NOTICE TO THE MARKET
São Paulo, May 28, 2020 - BRASKEM S.A. ("Company") (B3: BRKM3, BRKM5 and BRKM6; NYSE: BAK; LATIBEX: XBRK), in connection with the notice to the market disclosed on March 20, hereby informs its shareholders and the market on the measures that have been taken by the Company in view of the progression of the new coronavirus (COVID-19) outbreak and its impacts on the Company's operations.
In line with our core value of Safety, the Company started to operate its industrial assets with minimal teams. The reduction by ~50% in the number of industrial team members and contractors has allowed us to keep teams safe while maintaining reliability of our operations.
Utilization rates in Brazil and the United States were reduced temporarily due to lower demand and inventory effects in the petrochemical and plastics production chain. The utilization rates will be adjusted considering the market demand and the potential opportunities for exports to other regions that may arise, especially with the resumption of activities in Asia. The main adjustments so far have been:
- Brazil: Reduction in ethylene production to ~65% of its total capacity, which is 3.6 million tons/year; and
- United States: Reduction in polypropylene production to ~85% of its total capacity, which is 1.6 million tons/year.
In this regard, the Company has been taking a series of measures to preserve liquidity in order to maintain its financial strength and business resilience, such as:
- Disbursement of Revolving Credit Facility of US$1 billion;
- Reduction of administrative expenses by approximately 10%;
- Reduction of planned investments for 2020 from US$ 721 million to US$ 600 million;
- Postponement of social contributions collection in Brazil; and
- Working capital optimizations.
Finally, the Company highlights its critical actions on four important fronts: actions taken jointly with clients and partners to transform plastic resins and chemicals into essential items to combat COVID-19, especially surgical masks, packaging for liquid and gel alcohol, bleach, and 3D printing of rods for protection masks; donation of LPG to hospitals; actions to support clients and supplier chains, especially small and midsized companies; and donation of hygiene kits and basic food baskets to affected communities around its plants.
For more information, contact Braskem's Investor Relations Department by calling +55 (11) 3576-9531 or sending an e-mail to email@example.com.