE

PERU

EQUADOR

COLOMBIA

BOLIVIA

VENEZUELA

URUGUAI

PVC Capacities

PVC Capacity (kt/year)

479

231140 128

140

240210

355

120 150280

281

MVC Capacity (kt/year)

EDC Capacity (kt/year)Source: CMAI, Braskem

BRAZIL

ARGENTINA

COLOMBIA

Solvay Indupa

Solvay Indupa

Carbocloro

Braskem

442

600

PequivenPetco

PVC DemandSouth America PVC Demand:1,14 million t (4.1 % of world demand)

Source: CMAI, Braskem

700

63

6211

7

853

40

12842

20

PVC Demand (2002)

BRAZIL

ARGENTINACHILE

PERU

EQUADOR

COLOMBIA

BOLIVIA

VENEZUELA

URUGUAI

PARAGUAI

GUIANAS

• End uses - %

PVC Demand

Source: Local Companies, compiled by Instituto do PVC

Piping & Fittings 51 35 52 68

Films 5 12 6 4

Compounds 37 50 38 22

Other 7 3 4 6

Total 100 100 100 100

Country

End Use Brazil Argentina Colombia Venezuela

PVC Demand - Housing

0,000

1,000

2,000

3,000

4,000

5,000

6,000

7,000

6,000

Brazil

3,700 (E )

Argentina

1,700

Colombia

1,500

Venezuela

HOUSING DEFICIT (2002) - 1,000 UNITS -

52

2431

0

50%

100 %

11

Argentina

2

Colombia

25

Venezuela

15

Brazil

URBAN60 RURAL

BASIC SANITATION DEFICIT - Sewage -

Source: IBGE, Brazilian Construction Industry Conference, DANE(E) Estimated

The Region deficit in housing will fuel PVC growth

PVC Demand - Sanitation

0,000

1,000

2,000

3,000

4,000

5,000

6,000

7,000

6,000

Brazil

3,700 (E )

Argentina

1,700

Colombia

1,500

Venezuela

HOUSING DEFICIT (2002) - 1,000 UNITS -

52

2431

0

50%

100 %

11

Argentina

2

Colombia

25

Venezuela

15

Brazil

URBAN60 RURAL

BASIC SANITATION DEFICIT - Sewage -

Source: World Bank

The region deficit in sanitation will fuel PVC growth

PVC Consumption per Capita - 2002/2003

PVC CONSUMPTION POPULATION (1000 t) (millions)

KG/INHABITANTCountry 2002 2003 2002 2003 2002 2003

Brazil 690 605 175 178.5 3.9 3.4

Argentina 70 85 37 37.5 1.9 2.3Colombia 130 110 44 44.8 3.0 2.5Venezuela 40 30 23 23.5 1.7 1.3

Sources: IBGE (Brazilian Institute of Geography and Statistics), Braskem.

Prospective Analysis

Growth Rate Forecast/Year - 2004/2008

Country %

Brazil 5.0 - 6.0Argentina 4.0 - 5.0Colombia 2.0 - 3.0Venezuela 6.0 - 7.0

Sources: Braskem, Solvay Indupa, Harrimann Consulting

Future Expansions (1000 t)

Company Country Additional YearCapacity-t/yr

Braskem Brazil 50 2005/2006

Solvay Indupa Brazil 40 2005/2006

Environment: a key issue

On a long term basis, PVC demand may be affected by environmental restrictions that discourage product innovation and stimulate competing products.

Environmental Issues• South America faces the same challenges as other regions

Brazilian Government totally focused on the establishment of a Solid Waste National Policy, with the participation of the plastic industries;

The use of phthalates in toys is still a great concern (Mercosul Policy);

Greenpeace focused on new campaign: “Domestic Poisons”;

PVC flooring: rubber flooring manufacturers’ campaign states that PVC is not an environmental friendly product;

Pan-American Games - Rio de Janeiro/2007: specific actions are being taken in order to avoid restrictions on PVC.

Greenpeace focused on transgenics and devastation of the Amazon forest.

BRAZIL

Environmental IssuesSouth America faces the same challenges as other regions

ARGENTINA

Several law projects against disposable plastic packaging (PET and PVC) and also against the use of phthalates in PVC toys. AAPVC acting strongly towards PVC defense and promotion

Strong criticism against environmentally inadequate domestic residues disposal (Government, NGO’s and consumer entities)

Insignificant plastic recycling throughout the country

AAPVC created a group formed by resin, additives and pipes producers, called COTyC, to defend PVC pipes against attacks from PP and PE pipes

Greenpeace focused on transgenic and nuclear energy

Environmental IssuesSouth America faces the same challenges as other regions

COLOMBIA

Law Project being voted at the Senate obliges companies to get acquainted with product lifecycle before selling it

Acoplasticos (Plastic Manufacturers Association), together with the Ministry of Environment proposed the preparation of a document regarding the sustainable management of plastic residues (as a result of the Basel Convention)

Use of post-consumer plastics, like packaging, is strongly criticized

Greenpeace: no local representative. Nevertheless, Greenpeace’s materials and news are always forwarded to Colombian Government.

Instituto do PVCMain Achievements - 2003

South American Vinyl Network (SAVN) foundation, in São Paulo - Brazil, including Brazil, Argentina, Colombia and Venezuela (March)

Speech of the Minister of Economic and Social Development to Instituto do PVC members and guests. Invitation by the Minister to join the Ministry’s Council (April)

Launching of the document “PVC Contribution to Sustainable Development” (June)

Pipe & Fittings producers - voluntary commitment for replacing Pb stabilizers by Ca/Zn stabilizers. Deadline: December/2004;

Meeting with the new Minister of Environment in order to introduce Instituto do PVC (July);

SAVN first international presentation: GVC Meeting - Athens/2003.

Instituto do PVC

First Brazilian PVC Congress

Date: October 5-6, 2004

City: São Paulo, Brazil

Place: to be defined

Instituto do PVCFirst Brazilian PVC Congress

Preliminary Program

Tue, Oct 5th

Morning: Opening & Worldwide PVC Market PanelAfternoon: Sustainable Development & Communication

Wed, Oct 6th

Morning: TechnologyAfternoon: Innovation