Suppliers G4-DMA, G4-12, G4-EN32

Oxiteno's Supply area, which is responsible for supplying raw materials, packaging and utilities of all industrial units and contracting (tolling), is composed of a Global structure based in São Paulo and three regional units: Mercosur, MAC (Mexico, Andean and Caribbean) and the United States.

As part of the organizational restructuring promoted by the Evolution Project (read more on Training, the Global Supply area has taken important steps towards the globalization of its processes in 2017. In partnership with the three regional areas of Supply and with the Global Quality Management area, all processes were reviewed, making them clearer, more aligned, more robust and more efficient.

The relationship with suppliers is guided by the Ultra's Code of Ethics and specific Ultra policies (Conflict of Interest Policy, Anti-Corruption Policy, Anti-Corruption Policy and Relationship with Public Agents and Corporat Competitive Policy), which are standards that meet technical guidelines and commercial. The company also develops a responsible purchasing program with environmental, social and quality requirements.

Expenditure on raw materials of renewable origin accounts for approximately 26% of expenditure on raw materials and accounts for 12% of the total (in tonnes) of raw materials consumed.

The contracting strategy of suppliers considers criteria such as price, availability, relationship and lead time. Although the geographical location of the supplier may influence, there are no specific policies or practices that prioritize the hiring of local suppliers. "Locals" are all suppliers located in the same country as the corresponding industrial unit.

90% of Oxiteno's acquisition costs are allocated to local suppliers in Brazil.

1 Information not available up to the date of publication of this report.

Palm Kernel Oil (PKO) G4-12

Palm kernel oil (PKO) is the most consumed vegetable oil in the world. Malaysia and Indonesia account for more than 90% of the production of this renewable source material. Oxiteno, with its Oleoquímica unit, located in the Industrial Complex of Camaçari (Brazil), is the only company in Brazil that manufactures fatty acids, fatty alcohols and glycerine from PKO.

These three derivatives are the basis of the manufacture of numerous Oxiteno products in the segments of personal care, domestic and institutional cleaning and food. They are present in shampoos, conditioners, skin creams, oral hygiene products, among others.

The palm oil production chain, including palm kernel oil, still presents challenges in social, environmental and economic aspects. The Malaysian-based non-governmental organization Roundtable on Sustainable Palm Oil (RSPO), develops and implements global standards for the sustainable palm oil chain. Oxiteno is an ordinary member of this NGO and, in support of the cases defended, has established a (Responsible Palm Oil Sourcing Policy) that defines specific requirements for suppliers of this raw material of strategic importance for your business. This document is available at www.oxiteno.com. G4-15 G4-15

Oxiteno's goal is to exclusively use PKO RSPO certificate by 2024.

Oxiteno has 98.6% traceability for palm derivatives up to the stage of processing the (palm kernels) in the mills.

NEW SUPPLIERS SELECTED BASED ON SUSTAINABILITY CRITERIA (%) G4-EN32

Social development G4-DMA

In order to put into practice its vision and its values, Oxiteno focuses its efforts to make possible different socio-environmental actions that impact the entire chain of relationships. There are, for example, specific initiatives aimed at the selection and monitoring of suppliers of raw materials, or even actions that positively impact communities around the operational units. Throughout the process of product development, the company also remains committed to the health and well-being of society.

Thinking about the development of the supply chain, the company, whenever possible, opts for the contracting of local suppliers. In the year, 74.66% of the inputs were purchased from companies located in Brazil. Another relevant point is the supplier qualification policy, which monitors and develops suppliers following the best sustainability practices.

74.66%
of the inputs were acquired from companies located in Brazil.

INITIATIVES IN MEXICO AND URUGUAY

In San Juan del Río (Mexico), the Safety, Quality and Health Week is organized annually, with actions that engage customers, suppliers and local communities. The San Juan del Río unit also maintains agreements with three major universities in the city to implement initiatives that help promote these issues.

Oxiteno's management team in Mexico includes a group of 45 executives, representatives of Brazilian and foreign companies in the country, with the objective of contributing to the development of markets close to the region, with great potential for growth due to its natural resources and location geographical proximity to the Atlantic and Pacific Oceans, a strategic location for exports, especially to the United States and other regions of Mexico itself.

In Coatzacoalcos, also in Mexico, Oxiteno participates in the local mutual aid committee, which includes the Adopt a School program. The unit provides training, courses, lectures and shares knowledge with the school community on weekends. It also organizes visits so that the community knows Oxiteno's company facilities, production process and good practices. The plant also participates in the Reciclon, program for the recycling of electronic products, maintaining its presence in the organizing committee of the initiative.

In Uruguay, the company shares and exchanges knowledge with the students of a training center located near the plant, which is one of the poles forming human capital accessed by Oxiteno. There are scheduled visits to Oxiteno's site where the company has the opportunity to boost local development and generate environmental, economic and social value.

Oxiteno carries out socio-environmental initiatives to select and monitor suppliers of raw materials.

INITIATIVES IN BRAZIL

The manager of the unit in Mauá (SP) took over the chairmanship of the Industrial Promotion Committee of Polo Grande ABC (Cofip), which disseminates best practices among companies in the region. In the unit, the Open Doors program takes place, an initiative that aims to present Oxiteno and its products to the surrounding community and family members of the employees, thus strengthening the company-society tie.

Also in Mauá, Oxiteno supports the social project Integrating Art and Life, carried out in partnership with the municipal government and the local education secretariat. The purpose of the initiative is to complement the educational process to avoid school dropouts, offering alternatives such as cultural and sports workshops. In 2017, the project 100% sponsored by Oxiteno, involved monthly about 210 children of the Municipal School Cora Coralina, who participated in extracurricular activities – artistic and sports workshops – covering judo, dance and soccer. This project is maintained by resources of sports incentive laws and managed by the National Sports Association (ANE) and National Association of Sports and Education Development (Andee).

Oxiteno Camaçari (BA) has a theater group formed by its employees and third parties, which deals with issues relevant to the unit, such as safety and good manufacturing practices. Due to the commemoration of the 40th anniversary of the Camaçari Complex in 2018, the unit will join, along with 14 other companies, a Cofic initiative to carry out a study on the competitiveness of the Polo. This project, led by SENAI Cimatec, will involve academics and experts over the coming year.

Also highlighted is the Coral initiative, in the Camaçari and Mauá units, which promotes culture and collective responsibility in these communities, strengthening relationships between the company and society.

The units of Mauá (SP), Tremembé (SP), Suzano (SP), Triunfo (RS) and Camaçari (BA) relate to the surrounding communities through the Community Councils. representatives of the communities (leaders, civil defense, schools, health posts, among others) are held bi-monthly meetings to align topics related to health, safety and the environment.

We also highlight the Formare Program, which is managed by the Ultra Institute, which focuses on the student and professional education of young people from the less favored classes (read more about Formare on Training of young people).

Promoting science among children G4-DMA, G4-EC8

Oxiteno conducts Nau dos Mestres (Masters' Ship), a science teaching program that awakens curiosity, playful learning and the investigative instinct of children. Equipped with a mobile laboratory and a collection of books combining chemistry, physics, biology and optics, the project seeks to encourage students' interest and learning from scientific experiments and interactive challenges.

In 2017, Oxiteno enabled the execution and distribution of Nau dos Mestres in five schools in the cities of Santo André and Mauá, in the metropolitan region of São Paulo, benefiting 4,339 students between the ages of nine and 13, attending Elementary School, and 18 teachers. The program, developed by Evoluir, in partnership with Science in Show, is funded by the Ministry of Culture through the Rouanet Law.