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Company Corporate Profile

Corporate Profile

The Brazilian oil and gas market, as well as the alternative energy market, especially ethanol and biodiesel, is currently being transformed due to heavy ongoing or planned investments to increase local production, while Lupatech’ operations are focused on the expansion and maintenance of energy source production infrastructure through the supply of equipment or services or a combination of both.

In particular, the recently-announced discoveries of oil and gas reservoirs in Brazilian waters, its main market, have substantially boosted the Company’s business prospects, since the oil and gas majors will have to make substantial investments in order to build the necessary production infrastructure.

The Brazilian Oil and Gas segment is regulated by an independent regulatory agency (ANP), created by the Oil Law of August 1997. One of the main guidelines of the ANP is the creation of a competitive environment and to regulate the terms related to exploration and development of oil and natural gas in Brazil.

In 1999, the ANP established the commitment of local goods and services acquirement, another factor that benefits the business prospects of the Company. Local Content is what defines in the Concession Agreements signed by the ANP with the winner companies in the bidding rounds, the minimum percentage of participation of Brazilian companies that supply goods, systems and services in economic activities related to the activities under the Contract.

Brazil’s state-owned oil company Petróleo Brasileiro S.A., or Petrobras, the Company’s largest client in the sector, has announced plans to investment approximately US$224.7 billion from 2011 to 2015, representing an average of US$44.9 billion per year. The production targets established by Petrobras for 2020, when it is expected to produce 6.4 million barrels of oil equivalent, state that investments in the next years should significantly grow.

Success in this segment depends largely on the ability of suppliers to meet strict quality and technological standards imposed by other industry participants, principally Petrobras and its contractors under Engineering, Procurement, Construction and Project Management Agreements, or the EPC Agreements (Engineering, Procurement and Construction). Lupatech believes it is one of the few Brazilian products and services suppliers who qualify in the highest quality level in the suppliers list of Petrobras (“Level A”). Its products and production processes have international certification and incorporate state-of-the-art technologies.

Besides the leadership, the Company benefits from the credibility and close relationship with clients due to the long term activities with them, high quality standards, innovative technologies and international certifications. The Company is also recognized for its maintenance services and its organized and highly skilled sales force. The physical proximity of its industrial plants also facilitates the logistics of its products and provides greater efficiency in services and technical assistance.

Lupatech believes that the Brazilian government’s current policy of promoting the use of Brazilian-made products and services in its projects for the oil and gas industry, coupled with the small number of Brazilian manufacturers with the capacity to make the necessary capital investments to meet the industry’s strict manufacturing requirements, and particularly Petrobras, will contribute to the continued development of its business. The Company also supplies small clients in the gas industry, including state-owned companies such as Companhia de Gás de São Paulo - Comgás (British Gas).

Lupatech is also the leader in Brazil in the manufacture of valves. The Company’s well-known brands “Lupatech Valmicro”, “Lupatech Mipel”, “Valbol” and “Lupatech Jefferson”, supplies to several industrial sectors, mainly chemical, ethanol, pharmaceutical, steel, paper and pulp and food industries. Lupatech supplies to large clients, such as Rhodia, Basf, Vale, Votorantim and Sadia, as well as the oil and gas industry.

Important to mention that the Company has its own casting unit producing valves parts using investment casting working 100% dedicated to the group. This allow the Company to not only guarantee the supplying of parts but also to assure their quality using production processes with high level technical requirements and control.

Last Update: April 20, 2012


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