Francisco de Assis Esmeraldo, president Instituto do PVC - So Paulo, Brazil

Vinyl Players
Pequiven
VENEZUELA

Petco
EQUADOR

COLOMBIA

BRAZIL PERU

BOLIVIA

Braskem Braskem

Braskem
Carbocloro Solvay Indupa
CHILE ARGENTINA URUGUAI

Solvay Indupa

Source: CMAI, Braskem

PVC Capacities
Pequiven Petco
281 COLOMBIA 600 479 442 120 150 280

BRAZIL

Braskem

140

Carbocloro
Solvay Indupa
231 ARGENTINA 140 128

Solvay Indupa
355 210 240

PVC Capacity (kt/year) MVC Capacity (kt/year) EDC Capacity (kt/year)

Source: CMAI, Braskem

PVC Demand
128
COLOMBIA EQUADOR

42
VENEZUELA

20
GUIANAS

700

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

40
BRAZIL

53

PERU

8
BOLIVIA PARAGUAI

PVC Demand (2002)

CHILE

ARGENTINA

URUGUAI

11 62 63

Source: CMAI, Braskem

PVC Demand
End uses - %
Country
End Use Piping & Fittings Brazil 51 Argentina 35 Colombia 52 Venezuela 68

Films Compounds Other Total

5 37 7 100

12 50 3 100

6 38 4 100

4 22 6 100

Source: Local Companies, compiled by Instituto do PVC

PVC Demand - Housing

HOUSING DEFICIT (2002) - 1,000 UNITS 7,000 6,000 5,000 60 4,000 3,000 2,000 1,000 0,000 Brazil Argentina Colombia Venezuela 0 Brazil Argentina Colombia Venezuela 1,700 1,500 15 11 2 URBAN RURAL 6,000 100 %

BASIC SANITATION DEFICIT - Sewage -

3,700 (E )

52 The Region deficit in 50% housing will fuel PVC growth 31 24 25

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

PVC Demand - Sanitation

HOUSING DEFICIT (2002)
- 1,000 UNITS 7,000 6,000 5,000 6,000 100 %

BASIC SANITATION DEFICIT - Sewage -

The region deficit in 3,700 (E ) 4,000 sanitation will fuel PVC 3,000 growth
2,000 1,000 0,000 Brazil Argentina Colombia Venezuela 1,700 1,500

60 52 50%

URBAN

RURAL

31 24 15 11 2 0 Brazil Argentina Colombia Venezuela

Source: World Bank

25

PVC Consumption per Capita - 2002/2003

Country Brazil Argentina Colombia Venezuela

PVC CONSUMPTION (1000 t) 2002 2003 690 70 130 40 605 85 110 30

POPULATION (millions) 2002 2003 175 37 44 23 178.5 37.5 44.8 23.5

KG/INHABITANT 2002 2003 3.9 1.9 3.0 1.7 3.4 2.3 2.5 1.3

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

Prospective Analysis
Growth Rate Forecast/Year - 2004/2008
Country Brazil Argentina Colombia Venezuela % 5.0 - 6.0 4.0 - 5.0 2.0 - 3.0 6.0 - 7.0

Sources: Braskem, Solvay Indupa, Harrimann Consulting

Future Expansions (1000 t)

Company

Country

Additional Capacity-t/yr 50 40

Year

Braskem Solvay Indupa

Brazil Brazil

2005/2006 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

BRAZIL
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.

Environmental Issues
South 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, NGOs 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 Issues
South 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, Greenpeaces materials and news are always forwarded to Colombian Government.

Instituto do PVC Main Achievements - 2003

South American Vinyl Network (SAVN) foundation, in So 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 Ministrys Council (April)

Launching of the document Development (June)

PVC

Contribution

to

Sustainable

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: City: Place: October 5-6, 2004 So Paulo, Brazil to be defined

Instituto do PVC
First Brazilian PVC Congress
Preliminary Program
Tue, Oct 5th
Morning: Opening & Worldwide PVC Market Panel Afternoon: Sustainable Development & Communication

Wed, Oct 6th

Morning: Technology Afternoon: Innovation