Message from the CEO G4-1

Solutions that simplify life

2016 was a year of high achievement for Nitro Quimica. We invested R$ 60 million in the year, with 70% allocated to plant expansion and upgrades. These investments, the highest in recent years, were despite the challenging economic environment in Brazil and further delivered on our commitment to developing solutions that make life simpler for customers.

Customer focus is at the heart of our strategy. We strive to work closely with our customers to ensure our products and services are a perfect fit for their needs. As part of this, we have recently established a number of business units and offices outside Brazil to cater to our export customers in more than 70 countries on all continents.

In 2016, our journey to internationalization began with the acquisition of Alchemix Corporation, North America’s leading producer of nitrocellulose-based solutions for flexible packaging, cosmetics, automotive refinishing coatings – and importantly, pharmaceutical and dermatological products. The Atlanta-based company will further expand our product portfolio and strengthen our presence in a key region for our business. We have also opened a regional office in Austria to serve the European, Middle East and Asian markets. Our international expansion will continue in the coming years with further operations and service offices in key consumer markets.

We have also worked closely with our customers to further develop and expand our product portfolio, which has grown from industrial grade nitrocellulose in cotton form into a complete range of chemical solutions and systems formulated from – biorenewable – nitrocellulose. Our new product ranges have been developed as a collective effort of our sales teams – who work closely with customers to understand their needs – and our research, development and technical support departments, where industry specialists work to develop best-in-class solutions. These solutions have helped our customers improve efficiency and competitiveness by reducing process steps, while also providing us the benefits of new market access and a value-added product and service offering. Our R&D efforts and investments have continued to grow. Investments in 2016 accounted for 14% of our CAPEX. This was achieved in a highly challenging year in which most companies in every industry tightened their investment spend due to the extended economic crisis in Brazil. Our strategy has proven to be successful, delivering net revenue growth of more than 10% and generating 50 new job opportunities in Brazil, the US and Austria.

In 2017 we hope to set a new investment record and will continue on our journey of responsible growth. Safety is a fundamental pillar in our management approach, and safety awareness is disseminated company-wide. Nitro Quimica’s Safety Committee and its nine subcommittees provide safety coordination at all levels of the organization, from occupational health and safety to transportation safety.

We recognize our responsibility to our communities in Sao Miguel Paulista, East Sao Paulo, Brazil, where our headquarters has been since 1935 and where approximately 70% of our employees live. We continuously engage with community leaders and government agencies around our policies and initiatives on safety, accident prevention and social and environmental responsibility.

Our achievements and accomplishments in 2016 are described in detail in this, our first, Sustainability Report. We hope through this report to share with our stakeholders, and especially our customers, the strength of our business and our commitment to working closely with our customers to deliver increasing efficiencies and high-quality, sustainable products and solutions that make life simpler.

Marcos Cruz
CEO, Nitro Química