Corporate Presentation - Alpek · 2017-01-25 · This presentation contains, or may be deemed to...
Transcript of Corporate Presentation - Alpek · 2017-01-25 · This presentation contains, or may be deemed to...
Corporate Presentation
3Q16
This presentation contains, or may be deemed to contain, “forward-
looking statements”. By their nature, forward looking statements involve
risks and uncertainties because they relate to events and depend on
circumstances that may or may not occur in the future. The future results
of Alpek, S.A.B. de C.V. And its subsidiaries may differ from the results
expressed in, or implied by the forward-looking statements set out
herein, possibly to a material degree.
v 10.4
16.4
Index
• Business Overview
• Consolidated Financials
• Appendix
Index
• Business Overview
• Consolidated Financials
• Appendix
Investment Highlights
5
Market-leading position in the Americas1
High-return integration and cost-saving projects3
Attractive consumer-oriented product portfolio2
4 Low cost producer with leading technology
5 Experienced management team
6 Strong free cash flow and financial performance
Polyester (71% of Sales) Plastics & Chemicals (29% of Sales)
Alpek is a leading petrochemical company focused
on Polyester chain products, mainly PTA and PET
Source: Alpek estimates
(1) September 2016 LTM
(2) 6.65% of the subsidiaries Akra Polyester, S.A. de C.V. and 8.55% Tereftalatos Mexicanos, S.A. de C.V., are owned by BP Amoco Chemical Co.
(3) 49% is owned by Lyondell Basell Industries Holdings B.V.
(4) 50% minus one share is owned by BASF de Mexico S.A. de C.V.
Revenues1 US$ 4.8 Billion
EBITDA1 US$ 679 Million
Polypropylene Expandable Polystyrene
Capro-lactamPTA / PET
Polyester Fibers
Fertilizers & Specialty
Chemicals
Products
and Uses
Subsidiaries Grupo Petrotemex2 Indelpro3 Styropek Unimor
Polioles4
6
Source: Alpek
Polyester Chain
Gasoline
Reformer Paraxylene
Crude Oil
Fibers
PET
PTA
MEGEthyleneCrackerEthane
Naphtha Ethylene Oxide
Polyester
7
Alpek´s products are widely used for food
packaging and consumer end-markets
Source: Alpek estimates
Kta: Thousand tons per year
Sample End Users by Industry
Beverage Food
Personal Care Textiles
Volume by Industry 2015(3,937 Kta)
Consumer
Goods
32%
Textiles
7%Construction
3%
Sales Geography 2015
Europe
3%
Mexico
37%
USA &
Canada
45%
Asia and Others
1%
LatAm
14%
Food and
Beverages
58%
8
Alpek is the largest integrated polyester producer
in North America (PTA-PET)
Source: PCI
2015 Capacities, 2016 M&As
PTA(5,560 kta)
BP
Eastman
Indorama
NanYa
M&G
Indorama
41% 42%
PET(4,443 kta)
North America
2015 Installed Capacity
9
Alpek’s installed capacity amounts to 5.8 M tons;
23 production facilities and ~5,000 employees
Source: Alpek estimates
Kta: Thousand tons per year
(1) Includes industrial and specialty chemicals and recycled PET capacities
Location of Production Sites Installed Capacity Breakdown (Kta)
10
Site PTA PET rPET Fibers PP EPS CPL Other
Mexico
(2,950 Kta)
A Monterrey 160
B Altamira 1,000 640 165
C Salamanca 85
D Ocotlán 10
E Cosoleacaque 610 185
F Lerma 100
USA
(2,343 Kta)
G Cedar Creek 170 73
H Cooper River 170 150
I Columbia 640 725
J Pearl River 430
Canada K Selenis 144
Argentina
(225 kta)
L Zárate 190
M Pacheco 16
N General Lagos 19
Brazil O Guaratingueta 46
Chile
(27 Kta)
P Santiago 5
Q Puerto Montt 2
R Concon 20
Total Capacity1: 5,755 Kta 2,250 2,014 89 310 640 250 85 117
Corpus Christi
(2017)
PTA: 420 k tons
PET: 500 k tons
AB
CD EF
GIHJ
LMN
O
P
Q
R
K
Alpek has developed a leading position in every
product of its portfolio
Source: PCI and Alpek estimates
(1) In North America
(2) In the Americas, including recent EPS acquisition
Alpek: Industry Position
Industry Position Comments
PTA #1 in North America • Attractive industry structure
• 41% est. installed capacity share1
PET#1 in North America
#2 Worldwide• 42% est. installed capacity share1
Fibers #2 in North America• Leading supplier of filament for car seatbelts
• 26% est. installed capacity share1
PP Only producer in Mexico • Attractive growth potential
EPS #1 in the Americas• Largest plant in the Americas
• 40% est. installed capacity share2
CPL Only producer in Mexico • Among top 5 lowest cost producers worldwide
Po
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Ch
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11
Alpek is investing in attractive organic projects to
boost profitability
Strategic Guidelines
Source:Alpek estimates
(1) Does not include 100 ktons additional supply rights recently acquired
(2) US $663 M invested up to date
Project OverviewEstimated figures and dates
● Capture natural gas, ethane and propane
advantage in North America
● Maximize operating efficiency
● Selective capacity expansion
● Lever IntegRex® technology
12
ProjectCapex (US$M)
EBITDA (US$M)
Start-up
1. Cosoleacaque Cogeneration 140 30 4Q14
2. MEG Tolling Agreement 65 20 2Q16
3. PTA/PET Site (Corpus Christi)1 350 80 2017
4. Propylene Spheres (2) 20 10 2017
5. EPS Expansion Altamira 30 10 2017
6. Altamira Cogeneration 350 90 2018
7. Fiber Expansion Pearl River 30 20 TBD
Total ~ $1 B2 ~$250
8. Integrated MEG Plant (Mex) $1+ B 250 N/A
Alpek also holds a successful M&A track record
and is constantly evaluating potential targets
13
Attractive Market Potential
Existing/Related Business
Cost Competitiveness
M&A Deals (2011-2016)M&A Guidelines
Product Capacity Year Country Investment
1. EastmanPTA /
PET1.3 Mtons 2011 USA US $622 M
2. Wellman PET 430 ktons 2011 USA US $123 M
3. Cabelma rPET 16 ktons 2014 Argentina Undisclosed
4. BASF EPS EPS 230 ktons 2015 The Americas Undisclosed
5. BASF (Concon) EPS 20 Ktons 2016 Chile Undisclosed
6. Selenis PET 144 ktons 2016 Canada Undisclosed
Alpek
M&A
7. PQS (1)
PTA 700 ktons
TBD Brazil US $385 MPET 450 Ktons
Fibers 90 ktons
(1) Subject to corporate and governmental approval
2016 average Brent price was revised up to $45/bbl
Brent Crude Oil
2014 2015
● Inventory devaluation
● Inventory cost carryover
● Value of feedstock discounts
● Product price formulas
● Import parity
Impact on Alpek
14
2016
20
40
60
80
100
120
US$/Bbl
99 $/bbl
53 $/bbl
Orig. Guidance ($38/bbl)
New Guidance ($45/bbl)
Alpek benefited from strong drivers in 1H16 which
moderated in 2H16
15
Segment 1H16 2H16 2017 Preview
Polyester
Favorable oil price environment
Gradual Asian margin recovery
PTA price formula increase
(April 2015)
Challenging oil price environment
in 3Q16; recovery in 4Q16
Reference Asian margin retreat
Hurricane Matthew
Pressure on U.S. PET margins in
anticipation to Corpus startup
Favorable oil price environment
Gradual Asian margin recovery
expected to resume
Plastics &
Chemicals
(P&C)
Record-high PP margins
Strong EPS margins and
acquisition in March 2015
Sequential PP and EPS margin
decrease vs 1H16
Moderate PP and EPS margin
reduction vs 2H16
2016 Guidance (2Q16 revision to EBITDA)
4,1503,9373,9313,874
201520142013
+5%
2016G
Sales Volume Revenues
EBITDA CAPEX
Source: Alpek estimates
700630
434
572
+11%
2013 2016G20152014
320317320
179
+1%
2016G201520142013
(Kto
ns
)
(US
$ M
illio
n)
(US
$ M
illio
n)
(US
$ M
illio
n)
4,8005,284
6,4717,028
-9%
2016G201520142013
% Sales 8.1% 14.6%6.7% 11.9%
16
Index
• Business Overview
• Consolidated Financials
• Appendix
Sales Volume and Revenues
78%
22%
3,931
2016 (1)
3,874
78%
2015
24%
76%
22%
2014
3,938
2013
77%
3,937
23%
0%
Sales Volume Revenues
-8%24%
29%
4,874
2016 (1)
6,471
2013 2015
76%
73%
27%
2014
73%
27%
7,028
5,284
71%
(Kta
)
(US
$ M
illi
on
)
Polyester Plastics & Chemicals
Source: Alpek estimates
(1) September 2016 LTM 18
Income Statement Accounts
535
481
286
228
2016 (2)
+11%
201520142013 (1)
Operating Income EBITDA
Financial Cost, Net (3) Majority Net Income
Source: Alpek estimates
(1) Includes US$173 million asset impairment charge from Cape Fear plant closure
(2) September 2016 LTM
(3) Financial Cost, Net = Net Financial Expenses + Fx Gains (Losses) + Interest Rate Swaps + Gas & Comm. Derivatives
134
116111
91
+16%
201520142013 2016 (2)
199
175
65
21
+14%
2016 (2)201520142013
(US
$ M
illio
n)
(US
$ M
illio
n)
(US
$ M
illio
n)
(US
$ M
illio
n)
11.0%9.1%3.2% 4.4%% Sales % Sales
4.1%3.3%0.3% 1.0%% Sales
679630
434
572
20152013 2016 (2)2014
+8%
13.9%11.9%8.1% 6.7%
19
Balance Sheet Accounts
670632
685
915
2014
+6%
2013 2015 2016 (2)
Net Working Capital(1) Property, Plant and Equipment
Net Debt(3) Stockholders’ Equity
Source: Alpek estimates
(1) Net Working Capital = Accounts receivable + Other accounts receivable + Inventories - Suppliers - Other accounts payable and accrued expenses
(2) Septiembre 2016
(3) Net Debt = Bank loans and notes payable + Current portion of long term debt + Long term debt – Cash
1,8721,8201,8611,889
+3%
2016 (2)2014 20152013
915
722715766
2014 2015 2016 (2)
+27%
2013
2,0312,0052,0282,071
2013
+1%
2014 2015 2016 (2)
(US
$ M
illio
n)
(US
$ M
illio
n)
(US
$ M
illio
n)
(US
$ M
illio
n)
514549 47NWC Days
20
Financial Ratios and Other Indicators
Interest Coverage(2)Net Debt / EBITDA
CAPEX
Source: Alpek estimates
(1) September 2016 LTM
(2) Interest coverage= EBITDA / Net financial expenses
10.810.7
6.5
2014
7.1
2013 2015 2016 (1)
1.3
1.1
1.6
1.3
2013 2014 2015 2016 (1)
438
317320
179
20142013 2015 2016 (1)
(Tim
es
)
(Tim
es
)
(US
$ M
illio
n)
173160
110
148
2013 2014 2016 (1)2015
EBITDA / Ton
(US
$ / T
on
)
21
Alpek Consolidated Debt Profile
September 2016
● Gross Debt: U.S. $1.155 billion● Net Debt: U.S. $915 million ● 99% of our debt is denominated in US dollars(1)
1. A small portion of debt is denominated in ARS
300
650
127
803450
240
16 17 2018 22 232119Cash
22
Index
• Business Overview
• Consolidated Financials
• Appendix
Operating & Financial Highlights (3Q16)
Alpek
• 3Q16 Consolidated EBITDA of U.S. $157 million, including a U.S. $1 million non-cash inventory
devaluation charge and a U.S. $6 million insurance claim cash gain
• Acquired controlling interest in Selenis Canada Inc., a 144 Kty PET plant in Montreal, Quebec
• Solid balance sheet: 1.3x Net Debt / LTM EBITDA and 10.8x Interest Coverage
Polyester
• 3Q16 Polyester EBITDA of U.S. $83 million, including a U.S. $7 million non-cash inventory
devaluation charge and a U.S. $6 million insurance claim gain
• Results impacted by: i) lower-than-expected oil/feedstock price environment, ii) an extended
scheduled PET shutdown in Argentina, iii) PET sales mix, and iv) weak polyester fiber demand
Plastics &
Chemicals
(P&C)
• 3Q16 P&C EBITDA of U.S. $73 million, including a U.S. $6 million non-cash inventory gain due
to higher propylene prices
• Polypropylene margins decreased as expected vs. 2Q16, still remain above historical levels
• Better-than-expected EPS performance resulting from robust demand and margins
24
Latest Quarter Results
Source: Alpek
(1) Times: Last 12 months.
Alpek: Selected Financial Information
25
(%) 3Q16 vs.
3Q16 2Q16 3Q15 2Q16 3Q15 YTD16 YTD15 Ch.%
Total Volume (ktons) 998 981 980 2 2 2,967 2,970 -
Polyester 757 743 751 2 1 2,254 2,282 (1)
Plastics & Chemicals 241 239 230 1 5 713 688 4
Consolidated Revenues 1,236 1,237 1,346 - (8) 3,655 4,065 (10)Polyester 885 871 993 2 (11) 2,593 2,956 (12)
Plastics & Chemicals 351 366 354 (4) (1) 1,062 1,109 (4)
Consolidated EBITDA 157 208 156 (25) 1 536 488 10Polyester 83 110 79 (25) 6 267 273 (2)
Plastics & Chemicals 73 98 76 (25) (4) 270 211 28
Profit Attributable to Controlling Interest 50 48 38 4 30 170 146 16
CAPEX and Acquisitions 128 110 35 17 265 270 150 81
Net Debt 915 910 656 - 39
Net Debt/LTM EBITDA(1) 1.3 1.3 1.2
Interest Coverage(1) 10.8 11.1 9.2
Latest Quarter Results
Sales Volume Revenues
EBITDA Majority Net Income
Source: Alpek
(Kto
ns
)
(US
$ M
illio
n)
(US
$ M
illio
n)
(US
$ M
illio
n)
9801,000989984 998981988967
3Q1Q4Q 2Q
156
195
137
71
157
208
171
143
2Q4Q 1Q 3Q
1,3461,3981,321
1,646
1,2361,2371,1821,219
1Q 2Q4Q 3Q
38
83
25
-29
5048
72
29
3Q2Q1Q4Q
-1.9% -11.5%
6.7% -42.1%
Ch.% Ch.%
Ch.% Ch.%
1.8% 8.2%
0.6% 29.6%
-1.6% -25.9%
100.1% 198.7%
(US
$ M
illio
n)
-o.1% -10.5%
25.5% 189.9%
262014 2015 2016
Latest Quarter Results
Source: Alpek
Alpek: Net Income
Alpek: Cash Flow
27
(%) 3Q16 vs.
3Q16 2Q16 3Q15 2Q16 3Q15 YTD16 YTD15 Ch.%
EBITDA 157 208 156 (25) 1 536 488 10
Net Working Capital & Others 37 (22) 76 264 (52) (100) (7) (1,307)
Capital Expenditures & Acq. (128) (110) (35) (17) (265) (270) (150) (81)
Financial Expenses (18) (18) (19) (2) 1 (41) (58) 29
Income tax (23) (45) (20) 49 (11) (142) (41) (248)
Dividends - (69) (12) 100 100 (205) (150) (36)
Payment affiliated companies (4) 52 - (108) (100) 60 (2) 2,927
Other Sources / Uses (25) (3) (19) (819) (29) (32) (22) (49)
Decrease (Increase) in Net Debt (4) (7) 126 35 (104) (193) 59 (429)
(%) 3Q16 vs.
3Q16 2Q16 3Q15 2Q16 3Q15 YTD16 YTD15 Ch.%
Consolidated Net Income 65 70 48 (8) 34 240 190 26
Non-Controlling Interest 15 22 10 (34) 54 70 44 58
Controlling Interest 50 48 38 4 30 170 146 16
Earnings per Share (U.S. Dollars) 0.02 0.02 0.02 4 30 0.08 0.07 16
Avg. Outstanding Shares (Millions)* 2,118 2,117 2,118 2,118 2,118
Comparable EBITDA
28
Reported EBITDA 2014 2015 2016G 2016G2 YTD15 YTD16
Polyester 270 344 350 380 273 267
Plastics & Chemicals 159 284 280 320 211 270
TOTAL 434 630 630 700 488 536
Comparable EBITDA 2014 2015 2016G 2016G2 YTD15 YTD16
Polyester 341 378 350 376 285 265
Plastics & Chemicals 159 273 280 314 200 256
TOTAL 505 654 630 690 488 520
Adjustments* 2014 2015 2016G 2016G2 YTD15 YTD16
Polyester 71 35 - (4) 12 (2)
Plastics & Chemicals - (11) - (6) (11) (14)
TOTAL 71 24 - - - (16)
*Adjustments: Inventory and non-operating, one-time (gains) losses
New Guidance 2016
2016 Ch.% (vs. 2015)
Volume (Ktons) 4,150 5
Net Sales (Million) U.S. $4,800 (9)
EBITDA (Million)1 U.S. $700 11
Capex (Million) U.S. $320 1
2016 New Consolidated Guidance
1) Does not include any impact from inventory valuation.29
Breakdown of revised 2016 EBITDA Guidance
30
40
30
700
630
2016G2P&CPolyester2016G
1624239700
630
2016G2Other
3
EPSPoly
propylene
Higher
Avg. Oil
Price
Inventory
Gain
1H16
2106G
By Business Segment
By Main EBITDA Driver
(US
$ M
illio
n)
17380
2H16E
320
Inventory
Gain (1H16)
9
Plastics &
Chemicals
67
Polyester1H16
1H16 vs. 2H16E
(US
$ M
illio
n)
Polyester Chain
PTA, PET, and Polyester Fibers
Employees: 3,629
Products (Capacity):
• PTA (2,250 Kta)
• PET (2,014 Kta)
• rPET (89 Kta)
• PSF (150 Kta)
• Filament and polymer (160 Kta)
Raw Materials:
• Paraxylene (Px)
• Monoethyleneglycol (MEG)
• Acetic Acid
End Markets:
• Food and beverage
• Textile
• Consumer Goods
EBITDA 2016 (1)
US$ 3,477 Million
Revenues 2016 (1)
US$ 337 Million
General Information
Source: Alpek
(1) September 2016 LTM 31
Pearl River, MI
PET
Cedar Creek, NC
PET, R-PET
Columbia, SC
PTA & PET
Cooper River,
SC
PET & PSFMonterrey, N.L.
Headquarters
Polyester Filament
Cosoleacaque, Ver.
PTA & PET
Altamira, Tamps.
PTA
Selenis, Quebec.
PET
ARG
Zárate, Arg.
PET
Pacheco, Arg.
PET
Plastics & Chemicals
PP, EPS, CPL and Others
General Information
Employees: 1,527
Products (Capacity):
• Polypropylene - PP (640 Kta)
• Expandable Polystyrene - EPS (250 Kta)
• Caprolactam - CPL (85 Kta)
• Other (117 Kta)
Raw Materials:
• Propylene, Styrene, Cyclohexane,
Ammonia, Sulfur, Pentane, Ethylene
Oxide, Propylene Oxide and Others
End Markets:
• Consumer Goods
• Food and Beverage
• Construction
EBITDA 2016 (1)
US$ 1,397 Million
Revenues 2016 (1)
US$ 342 Million
Source: Alpek
(1) September 2016 LTM
Ocotlán, Jal.
Nylon 6
Monterrey, N.L.
Headquarters,
Lerma, Edo. De Mex.
Specialty Chemicals
Altamira, Tamps.
PP, EPS
Salamanca, Gto.
CPL and Fertilizers
Guaratingueta, Brazil
EPS
Santiago, Chile
Other
Puerto Montt, Chile
Other
General Lagos, Argentina
EPS
32
Concon, Chile
EPS
Alpek is managed by an experienced team focused
on delivering value to shareholders
Source: Alpek
Po
lye
ste
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las
tic
s&
Ch
em
ica
ls
Name PositionYears with
Alpek / Alfa
José de Jesús Valdez Simancas CEO 40
Eduardo Escalante Castillo CFO 29
Felipe Garza Medina President, PTA 39
Jorge Young Cerecedo President, PET and PSF 26
Jorge González Escobedo President, Polyester Filaments 42
Alejandro Llovera Zambrano President, Polypropylene 31
José Luis Zepeda Peña President, EPS and Chemicals 30
Gustavo Talancón Gómez President, CPL and Ammonium Sulfate 27
Po
lye
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s&
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33
Plastics & Chemicals
Organization Chart
Source: Alpek
Polyester Chain
Felipe GarzaPresident, PTA
Jorge YoungPresident, PET
and PSF
Alejandro Llovera
President, Polypropylene
Jorge GonzálezPresident, Polyester Filaments
Eduardo Escalante
CFO
José de Jesús ValdezCEO
José Luis Zepeda
President, EPS and Chemicals
Gustavo Talancón
President, CPL and Ammonium
Sulfate
34
Polypropylene Chain
Source: Alpek
Propylene
Refinery
Cracker
Polypropylene
35
Gasoline
Reformer Benzene
Refinery
Crude Oil
EPS
EPS & CPL Chain
Source: Alpek
Ethylene
Styrene
Cyclohexane Caprolactam
(CPL)
Cracker
Ammonia
36
+ +
World leader in PP production with sales
in more than 100 countries
Largest petrochemical company in the
world with more than 370 sites
Alpek has been a reliable partner to other global
industry leaders through successful joint ventures
51.0%50.0%
+ 1 Share
Source: Alpek
Alpek: Sample Joint Ventures
37
Alpek has grown at a 10% annualized rate since
1986 through M&A, JVs and organic projects
1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015
PTA/PET acquisitions
(USA)
CabelmaPET
Coso Cogen
Acquisition of
Univex
(Caprolactam)
Clear Path
Recycling
Cogeneration
project
Acquisition of PTA
plant
Polypropylene plant
start-up
Propylene
splitter
installation
Acquisition of
polyester business
(USA)
Acquisition of Argentina
and Mexico PET plants
EPS expansion in
Altamira
IPO (BMV)
DMT
Expansion EPS
Expansion
Polypropylene
expansion
EPS acquisition
(Concon)
Source: Alpek
Sales Volume 1986-2013(Index: 1986=100)
38
Organic growth and acquisitions position Alpek as
a leading PTA and PET producer in North America
2004(5,500 Kta)
2015(5,560 Kta)
2004 (3,800 Kta)
2015(4,443 Kta)
PTA – Installed Capacity(1)
PET – Installed Capacity(1)
InvistaInterquisa
Eastman
BP
Others
M&G
Indorama
NanYa
Wellman
Invista
Eastman
NanYa
M&G
Indorama
Source: PCI
(1) In North America
2015 Capacities, 2016 M&As
29%
41%
8%
42%
39
BP
Eastman
Indorama
Proprietary Technologies
(I&D, acquisitions)
Third-Party
Technologies
Alpek operates a state-of-the-art portfolio of
proprietary and third-party technologies
PTA
• Integrex PTA
PET
• Integrex PET
• Melt – TekTM
Oilfield Chemicals
• In-house
technology
Polypropylene
• Spheripol (LB)
• Spherizone (LB)
EPS
• Single Step
(BASF)
Caprolactam
• HSO
Alpek: Proprietary and Third-Party Technologies
Source: Alpek
40
Oxidation
Post-Oxidation
Filtration and
Drying
CTA Storage
Filtration and
Drying
Feed prep
Hydrogenation
Crystallization Crystallization
PTA Storage
Polymerization
Precursor
Storage
Esterification
Pre-Poly
Annealing
Solid State
Polymerization
Crystallization
PET Resin
Pelletization
Precursor
Preheating
Steps eliminated
with IntegRexTM
technology
Alpek’s IntegRex® technology simplifies both PTA
and PET production processes
Benefits from IntegRexTM technology:
• ~20% reduction in conversion cost
• ~US$15 less per ton in capital cost
• 11 less steps for the production of PTA and PET
• Lower wastewater by-product and greenhouse gas emissions
Source: Alpek
PTA / PET: Process Diagram
41
Power cogeneration overview
Contract-based
power
customers
Ga
s
turb
ine
Heat Recovery
Cogeneration plant
Ste
am
turb
ineNatural Gas
Electricity
Steam
Steam
12
3
1. Gas turbine generates electricity
2. Combustion gases produce steam
3. Steam is used to generate additional electricity and for Alpek’s chemical reactions
Hot
gases
42
Alpek signed an IntegRex® PTA license and PTA-
PET sourcing agreement with M&G
• Integrated PTA - PET site in Corpus Christi, TX
• Capacity: 1.2 M tons PTA and 1.1 M tons PET
• Wholly owned and operated by the M&G Group
• ~U.S.$ 1B estimated investment (green field)
• Largest IntegRex® PTA facility in the world
• Expected to begin operations in 2017
License fee ($)
U.S.$ 350M
400 Ktons per year
of integrated PET
PTA-PET
Sourcing
Agreement
IntegRex®
PTA License
Agreement
Corpus Christi Site
43
The sourcing agreement provides Alpek with
unique access to M&G’s Corpus Christi site
(1) Additional supply rights acquired in 4Q15
336 Ktons+84 Ktons1
PTA1.2 M tons
M&G864 Ktons
400 Ktons+100 Ktons1
M&G600 Ktons
Pearl River
PET1.1 M tons
350 Ktons PTA
Corpus Christi Site (CC)
Raw materials(e.g. Px, MEG, etc.)
Raw materials(e.g. Px, MEG, etc.)
44
Alpek acquires Polioles’ and BASF’s EPS business
activities in North and South America
Polioles’ EPS business activities
EPS site in Altamira, Mexico
Polyurethane (PU) business activities
Selected assets in Lerma, Mexico
EPS sales & distribution in NA/SA
EPS site in Guaratingueta, Brazil
EPS site in General Lagos, Argentina
Aislapol, S.A. (Chile)
Industrial & Specialty Chemicals
Alpek/BASF JV
45
Styropek is the leading EPS player in the Americas
Sites
Sales office
Warehouses
• Largest EPS capacity in the Americas (~250 ktons)
• Only EPS producer covering North and South America
Styropek: Locations
46
Alpek has effectively transformed its EPS business
47
The Americas’ installed EPS capacity 2017ETotal: 600 ktons
Flint Hills
Nexkemia42%
Others
8%
Nova18%
17%
15%
Alpek
(Styropek)
32575
23065
165
20
2018Altamira
Expansion
Concon
Plant
2015Acquisition2014
Kta
Alpek: EPS capacityExpandable Polystyrene (EPS)
Alpek acquired a 20 Kta EPS plant in Concon, Chile
from BASF
48
Alpek: EPS production facilities Concon Plant
• Capacity: 20 Kta (EPS)
• Location: Concon, Chile (BASF site)
• Closing: March 31, 2016Altamira. México
Guaratingueta, Brasil
Santiago, Chile
Puerto Montt, Chile
General Lagos, Argentina,
Concón, Chile
Styropek Plants (230 Kta)
Concon Plant (20 Kta)
Alpek acquired a controlling interest in Selenis
Canada Inc.
49
• Capacity: 144 Ktons (PET)
• Location: Montreal, Canada
• Rationale: • Only PET plant in Canada• Alpek to capture PTA integration synergies• Complement product portfolio with
differentiated PET products
Montreal. Canada
Charleston. USAColumbia. USA
Bay St. Louis. USA
Monterrey. México
Fayetteville. USA
Altamira. México
Cosoleacaque. México
Zárate. Argentina
Pacheco. Argentina
Alpek: Polyester production facilities
Polyester Plants (4,519 Kta)
Selenis Plant (144 Kta)
Selenis Plant
U.S. PET antidumping case
Case Calendar
• March´15: Department of Commerce (DOC) and
International Trade Commission (ITC) filing
• March´16: DOC issued affirmative FINAL Antidumping
Duty and Countervailing Duty determinations
• April´16: ITC issued affirmative FINAL determinations
Countervailing Antidumping
Canada N/A 14 %
China 7 – 126 % 105 – 126 %
India 0 – 1541 % 8 – 19 %
Oman 1 % 8 %
(1) 154% only for JBF Industries Limited
Final Rates
50
• Rates applicable for a minimum period of five years.
• Trade orders could be renewed in five-year increments
871920
838882
948
1,168
9701,014
1,6411,6351,708
926
4Q’162011 1Q’162Q’15 4Q’15 3Q’162Q’163Q’151Q’1520132012 2014
Px USA Contract Price
(US
$ / To
n)
Paraxylene (Px) Price
51
205202215
200208210217213
235236246
394377
2014 4Q3Q 4Q 1Q 2Q2Q1Q2013201220112010 3Q
Margin: China PET to Px/MEG
(US
$ / To
n)
PET Margin (Asia)
2015 2016
52
Alpek stock highlights (BMV: ALPEK)
Valuation 4Q13 4Q14 4Q15 4Q16
Market Cap. (U.S.$ B) 4.600 3.372 3.068 2.463
Net Debt (U.S.$ M) 766 715 722 915
EBITDA LTM (U.S.$ M) 572 434 630 6791
Enterprise Value / EBITDA 9.8 10.0 6.4 5.3
Price / Earnings 24.4 32.5 13.1 8.7
Price per Share (MXN) 28.29 22.03 24.26 25.0
Exchange Rate (MXN/USD) 13.03 13.84 16.75 21.50
6
3
5
4
5
1
3
2
0 0
2
1
4
AugMay SepJulJunAprMarFebJanDec Nov DecOct
Daily Average Traded Shares & Value
2016
Daily Stock Price
(Pe
so
s)
32
36
20
34
26
28
24
30
22
AugAprFeb DecOctJunDec
2016
Performance ALPEK IPC DJI
December 2016 -12.5% 0.7% 3.3%
YTD (Dec-16) 2.4% 6.2% 13.4%
LTM (Dec-16) 2.4% 6.2% 13.4%
Shares
Value
(M Shares) (U.S. $ M)
(1) Alpek 3Q16 LTM EBITDA 53