Understanding a Market of Understanding a Market of 100 million cylinders100 million cylinders

GLOBAL FORUM OF LP GAS GLOBAL FORUM OF LP GAS Speaker: Ivo Gastaldoni

Understanding Brazil

Understanding Brazil

Northern: : 6,8 %

Northeast: 26,4 %

Midwestern: 8,4 %

Southeast: 43,2 %

Southern: 15,2 %8.514.876,599 km2

191.480.630 inhabitants

Source : ANP / IBGE

% Domestic Sales

General View of the MarketGeneral View of the Market

Understanding Brazil

Regional DivisionRegional Division

(Characteristics of the Country)CYLINDERS OF 13

KG IN ALL NATIONAL TERRITORY

LP Gas Market Brasil - WorldLP Gas Market Brasil - World

Understanding Brazil

General View of the MarketGeneral View of the Market

95% of Households Served;

31 million P.13 commercialized per month;

Universe estimated in 100 million of P.13 cylinders;

22 Distributors of LP Gas;

37.000 official resellers;

SUPPLIERSUPPLIERPetrobrás/others

DISTRIBUTORSDISTRIBUTORS22

BULKBULK

PACKEDPACKED

RESELLERSRESELLERS37 .000

FINAL CONSUMER

Source: Sindigás

430.000 ton/month

LP Gas Market

Source: ANP

UniverseUniverse

Source: Statistical Review of Global LPG

World World Consumption of LP Consumption of LP Gas Gas

(year 2007)

LP Gas LP Gas Consumption in Consumption in

Brazil Brazil (year 2007)

Before and After –Before and After – Auto-Auto-Regulamentacion CodeRegulamentacion Code

Universe of 13 kg Gas cylinders

Source: PNR – REPORT OFF 23/06/09

Quality / Safety / Quality / Safety / TraceabilityTraceability

83 MM83 MM

1ª Stage 10 years1ª Stage 10 years

Save Gas CylinderSave Gas Cylinder

17 MM of 13 kg Gas cylinders17 MM of 13 kg Gas cylinders

SAFE GAS CYLINDERSAFE GAS CYLINDER Distributor’s ObligationsDistributor’s Obligations ::Distributor’s ObligationsDistributor’s Obligations ::

Source: Sindigás

The 13 kg Gas cylinder

Inviolable Inviolable SealSeal

Inviolable Inviolable SealSeal

Safety Label Safety Label of the gas of the gas cylindercylinder

Safety Label Safety Label of the gas of the gas cylindercylinder

InspectionInspection

Name of the Name of the distributor distributor

stamped on the stamped on the bodybody

Name of the Name of the distributor distributor

stamped on the stamped on the bodybody

RESOLUTION Nº 15, FROM MAY 18th, 2005

Fill and commercialize only cylinders in which the brand is stamped on its body ;

Commercialize only cylinders in which the label informs the date of filling, the distributor that performed the filling and the distributor that will perform the sales; Commercialize only cylinders that have the inviolability seal of the flow valve that informs the distributor’s name and that is certified with the National Brand of Conformity issued by INMETRO

Fire Brigade

Organs of Consumer Protection

Secretariats of Finance

Secretariats of the Environment

Who regulates and inspects the Who regulates and inspects the commercialization of the 13 kg Gas commercialization of the 13 kg Gas

cylinder?cylinder?

Inspection in Brazil

LogisticLogistic

A

A A AA

A A A A

exchange (18 plants)

600 M botijões600 M botijões

exchange (18 plants)

600 M botijões600 M botijões

VISUAL INSPECTION / SELECTION

VISUAL INSPECTION / SELECTION

RequalificationRequalification

Source: Estimate based in PRN - CND

Estimate of on board

transit 6 MM

Estimate of on board

transit 6 MM

OTHERS 2 2 MM de MM de

cylinderscylinders

OTHERS 2 2 MM de MM de

cylinderscylinders

The Logistic of Cylinders

Requalification

Requalification WorkshopsRequalification Workshops

RequalificationRequalification – periodic process for evaluation of the condition of the cylinders, determining its continuity in service, according to the rule NBR 8865 from ABNT.

1st1st RequalificationRequalification

Up to 15 years Up to 15 years (manufacturing date)

Next Next RequalificatioRequalificatio

nsns

Up to 10 years Up to 10 years (date of the last

requalification)

TOTAL = 33 TOTAL = 33 WORKSHOPSWORKSHOPS

Source: Sindigás

Requalification Workshops

COMPANIES QUANT.Aratell 2Berquó 1CNC 1Esmaltec 1Fogás 2Grupo Ultra

4Mangels 5Milano 1Nacional Gás 4NHL 1Nova Fase

2Pampa 1Qualival (SHV) 1Rebogás 1Servgás 1Superfície 2Trucoffer 1Urano 1Worthigton

1TOTAL 33

Requalification Numbers Requalification Numbers

Source: PNR – REPORT OF 23/06/09

Requalification Numbers

Requalified Total Requalified Total (1997 - 2009)

83 MM83 MM13 kg Gas Cylinders

Scrap Total Scrap Total (1997 - 2008)

17 MM17 MM 13 kg Gas Cylinders

SwapSwap

Annual Evolution (millions

of cylinders)

Annual Evolution (millions

of cylinders)

REQUALIFIEDREQUALIFIED UNUSABLEUNUSABLErequalifiedrequalified scrapscrap

SOURCE: CND - National Coordination of Swap

1. Araucária/PR;

2. Aracaju/SE;

3. Belém/PA;

4. Betim/MG;

5. Brasília/DF;

6. Campo Grande/MT;

7. Canoas/RS;

8. D. de Caxias/RJ;

9. Fortaleza/CE;

10.Goiânia/GO;

11. Ipojuca/PE;

12.Manaus/AM;

13.Mataripe/BA;

14.Mauá/SP;

15.Paulínia/SP;

16.Porto Velho/RR;

17.S. J. dos Campos/SP;

18.São Luís/MA

THE GAS CYLINDER SWAP

Numbers of the 13 kg Gas cylinders SwapNumbers of the 13 kg Gas cylinders Swap

Source: CND : National Coordination of Swap

Numbers of the 13 kg Gas cylinders Swap

Annual Evolution

Annual Evolution

SWAP SWAP (P.13 x1.000)(P.13 x1.000)

Expenses with Swap without freightExpenses with Swap without freight (R$ (R$ x1.000)x1.000)

The InvestmentsThe Investments

REQUALIFIED

SWAP OF CYLINDERS WITH FREIGHT ESTIMATION

SCRAP REPLACEMENT

R$ 110.000.000,00

R$ 55.000.000,00

R$ 132.000.000,00

Investments performed by the DistributorsInvestments performed by the Distributors

The Investments

R$ 297.000.000,00

PROJECTION OF THE BRAZILIAN MARKET’s ANNUAL

EXPENSES