SAP: Pursuing growth and synergy through mergers and acquisitions

BRASKEM PURSUING GROWTH AND SYNERGY THROUGH MERGERS AND ACQUISITIONS QUICK FACTS Key Challenges Why SAP Was Selected Industry • Speed up business integration and synergies • Ability to scale software to support busi- Chemicals – specialty chemicals • Standardize heterogeneous processes ness growth and global expansion Revenue into a single corporate process with built-in • SAP’s experience in the petrochemical US$13 billion best practices to facilitate growth, acquisi- industry tions, and internationalization • Best-practice business processes that are Employees • Implement a common business platform supported by standard industry-specific 5,500 within 1 year software • Ensure user proficiency of 4,000 office • Ability to leverage the experiences of other Headquarters and production personnel SAP customers Camaçari and São Paulo, Brazil • Reduce IT complexity resulting from past Web Site mergers www.braskem.com SAP® Solutions and Services Implementation Best Practices Low Total Cost of Ownership SAP® Business Suite, SAP Trans- • Evaluation by steering committee of every • Adopted scalable solution that can support portation Management application, customization proposal based on business growth without additional investment SAP NetWeaver® components, and case • Reduced operating costs by eliminating SAP Solution Manager • Approach to implementation as a business legacy and redundant applications transformation initiative, not just an IT • Implemented 97% of the standard solution Implementation Partner project to reduce IT and maintenance costs Accenture • Gain support of entire enterprise from • Reduced integration time and costs for steering committee and executives to acquired businesses Braskem S.A. is the leading petro- production employees • Automated managerial report generation • Invest in training and change management chemical company in Latin America to ensure successful user adoption with nearly US$13 billion in revenue. The company operates 19 plants Financial and Strategic Benefits Operational Benefits with a total production capacity of • More quickly assimilated companies ac- Key Performance Indicator Impact quired through mergers and acquisitions 5 million tons per year of petrochemi- • Reduced inventory through improved Integration of a newly From “virtually cal and chemical products, including supply chain operations acquired business impossible” to • Increased plant capacity due to fewer 2 months thermoplastic resins and solvents. setups Financial closing time Reduced Braskem redesigned its IT landscape • Achieved better coordination between production and sales to optimize shipping Finished goods inventory Reduced in just 1 year by focusing on opera- and improve order fulfillment Maintenance material inventory Reduced tions and supply chain management • Reduced data complexity and achieved reporting and auditing compliance Maintenance, repair, and Reduced and has realized tremendous bene- operations costs • Improved employee productivity by auto- fits in manufacturing, logistics, and mating processes Acquisition costs of indirect inventory management. material and services Reduced Freight costs Reduced SAP Business Transformation Study Chemicals – Speciality Chemicals “For a recent acquisition, we brought the company on board within two months. www.sap.com /contactsap Without a single platform, that would have been impossible.” Stefan Lanna Lepecki, CIO, Braskem S.A. Going for Top Ten Through achieve enterprise-wide buy in from all lev- “For mergers and acquisitions, we now Business Process Transformation els of the organization, and it did. “Our have one managerial platform to imple- steering committee, top executives, people ment. It’s a way to speed up the busi- When raw materials in a petrochemical in the plant – everyone understood the rel- ness integration and realize the benefits plant are brought together under the right evance of the project,” Lepecki comments. of the merger faster,” Lepecki explains. conditions, a new and stronger product “For a recent acquisition, we brought the is made. Something similar happened Instituting a strict governance process, company on board within two months. when six Brazilian companies merged Braskem was able to minimize customiza- Without a single platform, that would their petrochemical assets in 2002. A tions to keep the project moving. “We have been impossible,” Lepecki adds. new and stronger company was formed decided to be very rigid in the customiza- – Braskem S.A. tion approval process. For every request, Realizing Operational Benefits the business leader had to present a busi- Braskem wanted to leverage the advan- ness case and cost benefits and had to As far as quantifiable business benefits tages of its integrated production chain get approvals from the process manager go, Braskem has reduced maintenance, and grow its business to be one of the and the steering committee. About 97% repair, and operations costs. Supply world’s top ten petrochemical companies. of what we implemented was standard chain improvements have enabled But the company’s existing technology SAP software,” Lepecki explains. Braskem to reduce its finished goods landscape could not support this vision. inventory and its maintenance material “We needed an integrated, global man- Adherence to the schedule was evident inventory. In addition to gaining agement platform that would help us grow throughout the course of the implementa- Sarbanes-Oxley compliance, Braskem not only through strategic acquisitions but tion, which Braskem successfully completed can perform financial closings more also through internationalization,” says within one year and without any operational quickly and with fewer people – reduc- Stefan Lanna Lepecki, Braskem CIO. or billing impact. ing the time required from eight to five days.