[OBJECT OMITTED] BRASKEM
August 18, 2006
VIA EDGAR
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Ms. Cecilia D. Blye
Chief
Office of Global Security Risk
United States Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549-5546
cc:
Chris H. Owings
Division of Corporation Finance
David Mittleman
Division of Corporation Finance
Re: Responses to Comments dated July 7, 2006 Regarding Braskem S.A.'s
Form 20-F filed on June 23, 2006 (File No. 1-14862)
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Dear Ms. Blye:
I refer to the inquiry of the Staff (the "Staff") of the U.S. Securities
and Exchange Commission (the "Commission") set forth in your letter dated July
7, 2006 (the "Letter") regarding Form 20-F for the fiscal year ended December
31, 2005 (the "20-F") filed by Braskem S.A. ("Braskem") with the Commission on
June 23, 2006.
Set forth below is the response of Braskem to the inquiries in the Letter.
I. Response to the Letter
In responding to the Staff's inquiry, Braskem would like to clarify the
context of the reference to Iran in its Management Report for the year ended
December 31, 2005 (the "Management Report"), which Braskem filed with the
Commission under cover of Form 6-K on February 9, 2006, and explain that the
training of a foreign team of workers to operate a new
polyethylene plant in Iran using Spherilene technology is not part of Braskem's
international expansion.
In 1995, under a technology license agreement entered into with Basell
Polyelefine GmbH, formerly Spherilene S.p.A. ("Basell"), a German petrochemical
company, Braskem obtained the right to use Spherilene technology to produce high
density and linear low density polyethylene (effective in 1999). The most common
end use of high density polyethylene is in the production of blow-molded plastic
bottles, such as milk bottles, and the most common end use of linear low density
polyethylene is in the production of garbage bags, packaging, film, toys,
housewares, electrical insulation and paper coatings.
In August 2005, Braskem entered into a Second Spherilene Process
Cooperation Agreement (the "Technology Cooperation Agreement") with Basell,
under which Braskem and Basell agreed to collaborate in the development of
ethylene polymers using Spherilene technology.
Although the development and sale of technology is not part of Braskem's
core business, Braskem has developed an expertise with Spherilene technology
that has been recognized by Basell. Therefore, within the scope of the
Technology Cooperation Agreement and given Braskem's longstanding relationship
with Basell, Basell requested Braskem to train a team of petrochemical engineers
and technicians from Jam Petrochemical Company, an Iranian petrochemical
company, for the start-up and operation of a polyethylene plant using Spherilene
technology.
In November and December 2005, a team of 24 engineers and technicians from
Jam Petrochemical Company visited Braskem's polyolefins plants in Triunfo, Rio
Grande do Sul for receiving the abovementioned training.
Braskem did not receive any compensation (from Basell, Jam Petrochemical
Company or any other source) in connection with the visit, and all the
out-of-pocket costs incurred by Braskem related to this visit were reimbursed by
Basell.
The visit by the Iranian workers to Braskem's facilities was a one-time
event and is not part of Braskem's international expansion plans. Braskem has
not had further contacts with Jam Petrochemical Company or any other Iranian
entities since the visit and does not intend to do so hereafter. The training
that Braskem provided regarding Spherilene technology does not have any military
application.
Braskem does not believe this contact was material, in quantitative or
qualitative terms, and accordingly, does not believe that it constitutes a
material investment risk for its security holders. Braskem was not compensated
for this visit and given its limited nature, does not believe that it may
adversely impact Braskem's reputation or share value.
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II. Declarations of Braskem
Braskem acknowledges that: (1) it is responsible for the adequacy and
accuracy of the disclosure in its filings; (2) Staff comments or changes to
disclosure in response to Staff comments do not foreclose the Commission from
taking any action with respect to the filings; and (3) it may not assert Staff
comments as a defense in any proceeding initiated by the Commission or any
person under the federal securities laws of the United States.
Sincerely,
/s/ Paul Elie Altit
Paul Elie Altit
Chief Financial Officer and
Investor Relations Director
Braskem S.A.