Message from the President and CEO

San Francisco hydroelectric plant powerhouse in Ecuador

For the Odebrecht Group, the year 2010 arrived in 2007, when we met the goals previously
set for the end of the decade. We are already ranked among the three largest private-sector
industrial groups in Brazil. We have surpassed our original target of attaining USD 15 billion
in annual earnings by 2010, while enjoying robust financial health and a solid equity structure.
Our two main subsidiaries – Construtora Norberto Odebrecht and Braskem – have become market leaders in their industries in Latin America. Through the creation of ETH Bioenergy,
we have begun operating in the Sugar, Ethanol & Bioenergy business, an area with tremendous growth potential. Now, we are looking beyond 2010 and focusing on 2020.
This was made possible by the excellent performance of the teams working in each
of our businesses.

In Engineering & Construction, we reached the end of 2007 with a backlog worth USD 17 billion, the equivalent of three years’ production. In addition to expanding its international presence through new operations in Africa and the Middle East, Construtora Norberto Odebrecht is taking part in important projects aimed at improving Latin America’s transportation, energy, sanitation and supply infrastructure facilities, particularly by working through public-private partnerships and Brazil’s Growth Acceleration Program. The company’s significant expansion has made it necessary to divide its current markets among four new Odebrecht subsidiaries: Odebrecht Investimentos em Infra-estrutura (concessions), Odebrecht Engenharia Ambiental (environmental engineering), Odebrecht Empreendimentos Imobiliários (real estate) and Odebrecht Óleo e Gás (oil and gas), thereby allowing Construtora Norberto Odebrecht to focus on its core business of construction and engineering services.

In Chemicals & Petrochemicals, the acquisition of the Ipiranga Group’s petrochemical assets has redrawn the map of that industry in Brazil and put Braskem on a new level of success by adding approximately USD 3 billion to its gross revenue and giving the company potential synergy capture valued at USD 1.2 billion. Furthermore, a new strategic alignment with Petrobras has taken shape by increasing the state-owned oil giant’s stake in Braskem to 25%.

In 2007, Braskem, having established its leadership in the Brazilian market, took decisive steps towards achieving the international expansion that is essential to the continued growth of our Chemicals & Petrochemicals operations. While joint-venture agreements signed with Venezuela’s Pequiven will help increase Braskem’s presence in the international market, the launch of the first green polyethylene, obtained from sugar ethanol, has put the company at the forefront of an eco-friendly technology with massive consumer potential.

Through the creation of ETH Bioenergy in 2007, we also reached the goal of starting a new business that is in line with Brazil’s national interests, synergetic with our existing businesses and has tremendous potential for growth and market leadership. In the next few years, Odebrecht will invest 3 billion dollars in this subsidiary, which was born with the vision of ranking among the world’s top three companies in its industry by 2015. It already operates two plants, in the states of São Paulo and Mato Grosso do Sul, and is presently building three more, which will be located in those two states, as well as in the state of Goiás.

“We work in an environment that is rich with opportunities, but also
filled with ambiguity and flux caused by global forces. This demands
quick and adaptive responses to fresh challenges.”

Onward to ward 2020

An overview of the Odebrecht Group today shows a confederation of three generations of entrepreneurs working in 18 countries. Our 59,000 members are united by the values and beliefs that form the basis and foundation of our Odebrecht Entrepreneurial Technology (TEO). We work in an environment that is rich with opportunities, but also filled with ambiguity and flux caused by global forces. This demands quick and adaptive responses to fresh challenges. In this context, the size and complexity of our businesses requires constant evaluation and innovation to guarantee a focused vision of the future.

The process of planned succession is underway at Odebrecht’s strategic leadership levels,
to ensure the development of a new generation of entrepreneurs ready to assume the management of our companies. At the same time, we have begun building our Vision for 2020. All these processes are interlinked and are being carried out with the utmost entrepreneurial confidence and precaution, as we reposition ourselves for new growth opportunities and live up to our leadership role in Brazil and worldwide. We are doing this in a context of increased complexity and dynamic change within society, without losing sight of our core principles and values, including those we value most: humility and simplicity.

Pedro Novis