Suzano Petroquimica

completed

Suzano Petroquimica S.A. (Suzano or the company) is one of the largest petrochemical companies in Brazil that, through its controlled company Polibrasil Resinas S.A. (Polibrasil), and its joint controlled companies, Politeno Industria e Comercio S.A. (Politeno) and Petroflex Industria e Comercio S.A. (Petroflex), produces, markets and distributes petrochemical products. The company was incorporated in 2001 as a result of a corporate reorganization that culminated in a spin-off of all petrochemical assets then held by Companhia Suzano de Papel e Celulose (a former IFC client). These companies produce three main products: polypropylene (PP), in the case of Polibrasil, polyethylene (PE), and synthetic elastomers, which are sold in both the domestic and the international markets. The company also has a controlling block of a new company, Rio Polimeros S.A. (Rio Polimeros), which is building the first petrochemical complex in Brazil that will use natural gas fractions as raw material and has integrated ethylene and polyethylene production units. The project under consideration includes the buyout of Basell''s 50% stake in Polibrasil with the aim to hold 100% ownership of the company, the announced corporate restructuring, the debottlenecking of Polibrasil’s operations and debt refinancing. The acquisition was announced on June 20, 2005 and was completed on September 1st 2005. By taking full control of Polibrasil, Suzano will become an operating company, positioned as one of Latin America’s largest thermoplastic resins producers and the largest PP producer. This acquisition enables Suzano to become a major integrated petrochemicals player, instead of an investor and holding company, positioning itself as a consolidating agent in the Brazilian petrochemical sector in the Southeast region. Suzano will also implement a corporate restructuring aimed at simplifying its group structure and turn itself into an operational company as disclosed to the market on its press release of September 1st, 2005.