Braskem S.A. (BRKM5) Earnings Call Transcript & Summary

Good morning, everyone. And thank you for waiting. Welcome to Braskem's conference call to Braskem Day 2024. With us here today, we have the presenters, Roberto Bischoff, Braskem's CEO; Pedro Freitas, Braskem's CFO; Rosana Avolio, Investor Relations, Strategic Planning and Corporate Marketing Intelligence Director; Isabel Figueiredo, Vice President of Vinyls & Specialties; Mark Nikolich, Vice President of Olefins and Polyolefins, North America; Stefan Lepecki, CEO of Braskem Idesa; and Walmir Soller, Vice President of Olefins and Polyolefins, Europe and Asia. We inform you that this event is being recorded, and the presentation will be held in Portuguese with simultaneous translation into English. [Operator Instructions]. [Foreign Language] The audio of this event will be available on the Investor Relations website after it ends. We remind you that participants will be able to register questions for Braskem, which will be answered after the end of the event. Before proceeding, we would like to clarify that any statements that may be made during the conference call regarding Braskem's business prospects, projections, operational and financial goals constitute release and assumptions of the company's management as well as information currently available to Braskem. Future considerations are no guarantee of performance and involve risks, uncertainties and assumptions as they refer to future events and therefore, depend on circumstances that may or may not occur. Investors and analysts should understand that general conditions, industry conditions and other operational factors may affect Braskem's future results and may lead to results that differ materially from those expressed in such future conditions. I will now turn the presentation over to Rosana Avolio, Director of Investor Relations, Strategic Planning and Corporate Marketing Intelligence, who will begin the event. Please, Ms. Avolio, you may proceed.

Good morning. Thank you very much. Welcome to our Annual Investors Meeting, Braskem Day. I will start the presentation from Slide #3. I'll go over the agenda very quickly. So we start our presentation today with Roberto Bischoff, our CEO. He will give a brief opening, and then he will discuss all the avenues, the projects initiatives of the growth avenues of the company. And then we are going to move on to a session where the Vice Presidents of the business units will present their own businesses, such as short-term levers. And then we'll move on to Pedro Freitas, our CFO, and he will give a brief update of Alagoas event and discuss financial results as well as the principles of our finances. And then I will give the strategic direction for the next years. And then I'll turn the call back to Bischoff for his final considerations. And then we will have a Q&A session where we are going to take any questions you may have. Have a great event, everyone. And I'll turn the call to Roberto Bischoff.

Thank you, Rosana. Good morning, everyone. I apologize, my throat is kind of sore. So if I need to, I will ask for help from Pedro and Rosana. Initially, I'm going to give an overview about Braskem, followed by an update on our avenues for growth. Well, Braskem is a global petrochemical player. Most of you know us. We are the biggest producer of thermoplastic resin in the Americas, and we are a benchmark in the polymer market. We have 40 industrial units in 4 countries: Germany, Mexico, the United States and Brazil. We have 14 commercial offices in LatAm, Asia and North America and Europe. And we have clients in over 70 different countries. Our leadership in biopolymers around the world is also our leadership in the Americas as producer of PE, PP and PVC. Just to give you an idea of the scope of what we're talking about in our EBITDA, our recurring EBITDA is approximately $2.8 billion. We turn $2.1 billion of that into operating cash. Braskem's journey begins in 2002. We are strongly leveraged by growth in the Brazilian market during this stage, thanks to consolidation of companies in the Brazilian market and plants. And in 2006, we acquired Politeno. In 2007, we acquired Ipiranga holdings in petrochemical industries. Then in '08, we build a plant in Paulínia to produce PP. In '09, we acquired Triunfo, another petrochemical company, again, giving us great coverage in Brazil. At that point, we start focusing on our internationalization strategy, starting in 2010 when we purchased Sunoco and its assets, followed by Quattor as well. That's the PP plants in the U.S. and Germany. And our growth in Brazil continues when we acquired Quattor again in 2010 and its PVC and butadiene plants. In '11, our growth abroad remains when we sign a contract in Mexico. Then we have the Braskem Idesa complex in Mexico, again, to produce polyethylene. And in 2016, the new PP plant in the U.S. In 2022, our expansion continues with green ethane and our partnership to build more production capacity for Green PE in Thailand and partnerships focusing on recycling in Europe and Brazil through Sustainea, Wise and Upsyde. In 2020, Braskem has reaffirmed its commitments to sustainable development, basically grounding us on principles such as human rights and social responsibility, the elimination of plastic waste and combating climate change. Now to give you a little bit more detail about what -- where Braskem stands in terms of production of different assets. In Brazil, we have 29 plants, we have 4 offices, 3 technology offices. In the U.S., we have 5 plants, 2 technology centers and 2 offices. Europe has our base in Rotterdam, where we have 2 industrial plants in Germany as well as a technology center. And in Asia, we have in Singapore, our office, and in Japan, our commercial office. And in Mexico, we have 1 petrochemical industry with 4 plants, 1 technology center and 1 office. That is our distribution of assets around the world. Next slide, please. This process that I've just described, this growth has brought us to attain levels of scale and of size as a company that allow us to fundamentally compete at the global level. This position that I highlight as a leader in our production, PE, PP and PVC in the Americas today is already at 8.8 million tons of production. As our leadership in the U.S., I can also cite our start-up of the Delta plant in Texas. We established over 2 million tons of production capacity for PP, and as the leading producer in Latin America in PE, we also reached significant capacity -- installed capacity in Brazil, measuring over 4.2 million tons of polyethylene. Next slide, please. This entire process was sustained by a very clear strategy that sought to diversify our inputs coming out from a position where we were almost 100% naphtha, 100% of Brazil's EBITDA in '09 was naphtha, down to 50% or 48% in terms of geography outside of Brazil. We are -- we began strongly focused on Brazilian naphtha producers, specifically to produce polypropylene. And now in 2024, we will reach -- we have reached 35% of our production with a naphtha base in addition to our other growth. Also, that includes gas and ethane in Mexico and especially ethanol in terms of renewables. And in conjunction with our inputs that is strategically defined to bring the company better results, we also, starting in 2010, began in earnest our internationalization strategy. So we started making a marked improvement into the company's geography. We moved from a fully Brazilian company in '09, and in '24, in the year-to-date, over 30% of our results is based on assets located outside of Brazil. Braskem today has over 100 products in various product families, focusing on resins, PE, PP and PVC, olefins and aromatics of all types through our production in Brazilian crackers, renewable products, I'm green, polyethylene, EVA as well and bio-based PE waxes as well in addition to products resulting from the circular economy, some of which also have renewable content and specialty products that are essentially bound to a different petrochemical cycle than the traditional cycle where we are already established in PE and PVC primarily. Next slide, please. Braskem's corporate strategy is designed around 4 strategic pillars. And they truly anchor the whole process, productivity and competitivity of our productions, sustainability today and in the future, growth and diversification, and a strategy that I've managed to speak a little bit about in innovation and growth and always strong focus on innovation. And our values on which we are founded include safety, a very strong focus on people and culture that we will talk about in a bit and a very well-structured governance process. So these are 3 strategies that the company's growth hinges on. The first is our traditional business, fossil, but with a vision for the future, looking at growth and selective opportunities with highly competitive results and decarbonizing by using gas-based inputs. Another striking strategy where we are already leaders with significant results by using renewable sources for our inputs, moving from existing biomass platforms in Brazil and the U.S. and a third growth avenue focused on products with recycled and recyclable content. This adds up to a very clear strategy seeking to bring value to our shareholders and create a positive impact for all of the company's stakeholders. Next slide, please. I'd like to mention very briefly the different foundations I touched on earlier in terms of people and culture and safety. In terms of safety, the company has been performing among the world's best. Our consolidated result in '24 was 0.91 accidents per million man-hour worked. This was the result of a number of robust programs to support this development over time. We are very ambitious in this topic when it comes to this, we are constantly seeking new technologies, instruments and methods that allow us to work and improve the level of performance of the industry as a whole when it comes to the performance of safety, not just the safety of people, but also the safety of our processes. As I mentioned, the company performs in line with the major players in the petrochemical sector. With regard to people and culture, our core values are very dear to us. We believe in people and their development potential. We value trust, which is the basis for everything that the company does specifically in terms of planned delegation, which is a policy that allows each and every person to reach their highest potential in all fields by generating results and really being the owner of that process. And we operate with a clear focus on results with a mind to our entrepreneurship roots and strong focus on client satisfaction and client results. All of this is part of the value proposition for people who seek to create the conditions to allow each and every individual to be a protagonist of their own journey and of the journey with the company. Next slide. Among the strategic pillars that I mentioned, those 4, I'd like to highlight, in particularly, the innovation pillar. We deem this to be a fundamental pillar for the company. And we strive to position this pillar as a lever on which the company will hinge and obtain compliance with the different targets that have been set. Always with a focus on excellence throughout our operations. We have many fields focused highly on innovation, developing a circular economy and advanced one in developing a future that is increasingly more and more carbon neutral by striving for what we call increased industrial efficiency and the promotion of the search for new materials with renewable sources and always investing in new sources of renewables. And of course, we cannot ever forget the development and improvement of our current portfolio of products and solutions. So where do we do this? We have our various technology centers. One of them is in Lexington in the U.S., focused on renewable input. We have another biotechnology laboratory in Campinas. We have 2 technology and development centers, one in Pittsburgh and one in the city of Triunfo in Brazil. We have 2 polymer development centers, one in Wesseling in Germany and another in Coatzacoalcos in Mexico. One process technology development center in Mauá in Brazil. And we also have 7 pilot plants that work on polymerization and they are based in Triunfo and Camaçari in Brazil. Some numbers for technology. We invested over BRL 554 million last year. Also last year, we applied for 20 new patents. New products over the past 5 years represent 11% of our sales. And we support through different activities at our technology centers, over 450 clients. Now I'm going to speak in a bit more detail about our growth avenues as well as our strategies that we are developing at each of them. Next slide, please. Our future and our vision is focused clearly on 3 important growth avenues, each of which is relevant and which has a specific strategy as well. The first is our traditional business, fossil-bases, it's where the company was founded, and it's what brought us to the current level that we occupy today. Within this business, our strategy and vision is to focus on the -- optimizing the profitability of the business through high financial return investments and investments that have strong impact in sustainability. In terms of renewables inputs, our focus is on strengthening our leadership position by developing new solutions, specifically, when it comes renewables. And in terms of recycling, we aim to be recognized around the world as a company that develops the recycling chain, the recycling network in the regions where it does business. All of this while striving to build the path to being a leader in sustainable impact with a focus on circular inputs and the use of contents with renewable sources and focusing on decarbonization and selective fossil investments. Those are our investments. Next slide, please. Now I will try to talk about our traditional business. This is the best-known business of ours. Here, our major focus is on selective investment that means investing in places where we identify opportunities for competitive advantage and fundamentally opportunities to decarbonize our operations. Our ambition, which was set in 2022, is to grow through selective investments, including by optimizing productivity and competitiveness as well as decarbonizing our current assets. The goal we've set for 2030 is to reduce by 15% our Scope 1 and Scope 2 emissions and achieve thereby carbon neutrality by 2050. In the next slide, I will go into some more detail about our decarbonization and what Braskem has been doing in that direction. I'm very proud to mention the amount of initiatives we have developed. They are through a structured decarbonization plan that strongly focuses on reducing emissions in many different lines of action. These lines are focused on continuous improvement of our operations. They are opportunities to use technology to improve processes that all have 0 or near 0 required investments. The second major group strives for energy optimization and to integrate our industrial processes with investments. So there are needed investments that allow us to capture that value. The third major avenue resides in opportunities to electrify large equipment, which in combination with the replacement of other equipments that today operate -- are powered by fossil fuels. This electrification will allow us to use renewable sources and thereby operate these electrically powered devices. Thirdly, and more broadly, the changeover of the company's electrical matrix by introducing new elements of renewable sources, and lastly, carbon capture. This set of initiatives has allowed us over the last 3 years to reduce approximately 300,000 tons of CO2 emissions in our operations. Next slide. Still on this topic, we have a road map that we have established and implemented and where we identify opportunities to reduce 2.3 million metric tons of CO2 equivalent of which we've already met 1.1 million, strongly due to continuous improvement, but also the other avenues that I mentioned. And also in parallel, a changeover in our power matrix. We also have over 200,000 tons ongoing at this moment. And if we look at the graph on the right, we can see that today, our emissions base, which is approximately 9.2 million, which was from 2018 to 2020, today, we managed to operate at -- ultimately to arrive at a level of 8.6 million. On the topic of traditional business, I mentioned we contribute significantly through 2 main points. In Brazil, we have the gas project that increases the availability of natural gas in Brazil at competitive prices. And also what we call Route 3, and the spin-off of gas from pre-salt, this allows us to expand our center, our complex in Rio de Janeiro as well. Next slide. Next avenue is the bio-based one. It began in 2010. They produce 260,000 tons of PE from renewable sources. Our goal or our ambition, I should say, is to, by 2030, reach a level of production of products with renewable sources in the order of 1 million tons, and to that end, we've structured a number of different initiatives that I will discuss in the next slide. As I mentioned, today, our current portfolio is 260,000 produced with PE in Rio Grande do Sul. We have a study in the U.S. to produce green PE using the same inputs. We're also developing engineering with Braskem Siam in Thailand with our partner SCG. This is a project where the final decision is going to be made in 2025 and another project with Sojitz's Sustainea to produce green MEG, which essentially complement our portfolio of initiatives that will bring us to meet our challenge we set to -- by 2030. Next slide. From the perspective of recycling, we would like to be known for being a company that focuses on recycling everywhere from our input to our relationships with clients, always focusing on sustainability. We began setting our ambitions in 2022 and at that point, we used mechanical recycling. And we also decided to increase the use of circular feedstock, also known as chemical recycling. All of this always striving for a very challenging goal, again, 1 million tons per year by 2030 of products with recycled content. Next slide. Now let me show you this visually. Today, we have 50,000 tons of mechanical recycling in Brazil. Essentially, this is through Wise plastics. We have 23,000 tons in Europe through our partnership with Terra Circular and 50,000 tons of recycling capacity around the world, essentially represented by access contracts in partnership with many sources of bio-circular inputs that we are already seeing some of them starting to be processed at our plants. This has allowed us to begin selling products that result from chemical recycling. Next slide. And just to conclude, here is an overview of our network, our chain today, it is much more complex than we had. If we look at Braskem in the past, we would produce fossil monomers, polymers. And in the third generation for our clients, we gave clients a very low level of integration. Now today, our residue is transformed. We have upsiding, they are turned back into final products. We also have residues and waste that through Wise and mechanical recycling in this solution, we produce polymers that our clients once again transform. And we have chains that create products with renewable or circular source products that are also made available through our stronger brand called I'm Green and Renew as well, focusing on the circular side of things. So today, increasingly, our industry and Braskem are in a much more circular environment. Our commitment to the circular economy is made that much clearer through all of our initiatives. Next, now I have a brief time line since November '23 of the different initiatives that we invested in, in terms of circular economy, developing new inputs. We look at Veolia, Shell Chemicals, our partnership with Lummus Technology, Cetrel and Solvi, striving to clear up new initiatives also focusing on navigation, circular PP partnerships with input suppliers, our partnership with Petrobras to produce green RLH, and our partnerships with technology centers and partners striving to improve access to circular products. More and more of these initiatives will be part of our reality. Now I think I will wrap and pass the floor to Isabel, who will speak about our business in Brazil and South America.

Thank you, Bischoff. Good afternoon, good morning, good evening, everyone. It's a pleasure to be here with you to talk about the business units of South America Braskem. And the South America unit of Braskem is the most important one for Braskem. Because this is where Braskem concentrates most of its production capacity of assets, volume as well as of its results. In Brazil, Braskem is a leader in all segments it operates. It has a broad portfolio of products that makes us to mitigate our risks. We -- along the last few years, we have also diversified the feedstock we use. In the beginning, Braskem only used naphtha in Brazil. But throughout time, we started to use propane, [ AGL ] as well as ethanol, which the feedstock that we use in the crack in the South for polyethylene and green ethylene. It's the only petrochemical, which is integrated in the production of resins, CPE and PP. Today South America unit is divided into 2 business units. We refer them to olefins and polyolefins and the other one which is Vinyls and Specialties for which I am responsible. Braskem operates in the first and the second generation, the first generation is the cracking of naphtha. And the second generation is the polymerization. And in the 2 units, we meet all our clients' needs. On the right, I would like to show a little bit of the petrochemical cycle that has been a challenge for us in terms of results. So we're going to go back, back to 2019 when in 2020, the pandemic hit and the first semester was really bad because the world practically came to a stop. In the second quarter of 2020, the results were good. And in 2021, Braskem reached its best historical result. This is the result of South America alone. And in 2022, we had a very good semester. However, the second semester, we felt the effect, especially of the excess of capacity in China. What happened is that China had an ambition of being also sufficient in petrochemical products. And when those plants started to start up, they had an internal crisis of demand as a result of the civil construction, and it had to provide to export all those petrochemical products to the world. And then we saw this lower cycle in the petrochemical segment. In 2023, we had a very negative result. In 2024, results improved a bit. However, we know that we have a very challenging cycle ahead of us. However, considering all this, the recurring EBITDA in Brazil accounts -- or South America accounts for 65% of the current EBITDA consolidated at Braskem, which is so important. And why is Brazil so important for Braskem? Next slide, please. In Brazil, since it's the only integrated petrochemical player, we meet all the Brazilian market demand. If you look at the map on the right, we can see our industrial units along the coast, close to the clients that allows us to meet their needs. And the relationship that we have is very different and differentiated with our clients. We have a broad portfolio of products. Altogether, we have 29 industrial units in Brazil out of the 40 total units that Braskem has across the world in different locations, as you can see on the right, Maceio, Camaçari, Duque de Caxias, Paulínia and interior of Sao Paulo, [ Santander ] [indiscernible] and Triunfo. We also have mechanical recycling assets. In terms of feedstock, we are less exposed to naphtha, and we move towards -- by the way, we increased the use of ethanol as raw material in our cracker in the South. So Braskem's scale is what brings it at differentiation. Our consolidated capacity to export as well. Today, we have exported to different countries, not only in South America but across the world. Next slide, please. And in addition to the very important Braskem, Brazil's operation is very important to the Brazilian industrial chemistry as a whole. In addition to this strategic role in the petrochemical industry, brazil segment of Braskem is part of the sixth largest chemical and petrochemical industry in the world. The Brazilian chemical industry in the world is the third largest in the GDP in Brazil accounting for 11% of the industrial GDP in Brazil. And what has been happening to the chemical industry in Brazil as a whole, it has been reducing its average utilization rate of installed capacity and reaching about 64% and that brings a loss not only to the petrochemical industry, but also to Brazil at large because at every 1 million increase in the chemical production, it generates BRL 960 as an addition to the GDP of the economy, and it generates 15,000 direct and indirect jobs and adds collection for taxes for the government. So the chain as a whole, it needs to get together. It needs to join forces and to have this dialogue with the government because, in fact, we are being hit very hard, and it's not only Braskem. The chemical industry in Brazil is undergoing difficult moments. Next slide, please. Now we are going to discuss olefins and polyolefins. As I said, it's the main business unit at Braskem comprising the first generation. This is where we produce olefins and aromatics such as ethylene, benzene, [indiscernible], butadiene. And the first generation has the production capacity of 7.3 million tons of production per year and the second generation where is included PE, PP and EVA, it has a production capacity of 5.7 million tons of production a year amounting to more than 13 million tons of production a year. Next slide, please. In addition to this production capacity and result, the olefins and polyolefins meet the needs of clients from different sectors of the Brazilian economy. It has an integrated production in 4 states, as you can see on the map to the right, by Rio de Janeiro, Sao Paulo and Rio Grande do Sul. And as you can see, olefins meet a number of chains, cleaning products, civil construction, home appliances, packaging, furniture, lots of segments. So we usually say that the chemical industry is the mother of all industries because whichever industry we're talking about, they will require chemical products. This is the importance of the Brazilian chemical industry, but also in the world. We cannot live without chemical products. When we look at the aromatics, we see polyethylene, benzene, they are included in different production capacities, automobile, packaging, textiles. So we continue being responsible for the sales of different segments, segments which are very important to the Brazilian economy. And polyolefins, PE, PP and EVA, they are also going to be directed to the packaging industry, but also agribusiness, civil construction, hospital, applications, gardening, several segments. Can we move to the next slide, please? Now I would like to mention the diversification and how Braskem is exposed to different markets. And they help us mitigate the risk as well as to be able to meet different customers in Brazil and South America. Olefins and Aromatics business, when we look considering the sales per segment, it is in chemistry, elastomers, in the utilities as well as plastics and fibers. We have many clients in the plastic and fiber chain. Olefins and Aromatics has revenue of $7.2 billion per year with an EBITDA margin of approximately 10%. And it's responsible for 40% of all EBITDA in Brazil. These numbers are the average of the last 4 years up to 2023. When we look at the polyolefins business, PE and PP, we can see that the sales are directed to different sectors of economy. As I said, our diversification, our presence in different segments is very important. The sales reach about $5.7 billion. And it amounts to 14% of EBITDA margin. The margin is a bit better because of the added value, and it also accounts for 40% of Brazil's EBITDA. Can we move to the next slide, please. The 20% remaining of Braskem's EBITDA comes from the Vinyls and Specialties business. This business unit operates in the first generation intermediaries and the second generation. It's the business operation that has the vinyls that includes PVC, caustic soda, hydrochloride, fuels, gasoline, [ PBDE ], LPG and other solvents, toluene, xylene, [indiscernible] et cetera, specialties [indiscernible] isoprene, et cetera. Considering the total capacity of production of vinyl specialties would amount to 2.8 million tons per year. And why is this business unit so important, because it covers for business that has rationales which are very different that include olefins and polyolefins. It also contributes to improve the results of the petrochemical central by means of the use of chains that -- whose use is not so knowable, but we are trying to develop new products so as to use those chains. Next slide, please. So now going back to the development of new products in order to add more profitability to Braskem, including focus on safety, renewable content and circularity. In vinyls, we have applications that are directed to civil construction, paper and pulp, chemicals, among others. And it's very important to mention that the PVC, which is one of the most important products in the finals. It's used in the application of tubes and fittings for the civil construction that account for 6% of our sales of PVC, so civil construction is extremely important for the PVC business. When we look at fuels, we saw that we grew our production of gasoline. When we started to sell gasoline, we used to sell 700 tons a year, and then we sell 1.1 million tons of gasoline A. We also developed a premium gas for the Brazilian market. And Braskem today is the third largest producer of gas in Brazil -- gasoline Brazil and meets not only the Brazilian market but also the international market. We exported the fuel products that we produce. As to solvent, we have the main product, which is xylene and toluene used in paint and resins, adhesives in the agri business. And we have the flexibility to use those solvents as solvents, so sell them as solvents. Or we can use them as boosters for the gasoline. So those solvents can also be used for gasoline production. And this flexibility is very important for us to manage to maximize Braskem's results. When we look at specialties -- chemical specialties, we have products that we refer to as intermediaries such as PIB, resins, isoprene that are using different applications such as varnishes, cosmetics and more than 70% of those specialties that we produce today in Brazil, they are exported for more than 40 countries. So it's also a very important business for Braskem. Recently, this year, in the [ export ] heavy steer trade fair, we launched our Resysta, which is an ecological wood that comprises rice and PVC. And today, we're selling it, and we reached the sale of 50 tons this year. And this was very impressive because we have just launched the product, and we have already managed to have clients using our product. And this is a product that has a very important renewable sources. 40% comes from the cover of rice. Next slide, please. We continue the explanation of this added value product that vinyl portfolio brings to Braskem. I have already mentioned Resysta. But in addition to Resysta, we have some strategic approaches related to researches that is developing additives to be used in PVC. So vinyls are accounted for the net revenue of $1.1 billion across 5 regions in Brazil and more than 300 direct customers and with a sales volume of 850,000 tons per year. When we look at fuels, we have met the [ NP ] standard through gasoline A and as well as others fuels that were produced. We also provide sustainable solutions, which is -- such as ETBE. And this business has a net revenue of $1.1 billion net revenue exported to 3 different continents with more than 100 direct customers with a sales volume of about 1,500 tons per year. Next slide, please. And we also have in this diversified portfolio, we have our solvents, and especially the ones that are more recognized by the market, such as HE 705. And in the past years, we have developed circulating hexane and HE 705 that has ethanol content, the net revenue accounts for $200 million. And we have the market leadership in the hydrocarbon solvents in Brazil. Margin EBITDA reaches 40% in this business, we met the needs of more than 100 clients, and we have a sales volume of about 130,000 tons per year. So it's important to mention that specialties and solvents have a result, which are very stable. The low cycle and high cycle, whichever, the EBITDA margin will be delivered at about 35%, 40%, which is very important to bring constant result to Braskem. And this is the reason why we have invested in the expansion and in the diversification of solvent specialties in Braskem. And we have also launched last year the PE wax because we have already a Green wax -- PE wax in Brazil already in our portfolio, we are going to sell 160 tons. So this is a chemical specialty that we have, and we are very proud to have those developments. The revenue of specialty is about $200 million, we export to more than 40 countries, 40 different countries, and we have an EBITDA margin of about 30%. As I said, both solvent and specialties are very resilient businesses, considering the petrochemical cycles. Next slide, please. And to end, I would like to mention the strength of Braskem in Brazil. Considering the competitive advantages in the region, our strategic focus in the short term is to strengthen our trade relationships with our clients, prioritizing the service provided to the Brazilian market and optimizing our operating costs. So the main competitive advantages, we are leaders in the region and we are the only petrochemical, which is integrated across Brazil. We are very focused on the client and we have a broad portfolio of products with circular products and bio-based products. With the short-term levers, we have optimization of products, we aim to keep the leadership in South America with added value to Braskem expanding our circular products and also capturing the opportunities related to the increase of import tariffs in Brazil. Last month, the tariffs of our resins, PE, PP and PVC increased from 2.6% to 14%. And this is going to increase and improve our risk. Of course, this is not an effect alone, we need other things, but this will help us. And also the optimization of costs as we are reducing fixed costs, logistics costs, variable costs, as we are negotiating with all the suppliers, including logistics suppliers so that we can reduce and optimize our costs. Considering all those initiatives, our initiative is to capture an additional value at $100 million or $150 million in additional EBITDA for the next year. I'll end here the chapter Brazil and South America. And I hand over to Mark Nikolich, who is responsible for Braskem United States and Mexico, North America. Thank you, Mark, over to you.

Thank you, Isabel. Good morning. Good day to all. I'm Mark Nikolich, I'm going to talk a little bit about our operations in the U.S. and Europe, and explain how they strategically fit in with Braskem and fit in with our strategy. So if you go to the first slide, please. Excellent. So the first comment I'll make about U.S. and Europe, and Isabel walked through this very clearly is that our operations in the U.S. and Europe are predominantly second generation. They moved into feedstock a little bit from a procurement perspective and from a portfolio perspective. But the U.S. operations and the European operations are polymerization operations, therefore, second generation. In the U.S., we're the largest polypropylene producer. So if you think about our 3 big product portfolios that Isabel described in our traditional businesses of polyethylene, polypropylene and PVC. This is the -- a big part of the polypropylene footprint. We have a lot of flexibility because of the asset base in the U.S., and I'll talk a little bit about that. With our expansion of our business outside of Brazil, over the last 15 years, we've expanded both polypropylene in the U.S. and in Europe, and you'll see that when I talk about the asset base. And then the other additional aspect of this is our connection to shipping to trading and to the critical feedstock markets of the world that exists in Europe, Africa, Middle East and in the U.S. So these offices in the U.S. and Europe as well as Asia give us access to that, easy access to that, which is both for knowledge purposes as well as for business operations purposes, okay? If you look on the right-hand side of this, it shows you some of the history. If we go back in time, the operations outside of Brazil brought in less than 5% of the recurring EBITDA. And you can see over time through acquisition, through enhancing these businesses, through enhancing our trading operations, we've been able to increase that to over 20% of the recurring EBITDA. So very positive as part of our growth story. You can also see in the right-hand graph, the cyclical nature of our business that we've been talking about peaking in the pandemic in 2021 and then going into this down cycle starting in the second half of '22 through '24. And then we'll see what I would consider to be incremental improvements quarter-on-quarter thereout, okay? So that's a little bit about the high-level business model for the U.S. businesses in Europe. Next slide, please. So now I'm going to go in a little bit of the history of the U.S., explain some of the strategy there and some of the growth opportunities as well. So if you go back 15 years, almost 15 years to the original acquisition of the U.S. assets. We added to that Sunoco platform, 2 Dow plants. That was concurrent with adding 2 Dow polypropylene plants in Germany, which I'll talk about in a little bit. In addition to that, we've enhanced the feedstock aspect of the asset base in the U.S., meaning that we are able to bring in less pure feedstocks and therefore, get additional margin. So that was a splitter acquisition in Marcus Hook and continued, I'll say, investment in the front end of our process. We've also debottlenecked assets here, expanded our Specialty Polymer business, which is the UTEC plant in Texas. And then I would say our largest endeavor in the U.S. to date has been the Delta project, which Bischoff mentioned earlier, which was the construction of essentially a brand-new 500 kt per year plant in Texas at our La Porte site. State-of-the-art first asset in the new build cycle that started before the pandemic in North America and Braskem was the first one to bring the new plant to market. So that was very significant. You can see the capacities for North America on the lower left-hand side, our leadership position. I would say our leadership position in North America is not just in scale. It's not just in how many kilotons we produce per year. It's also in the product portfolio we have, both in Europe and the U.S., we have 2 different technologies that we deploy for polypropylene. This gives us a very broad portfolio. It allows us to supply all of the vertical markets that are critical to the health of this industry. So that's a very positive aspect of our leadership position in addition to just the scale and volume. And then on the right-hand side, I'll talk a little bit about geographic diversification. As you know, the energy complex is spread out over the U.S., 150 refining assets. A lot of the steam cracking assets. Most of the steam cracking assets are on the U.S. Gulf Coast in Texas and Louisiana. There are some based in Western Canada and then Southern Canada and North of Detroit and sort of the Midwest automotive area of the U.S. So you can see the Braskem plants are spread out from Texas all the way into the Northeast. This gives us a couple of things. First of all, diversity of supply. I'll talk about this a little bit more, but we're able to buy different sources of feedstock from different processing units, and that gives us a portfolio of supply. Secondarily, there's a lot of storms in the U.S. Gulf Coast. You've heard about the hurricanes and the disruption to business. And our assets being spread out in the Northeast and the Gulf Coast give us some resilience to storm activity and climate change in the U.S. Gulf Coast. The other thing I'll mention are our 2 technology centers in Pittsburgh and Lexington, special mention to Lexington. That's our newest technology center. It's renewable technology center. That's where some of our newest technologies around sustainability are going to come from. We just opened that a few months ago outside of Boston, Massachusetts. And again, it continues to build on this innovation foundation that Roberto mentioned in the beginning. So those are some aspects of the U.S. footprint that I'd like to share with you. Next slide, please. So this gets a little deeper on the U.S. assets in regards to feedstock. And I talked about this from a portfolio perspective. Roberto talked about this earlier, how do we balance between oil-based as in naphtha purchases, gas-based as in NGL purchases like ethane and propane. And also when we look at our feedstock for olefins, when we're buying olefins, how do we make sure we have a diverse portfolio of olefins. Our olefins in the U.S. are propylene and ethylene come from both refining as well as steam cracking as well as on purpose. And we also buy multiple grades. These are all different purity grades. That means there are different price points, and we create different value for them. So that's a big part of our feedstock strategy in the U.S. and our foundational strategy around these second-generation plants is buying feedstock from broad sources, very different price points, purifying some of that ourselves to essentially solidify the feedstock purchases and create value around the feedstock purchases for us in the U.S. Second aspect is much more forward-looking. So this is one of the largest markets for consumption of polymers in the world. We still have a lot of opportunity to expand the I'm Green portfolio, our bio-based polyethylene. And in addition to that, if you think about our model in Brazil and how we're using the base of sugarcane, sugarcane ethanol as a feedstock for chemicals, similar opportunity exists in North America and specifically in the U.S. with the U.S. ethanol production from corn. So we have a lot of work going on to see how we can utilize this corn, this bio-based fuel instead of burning it in gas tanks in North America, how do we turn that into chemicals and how do we turn that into circular materials. So there's been a lot of work that we've done on U.S. ethanol market as a source of production for some of our newer businesses and Roberto mentioned that we have a bio-based polypropylene project that we're working on that would take U.S. ethanol to biopropylene -- to biopolypropylene similar to our I'm Green biopolyethylene business. So that's one of our opportunities that we've been working on in the U.S. Next slide, please. So focus more on Europe and Asia. First of all, the 2 assets in Germany are both polypropylene assets. They came to us through the Dow acquisition. These are excellent assets. They are complementary to the polypropylene assets that we have in the U.S. and in Brazil as in similar technologies. So we can share portfolios. They're both in Germany. So if you think of Benelux stuff and you think about the hub of premium industrial activity and consumption of materials in Europe, so they're right in the right spot for us. And they provide a local manufacturing base that we've been able to build the business off of for many years now. In addition to that, it allows us access to the European market where we can import from other asset bases. We've done this consistently from Brazil over the years. We've done this from the U.S. when it's made sense for the business. So it's also an opportunity -- we also create an opportunity with this base in Europe to import material into Europe and distribute it broadly across Europe. The other aspect of our European operations is again back to the trading aspect and the feedstock that I mentioned earlier. Our office in Rotterdam, it's located in one of the largest trading hubs in the world, access to Middle East, Africa, U.S. materials and provides the primary services of feedstock to our Brazilian operations from outside of Brazil. In addition to this, the Europe and Asia operations have set up, what I'll call, outposts, Singapore, Thailand, Japan, and this allows us access to 2 things, very critical growth market for all of petrochemicals. And then secondarily, and I think most importantly for Braskem, the growth of bio-based materials and consumption of bio-based materials in Asia is accelerating. It's a focus area for us. It's a critical market for our bio-based materials and having offices there facilitating both partnerships, strategic partnerships like our partnership with -- in Thailand, around our project there, Bio PE, and also into Japan where there's a large consumption of our bio-based products. So it provides that outpost in that footprint to allow us to continue to expand strategically across our critical portfolios in growth and sustainability into Asia. Last comment I'll make about BT&S, this is Braskem Trading and Shipping. So this is an optimization that we're able to do with the trading and shipping company that's based out of Rotterdam. This gives us reliable transport for all of our feedstock materials. This is where we hold our vessels. So we have a competitive low emission vessels that we've had commissioned and built for us, and we operate that fleet, manage that fleet and all the operations around that on behalf of Braskem from Braskem Trading and Shipping. Again, global access, expertise, subject matter expertise, cost efficiency, reliability, efficiency, something that we control. So that's been a big value, I'll say, both in source of supply as well as in price and portfolio for our operations in Brazil as well as Mexico. So with that segue, I will turn this over to Stefan Lepecki, our CEO for Braskem Idesa in Mexico. Thank you.

Thank you, Mark. Thank you very much. Hello. I am Stefan Lepecki, I am CEO of Braskem Idesa. And I'm going to share a little bit about our history. Next slide, please. As you know, Braskem Idesa arose out of a contract originally out of an auction that we acquired a business from PEMEX in 2010. Braskem Idesa is 75% Braskem, 25% Idesa, which is a very traditional Mexican company. . Today, they are part of the Carlos Slim conglomerate in Mexico. This is the largest investment ever made in one single petrochemical location in Mexico. We are based on ethane as our feedstock, it's a very competitive material, and it is -- PEMEX is supplying it through imports. We are self-sufficient in terms of energy and we have a very diversified and competitive logistics platform. Braskem Idesa represents the integration between the first generation. We get ethane and transform it into ethylene, and we turned that into both low and high density products, and thereby provide products for all of our clients. Now based on ethane, we have a very competitive feedstock but added with the scale of our plants and the very optimized -- highly optimized costs we have in Mexico, all of that combined gives us a very resilient operation through and across different cycles. But we are, again, also impacted by the cycle. Conversely, even in a downward cycle, we can maintain a very relevant EBITDA cycle. This year, we reached 21%. And to give you an idea, the third quarter reached 32% even in a low cycle. Next slide, please. Here, we've seen one of the strengths of our business. Mexico is located very strategically in terms of product distribution. And that means everywhere, North America, South and Central America, Europe and Asia as well. Braskem Idesa makes the most of the strategic geographies. We have a logistics platform, and we also have a very important distribution network that allows us to reach these markets very competitively. We already export to over 40 countries. Exports represent roughly 40% of our available production capacity and sales capacity, essentially for Latin America, Europe, North America and Asia. Just as Isabel showed for the polyethylene business in Brazil, we also have significant participation in every segment of the industry in Mexico. We're very diversified. It's one of the most products -- one of the most diverse products in terms of the polyethylene market. The Mexican market has been growing at stable and consistent rate with a certain degree of elasticity with regard to the Mexican GDP, and we expect -- firmly expect this to continue. So it's a very strong pillar for us, specifically in terms of logistics and delivering products, not just in Mexico but also abroad as well. Next slide, please. Here is something that is very important, and I'm sure you're all aware of, we have been fueling very significantly the actions of PEMEX. PEMEX is a state-owned company in Mexico. And over the past few years, it has been suffering a significant degradation of its production capacity, including ethane, which has been -- really been felt at our plants. And you see on the left that this -- how this shows the impact we felt and also the resiliency because even in spite of those drops in capacity, we were still able to reach the EBITDA levels that I showed you in previous slides. Our overarching strategy has been as and when we fail to receive enough ethane from Panamax, we began to import ethane through a temporary solution that we call the Fast Track. And we are currently making an important investment into an ethane import terminal. And it will enter operations in Q1 '25. And starting at that point, we will begin operating at close to 100% capacity once again. This terminal is the result of joint venture that we have with a company called [indiscernible]. They're one of the leaders in constructing and running chemical terminals. That's both liquid and gas. And in addition to the financial contribution they make, there's also the knowledge they bring to us. This terminal will be able to supply up to 80,000 barrels a day. Today, for our plant, we need 64. This means that we still have headroom for expansion in our plant and increased efficiency. Our CapEx is estimated at $580 million approximately. That's the total investment. We see that on the top right. In addition to the spin-up of this terminal, which will give us full access to feedstock, we're also going to have a scheduled downtime. This will be our largest ever and very first large-scale scheduled downtime. This will occur between June and July of '25. And starting after that scheduled downtime, we will really be able to reach a new level, unparalleled level of efficiency and utilization that will put us head and shoulders above our competition. Next slide, please. Here, we see an important comparison. As I mentioned, we have been importing ethane through a temporary business called Fast Track. And here we compare and see what we stand to gain with this new JV when it begins operation. First, the volume itself would be much larger. Our Fast Track is up to 35,000 barrels a day at the peak. But the terminal will be able to reach levels of 80,000 barrels a day. In terms of logistics, we're going to be much more efficient. Our logistics costs will be reduced by roughly 30%. We are going to have dedicated ships and vessels leased by BT&S that Mark showed us, and we're going to be connected not through trucks, which is what happens in Fast Track but through a pipeline, which is going to be a significant improvement. And we're going to have storage capacity as well. So this will add important resiliency in potential oscillations or variations, whether they are climate-based or logistics based. And this will support our complex overall. This is going to be great for Braskem Idesa. Next slide, please. And so to summarize, Braskem Idesa has scale that has competitivity, it's going to be even more competitive from here on out when the import terminal enters operation. We are the regional leaders in polyethylene. We also have the ability to add to our portfolio with products from Braskem such as polypropylene and with this implementation, we expect to definitively implement our feedstock strategy, which is so important in the petrochemical industry and for Braskem Idesa. We're also strongly focused on financial health. We're going to have a challenging year in terms of financials. So respecting our financial discipline, and that means not just fixed but also variable costs, CapEx and financial operations, all of that is going to be important to get us through this period and really make the most of the new time that Braskem Idesa is going to be in starting when that terminal begins operation, and that is in the second half of next year. So this is essentially what I wanted to share with you. I want to pass the floor now to my colleague, Walmir Soller, who is going to tell you a little bit about what bio-based PE is at Braskem. Thank you.

Thank you, Stefan. Good morning, everyone. My name is Walmir. I'm Vice President of olefins and polyolefins for Europe and Asia, headquartered in Rotterdam, based in Rotterdam in the Netherlands. And I'm responsible for the business of Europe and Asia. Braskem has a long history of production, and products based on renewable feedstock. And it started polymers with the start of green plant produced from sugarcane ethanol. The capacity is 200,000 tons of biopolyethylene per year and led Braskem to the world leadership in -- with clients in all continents. In 2023, we expanded our capacity by 30%, and we reached to 260 tons as a result of the growing demand from the market. Along the years, we continued investing in innovation and technology and established partnership for the business to grow. I would like to mention the partnership with Lummus Technology, which is a global technological player in petrochemicals for the permitting of the Evergreen EtE technology, which is the technology to transform ethanol and green ethylene, and Thailandese company for the production of bio-based polyethynol and getting closer to Asia, which is a market that has been growing at an accelerated pace with a great potential for this product. The Thailand project at present is in the detailed engineering process, and we are going to have a final decision in the second quarter of next year, which is another step for us to reach 1 million tons of bio products produced for the year, as mentioned by Bischoff previously. In the next slide, here, we have the production process of biopolyethylene. Based on sugarcane ethanol that replaces the fossil naphtha, the polyethylene using this process allows for the removal of carbon from the atmosphere from the source of raw material and the resins at the plant, which is referred to as cradle-to-gate. The bio-based polyethylene provides the removal of 2 kilograms of CO2 for each kilogram of polyethylene produced. In other words, it has a negative carbon footprint. It removes carbon from the atmosphere. In the applications where it's replaced the fossil product, the benefit of using the product is 5 kilograms of CO2 for each kilogram of green polyethylene use. In other words, 2 kilograms are removed, cradle-to-gate, as I previously mentioned, and 3 kilograms are avoided. The 3 kilograms account for the average of emissions of the fossil polyethylene considering the same basis, cradle-to-gate. Our polyethylene is a brand which is known [ level ], and it's used by brand owners in applications that are ranged from sports material, toys and even [indiscernible]. In the next slide, next slide, please. Here, we make a comparison between the green bio-based polyethylene with fossil material in such a way that we can see the same properties but at the end, we can see that -- we can track the authenticity considering the conversion result, which is the same way used by archaeologists in order to identify the fossil carbon. So we can identify that it's a new carbon. It's not a carbon that has been obtained by means of fossil origins. It has the advantage of being used in the same equipment, the same applications without loss in productivity and the advantage that it's made from renewable raw material with a carbon footprint, which is more favorable. And it's equally recyclable considering in comparison to the fossil equivalent. We can notify that our commitment to sustainability is very strong. We have a process in Brazil that we call responsible protocol supply that when we define the requirements to our suppliers in terms of best agricultural practices, carbon footprint and respect to the labor loss. And this is based by means of certifications to our suppliers and also by means of audits made in our value chain, and we hire auditors -- Braskem hire the auditors. In the following slide, we show some of the business growth along the years. The business has been growing since its operation started in 2010. And sales are distributed in European, Americas and Asian markets. And it's important to mention that it's a business that has been delivering results comparable to chemical specialties. And it has shown resilience even in the low cycles of the petrochemical segment, such as the one that we are experiencing now. Capacity expansion was implemented in 2023, as I mentioned, after our scheduled maintenance stoppage, and we started to operate at full capacity as of 2024. I would like to mention the slide on the -- you can look at the graph on the right, in the lower part. It's based on a study that was carried out by Deloitte in 2023 in Europe. This is what we refer to the road map for circularity and net zero carbon. And it requires the 11,000 tons of biopolymer, only in Europe, in order to meet the requirements of the green zero established by Europe. So you can understand the market potential when we look at Europe alone. In addition to this growth potential that we have in Europe, we had an important growth also in Asia in the past few years. And in the last year, specifically, we started to penetrate into the Chinese market, which is a market that we hadn't operated in before. In addition to that, we also see a major potential in -- of growth in the Americas, especially now with the increase of capacity, with increase in the availability of the product. And also after the new frameworks -- regulatory frameworks. Considering that we are pioneering the sector, Braskem has also a very important role in the advocacy of products based on renewable sources. We have an active role in the regulatory discussions in the market, which has been expanding in Europe, Asia and also in America. So in addition to promoting the product in terms of market, we have been working hard in advocating those chain -- advocating the chain, including different stakeholders so that everybody can understand, everybody can have clear idea of what is the supply of products based on renewable sources. The biopolymer competes in the biopolymer ecosystem. And considering this ecosystem, it's the most competitive product in terms of performance and value in the global market. In addition to it, it has scale and has different types for different applications. So among all the alternatives that are available today based on renewable sources. On the next slide, next slide, please. So this is a summary of the business and the focus that we have. In other words, it's a business where Braskem is a pioneer, is a leader, and it has been there for more than 14 years. The focus was to expand its geographic reach and it went -- we want also to reach Thailand, as mentioned before, in addition to diversify the portfolio of applications in the segment, especially after the project expansion. We also aim at the new capacity based on the Thailand project as it is approved in order to meet this global demand for this type of solutions, obviously, because we are in a low cycle, considering the different changes at a global level. There are moments of deacceleration in the process that was moving forward strong. But we can see that there's still a growth. There is still the interest for sustainable materials and alternative materials. As for the operations, we want to optimize the operation cycle and the green ethane plant in order to increase its capacity. And lastly, in my last slide, I would like to share with all of you the base of the most recent global campaign, where we say that the product behaves as a traditional plastic, but it's based on renewable plastic -- renewable materials. The idea is we can all contribute in the decisions that we make every day, and the choice of polyethylene with biobased is a way to show that we can all contribute to this initiative of fighting climate change. So this is when I end the part of green polyethylene, and I turn the call to Pedro Freitas. Pedro, over to you.

Good morning, good afternoon, everyone. I'm now going to speak about the Alagoas event as well as our financial strategy. So beginning in 2019 -- late 2019, early 2020. We started signing the various different agreements that we have in this case. The first and perhaps most relevant is this agreement that established the template for compensation of residents and removing them from high-risk locations. After that, we had various other agreements with the Ministry of Labor, the environment, and different federal and state agencies. We also had the Flexais program, which included other entities of the Brazilian government and the city of Maceió. And then in June 2020, we had the global overarching agreement with the City of Maceió, which also included the social environmental agreement. This is an important step for us to repair the social and environmental aspects within the program. We also have some other agreements that are less expressive, but overall, the set of agreements established a framework to allow us to move forward and compensate people to close out the mine and also to make other operations that were deemed fit. On the left, on the next slide, we see the commitments that Braskem assumed formally. Number one, always, our priority is on the safety of people and offering social support to affected residents. Another aspect is in monitoring the soil, evaluating the tangible and intangible historic heritage in the region, the permanent and transparent accounting that we provide to all players and stakeholders and interested parties and more. And on the right, we see a number of our different actions and the expected dates of completion. So you'll see that in Q1 '25, we expect to finish relocating the residents and also finish the Encosta do Mutange region. Flexais is also going to be completed over the year 2025. Now as for the closing of the wells and tearing down the homes that have been emptied out is going to happen in '26. So we see that most of what needs to be done has or will be done very soon. And what is pending is going to be completed in '26, '27. Next slide, we see the status of the mine. We have 35 salt cavities. 11 have already been filled and confirmed, we can say that they have been, call it, confirmed to simplify. We have 9 that have been pressurized and where we have installed sensors to confirm that pressurization. In orange, we see 8 that are in progress, 3 are being sand-filled. And 4 already have -- sorry, well, cavity 18 is already been naturally filled. And now we are performing studies, technical and scientific studies to prove the fact. And we also have 4 cavities where we are currently installing sensors in order to ascertain and prove the pressurization. And we have seven that are still in the backfilling and pressurization state. So as I mentioned, this plan that you see here on screen is going to be completed by 2026. I'll show you some pictures to illustrate what has been done in the next slide. We see -- in the Encosta do Mutange region that has been stabilized. We can see here that many properties have been demolished. The plan is to give this region plant cover. So by stabilizing the Encosta do Mutange region -- and we can see on the right that this is almost complete. And next slide, please. We have another a closer picture. Here we see before and after. We've been demolishing these regions and planting plant cover. We already have over 50% of the affected area that has already been demolished. Now moving along, we see the development of the urban regions, this includes all number of different constructions. On the next slide, we also see that 3 of these are still currently being constructed. And in addition, we have 3 more that are in the preparation stage. Here, we also see roadways and smart road traffic lights, which increases and improves traffic flow by up to 30% in -- during rush hour. All in all, 30% plus, 20% we see that we have been making strong improvements to the region's grid. In the next slide, see the action plan for social and urbanistic, regions as well as the Flexais region. In urban planning, we have 48 validated actions of which 30 are by Braskem and 18 are being executed by the Maceió City Hall. They are social projects of various different natures. Here are some pictures that also illustrate a few of these actions. And on the right, the requalification of the Flexais region which is a little -- a region located slightly a bit more north of the affected region. It has some social and economic differences. It is a location where we are building daycares and schools in partnership with residents. And we also have a financial support program that is almost complete. On the next slide, we see here our balance is today, BRL 4.8 billion in Q3 as well as an additional sum that is in accounts payable, adding up to a total of BRL 5.5 billion. And remember that BRL 11.5 billion has already been paid out by Braskem. So roughly 1/3 is still yet to be disbursed. And when we look at the actions, we see that most of the payment were assigned to the reallocation and compensation plan for individuals. Approximately 80% of that has already been disbursed. And in the additional provisions, we still have a percentage of people that have yet to be paid. But it also includes street furniture at large public equipment that we are also compensating the public sector. For the closing of the mines in Item 2, this has been -- moving forward, there's still BRL 1.5 billion provisioned and not yet paid. We have under number 3, socio-urbanistic measures, this began later on in the road map. So it is not yet as far advanced. And additional measures as well, most of which have already been paid. Moving along, I will now talk about our financial results. Here, we see the principles of our risk management and the main risks that we aim to mitigate as our financial management. The first is liquidity risk. We have a very robust cash position in order to meet all of our financial obligations. We have a minimum level of cash that is determined by our financial policy. It is approximately between [ $1.5 billion to $1.8 billion ], there are two different ways of calculating that but this gives us -- this adds up to our baseline, $1.5 billion to $1.8 billion a year. This allows us to use these funds, the cash as standby credit to meet liquidity demands when necessary. And it's important to highlight also that the cash that the company needs in order to run its business is less than $1 billion. So this does mean that as our minimum cash, it includes over 50% more than the strict minimum. But notwithstanding, we actually have been running with liquid cash reserves far in advance of these numbers that you see here. And part of that is to prepare for the Alagoas event. Next, we see that our company is strongly linked either to the dollar or to dollarized sum. So most of the company's debt is tracked in dollars. Since most of our revenue is in dollars, our debt is also measured in dollars. We also have a portion of our cost in reals and a portion of our cash in reals. We also have foreign exchange risk that we look at up to 18 months in the future. We look at 0 cost dollars to mitigate any kind of short-term volatility between the BRL and USD. The third risk is commodity risk. We are in the petrochemical industry still the risk of commodities of our spreads is an inherent part of our business. But it's important to remember that the cost of feedstock is highly linked to the cost of finished products. So the spread is actually much more stable than the price volatility that we have. And we do hire a little bit of commodity hedging, but that is actually much less relevant overall. And number four, we do have default risk. So we have a credit rating system that we developed in-house and is quite robust. And as part of this program, we also see roughly 80% to 90% of the company's receivables and they are all measured at a minimum or low risk rating. And if we look at Braskem's default history, it is a very, very, very low. It is approximately 0.9%. On the next slide, we see our recurring EBITDA and margin over time. Here, you can see that there was a very important market moment in 2021. Rosana will explain about the cycle in a bit. But here in '24, we do see a slight recovery compared to '23. And on the right, we see that even in 2019 and 2020, which were very challenging cycles we did generate positive cash in our business. And now in '23 and '24, we have been consuming a little bit of cash in our operations. And if we put Alagoas and those numbers on the table. We were producing positive cash. But now with Alagoas, we are actually -- pardon, we were generating cash. But now with Alagoas, we are actually consuming cash. But we'll see that in -- we'll go back to 2019 levels even with lower EBITDA levels. So a lot of the work that we've been doing in-house by managing costs, limiting CapEx, prioritizing investments and growth. This is linked to the scenario that we find ourselves in today and our essential, fundamental and objective priority Alagoas that we have and the generation of cash that is going to begin starting in next year. In the next slide, we see our debt profile. This is very long-term debt. On average, it is roughly 11 years. The company's total liquidity at close of Q3 was at $13 billion, including the standby line. Just with the cash alone that covers 52 months of debt, and that doesn't even take into account the standby. So we have been working to recover our results to reduce that leverage. We had a new round recently approximately 8%. And part of that was used in the partial repurchase of the bond. We have already through that fundraising round, acquired the funds to complement that hybrid bond for next year and also to meet our requirements, our obligations for '25. Moving along and to my last slide. Here, we see an overview of our strategic direction and principles which is focused on improving our rating from the ratings agency. So our debt profile is part of our financial plan. We have been delivering that very consistently over the last several years. It is not anything new, we continue to aim to reduce our leverage to approximately 2.5x net debt and EBITDA. We've also been signing strategic partnerships to keep our growth avenues open. So that we can continue to deliver our business strategy even in challenging cycles and moments. Recovering our cash generation throughout the cycle is another part of our strategic direction, as I mentioned. And lastly, maximizing shareholder value. at every moment in the cycle. And so this concludes my overview of the financial strategy, and I will pass the floor to Rosana, who will talk about Braskem's business.

To's so start this session in which we are going to share with you the strategic direction of Braskem. It's very important to understand, before anything else, what is the scenario that we are considering or our discussions. The basic principle of the petrochemical sector, in fact, is the supply -- global supply and demand. So I'm going to start to talk about the expectation -- the global expectation that Braskem sees and also external consulting. Isabel mentioned that the chemical industry is the mother of all industries. So naturally there's a very strong correlation of the demand growth of products that we produce, resins and chemical products with the global GDP. So when I look on the left side of the slide, in spite of the growth expectation of the global GDP, which is lower than the history levels, when I compare to the average of 2000, 2009, or from 2010 and 2019, we can see that the global GDP continues growing. So that means that the demand for the product of the company, the products that we produce continues to be in demand. This graph on the right shows that on average the demand for products for petrochemical resins grew by 1x. So, this is a positive message. We continue observing a growth of demand by the products that are produced by the company. Next slide, please. And then as to supply. And I'm going to explain the methodology used to produce this graph. As to the supply, we can see the capacity is still coming in. Some of my friends also brought this information. They talked about the sufficiency of China, all the capacity that has been at play in an important way. But when we look to the future, basically, is China that's adding capacity. The other players considering the margin that we observed, the margins of the petrochemical sector in the past years. In fact, we haven't seen in a very major way in important events in terms of supply. Before I talk about the spread expectation for the years to come, I would first like to qualify the analysis of cash. This is when we normalize the volume of sales of the company. What we would like to show with this graph is the volatility of the spreads international market. Let's see the track history of 2016. And if we see what we have observed in the past year or 1.5 years, and we compare with our expectations for the future. In fact, every year, we see there's a greater balance between global supply and demand. As I said, the global demand continues to grow and supply, on the other hand, is reduced when compared to the previous year. That makes this spread -- this is an index. It's an index. And this shows the expectation of the company in our consulting companies. It shows that there's a growing a gradual increase of the spread. But when we compare with the two last years, results, we see that the bottom of the cycle has come to an end. So what can leverage in a major way, the improvement on spreads? Is the rationalization of the petrochemical and chemical industries. The volume of supply that we have seen in the past 5 or 6 years was very substantial, accounting for nearly 25% of the global production capacity. And when we look the producers at the global better global level, we start observing that there are some producers, especially in Asia. Some producers are also based in Europe that have the risk of rationalization. So what can really leverage this improvement in a more accelerated way is the rationalization in the industry. Next slide, please. And then another concept, another trend that we observed -- and this is what was considered in our strategic direction are the trends that are likely to continue growing some of them, which are going to start in the next cycle. So starting with ethane competitiveness without a doubt. Ethane is the most competitive feedstock. Stefan mentioned this when we talked about the EBITDA margin of the third quarter, which was higher than 30% when compared to the EBITDA margin at the consolidated level, which was about 10% or 11%, so what was the opportunity that we see? Of course, it's to expand our centrals in Rio de Janeiro and we have discussed when we discuss prices in Brazil, we talked about the pod, gasoline and what is going to be -- going to allow for the expansion of the petrochemical segment in Brazil and also the expansion in Mexico. As Stefan said, clearly, we already have the solution, the logistics solution for imports that is going to make this expansion possible. in Mexico and also in Rio de Janeiro. Another trend that continues to accelerate is what I've just mentioned in relation to the self efficiency in China, China 5 years ago, brought in self-sufficiency goals, both for polyethylene and for polyethylene and polypropylene. Of course China, when we deserve the demand of China as a country in terms of combination the energy transition is so important for society. China says that it's going to increase its issues up to 23rd. And after 2030, we'll start reducing in order to meet the long-term what we consider, in fact, when we define the strategy is that China is going to add capacity both as for polypropylene and polyethylene. And all this to what we are after, in fact, is at and expand the initiatives of resilience and optimization of cash flow, which are going to be basic for us. In relation to the consolidation and rationalization, we have seen -- beginning of the consolidation of the industry, especially in Asia. We see companies being consolidated in order to optimize its assets. In a combined way. And the rationalization that I mentioned two slides ago is what will likely to increase the acceleration of the petrochemical spreads. We believe that the marginal producer is operating with a negative margin. This is what we believe. And we start to observe announcement of producers, especially in China, because China has a different strategic movement. What is Braskem's strategic direction? To capture commercial opportunities. Braskem is the largest Americas producer. And when we see a rationalization movement in the industry, what we have in the Americas, nobody else has. So the objective is to capture those trade opportunities. And so moving up, sustainability is so important. We should have also made important comments about how our objectives for sustainable development are very connected to our strategy. But today, we still do not see the circular volume start we see any difference in the petrochemical industry in terms of pricing. And our opportunities happen by leverage the main drivers of Braskem in relation to the industry, which is -- it is competitiveness in terms of sustainability. Braskem the largest produce biopolymers. We are going to continue make headwind related to those projects, of course, by means of partnerships. I will mention more about it. And in relation to the circular aspect, we have 123,000 tonnes that generates profitability to the company already. We are going to continue moving ahead in order to deliver the goals that we shared with you for 2030. And lastly, we have seen this in the context, we say who's going to pay the bill in terms of refinery in the context of energy transition, when the fuels are going to have a lower demand in relation to the electric cars for the future. So we see a larger integration of oil and gas, refineries and petrochemical industries. Most large part of refineries, 5% or 10% of original refinery produced naphtha. Naphtha is still imported substance in Brazil. But of course, the opportunity that are the related to the integration of the -- oil and gas companies, refineries and our petrochemical assets. So I would like to draw your attention not only to the traditional feedstock but also to the circular -- bio circular and renewable feedstocks. Okay. Let's move on. Next slide, please. In the three slides I provided the context, the scenario that we are considering. In order to explain what's the strategic direction that we want to adopt. First, we need to maximize the cash generation at present. The cash generation at present is what is going to return value to the shareholders, but it's also made the growth available. So the initiatives of resilience and finance stridency or going to be expanded. With all this, with this cash generation in order to balance our business growth as bit presented when he talked about the avenues for growth. Of course, all those pillars are based on the corporate strategy, which was also presented here previously. Now let's move on next slide. The first pillar of resiliency, there are different initiatives that the company has been adopting. We have been going after those pillars, and we have been delivering the results. We show the results year-to-date, but we are talking about different from commercial front. As I said, Brazil is a leader in many markets where we produce, where we operate. So in fact, able to leverage this leadership position, we're going to implement our commercial strategy and I mean we are going to go after sales with highest added trend. As for feedstock, because we are a leader, we also consume stock in the areas where we need to go after the competitiveness and the search of stock. And I would like to mention Braskem trade and shipping that has been reducing the price of feedstocks. In Brazil, Braskem imports about 60% or 70% of our needs of feedstock. In Mexico, we are going to be a major importer of feedstock, so this synergy with logistics will be fundamental for us to reduce the cost and the variable cost of the company. Now moving on, talking about the Brazilian industry. Without a doubt, Brazil is going to provide support to this major front that has been discussed with different players, players of the chemical industry. Braskem and the chemical industry is the mother of our industry as mentioned by Isabel and of course, we need to defend the chemical industry, especially considering the context where China has been going forward self-sufficiency and does not have an idea of growth is focused more on the GDP growth. And considering the competition that we have with the American products, whose feedstock is more competitive than that of the Brazilian feedstock. And now talking about the operational dimension, is talk about the optimization of the investments. We created a methodology in order to go after a capital allocation that can be efficient at the operational level, as Pedro mentioned so well. So we are going to maintain the liquidity, the liquidity is buffer so that we can go through this low cycle that is likely to continue in the years to come. And lastly, the business as for the business model. In the past two Braskem days, we have shown new business models partnerships that we have established in the past 2 years to do more with less plan -- this is when we start to capture value considering the different Braskem models such as Braskem Trading Shipping, as I mentioned before. Let's move on to the next slide. And then very quickly, as for CapEx, the investment, the consolidated investment asking this because et has already talked about the CapEx of Braskem Idesa for the next year. But in fact, this is what we did. We want to optimize the allocation of capital for the corporate investment at Braskem. We created a methodology that is going to have operational assumptions such as safety. Safety is a non-negotiable value for the company. So this is in the base of the permit, investments that are going to be prioritized. And we also developed a methodology in which we are going to consider the prioritized assets than those who would offer higher margins assets which are relevant. Those are assets which are competitive and impact on the production will not have an impact -- a negative impact on the results of Braskem and also marginal Braskem will have CapEx allocated accordingly lower than the relevant asset or the prioritized assets. for the next cycle. We are going to continue incorporating the methodology. And this is the methodology that made us defined for 2024, one of the lowest corporate investments. But we also brought in the optimization of the assets to the whole results. Let's move on to the next slide. And to end, I talked about resilience, the initiatives for resilience as the -- with the additional cash generation and we're going to atomize. And we -- cash flow has been a focus for the company. to be recognized by what we have always been recognized regardless of the scenario. We're going to continue generating cash. with this resilience, with this added cash and all those initiatives, we are going to back road. And this is going to ensure the perpetuity of the company. So you can see the three avenues of growth, traditional business, we got it out, focus on company selected investments move a move ahead with expansion in Mexico. While decarbonizing the government's current assets. And Bischoff talked about the decarbonization projects that we have in the portfolio in order to decarbonize our businesses being that created a positive value to the company. So it brings in an additional cash generation to the company. Lastly the logistics. I talked a lot about the breast and reading ship. We have already started seeing a reduction in the cost of imports, as a result of this new business. As for the green business, we're going to legwear going to grow the lease position that we already have in Brazil in the world by means of partnerships, how we can do more with less, and there are many projects that have been presented today. And at the same time, we're going to make headway in all our efforts. We have an advocacy area that aims to accelerate the debt. And then lastly, as to recycling. We're going to intensify our global operation, we're going to maximize the current portfolio of recycling. As we said, it's more than 120,000 tonnes. Going for new technologies such as CMO and accelerate the strategy of camel recycling. I'm going to move on to Bischoff. I would like to thank everyone for the attention, and Bischoff will give his final remarks.

Thank you Rosana. Well, thanks a must conclude, I will attempt to summarize the main skills that Braskem has developed and which have and continue to allow us to capture opportunities. First, we are a global company with units in Brazil, the U.S., Mexico and Germany and more with offices in many continents serving clients in over 70 country. Sadly, we are a leader in our markets. We're a leader in the Americas. And we are the seventh larger producer of thermoplastic resins in the world. We are also the only integrated petrochemical producer in Brazil. Our strategy and our contributions are significant in terms of sustainable development since our founding. We are a world leader in biopolymers, and we are committed to a carbon-neutral circular economy or we are client-focused and future-oriented. Our vision of the future is what guides us. We have a clear vision of partnership with our value with our clients. and with implementing new business models that allow us to increasingly integrate with and transform this change. Five, we have a very clear risk management strategy, which has been bringing us to diversify not just our feedstocks, but also our geography and our product mix as well, as I mentioned before. Six, we have a robust financial strategy that Pedro highlighted at length and which is significantly focused on solid and consistent recovery of the generation of operating cash. And seven and no less important our -- we have extensive operational experience focused on people. We are a global petrochemical market. In addition to the skills that bring us to this position that, in our mind, is very unique. Next slide, please. We also bring to the table many initiatives that are strongly focused on resilience and financial health. Where our focus is on maximizing cash generation. And we forecast that we will raise $400 million for our run rate. And we also have initiatives that were discussed with patent length over the course of our day to day, focusing on keeping our growth avenues and strategy, well nurse. And through those strategies, we expect to, by 2030, is capturing $700 million to $900 million. That's what I wanted to bring to you in terms of our strength and our strategies that we build here at Braskem. Our sustainability for the future. And before I move on to the Q&A, I'd like to thank all of you I am saying goodbye to Braskem. This is my last presentation. At the end of the month, I am leaving Braskem. I'd like to say thank you fully because we have built this relationship based on trust and closeness. And for that, I'm very grateful. Now I will open the floor for questions and answers.

And now ladies and gentlemen, we will begin the question-and-answer session. Our first question comes from Rodrigo Almeida from Santander.

First, Bischoff, I would like to wish you a great deal of success. I know you have a big challenge ahead of you in the coming weeks. But I have two questions. They are focused first on Brazil and then the U.S. On the topic of Brazil, I'd like to discuss with you about new projects I know it may be early still to talk about this, but I'd like to get a read on how you view these new projects, specifically in the context of [indiscernible] 3, and you mentioned Petrobras as well. That Petrobras is planning on developing projects either alone or with Braskem. So are you involved in discussions either with Petrobras or with other players? Also touching on the gas-based plant in Rio. What do you consider in terms of the REIQ, the import rate, how do you assess the prospects of new projects here in Brazil more broadly. And in the context of Brazil, could you also discuss the antidumping for polyethylene that has being discussed, that would be great, too. And my second question is about the U.S. included in his presentation, the discussion of feedstocks and how the arbitrage is done for the different degrees of field stock So I'd like to understand how that works in practice. Could you explain to us please. And also how has Braskem been responding with regard to the rise in the cost of natural gas in the U.S.

We were just figuring who's going to table that. First, I will get started and then we'll have Bischoff maybe Isabel to add on. On -- in my mind, I see this as divided in three topics. General projects in Brazil, then Petrobras and potentially integrating with refinement and [indiscernible]. What do we think is necessary? What do we think we need for us to invest even more in Brazil? So with regard to Brazil and projects, I think there's going to be some overlap. Most importantly -- well, firstly, we have smaller projects, projects with smaller financials. Some are more advanced. Some are less far along -- but we've been working on all of them. Most importantly, here in Brazil, I would say there's an important project to expand the real center. Our center is right in front of pre-salt and we have seen the government move some of the natural gas regulations here in Brazil. So that may suggest additional ethane availability as feedstock for petrochemical use. And in our assessment, the project that makes the most dense for the country is expanding the Rio de Janiero Central. It currently has limited CapEx. And through that expansion, we will attain additional production capacity. So that would be project one, I would say. Other expansions here in Brazil are always going to depend on the availability of the feedstock so looking at our traditional business this is the major initiative that is before us. Now in terms of renewables and solving I will pass the floor to Isabel , who is going to talk a little bit about these projects. And I'll come back talk about what is still needed.

Thank you Pedro. Only to add to what you said in relation to the projects that we have in Brazil, we have a project in order to increase the production capacity of our PVC plans in states because we can already feel the effect of the sanitation framework. In the past few years, our card has been demanding more PVC, and we would be ready to meet their demands. So we are in the process of increasing this production capacity already, which is likely to be completed in 1.5 years. So this is one of the projects that we have underway. Another project is that we are going to use the chain in the cracking of Bahia in order to produce a product that is going to be used which are residents of high-power resins that are going to be used in ship holes. They are very resistant. In 1.5 years, we are going to be ready to reproduce those presence in by United States. We are also developing another solvent for the agri business. This will be a new launch for the next year. In addition to this in Sao Paulo, we are going to make an investment in an effort to replace stock that we are using today. And that plant is going to become a swing pledge that is going to use electro and that is based on C3 chain. We are going to use a C4 chain in order to use ISO paraffins. So these are some of the projects that we have in the line of the traditional business. And of course, as for bio-based project. We are going to continue developing sales of resistance, which is the ecological feedstock that I mentioned in my presentation, and we also have some upgrade projects for the future. New solvents, new renewable source products. Thank you.

Now I'm back to Rodrigo and it's also important to mention the expansion of our Wise business in circular feedstocks. This is a company where we acquired a controlling stake 2 years ago, and it's currently involved in an important expansion. And also like to highlight that Braskem has been studying alternative investments into SAF. So we have one project in the south that is more well structured today and other projects also in the pipeline that we believe may be quite interesting to be developed. Before I move into what is needed for that to happen. We also have on the topic of Petrobras and the integration in Rio de Janeiro, we have been discussing terms because the ethane, the feedstocks exist, what is being discussed today is we're negotiating how this contract for the additional volume for a potential expansion in real would occur. But before I pass the floor to Mark to talk about the U.S. I think it's obvious for everyone who follows us that today Braskem does not have an actual capacity to invest in these large projects. I think we can for the smaller projects. But the larger ones, such as the Rio expansion, the SAF product maybe even building a new green ethane plant here in Brazil to expand our green ethane capacity, which today is fully consumed. We do have that Thailand project but we could potentially build a new plant in Brazil without a doubt. So all of that hinges on Breast recovering its financial capacity the announcement of the increase in the resin import rates cover some breathing room, but it's transitory measure will last 1 year. So this protection that is protecting Brazil is from the dumping that some other countries have been enacting against Brazil, that's very important. And we requested that recently. This was recently made the refer to the -- as the antidumping policy on polyethylene. We also have a request with the government. This is in partnership with Unipar. We have a request to review the antidumping rate for PVC. So these measures, these are more structural. These are the ones that we believe may help to replenish the company's ability to replenish its cash generation. In addition to that, ABIQUIM has been discussing a program in partnership with the government. To encourage the energy transition and the feedstock transition here in Brazil. This is another topic that we have been discussing with the government and with other public entities, program. And this will lead us to a well-structured and structural program. This will allow us to convert part of our naphtha base, which is less competitive to ethane, which is also more renewable as well as market. So there's the antidumping, which is a very technical discussion that is currently ongoing in the Brazilian government and more structural program to transition the chemical industry itself. That has also earned a discussion at the public sector. These are necessary measures for us to resume Braskem's cash generation potential. I think that without something of that nature. Again, we aim at a positive cash generation, but not at the level that actually means accelerated recovery of the company overall. So I will now pass the floor to Mark for him to address that question, but the propane market in the U.S.

Great. Thanks, Pedro. Hopefully, you can hear me. So I'm going to start really talking geographically about the U.S. So if you think of our asset base in the U.S., first of all, we have assets that are on the U.S. Gulf Coast in Texas, and then we have some assets that are in the Northeast, Midwest. The Northeast and Midwest assets have traditionally been supplied from refining base as well as steam cracking base in Southern Canada. That material is supplied through rail and pipeline. So a combination of rail transport as well as pipeline transport. At the Northeast assets, the Midwest assets we have a need to purify propylene. So we have distillation columns that allow us to take less pure propylene like refinery grade to purify it to the level that we need to polymerize it into polypropylene. There is a discount associated with that lower purity propylene. And since we're able to take it, we are able to capture that discount relative to the cost it takes us to purify it, right? So we're always balancing those costs. So that's one of our advantages in the Northeast, Midwest of the United States. When you get to Texas, we'll talk about scale. Braskem is the largest propylene buyer from a merchant perspective on the U.S. Gulf Coast. So we have very large scale. So we have a lot of connectivity as an example, in our La Porte, Texas asset, which is on the Houston Ship Channel. We have seven different propylene pipelines that come into that asset. That gives us immense flexibility in who we're supplied from, who we need to negotiate we get our material from. In addition to that, at the La Porte site, we all have a distillation column. So again, we can clean up less pure propylene. So that allows us on the U.S. Gulf Coast to take in polymer-grade propylene chemical-grade propylene on a variety of different volumes, a variety of different suppliers and through a variety of different price mechanisms. And I'll explain some of those, so you can explain -- so I can explain the portfolio effect. So if you think about the merchant prices, there's a polymer grade propylene price, contract price and a spot price, there's a chemical grade polypropylene or propylene rather contract and spot price. And there's a refinery grade spot price. So if you think about the stratification of the market in purity levels, that how the market works, we buy chem grade and polymer grade on the U.S. Gulf Coast. We buy it on multiple different indices. We buy it on a propane basis from propane dehydrogenation units. So that is a spread over propane, propane to propylene. We buy it on a refinery grade basis for those that split it and purify it outside of our business unit, and that would be a refinery grade to a polymer grade propylene price basis. And then the last is a chem grade price basis, which is similar to polymer-grade propylene price basis. So all of those discounts, all of those different price mechanisms give us a portfolio effect that with our scale gives us a strategic advantage in sourcing propylene on the U.S. Gulf Coast. So that's how we create through our asset base and through buying multiple grades of propylene through multiple different price indices or price mechanisms, we're able to create a portfolio effect that gives us an advantage when we buy. The last comment I'll make is about our most recent plant that we built -- in the ship channel. We call that Project Delta. As I mentioned, it was the first of a new wave of polypropylene plants being built in the U.S. Subsequent to us, Exxon Mobil, Heartland in Canada and now Formosa plastics, probably the end of next year, we'll be bringing up new lines. We were the first new line that allowed us to go to market with the first ask for propylene, which gave us a big advantage because there was excess propylene at that time, and we were the first ones to create another 500 kt -- I'll say, sync consumption of propylene in the U.S. Gulf Coast. So that gave us an advantage. The last question was about natural gas and natural gas prices appreciating in the U.S. Gulf Coast. I would say, generally speaking, we are -- we get benefit when those prices go down, and we get hurt a little bit when they go up. They obviously affect ethane prices for Mexico. Any NGLs that we buy in the U.S. and shipped to Brazil. But in addition to that, I would say we have short-term pricing mechanism that allow us to, I'll say, mute and reduce the volatility. But essentially, we see the volatility of natural gas in the U.S. show up in our utilities. Having said that, from a competitiveness perspective, and you've seen this in the slides, our assets are first quartile, second quartile interface, they're very competitive assets. our asset in Mexico is a very competitive asset. So even though gas prices might appreciate over the coming 24 months in the U.S., we will be on the right side of that curve because of the competitiveness of our assets and our utilities.

Our next question comes from Gabriel Barra from Citi.

Roberto, Pedro, everyone at Braskem and congrats on the presentation. I love getting this level of detail. I love seeing the snapshot of the company. I think this is very helpful for everybody. I want to go back to the previous question. There are 2 points I want to understand a little bit better. First, I think it was last week or this week, there was a potential fundraising. And with regard to the Nova North stake at the company and listening to Pedro and the size of the investment, the company's timing and the concern with cash generation, even though there is no concern with liquidity itself, I'm just brainstorming here. But I'm trying to understand whether this could potentially be done through fundraising, maybe bring in a third player, a third agent to invest in this initiative and perhaps dilute the Braskem's position as controller. Is something like that even possible? And along the same line of that project, another follow-up. During the last conference call, we were discussing potential rationalization on the size of the company, some plants that perhaps don't make sense in the current spread and term conditions. So how would Brazil influence these spreads and the increase in capacity? I think going to that context, there were also some headlines about the gas market in Brazil, potentially more gas coming in from Argentina. I think there's going to be a very strong gas market in Brazil in the next coming years. So I'd like to understand your take on how the company can benefit from that? How much flexibility is there in your contracts? What is the cost impact for the company? What are the upsides looking at this surplus of gas coming into Brazil?

Gabriel, thanks for your question. I'll start with the second half, which is the topic of increasing capacity and how we would accommodate that with the gas arriving. If it's competitive, it comes in on the first quartile of the cost curve, and it ends up being a profitable operation. So that's why I mentioned earlier how important it is to discuss the terms of the contract with Petrobras. They must be competitive. Otherwise, it doesn't make sense for us to do anything. They must be competitive globally. That is the priority. That is -- anything involving gas always needs to be competitive. That's the prerogative. In the Middle East, anywhere. It needs to be competitive in order for an investment to make sense. With regard to this Argentinian gas, we have details about the logistics route. We know that the distance is significant. We don't know when exactly things will happen. And in order to make a decision, we need to be very clear. We need to know the when. And thirdly, where because if the gas comes in at a location where ethane was already extracted, then it's not in a feedstock for us. There may be some energy benefits. So it's one potential route. There's already a pipeline that links Argentinian gas with Uruguayan gas. So if this pipeline is expanded, maybe if that is where that volume comes from, and if the connection is built between Uruguaiana and the Southern Brazil pipeline, this is right on the doorstep of our plant in Southern Brazil. So yes, we would see improved efficiency in terms of energy, but it wouldn't necessarily be feedstock. So what we are still studying is that, on the one hand, it needs to be competitive. And secondly, Argentinian gas specifically, we don't yet know where and how it's going to arrive. But with regard to your -- the other part of your question, capitalization and how this could come about, we saw the same headlines that you did. So as far as we know, as far as we've been tracking -- in other words, we don't yet have any additional information. We can hypothesize and plan, but it's all speculation at the end of the day until we know more. So until we have more concrete data, I would not comment on that front.

Our next question comes from Tasso Vasconcellos, UBS.

Bischoff, Pedro, Rosana, I have a question about the spread cycle. We've talked at length about the additional capacity in the past few years and in tandem, a deceleration at the global scale. So first, would it make sense for us to think about this new scenario, these new capacities and the deceleration of global growth in longer cycles from here on out compared to what we looked at historically? We know that historically, going through low, mid and high used to take around 5 years. So my question is, could it be that, in the future, these cycles are going to be longer? Does that makes sense? And the second half of my question is, still in this new scenario. Does it make sense for us to think about a potential mid-cycle with lower spreads historically? Rosana showed a spread from the 2000s, and the last mid-cycle was between 100 and 140. And right now, we're at the 80s. So could this new mid be around the low hundreds?

Tasso, thank you for the question. In relation to your specific question about the cycles, if they are going to be longer, I think there are considerations to make. First, we didn't see any change in the way the industry does the pricing. The marginal producer is the one that defines the pricing, the cash cost is higher. So theoretically, that would be the cost reduction plus the margin. So there was no structural change. Why do I say that? Because you wouldn't say, "Oh, there are more circular products, the feedstock stuff -- stock is more sustainable." No. From the structural viewpoint, we haven't seen any changes in the way the market operates. So what happened, which is different from the past? It was an imperfect combination because as for supply, we saw a lot of capacity. We have seen a little bit less now, but especially in the period after pandemic, up to 2023, the capacity was very expressive, very significant. So there are a combination of 2 main factors: the self-sufficiency of China, competitiveness of feedstock in the United States. When we look into the future, as I said in my presentation, we do not see a second wave for the time being from the United States. And that would hurt the global profitability at a global level because when this more competitive producer, when he uses very competitive feedstock, he gets in the first quartile of the curve. And the other producers that do not have this competitive feedstock, they are put to the side close to the marginal producer. And when we look into the future, we do not see a second or a third wave, if you thought that the previous one was the first and the second wave. But if we look into the future, we see that the producer base -- naphtha base, China producers especially, and the production is with self-sufficiency. In the way into the future, we see that our strategy is more short and medium term, but there are longer visions. We believe that the cycle has been longer. It's a capacity that was relevant, and the world growth at a lower pace. So any investment, if you look from the economic viewpoint, this new demand curve, where the world grows less, is going to be a variable. So now all producers when they make new investments, they are going to incorporate a world that will grow at a lower pace. So in a summary way, to answer your question is, yes, this was a longer cycle. It has been like this. We have seen this way, and rationalization may reduce this movement. But at a structural level, we haven't seen any changes in the medium or long term in the petrochemical dynamics. And when you talk about mid-cycle spreads, if I see that there was no change in the first moment, we see that the mid-cycle spread is going to continue as it has been historically.

Our next question comes from Leonardo Marcondes with Banco -- Bank of America.

I have 2 questions. The first is also about spreads. Rosana talked at length about your expectations for the spreads. But I'd like to know, could you give us some numbers about what you forecast for closing the capacity? And also, could you run through an exercise with us? I'd like to get your opinion, in case these capacity closures don't come to fruition, when can we expect the midpoint of the cycle to come again? And my second question is also about this topic. In the previous call, you mentioned a potential decision to rationalize capacity in Brazil, which is likely to be scheduled for next year. So I'd like to get your opinion on how you see Brazil's operations in that global cash cost curve? And what are the main points that are going to be discussed in the capacity closure discussions? And also, what is the EBITDA level that you consider to be appropriate in the region to recover investments in the company?

Leonardo, thank you for the question. I'm going to start answering the question about spreads. When you asked what are we considering in our strategic movement. As a main concept in 2024, considering the year-end trend and beginning of 2025, in our pricing curve, in our pricing models, we only consider the rationalization in which the main producer has already confirmed the rationalization. We prefer to be more conservative. And if it recovers its rate, we are going to add additional capital and maybe accelerate in some plants. And as of 2025, we have a model, internal model for rationalization in which we make an evaluation of the production cost, individual with all producers in the world. We access this data from external consultancy services. And in this model, when we do the rationalization in the medium and long term, it is a material rationalization, 20% of the capacity at present to get to the mid-cycle spreads according to your second question, which is a global operation rate of about 85%. And what are we considering our way of directing for 2025? Only the ones that we have announced, we want to be more conservative. We want to discuss in detail the allocation of the capital in different fronts of the company. And as of 2026, there is something hypothetical, but it's not shown by our model. Our model shows a rationalization that also comes from China. And I said that this is something that is not an economic direction. It has a bias of self-sufficiency to remove from -- sufficiency from other markets and suppress the domestic demand. So we're talking about large numbers, about 8.5 million tonnes of polyethylene in the next 5, 6 years, and something close to 8 million to 9 million tonnes for polypropylene as well. So again, we are conservative, but we believe that this is likely to accelerate. But if it's not confirmed in the short term, we are not going to be considering this in our short-term model. In relation to our decision to rationalize in Brazil, well, in fact, I'm going to talk about a topic that we do here. We study the assets in a recurrent manner. This is an activity that we have to do. We have to know, "Oh, Braskem is making money, but out of -- from the technical viewpoint, is that asset bringing us cash?" So we do different studies, different analyses. And even the United states would be an example. We hibernate one of the plants. I reduced the fixed cost and I maximized the cash generation of the company. So in the future, any study in any region, I'm going to be generic because we haven't made any specific decision made. So if the company decides to do this kind of action in one area is because we are looking for the result of the first pillar, that is the financial conservatism in order to generate cash for the company. This is our direction. 100% of cash flow. We talk about EBITDA, but the main driver for our discussion is cash flow, cash level. As for EBITDA, I don't know if Pedro would like to answer this question, what would be the average level of EBITDA expected for the company? I don't know. Okay but thank you, Leo.

If you consider the cash consumption in the order of $700 million to $800 million a year in the past few years, that's roughly what we need to restore in order to balance our cash consumption. It's relevant to mention that this actually involves roughly $500 million a year in Alagoas disbursements. Next year, we have a larger disbursement in the order of $450 million. But starting in '26, this level drops significantly to $200 million. So this recovery is approximately the size, the scale or order of magnitude that we need. If you look at our EBITDA on the one hand, our metric -- our debt metric was dropped significantly. On the other cash generation, specifically starting in 2016, resumes at a significant and interesting level. So this is approximately the number that we would need in order to have the size that we had in previous years.

Our next question comes from Conrado Vegner, Safra.

First, I want to thank the admin and the IR team for the event, and I want to wish Bischoff great success in his next steps in this journey. I want to follow up with Rodrigo on the Rio expansion. Pedro mentioned this, but specifically, I want to look at the availability of ethane. How has that topic been developing? Do you believe that the solution will come from the A&P in gas processing? Or is it likely to come directly from Petrobras from a more clear position of theirs in terms of petrochemical? And my other question touches on the goal of increasing the amount of recycled content products. What is the profitability like for that business today? And how do you think improvements will come about maybe through improved technology or in scale, reduce costs? Maybe a premium for that kind of resin? Do you see that market moving toward some kind of landmark of any kind in recycled material perhaps that would make that improve?

Conrado, I'll talk about gas first, and then Rosana will talk about the recycled ones. With regard to gas availability in Brazil, we do see that gas availability is already growing on the market today. This has already been happening. Obviously, not yet revolutionary, but it has been occurring in the Brazilian market. And also on the topic of Argentina, naturally, this could increase some more. And if we add what is coming from the pre-salt, it certainly means that there is a content of ethane that can mean more feedstock for our business. The only matter is extracting that ethane from the gas. And you did mention the A&P regulations. Well, the A&P has already made a change to its gas market regulation earlier this year. And we see that the A&P is concerned with ensuring that this feedstock exists here in Brazil. In other words, that this feedstock -- this potential feedstock is not burned for energy instead. So there is concern from the government, from the regulatory agency in ensuring that more feedstock in the form of ethane is available. As a result of that, we see that there is available feedstock that comes from Route 3. This ethane's availability has been confirmed. Now it's just a matter of discussing the terms of the contract to actually make the investment viable. That's the logic that we've been seeing here on the market. Rosana?

Thank you, Pedro. I think the major message is that Braskem believes in the circular model. And therefore, Braskem recognize its role in order to mobilize the chain, not only our role, but the chain as a whole. And this is what we have been doing in terms of profitability. I believe that the profitability is unlocked and generates EBITDA. So nowadays, we talk about the volumes of sales and EBITDA, and we accelerate as we see the opportunities to create value for the company. But we understand that the creation of value is going to come with the creation of demand. As an example of polyethylene in the past, the international reference was lower, $1,000, which is cheap in relation to the track history of the price of polyethylene. If we do not have regulatory environment that would create this demand, we see difficulties. We are talking about the global-level difficulties faced by the company. We have difficulty in creating demand because you have a traditional fossil-based product that has a competitiveness in terms of efficiencies and applications when only fossil products would be possible. Why would you buy a circular product, if the price of the fossil products are so low? So the main focus of the company are basically to make headway in expanding the portfolio by creating value. And today, in the presentation, we show that today, there are different initiatives ongoing, encouraging mechanical recycling, reaching to 130,000 tonnes, creating value to the company. And second, we are going to operate in a very important way at the global level, not only locally with a regulatory environment that will create this demand as the company believes in the circular model. Yes, we do. Thank you, Conrado.

Our next question comes from Regis Cardoso with XP Investimentos.

Roberto, Rosana, Isabel, Pedro and everyone at Braskem. I wish you the best of luck, Roberto. I'd like to make a few quick follow-ups, if you allow me, and then a more elaborate question. The follow-ups are, I understand that the Rio de Janeiro project is new capacity for gas space. We're not talking about conversion, right? So I understand that this would be a project linked to RioPol. So it wasn't clear to me, is there an angle for Braskem within the Boaventura Energy Complex, where the Route 3 arrives? So that's the follow-up. Second follow-up is, have you seen or captured the risks of import risk? And next, if you'll allow me a slightly longer question. It's about integrating petrochemical with refinery. Where do you see that integration generating value? And if I may talk about a specific topic, would it make sense to replace assets or maybe even Braskem could potentially sell assets to Petrobras? Do you see any kind of asset perhaps being better suited to a downstream player instead? What do you think?

Thanks for the question. Well, yes, in Rio, we're talking about expanding the old RioPol. So this is not a Boeventura Complex project. And I should mention that today, RioPol is not running at 100%. So the first stage would merely be to occupy the idle capacity. And then the second stage would, in fact, be expanding with an investment at that location. With regard to import taxes. We do see some recovery in market share in some effects, but we think the main effects will be felt next year, especially because the end of the year, November, but especially December, are months where seasonality here in Brazil leads to reduced sales. So we are not forecasting significant impact here in Q4. This is really something -- the recovery of our market share is something we expect to happen more effectively next year. And lastly, with regard to selling assets to Petrobras. We have not been assessing this topic. This is not a move that we are currently planning in any form.

Our next question comes from Thiago Casqueiro with Morgan Stanley.

I think most of my questions have already been answered. So I really -- I want to engage in a thought experiment with the company's strategy. Braskem has, for years now, been studying the potential sale by its controller. There were many hurdles, both by the Board and by the management, and that includes the gas contract with PEMEX, the Alagoas situation and a very lengthy, low cycle in the petrochemical industry as a whole. So with all of that being said, in this scenario, what do you think that Braskem could have done in terms of development, growth, new business development, if these hurdles hadn't been felt all throughout this time?

I think if you look Braskem's history in pretty much the last 15 years, all of the company's investments have all been focused on growth, focusing on increasing internal cash generation. The last outside investment was in 2010. Everything else was in -- was done with internal funds. And we capture value in everything we do. So typically, we use very attractive return rates, and they're in dollar because our business is dollarized. So what could we have done differently if the scenario were different? In my opinion -- I mean -- first, this is all largely focused on Alagoas. If we hadn't had that significant disbursement, $2 billion to date and $1 million -- $1 billion more, our numbers would be very different. Of course, the cycle is what it is. I don't think our leverage would be at 2.5 yet, but maybe around 3 or 3.5. And so with that, we perhaps would not need to be as selective in our strategic development project. So we would be accelerating development into renewables a little bit more. The matter of the SAF would probably be at a different level. So in this hypothetical, I think that's what would be different. Braskem would have its leverage outside of what our goal is, outside of our target but we perhaps wouldn't have needed to decelerate our growth so extensively.

This concludes Braskem's Q&A session. Now I would like to turn the floor over to the company for their final remarks.

Thank you. I think we came to an end. We addressed different questions. I would like to thank everyone. I wish you have a very good week and I'll see you next year.

The video conference of Braskem has now come to an end. We thank you for attending it, and have a good afternoon.