Braskem Expands Its Fuels Business Portfolio With the Launch of Octane Plus

Rhea-AI Summary

Braskem (NYSE: BAK), a leading producer of polyolefins and biopolymers, announced the expansion of its fuels business portfolio with the launch of Octane Plus. This premium fuel additive increases gasoline's octane rating, enhancing performance in high-performance engines. Developed at Braskem's Petrochemical Complex in Triunfo, Brazil, Octane Plus will primarily serve Central and North American markets. Initial exports from Brazil have begun, with more shipments expected soon. Braskem aims to combine quality, performance, and sustainability in its fuel products.

Positive

• Braskem launches Octane Plus, increasing its presence in the premium automotive fuels market.
• Octane Plus enhances gasoline's octane rating, boosting performance for high-performance engines.
• Developed through proprietary R&D at Braskem's Petrochemical Complex in Brazil.
• Initial export shipments to Central and North America are already underway with more expected soon.
• Braskem aims to combine quality, performance, and sustainability in its fuel products.

Negative

• No financial performance data provided to assess impact on revenues.
• Potential risks in meeting high regulatory standards in export markets.
• No mention of production capacities or potential supply chain challenges.
• The initial focus exclusively on exports could limit domestic market opportunities.

Insights

Market Research Analyst

Braskem's launch of Octane Plus targets the premium segment of the automotive fuels market, which is noteworthy given the increase in demand for high-performance engine fuels globally. This move aligns with industry trends where consumers are shifting towards vehicles demanding more efficient and powerful fuel options.

From a strategic standpoint, Braskem’s entry into this segment represents an effort to diversify its product offerings and tap into a high-margin market. The company's focus on exporting to Central and North American regions is astute, as these markets demonstrate significant demand for premium fuels. Additionally, positioning Octane Plus as a product that meets regulatory and environmental standards could give Braskem a competitive edge.

Short-term implications include potential sales growth and increased market presence in North America, while long-term benefits could involve stronger brand association with high-performance and sustainable fuel solutions, potentially leading to headway in other high-demand markets.

For retail investors, this move by Braskem could suggest future revenue growth and stronger market positioning within the fuels sector. However, it's important to remain cognizant of the market's competitive landscape and how swiftly Braskem can scale its operations to meet demand.

Financial Analyst

The introduction of Octane Plus could positively impact Braskem's financials. The premium automotive fuel market is lucrative and if Braskem effectively captures significant market share, it could translate into enhanced profitability. The announcement also aligns with Braskem’s strategy to diversify revenue streams beyond its core polyolefin and biopolymer offerings.

From a financial perspective, this development may lead to an increase in capital expenditure in the short term due to ramping up production and potential marketing efforts. However, the corresponding rise in revenue from premium product sales could offset these initial costs over time. Investors should monitor quarterly earnings reports for indicators of increased sales volumes and revenue, which will shed light on the immediate financial impact of this launch.

The company's current focus on exports might also mitigate risks associated with domestic market fluctuations. For retail investors, this could signal a more stable income stream for Braskem, given the diversified geographical revenue base.

The launch of Octane Plus production will serve the premium segment of the automotive fuels market

Octane Plus meets the demanding needs of today’s high-performance engines

SAO PAULO--(BUSINESS WIRE)-- Braskem (B3: BRKM3, BRKM5 and BRKM6; NYSE: BAK; LATIBEX: XBRK) (“Company”), the largest polyolefins producer in the Americas and leading producer of biopolymers in the world, today announced the expansion of its fuels business portfolio with the launch of Octane Plus focused on serving the premium segment of automotive fuels market worldwide. Octane Plus is an additive blended in the gasoline production process to increase the fuel's octane rating. The addition of Braskem’s Octane Plus enhances the fuel's ability to withstand intense temperatures which is crucial for high-performance engines requiring enhanced-octane gasoline to deliver the maximum power output.

Octane Plus Motor (Photo: Business Wire)

“Braskem is one of the largest suppliers of chemical and petrochemical products in the world, and we are excited to launch Octane Plus to the market as the latest addition to our fuels portfolio. Octane Plus provides fuels with greater quality and performance, raising it to a new level of power and efficiency,” commented Eduardo Camelyer, Commercial Leader for Gasoline and Blendstocks at Braskem. “The introduction of the unique Octane Plus fuel additive supports Braskem’s aim of delivering its clients value-added product volumes while also facilitating new gasoline formulating business opportunities. We look forward to bringing all the benefits of our premium Octane Plus.”

The proprietary research and development process for Octane Plus was conducted at the Company’s Petrochemical Complex in Triunfo, Rio Grande do Sul located in Brazil. Current production will be exclusively dedicated to export volumes serving mainly the strong octane demand in the Central and North American regions. With initial export shipments from Brazil already underway, the additional ramping of client deliveries is expected in the coming months.

Braskem’s fuels product portfolio seeks to combine quality, performance, and sustainability in line with the high standards required by the market and regulatory agencies. Octane Plus joins Braskem’s fuels portfolio covering a range of premium and regular gasoline, low sulfur oil, liquefied petroleum gas (LPG), and other special gases, as well as other octane and oxygenate boosters.

ABOUT BRASKEM

With a strategy centered on people and sustainability, Braskem improves people's lives through sustainable solutions in chemicals and plastics. The company is the world’s leading producer of biopolymers and is also engaged in contributing to the value chain to strengthen the Circular Economy. With its corporate DNA rooted in innovation, Braskem offers a comprehensive portfolio of plastic resins and chemical products for diverse industries, such as food packaging, construction, manufacturing, automotive, agribusiness, health and hygiene, and more. With 40 industrial units in Brazil, the United States, Mexico, and Germany, Braskem exports its products to clients in over 70 countries.

Braskem on social media:

www.facebook.com/BraskemGlobal
www.linkedin.com/company/braskem

FORWARD LOOKING STATEMENTS

This Notice to the Market may contain forward-looking statements. These statements are not historical facts, but rather are based on the current view and estimates of the Company's management regarding future economic and other circumstances, industry conditions, financial performance and results, including any potential or projected impact regarding the geological event in Alagoas and related legal procedures on the Company's business, financial condition and operating results. The words “project,” “believe,” “estimate,” “expect,” “plan”, “objective” and other similar expressions, when referring to the Company, are used to identify forward-looking statements. Statements related to the possible outcome of legal and administrative proceedings, implementation of operational and financing strategies and investment plans, guidance on future operations, the objective of expanding its efforts to achieve the sustainable macro objectives disclosed by the Company, as well as factors or trends that affect the financial condition, liquidity or operating results of the Company are examples of forward-looking statements. Such statements reflect the current views of the Company's management and are subject to various risks and uncertainties, many of which are beyond the Company’s control. There is no guarantee that the events, trends or expected results will actually occur. The statements are based on various assumptions and factors, including, but not limited to, general economic and market conditions, industry conditions and operating factors, availability, development and financial access to new technologies. Any change in these assumptions or factors, including the projected impact from the joint venture and its development of technologies, from the geological event in Alagoas and related legal procedures and the unprecedented impact on businesses, employees, service providers, shareholders, investors and other stakeholders of the Company could cause effective results to differ significantly from current expectations. For a comprehensive description of the risks and other factors that could impact any forward-looking statements in this document, especially the factors discussed in the sections, see the reports filed with the Brazilian Securities and Exchange Commission (CVM). This Notice to the Market does not constitute any offer of securities for sale in Brazil. No securities may be offered or sold in Brazil without being registered or exempted from registration, and any public offer of securities carried out in Brazil must be made through a prospectus, which would be made available by Braskem and contain detailed information on Braskem and its management, as well as its financial statements.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240520307193/en/

For press information:

FR Agency - Fato Relevante

Wagner Barbosa

+55 (11) 99907-6178

imprensa.braskem@agenciafr.com.br

Braskem North America

Stacy Torpey

Communications Director

1 (215) 841 3194

stacy.torpey@braskem.com

Source: Braskem

FAQ

What is Octane Plus by Braskem?

Octane Plus is a fuel additive launched by Braskem to increase the octane rating of gasoline, enhancing performance in high-performance engines.

When did Braskem launch Octane Plus?

Braskem announced the launch of Octane Plus in a press release dated October 5, 2023.

Which markets will Octane Plus initially serve?

Octane Plus will primarily serve the Central and North American markets.

What is the stock symbol for Braskem?

Braskem's stock symbol is BAK on the NYSE.

Where was Octane Plus developed?

Octane Plus was developed at Braskem's Petrochemical Complex in Triunfo, Rio Grande do Sul, Brazil.