HomeMy WebLinkAboutResolution - 2023-R0416 - City Tax Abatement Agreement No. 17471, Dura-Line, LLC - 08/22/2023Resolution No. 2023-R0416
Item No. 7.13
August 22, 2023
RESOLUTION
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK:
THAT the Mayor of the City of Lubbock is hereby authorized and directed to execute
for and on behalf of the City of Lubbock, a City Tax Abatement Agreement No. 17471 for a
5-year declining City tax abatement for a Commercial or Industrial Project in a Reinvestment
Zone, by and between the City of Lubbock and Dura-Line, LLC, and related documents. Said
Agreement is attached hereto and incorporated in this resolution as if fully set forth herein
and shall be included in the minutes of the City Council.
Passed by the City Council on August 22, 2023
ATTEST:
,
Courtney Paz, City S etary
APPROVED AS TO CONTENT:
B u Kosteli , Chief Financia Officer
APPROVED AS TO T�ORM:
. �
elli Leisu e, Senior Assistant City Attorney
ccdocslRES.Contract 17471 Tax Abatement Dura-1,ine
7.10.23
Resolution No. 2023-R0416
���
lubb'ock
TEXAS City of Lubbock
Application for Industrial Tag Abatement
This application should be filed prior to the beginning of construction or the purchase of equipment. If applying for a tax abatement in a
jurisdiction other than City of Lubbock, a separate application must be completed for all other taxing jurisdictions. This application will
become part ofthe Tax Abatement Agreement and any knowingly false representations will be grounds for the voiding ofthe agrcement. An
original copy of this request should be submitted to Mrs. Cheryl Brock, Capital Program Manager, Finance Department, City of Lubbock,
1625 13"' Street, 2°d Floor, Lubbock, TX 79401.
Part I - Applicant Information
Company Name: Dura-Line LLC
Application Date 08 � 10 � 2023
Physical Address: � Lubbodc Business Park Blvd Lubbodc TX 76403
Telephone: 1-800-847-7661 Current Number of Employees: �
Annual Sales: �3,606,000,000 Employees in City Limits: �
Mailing Address: ��� Parkside Drive, Suite 300 Knoxville, n� s�ssa years in Lubbock: �
C� Corporation
❑ Partnership
❑ Proprietorship
Attachment 1: Attach a description of the Applicant Company, including a brief history, corporate structure,
business plan, and annual statement, if available.
Part II - Project Information
LoCation Addt'ess: � Lubbodc Business Park Blvd Lubbodc TX ZipCode: ��03
School District: Lubbock ISD
Legal Description: LUBBOCK BUSINESS PARK L 15 (Property ID: R533675-00000-00150-000)
Attachment 2: Attach site map showing project location and showing proposed co»struction if applicable
Project Description: �' New Construction ❑ Expansion ❑ Modernization
Attachment 3: Attach statement fully explaining project, describe existing site and improvements, describe all
proposed improvements and provide list of improvements and equipment for which abatement is requested, and
list of arty tangible persorral property presently existing on the Real Property if it is an existing facility.
Is the site located in an Enterprise Zone? ❑ Yes
Section A — Facilitv Information
Type of Facility/abatement:
L� Advanced Technologies and Manufacturing
�No
❑ Wazehouse/Distribution
❑ Reseazch and Development ❑ Value-added Agriculture Production
❑ Medical Services ❑ Information and Data Centers
❑ Corporate Headquarters — Regional/National Service Center
❑ T'he project is not included as a target industry, but has the potential of generating additional, significant
economic development opportunities to Lubbock
Industrial Tax Abatement Application Page 1
Manufacturer of 7elecommunications Conduit, other High-density potyethylene(HDPE)
Describe product or service to be provided: and connectivity infrastructure solutions that serve telecommunications
Is the company a producer, manufacturer, or distributor of goods and services of which 50 percent or more are
distributed outside Lubbock. C� Yes ❑ No
Attachment 4: Provide documentation demonstrating that the facility will distribute or manufacture goods and
services of which SO percent or more are distributed outside of Lubbock Counry,
Is the company applying for tax abatement L9�New Company to Lubbock ❑ Existing Company
The project meets one of the criteria in the Guidelines and Criteria Governi�n$ Tax Abatement for Industrial
Projects, Section IV. 3. L�' Yes ❑ No
Section B— Base Year Value
Attach a statement of the assessed value of the Real Property, Facility, or existing facility for the base yeaz from
the Lubbock Central Appraisal District.
Attachment S— Lubbock Central Appraisal District Assessed Yalue
Section C - Variance
Is the applicant seeking a variance? 0 Yes L� No
If "yes," attach letter requesting a.nd justifying the variance, with supplemental information.
PART III - ECONOMIC INFORMATION
Construction Estimate:
Start Date: September 2023
Completion Date: October 2024
Modernization:
Contract Amount: 46,700,000
Peak Construction Jobs: �
Estimated current economic life of structure
Added economic life from modernization
Permanent Job Creation/Retention:
Current employment:
[��
10 Plus ye�
5-15 years
Jobs to be Retained:
0
Jobs created at opening: � By yeaz 20 28
If existing facility, what is the current plant payroll: $ N/A
Estimated amount of new payroll:
130
$ 7,100,000
Industrial Tax Abatement Application Page 2
Personal
Estimated A raised Value On Site Land Im rovemenb Pro e
Value on Jan 1 recedin abatement 608,417 15 800 360
Estimated value of new abatable im rovements NA 19, 700 000 27 000 000
Estimated value of ro rties not sub'ect to abatement
Estimated value of property after improvements 608,417 35,500,360 27,000,000
Do you certify that this business (including any branch, division, or depariment of this business) does not
currently, and will not knowingly in the future, employ an undocumented worker? � Yes ❑ No
Comaanv Rearesentative to be Contacted:
Robert A Woods Jr.
Name
Authorized Com an Officisl:
Au orized ignature
President
Title
CFG ConsutGng 6300 Powers Ferry Rd
Address
Suite 600-309 Atlanta, Ga 30339
Address
rowoods@cfgconsulting.com
e-mail
Jennifer Roycroft, North American Tax Director
Name & Title
1-800-847-7661
Phone Number
jennifer. markham�orbia.com
e-mail
Industrial Tax Abatement Application Page 3
CITY OF LUBBOCK TAX ABATEMENT AGREEMENT
This Taa Abatement Agreement, Contract No. 17471, is by and between the City of Lubbock, a
Tegas home rule municipal corporation, and Dnra-Line LLC for the abatement of certain tages at
t6e prnperty located at 904 Lubbock Business Park Boulevard, Lubbock, Lub6ock County, Tezas.
RECITALS
WI�REAS, on June 30, 2023, the City of Lubbock received an application for ta�c abatement from
Dura-Line LLC concerning improvements to tangible real and personal property; and
VVI�REAS, the Dura-Line LLC application for tax abatement addresses, among other things, the
improvement of real property and purchase of new equipment for the property located at 904 Lubbock
Business Park Boulevazd, Lubbock, Lubbock County, Texas; and
WAEREAS, upon review of the Dura-Line LLC application for tax abatement, the City Council of
the City of Lubbock found that the property located at 904 Lubbock Business Park Boulevard,
Lubbock, Lubbock County, Texas is in the Reinvestment Zone designated by the City of Lubbock in
Ordinance No. 2023-00080; and
WHEREAS, the City Council of the City of Lubbock, through Resolution No. 2022-R0125, adopted
the Guidelines and Criteria Governing Tax Abatement for Industrial Projects in the City of Lubbock;
and
WI�REAS, the Texas Tax Code, Secrion 312.002, and Section IV of the Guidelines and Criteria
Goveming Tax Abatement for Industrial Projects in the City of Lubbock, recognize the improvement
of an existing facility and the addition of personal property in the form of equipment as being eligible
for tax abatement; and
WHEREAS, the City Council of the City of Lubbock hereby fmds that the Guidelines and Criteria
Governing Tax Abatement for Industrial Projects in the City of Lubbock have been, or will be, met
by Dura-Line LLC and
WHEREAS, the City of Lubbock has complied with all the requirements set forth in the Texas Tax
Code, Section 312.201, and with all of the requirements set forth in the Guidelines and Criteria
Governing Tax Abatement for Industrial Projects in the City of Lubbock; and
NOW THEREFORE, in consideration of the promises, terms, covenants, and conditions
contained in t6is Taa Abatement Agreement, the City of Lubbock and Dura-Line LLC agree
as follows:
AGREEMENT
1. Definitions. The following terms shall have the meanings ascribed to them in this Section for
purposes of this Agreement:
"AgreemenP' means this Tax Abatement Agreement, including its Recitals and Enhibits.
"Ap�lication" means Dura-Line LLC's application for municipal tax abatement submitted to the City,
a copy of which is attached to this Agreement as "Earhibit C."
"C�" means the City of Lubbock.
LEGAL02/43 t81915v 1
"Companv" means Dura-Line LI,C.
"Guidelines" means the Guidelines and Criteria Governing Tax Abatement for Industrial Projects in
the City of Lubbock that were adopted by the City Council through Resolution No. 2022-R0125, a
copy of which is attached to this Agreement as "Exhibit B" and incorporated herein.
"Improvement Pro,�ect" means the improvements to the tan�ible real and personal property that are
eligible for tax abatement and that are specified in Dura-Line LLC's application for municipal ta�c
abatement, a copy of which is attached to this Agreement as "Exhibit C."
"New Permanent Job": A new employment posirion created by a business that has provided
employment to an employee of at least 1,820 hours annually and intended to be an employment
position that exists during the life of the abatement.
"Site" means the Dura-Line LLC's property located at 904 Lubbock Business Park Boulevard,
Lubbock, Lubbock County, Texas, with a more particular description and depiction attached to this
Agreement as "Exhibit A:'
"Term" means the period of time in which this Tax Abatement Agreement is effective as provided
in Section 3.
2. Recitals and Eahibits. The representations, covenants, and recitations which are set forth in the
foregoing Recitals, and which are included in the Exhibits attached hereto, are material to this
Agreement and are hereby incorporated into and made a part of this Agreement.
3. Term. This Agreement shall become effective upon the date of its execution by the Parties, and
unless this Agreement is terminated earlier according to any provision contained herein, the Term of
this Agreement shall be five (5) years, with such Term commencing on January 1 of the tax yeaz after
the Improvement Project is at least ninety percent (90%) complete.
4. Base Year and Assessed Value. The base year applicable to the real and personal property, which
is the subject of this Agreement, shall be 2023. The assessed value of the real and personal property,
which is the subject of this Agreement, shaii be the assessed value of such property for 2023.
5. Base Year Taaes. The Company shall pay the base year taxes upon the personal property which
is the subject of this Agreement according to the base year assessed value. Therefore, the Company
hereby acknowledges that the base year taxes levied upon the personal property at the Site cannot be
abated.
6. Proaertv IneG�ible for Tag Abatement. The property described and set forth in Section IV (6)
of the Guidelines incorporated by reference herein as if fully set out in this Agreement and fully
describes the property ineligible for tax abatement.
7. Egemotion from Taz for Imarovement Proiec� The City covenants and agrees to exempt from
taxation, in accordance with the appropriate Sections above, the following:
a. All proposed new improvements to be placed upon the Site.
b. All eligible tangible personal property placed in or upon the Site. Any equipment or personal
property that has already been placed in service by the Company prior to the execution of this
Agreement shall not be considered "eligible tangible personal property" under this Agreement.
City of Lubbock Ta= Abatement Agreemeot — Dura-Line LLC 2023 Ppge 2
LEGAL02/43 1 8 1 9 1 5v1
c. It is further understood that all items affixed to the new improvements placed upon the real
property identifed above and in Exhibit "A", including machinery and equipment shall be
considered part of the real property improvement and talces thereon shall be abated in
accordance with the provisions of subparagraph (a) of this Section.
8. Economic Oualifications. As set forth in Section N(3)(a) of the Guidelines, the Company agrees
to expend funds necessary to qualify for the tax abatement provided by this Agreement by improving
real property and purchasing new personal property to be installed at the Site. A description of the
kind, number, and location of atl proposed improvements is set forth in the Application attached
hereto as "Exhibit C".
9. Value of Imnrovements. In accordance with Texas Tax Code, Section 312.204(a), the Company
will expend forty-six million seven hundred thousand dollars and NO/100 ($46,700,000.00) for the
improvement of real property and purchase of new equipment and machinery to be located at the Site.
After the commencement of this Agreement, the Parties agree that if the initial tax appraisal on the
Site does not reflect an increase in value at the Site equal to or exceeding forty-six million seven
hundred thousand dollars and NO/100 ($46,700,000.00) for the tangible real and personal property
described in this Agreement, the Company shall provide to the City invoices and proof of payment
for the improvement of real property and purchase of new equipment and machinery located at the
Site for an amount equal to or greater than forty-six million seven hundred thousand dollars and
NO/ 100 ($46,700,000.00), in order for the Company to maintain its eligibility for tax abatement under
the terms of this Agreemen�
10. Job Creation. The Company agrees to create a total of one hundred and thirty (130) New
Permanent Jobs at the Site by the end of the Term according to the following schedule:
Year 1: 30 jobs
Year 2: 60 jobs
Year 3: 90 jobs
Year 4: 110 jobs
Year 5: 130 jobs
11. Portion of Taz Abated. Throughout the Term, the City agrees to abate taxes as set forth in
Section 6(above) on the Improvement Project according to the following schedule:
Year 1: 100%
Year 2: 80%
Year 3: 60%
Year 4: 40%
Year 5: 20%
12. Tvae of Imarovementa In its Application, the Company proposes to improve existing real
property and purchase machinery and equipment for the Site. The Company acknowledges that the
improvement of real property and purchase of the new machinery and equipment shall commence on
or before January 1, 2024, and the Company hereby guarantees that the equipment purchases as stated
herein shall be completed by December 31, 2027. In the event that circumstances beyond the control
of the Company necessitate additional time for the commencement of purchasing and/or completion
of such purchasing, the Company may request an extension of the above date from the City and such
consent shall not unreasonably be withheld. Company shall provide proof of completion within sixty
(60) days of completion of such construction and purchases.
City of Lubbock Taz Abatement Agrcement — Dure-Line LLC 21123 Page 3
LEGAL02/43 1 8 1 9 1 5v1
13. Limitation on Use. Throughout the Term, the Company agrees to limit the use of the Site to
commercial, manufacturing, and/or industrial uses as contemplated herein, as those terms are defined
in the zoning ordinances of the City, and to limit the uses of the Site to those uses consistent with the
general purpose of encouraging development of the reinvestment zone.
14. Recaature. In the event of default of this Agreement by the Company, and after notice of such
default and an opportunity to cure such default have been provided to the Company by the City, the
Company agrees to be bound by and comply with all the terms and provisions for the recapture of
abated taxes under this Agreement, pursuant to law, and as set forth in the Guidelines.
In the event that the applicant or owner has entered into a Tax Abatement Agreement and fails to
create all or a portion of the number of new jobs or attain the appraised value of the property provided
by the Tax Abatement Agreement then in such event the City, shall give the Company sixty (60) days
written notice to cure such default. In the event such default is not cured to the reasonable satisfaction
of the City within the sixty (60) days' notice period, then the Agreement shall terminate and all
abatement of taxes shall likewise terminate. Taxes abated during the calendar year in which
termination takes place shall be payable to the City by no later than January 31 st of the following
year. If the termination takes place within the fust five years of the schedule set forth in Pazagraph
12 of the agreement, taxes abated in years prior to the year of termination shall be payable to the City
within sucty (60) days of the date of termination.
15. Citv Access to Pronertv. Throughout the Term, the Company covenants and agrees that the City
shall have access to the Site and to the Improvement Project upon reasonable notice, during normal
business hours, and subject to the Company's reasonable security, safety, and operational standazds,
and that the City shall be able to inspect the Site and the Improvement Project and any documents
necessary to ensure the Company's compliance with the terms and conditions of the Application and
this Agreement.
16. Certification. The Company agrees to provide to the City annual, written certification that the
Company is in compliance with the terms of the Agreement.
17. Compliance. In accordance with Sections IX and X of the Guidelines, the City may cancel or
modify this Agreement if the Company is in default of any term of this Agreement. The City shall
provide written notice to the Company specifying the basis for any such default, with said written
notice providing a timeframe and procedure within which the Company may cure any default.
18. Notices. Unless otherwise altered by either Party through written notice to the other Party, any
notice required to be given by this Agreement shall be in writing and sent by certified mail, return
receipt requested, to the following addresses:
CITY OF LUBBOCK
City Manager
PO Bog 2000
Lubbock, Tegas 89457
DURA-LINE LLC
Sally Rawlinson, CFO
904 Labbock Business Park Bivd.
Lubbock, TX 79403
With a copy by e-mail to:
Jennifer.mazkham@orbia.com
19. AssiQnmen� This Agreement may not be assigned without the written the approval of the City,
which approval shall not be unreasonably withheld.
City of Labbock Taz Abatement Agrcemeot — Dura-Line LLC 2023 Page 4
LEGAL02/43181915v1
20. Reuresentations. The City represents that:
a. The Site is within the Reinvestment Zone designated by Ordinance No. 2023-00080; and
b. The City has complied with all of the requirements set forth in Texas Tax Code, Section
312.201 and with all the criteria and guidelines as set forth in the Guidelines.
21. Miscellaneous.
a. Severabilitv. In the event any provision of this Agreement is held to be invalid or unenforceable
in any respect, such invalidity or unenforceability shall not affect any other provisions of this
Agreement.
b. Amendments. Any amendment to this Agreement shall be of no effect unless in writing and
signed by all parties hereto.
c. Counterparts. This Agreement may be executed in counterparts, each of which shall constitute
an original, but all of which together shall constitute one and the same instrument. The signature
page of any counterpart may be detached therefrom without impairing the legal effect of the
signature(s) thereon provided such signature page is attached to any other counterpart identical
thereto except having additional signature pages executed by any other party.
d. Venue and Applicable Law. This Agreement is subject to all present and future valid laws,
orders, rules, ordinances, and regulations of the United States of America, the State of Texas,
the Parties, and any other regulatory body having jurisdiction. This Agreement shall be
construed and governed according to the laws of the State of Texas. The sole venue for any
action, controversy, dispute, or claim arising under this Agreement shall be in a court of
appropriate jwisdiction in Lubbock County, Texas exclusively.
e. Rights and Remedies Reserved. The City and the Company each reserve the right to exercise
any right or remedy available to it by law, contract, equiry, or otherwise, including without
limitation, the right to seek any and all forms of relief in a court of competent jurisdiction.
Further, neither the City nor the Company shall be subject to any arbitration process prior to
exercising its unrestricted right to seek judicial remedy. The remedies set forth herein are
cumulative and not exclusive, and may be exercised concunently. To the extent of any conflict
between this provision and another provision in, or related to, this Agreement, the former shall
control.
f. Public Information.
i. This Agreement is public information. To the extent, if any, that any provision of
this Agreement is in conflict with Tex. Gov't. Code Ann. Chapter 552 et seq., as
amended, the same shall be of no force and effect.
ii. The requirements of Subchapter J, Chapter 552, Government Code, may apply
to this contract and the Company agrees that the contract can be terminated if
the Company knowing(y or intentionally fails to comply with a requirement of
that subchapter.
iii. To the extent Subchapter J, Chapter 552, Government Code applies to this
City of Lubbock Ts: Abatemeot Agreement — Dura-Line LLC 2023 Page S
LEGAL02/43 1 8 1 9 1 5v1
agreement, the Company agrees to: (1) preserve all contracting information
related to the contract as provided by the records retention requirements
applicable to the governmental body for the duration of the contract; (2)
promptly provide to the governmental body any contracting information related
to the contract that is in the custody or possession of the entity on request of the
governmental body; and (3) on completion of the contract, either: (A) provide at
no cost to the governmental body all contracting information related to the
contract that is in the custody or possession of the entity; or (B) preserve the
contracting information related to the contract as provided by the records
retention requirements applicable to the governmental body.
g. No Third-Partv Ben�ciaries. This Agreement is entered solely by and between, and may be
enforced only by and among the Parties. Except as set forth above, this Agreement shall not be
deemed to create any rights in or obligations to any third parties.
h. No Personal Liabilitv. Nothing in this Agreement is construed as creating any personal liability
on the part of any employee, officer or agent of any public body that may be a party to this
Agreement.
i. No Joint Enterprise. This Agreement is not intended to, and shall not be construed to create
any joint enterprise between or among the parties.
No Indemnification bv Cit� The parties expressly acknowledge that the City's authority to
indemnify and hold harmless any third party is governed by Article XI, Secrion 7 ofthe Texas
Constitution and any provision which purports to require indemnification by the City is invalid.
k. Soverei�rt Immunitv Acknowled�,ed and Retained. THE PARTIES EXPRESSLY
ACKNOWLEDGE THAT NO PROVISION OF TffiS AGREEMENT IS IN ANY WAY
INTENDED TO CONSTITUTE A WAIVER BY ANY PARTY OF ANY IlVIMUNITIES
FROM SU1T THAT A PARTY MAY HAVE BY OPERATION OF LAW. THE CITY
RETAINS ALL OF ITS GOVERNMENTAL IlVIMUNITY AFFORDED UNDER
TEXAS LAW TO A MUNICIPALITY THAT ENTERS INTO A CONTRACT.
Contracts with Companies Engaged in Business with Iran, Sudan, or Foreign Tecrorist
Organization Prohibited. Pursuant to Section 2252.152 of the Texas Government Code,
prohibits the City from entering into a contract with a vendor that is ident�ed by The
Comptroller as a company known to have contracts with or provide supplies or service with
Iran, Sudan or a foreign terrorist organization.
m. No Boycott of Israel. Pursuant to Section 2271.002 of the Te�s Government Code, a) This
section applies only to a contract that: (1) is between a governmental entity and a company
with 10 or more full-time employees; and (2) has a value of $100,000 or more that is to be paid
wholly or partly from public funds of the governmental entity. (b) A governmental entity may
City of Lubbocl� Tai Abatement Agrament — Dura-Line LLC 2023 Page 6
LEGAL02/43181915v 1
not enter into a contract with a company for goods or services unless the contract contains a
written verification from the company that it: (1) dces not boycott Israel; and (2) will not
boycott Israel during the term of the contract.
n. Texas Government Code 2274. By entering into this Agreement, the Company verifies that:
(1) it dces not, and will not for the duration of the contract, have a practice, policy, guidance,
or directive that discriminates against a firearm entity or firearm trade association or (2) the
verification required by Section 2274.002 of the Texas Government Code dces not apply to the
contract. If the Company has 10 or more full-time employees and if this Agreement has a value
of at least $100,000 or more, the Company verifies that, pursuant to Texas Government Code
Chapter 2274, it dces not have a practice, policy, guidance, or directive that discriminates
against a fireazm entity or firearm trade associarion; and will not discriminate during the term
of the contract against a firearm entity or fireatm trade association.
o. The Company represents and warrants that: (1) it dces not, and will not for the duration of the
contract, boycott energy companies or (2) the verification required by Section 2274.002 of the
Texas Govemment Code does not apply to the contract. If the Company has 10 or more full-
time emp(oyees and if this Agreement has a value of at least $100,000 or more, the Company
verifies that, pursuant to Texas Government Code Chapter 2274, it dces not boycott energy
companies; and will not boycott energy companies during the term of the Agreement. This
verification is not required for an agreement where a govemmental entity determines that these
requirements are inconsistent with the governmental entity's constitutional or statutory duties
related to the issuance, incurrence, or management of debt obligations or the deposit, custody,
management, borrowing, or investment of funds.
22. Effective Date. Notwithstanding anything contained herein to the contrary, this Agreement shall
not be effective until such time as it has been finally passed and approved by the City Council of the
City.
SIGNATURES
This Taz Abatement Agreement is hereby eaecuted on August 22 , 2023.
City of Lubbock Tea Abatement Agreement — Dure-Line LLC 2023 Page 7
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CITY OF LUBBOCK DURA-LINE LLC
TRAY PA , MA R JE FER YCROF
NO TH AMERICAN TAX DIRECTOR
ATTEST:
Courtney Paz, City Se tary
APPROVED AS TO CONTENT:
D. osteli , Chief Financia cer
APPROVED AS TO FORM:
.
elli Leisure, Assistant City Attorney
City of Lubbock Taz Abatemeot Agrcemeot — Dura-Line LLC 2023 Page 8
LEGAL02/43181915v1
EI�IT A: The Property — Legal Description & Map
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Cily of Lubbock Ta= Abatemeot Agreement — Dura-Line LLC 2023 1'age 9
EXHIBIT B: Guidelines and Criteria Governing Taa Abatement
For Industrial Projects in the City of Lubbock
LEGAL02/43181915v 1
City of Lubbock Taa Abatemeat Agreement — Dura-Line LLC 2023 page 10
EI�IT C: X-FAB Tezas, Inc. Application for Taz Abatement
LEGAL02/43181915v1
City of Lubbock Taa Abatement Agreement — Dura-Line LLC 2023 Page 11
EXHIBIT A: The Property — Legal Description & Map
City of Lubbock Tax Abatement Agreement — Dura-Line LLC 2023 Page 9
LEGAL02143181915v I
LAND SURVEYORS
CIVIL ENGINEERS
HUGO REED AND ASSOCIATES, INC.
1807 AVENUE N/ LUBBOCK, TEXAS 79401 / 808178�•6842 I FAX 8081783•3891
TEXAS REOISTERED ENOINEERING F�RM F•780
TEXAS LICENSED SURVEYING FIRAA 100878•00
METES AND BOUNDS DESCRIPTION of Lot 15, Lubbock Business Park, an addition to the City of Lubbock,
Lubbock County, Texas, and an unplatted 3.013 acre tract located in Section 7, Block A, Lubbock County, Texas,
all being further described as follows:
BEGINNING at a 1/2" iron rod with cap marked "HRA" found in the South right-of-way line of Lubbock Business
Park Boulevard as dedicated by plat recorded under County Clerk File Number (CCFN) 2009039502 of the Official
Public Records of Lubbock County, Texas (OPRLCT), at the most Westerly Northwest corner of Lot 15, Lubbock
Business Park, an addition to the City of Lubbock, Lubbock County, Texas, according to the map, plat, and/or
dedication deed thereof recorded under CCFN 2020047148, OPRLCT, and this tract which bears N. 88°31'36" W.
distance of 2407.58 feet and N. 01 °28'24" E. a distance of 2375.46 feet from the Southeast corner of Section 7,
Block A, Lubbock County, Texas;
THENCE N. 46°28'24" E., along the South right-of-way line of said Lubbock Business Park Boulevard, and the
Northern boundary of said Lot 15, a distance of 73.66 feet to a"crow's fooY' found at the most Northerly Northwest
corner of said Lot 15 and this tract;
THENCE N. 87°39'33" E., continuing along said South right-of-way line, and the Northern boundary of said Lot 15,
a distance of 59.85 feet to a 1/2" iron rod with red cap found at a corner of said Lot 15 and this tract;
THENCE S. 88°31'36" E., continuing along said South right-of-way line, and the Northern boundary of said Lot 15,
a distance of 471.62 feet to a 1/2" iron rod with cap marked "HRA" found in the West right of way line of North King
Avenue as dedicated by plat recorded under CCFN 2018038962, OPRLCT and street dedication deed recorded
under CCFN 202047150, OPRLCT at a corner of said Lot 15 and this tract;
THENCE S. 83°07'13" E., continuing along said West right-of-way line, and the Northern boundary of said Lot 15, a
distance of 55.48 feet to a 1/2" iron rod with cap marked "HRA" found at the most Northerly Northeast corner of said
Lot 15 and this tract;
THENCE S. 38°28'59" E., along the West right-of-way line of said North King Avenue and the Northern boundary of
said Lot 15, a distance of 71.67 feet to a 1/2" iron rod with cap marked "HRA" found at the most Easterly Northeast
corner of said Lot 15 and this tract;
THENCE S. 06°09'15" W., continuing along said West right-of-way line and the Eastern boundary of said Lot 15, a
distance of 97.39 feet to a 1/2" iron rod with cap marked "HRA" found at a point of curvature;
THENCE Southwesterly, continuing along said West right-of-way line and the Eastern boundary of said Lot 15,
along a curve to the left, said curve having a radius of 330.00 feet, a central angle of 04°40'S1", a chord distance of
26.95 feet and a chord bearing of S. 03°48'S0" W. to a 1/2" iron rod with cap marked "HRA" found at a point of
tangency;
THENCE S. 01 °28'24" W., continuing along said West right-of-way line and the Eastern boundary of said Lot 15, at
714.84 feet pass a 1/2" iron rod with cap marked "HRA" found at the Southwest corner of said North King Avenue
and the Southeast corner of said Lot 15, continuing for a total distance of 907.94 feet to a 1/2" iron rod with cap
marked "6453" found at the Southeast corner of this tract;
NOTICE.• This electronic file is provided for convenience purposes and is a verbatim copy of a certified desc�iption
retained on file at Hugo Reed and Associates, Inc. In any case of discrepancy, the certified description governs.
Page 1 of 2
iHENCE N. 88°31'36" W. a distance of 679.60 feet to a 1/2" iron rod with cap marked "6453" found in the East
right-of-way line of North Ivory Avenue as dedicated by plat recorded under CCFN 2021011704, OPRLCT, at the
Southwest corner of this tract;
THENCE N. 01 °28'24" E., along the East right-of-way line of said North Ivory Avenue, at 193.10 feet pass a 1/2"
iron rod with cap marked "HRA" found at the Southwest corner of said Lot 15, continuing along the East right-of-
way line of said North Ivory Avenue and the Western boundary of said Lot 15, for a total distance of 976.03 feet to a
1/2" iron rod with cap marked "HRA" found at a corner of said Lot 15 and this tract;
THENCE N. 05°16'06" E., continuing along the East right-of-way line of said North Ivory Avenue and the Western
boundary of said Lot 15, a distance of 60.13 feet to the Point of Beginning.
Contains 16.978 acres.
Bearings relative to Grid North, Texas Coordinate System of 1983, North-Central Zone, (2011, epoch 2010.0).
Dura-Line Reinvestment Zone
NOTICE: This electronic file is provided for convenience purposes and is a verbatim copy of a certified description
retained on file at Hugo Reed and Associates, Inc. In any case of discrepancy, the certi/ied description governs.
Page 2 of 2
as soo �so i000 �
F°" O Reinvestment Zone •• � ��ror
, ���.a. �,a :m�,��,-.�A.�eb,�. Lubbock
.e...:.::�.:�,.�.�����.�.• ��::, «,�,
EXHIBIT B: Guidelines and Criteria Governing Tax Abatement
For Industrial Projects in the City of Lubbock
LEGAL02/43181915v 1
City of Lubbock Tax Abatement Agreement — Dura-Line LLC 2023 Page 10
Exhibit B
City of Lubbock, TX
Guidelines and Criteria Governing Tax Abatement For
Industrial Projects In The City of Lubbock
SECTION I. General Purpose:
The City of Lubbock (City) is committed to the promotion of high quality development in all parts of the
City of Lubbock, Texas; and to an ongoing improvement in the quality of life for the citizens residing within
the City. The City recognizes that these objectives are generally served by enhancement and expansion of
the local economy. The City will, on a case by case basis, give consideration to providing tax abatement, as
authorized by V.T.C.A., Tax Code, Chapter 312, as stimulation for economic development within the City.
It is the policy of the City that said consideration will be provided in accordance with the guidelines and
criteria herein set forth and in conformity with the Tax Code.
Nothing contained herein shall imply, suggest or be understood to mean that the City is under any obligation
to provide tax abatement to any applicant and attention is called to V.T.C.A., Tax Code, Section 312.002(d).
With the above rights reserved all applications for tax abatement will be considered on a case by case basis.
SECTION II. Detinitions:
As used within these guidelines and criteria, the following words or phrases shall have the following meaning:
1. Abatement of Taxes: To exempt from ad valorem taxation all or part of the value of certain
Improvements placed on land located in a Reinvestment Zone designated for economic
development purposes as of the date specified in the Tax Abatement Agreement for a period of
time not to exceed ten (10) years.
2. Abatement Agreement: (1) A contract between a property owner and the City for the
abatement of taxes on qualified property located within a Reinvestment Zone or a designated
Enterprise Zone; or, (2) a contract for the abatement of taxes between the City and a certified
air carrier who owns or leases Real Property located within the Reinvestment Zone or Personal
Property or both as authorized by V.T.C.A., Tax Code, Section 312.204(e)
3. Advanced Technologies: advanced manufacturing which requires higher skills and results in
higher wages and investment.
4. Base Year Value: The assessed value of property eligible for tax abatement as of January 1
preceding the execution of an Abatement Agreement as herein defined.
5. Distribution Center Facility: A building or structure including Tangible Personal Property
used or to be used primarily to receive, store, service or distribute goods or materials.
6. Expansion of Existing Facilities or Structures: The addition of buildings, structures,
machinery or equipment to a Facility.
7. Existing Facility or Structure: A facility as of the date of execution of the Tax Abatement
Agreement, located in or on Real Property eligible for tax abatement.
8. Facility: The improvements made to Real Property eligible for tax abatement and including the
building or structure erected on such Real Property and/or any Tangible Personal Property to
be located in or on such property.
9. Information and Data Center: Facility used to house computer systems and associated
components, such as telecommunications and storage systems. The main purpose of the facility
2022 Industrial Tax Abatement Guidelines
March 8, 2022
is running applications that handle the core business and operational data of organizations, off-
site backups and other informational operations.
10. Improvements to Real Property or Improvements: Shall mean the construction, addition to,
structural upgrading of, replacement of, or completion of any facility located upon, or to be
located upon, Real Property, as herein defined, or any Tangible Personal Property placed in or
on said Real Property.
1 l. Manufacturing Facility: A Facility which is or will be used for the primary purpose of the
production of goods or materials or the processing or change of goods or materials to a finished
product.
12. Medical Services: Facilities such as hospitals, specialty hospitals and other like facilities that
are classified under North American Industrial Classification System Code 622.
13. Modernization/Renovation of Existing Facilities: The replacement or upgrading of existing
facilities.
14. New Facility: The construction of a Facility on previously undeveloped Real Property eligible
for tax abatement.
15. New Permanent Job: A new employment position created by a business that has provided
employment to an employee of at least 1,820 hours annually and intended to be an
employment position that exists during the life of the abatement.
16. Other Basic Industry: A Facility other than a distribution center facility, a research facility, a
regional service facility or a manufacturing facility which produces goods or services or which
creates new or expanded job opportunities and services a market of which 50°Io of revenues
come from outside of Lubbock County, Texas.
17. Owner: The record title owner of Real Property or the legal owner of Tangible Personal
Property. In the case of land leased from the City or buildings leased from a private party or
tax exempt property, the lessee shall be deemed the owner of such leased property together with
all improvements and Tangible Personal Property located thereon.
18. Productive Life: The number of years a Facility is expected to be in service.
19. Real Property: Land on which improvements are to be made or fixtures placed.
20. Regional Services Facility: A Facility, the primary purpose of which is to service or repair
goods or materials and which creates job opportunities within the affected jurisdictions.
21. Reinvestment Zone: Real Property designated as a Reinvestment Zone under the provisions of
V.T.C.A., Tax Code, Section 312.202.
22. Research Facility: A Facility used or to be used primarily for research or experimentation to
improve or develop new goods andlor services or to improve or develop the production process
for such goods and/or services.
23. Tangible Personal Property: Any Personal Property, not otherwise defined herein and which
is necessary for the proper operation of any type of Facility.
Attachment 1_Description of the Applicant Company
Senior Notes 2042
Debt series Senior Notes 2042 amounting to $400 million U.S. dollars.
Date of issue 2��2'o9'�9
Due date 2042-09-19
Issuance term 30 years
Interest / Yield calculation procedure Annual Fixed Rate 6.75%
Periodiciry in the payment of interest Payable semi-annually on March 19 and September 19.
No later than 10:00 a.m. (New York City time), not later than
Place and method of payment of interest one business day prior to any payment date, the Company
and principal. wiil irrevocably deposit with the Trustee or Paying Agent
sufficient money to pay said principal and interest.
Subordination of titles, if any. Does not apply.
Each Series of Bonds may be redeemed, at the option of the
Company, in whole or in part, on any Interest Payment Date.
by notifying the Holders not less than 30 days or more than
60 days (such notice must be iRevocable ), at a Redemption
Price, calculated by the Company, equal to the greater of (i)
100% of the pnncipal amount of the relevant Series of Notes
Amorti ation and early amorti ation / early and (ii) the sum of the present values of the remaining
maturity, if any. scheduled payments of principal and interest thereon
(excluding accrued interest at the redemption date)
discounted at the Redemption Date on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day
months) at the Treasury Rate ptus (a) 50 basis points for the
2022 Bonds, and (b) 50 basis points for the 2042 Bonds, plus,
in each case, accrued interest at the date of redemption and
any additional Amounts payable with respect thereto.
uarantors: Mexichem Brasil Industria de Transformaci n
PI stica Ltda., Mexichem Derivados, S.A. de C.V., Mexichem
Warranty, if any. Resinas Vin Iicas, S.A. de C.V., Mexichem FI or, S.A. de
C.V., Mexichem Resinas Colombia, S.A.S., Mexichem
Soluciones Integrales, S.A. de C.V., Mexichem Compuestos,
S.A. de C.V., Mexichem UK Limited, Mexichem Ecuador.
Trustee, if any. Deutsche Bank Trust Company Americas.
QualificaUon granted by a qualifying Fitch Ratings: BBB
institution: Moody s Baa3
Standard Poor s: BBB-
Common Representative Does not apply
Depositary Does not apply
Tax Regime Does not appiy
Remarks Does not apply
Attachment I: Description of the Applicant Company Page 6 of 204
Attachment 1_Description of the Applicant Company
Senior Notes 2044
Debt series Senior Notes 2044 amounting to $750 million U.S. dollars.
Date of issue 2014-09-17
Due date 2044-09-17
Issuance term 30 years
Interest / Yield calculation procedure. Fixed Annual Rate of 5.875%.
Periodicity in the payment of interest. Payable semi-annually on March 17 and September 17.
No later than 10:00 a.m. (New York City time), not later than
Place and method of payment of interest one business day prior to any payment date, the Company
and principal. will irrevocably deposit with the Trustee or Paying Agent
suffcient money to pay said principal and interest.
Subordination of titles, if any. Does not apply.
Amorti ation and early amorti ation / early At the option of the Company, in whole or in part, on any
maturity, if any. Interest Payment Date, by notifying the Holders not less than
30 days or more than 60 days of said redemption.
uarantors: Mexichem Brasil Industria de Transformaci _n
PI stica Ltda, Mexichem Derivados, S.A. de C.V., Mexichem
Resinas Vinllcas, S.A. de C.V., Mexichem FI or, S.A. de
Warranly, if any. C.V., Mexichem Resinas Colombia, S.A.S., Mexichem
Soluciones Integrales, S.A. de C.V., Mexichem Compuestos,
S.A. de C.V., Mexichem UK Limited, Mexichem Ecuador,
Mexichem Fluor, Inc., Mexichem Fluor Comercial, S.A. de
C.V.
Trustee, if any. Deutsche Bank Trust Company Americas.
Qualification awarded by a qualifying Fitch Ratings: BBB
institution: Moody s: Baa3
Standard Poor s: BBB-
Common Representative Does not apply
Depositary Does not apply
Tax Regime Does not apply
Remarks Does not apply
Attachment I: Description of the Applicant Company Page 7 of 204
Attachment 1_Description of the Applicant Company
Senior Notes 2048
Debt senes Senior Notes 2048 amounting to $500 million U.S. dollars.
Date ofissue 2017-10-04
Due date 2048-01-15
Issuance term 30 years
Interest / Yield calculation procedure. Fixed Annual Rate of 5.50%.
Periodicity in the payment of interest. Payable semi-annually on April 4 and October 4.
No later than 10:00 a.m. (New York City time), not later than
Place and method of payment of interest one business day prior to any payment date, the Company
and principal. will irrevocably deposit with the Trustee or Paying Agent
sufficient money to pay said principal and interest.
Subordination of titles, if any. Does not apply.
Amorti ation and early amorti ation / early At the option of the Company, in whole or in part, on any
maturity, if any. Interest Payment Date, by notifying the Holders not less than
30 days or more than 60 days of said redemption.
uarantors: Mexichem Brasil Industria de Transformaci n
PI stica Ltda, Mexichem Derivados, S.A. de C.V., Mexichem
Resinas Vin ticas, S.A. de C.V., Mexichem FI or, S.A. de
Warranty, ifany. C.V., Mexichem Resinas Colombia, S.A.S., Mexichem
Soluciones Integrales, S.A. de C.V., Mexichem Compuestos,
S.A. de C.V., Mexichem UK Limited., Mexichem Ecuador,
Mexichem Fluor, Inc., Mexichem Fluor Comercial, S.A. de
C.V.
Trustee, if any. Deutsche Bank Trust Company Americas.
Qualification awarded by a qualifying Fitch Ratings: BBB
institution: Moody s: Baa3
Standard PoorCs: BBB-
Common Representative Does not apply
Depositary Does not apply
Tax Regime Does not appiy
Remarks Does not apply
Policies related to changes of control, corporate restructuring (including mergers, acquisitions and spin-offs),
sale andlor constitution of liens on essential assets of the Issuer, during the term of the broadcast debt:
As of December 31, 2021, some financing and the Senior Notes or Intemational Bonds issued in the years 2012, 2014,
2017, as well as the Sustainable Bonds issued during 2021, establish certain restrictions, among which are restrictions
on the encumbrance or mortgage of propeRies, the sale and subsequent lease of assets and limitations on the
consolidation, merger or transfer of assets of the Issuer.
Attachment I: Description of the Applicant Company Page 8 of 204
Attachment 1_Description of the Applicant Company
Prohibited activities ouUined in the provisions of current financing of the Company include those that are usual for this
type of corporete financing, such as:
(i) Control chanqe: credit acceleration clauses in case of change of Control, in accordance with the Applicable
Legislation.
(ii) Corporate restructurinq: certain restrictions focused on limiting the consolidation, merger and/or transfer of various
assets of the Issuer.
(iii) Essential assets: various restrictions related to the granting or imposition of liens on certain properties, as well as
the imposition of liens on the assets of the Company.
Attachment I: Description of the Applicant Company Page 9 of 204
Attachment 1_Description of the Applicant Company
T�ble vf �antenis
ENERAl.INFaR ATlUN .......................................................................................................................i�
a] lossary of terms antl deTrn�tions .......................... ........ ......... ... - ............................... SO
b] Execulive Summary.. - ....... - ...... ---- ..... -- • - ..................... - - - - -- --- .............................. 15
c; Risk Factoas ..... ................................ - .............. -- --- .......... - -- - --- -- - - - •• •••• -- - 25
d] Olhar 5ecunSies. - - - ................. - - .....- - - ----- --- - - - - •- •..................................... ...48
eJ Significant �hanges to !ha F2ighis oi Ihe Securi3ies Registered in ihe Ragislry ---------------------------------------------------- 49
iy�eslinalionofFunds ...................................................�---��--�---�•---...............................................--�---..........--�----..�9
91 Pu6Hc �awments .................................................................................................................. d9
2. �liE ISSUER .................................•••.........................................•••.............................................................SO
a] Hislary and �eve{apmenl ...............................................��--�---�......----�.......................................---�---�--...-�---�-----..5�
i. Cnmpany Alame artd trade name of !he issuer-------.....--.--•.-•-•-- ..................-----....--•--•..............,,..•----•----.......50
ii. aate and Place W Incarporaii¢n and auralinn oS the issues ..................................................................•------......5n
iii. Address and te#eghane numders ai main affice ..............................................................................................5n
iv. His[oncal E�enls .............................................................................................................................................50
v. ener� business sltategy .................................................................................................................................58
b) Business ffescaiption ................ . ..........................................................................................84
f. Main acti�ity........ • ...............................••--.............._.......................................BT
i[. disfn6ulion Channels ...------------------------------•--.......---•---......--•--------------------•-• ..............................105
iii. palents, Licenses, Tra�emarks an6 oiher caniraCts ..---- ....................----------------------------•--.....-------...105
iv. Ahain CusSomers. - • ...............- - - - - - - • - ...............,. • � - • .............,........................107
v.Appiica�e Legislalion and 7ax Ssluation - -- - -- - - • ............... - • • •• •••' .......... • 1a8
vi. Human Resources.----•-�---•-�•-----• .................................................................... - ---.1t1
. ........................•-•-..........- •-
vii. En�ironmen[al PaAomiance....--•�-•---•--�......... .......................................................................................--•----.112
viii. Market Infnrmation ..............................................................................................................................--•-----•1 S6
ix. Coryoraie Slfudu�e ......................................................................................................................................116
x. �escripliOn of Main A55el5 ................................................................................................................. 1 f T
xi. Jud�ciaE. Adminislrative asArbilral Psaceadin¢s........ ....................................................................................12�
xii. Shares representing Capi[s4 Stock ...............................................................................................................12a
xiii. Dividends .....................................................................................................................................................125
3. FTt�tANC�AL REPORTIN .......................................................................................................................4P3
a) Se3eaed Consai,dated Financiaf Infartn�ion ...............•----........--.--......................---.......--.--......---.--......--..----••--- %23
b] Finaneial irtformalion by 6usiness group, geagrapte+cal area and eXpon sales ..................................... ............ 127
c} Relevan� Credif Reparl .................................................................................................................................. 323
d� Managemcnl s Discussion nf [he Resulis af Operation and Finan�ial Silcsaliaa� 01 the Issuer ............ ................. t34
i. Operating HesuHs ............................................................................................................................................135
ii. Financial Candilian M ihe Campahy, Liquidily and Capilai Resaurces .............................................................14fi
iii. Intemal cantrol. • ... ..... ... •• .........................................................................15U
e] Cn4ical accaunling estimales, prorisions or reserves------•----- ......................•----------•----................................ 152
4. ANA E ENi .................••••••...••••••...••••••••••-••••....••••••••••••••••••••..•••••..•••............•••.....................••••........354
a) �xlema{ Audtlor ...................................................................................................................................... • 154
b] Transac[ions wilh ReisFetE PersQns and Conflicis af Inleresl .............................................................................. 156
c} akeclors and Shxreholders ............................................................................................................................... t55
d] Corporate Bylaws and Olher Agreemenls .......................................................................................................... t69
5. CAPI7A� AR ET .................................................................................................................................174
a] Shareholding siructure ................................................. ..... --- ..... -- -- ..... •......... - ...... - --- - T74
bJ Pertormanca ol the share in the Slnck �Farket ................•-•----..----...---.----.--.-----...----------.....-.----.....--.-- ---. t74
c} Market Maker .................................................................................................................................................... f 75
6. R�SPQH518LE PERSaNS .........................................•••..........................................................»............775
7. AMNE](E5 ...............................................................................................................................................i79
Attachment I: Description of the Applicant Company Page 10 of 204
Attachment 1_Description of the Applicant Company
1. ENERAL INFOR ATION
a) lossary of terms and definitions
The terms used in this Annual Report and listed below shall have the meanings given below. They shall apply equally
to the singular and plural forms. which shall be used throughout this document to refer to this glossary
Hydrochloric acid: An aqueous hydrogen chloride solution, which is the second most commonly used acid in the
chemicals industry after sulfuric acid. It is used to descale metals, make Geaning products, and as a neutrali er, reduce
and intermediate in organic and inorganic synthesis in the chemical industry.
Hydrofluoric acid or HF: A chemical compound produced by mixing calcium fluoride (fluorite) withsulfuric acid mainly
used to produce refrigerant gases and Fluoropolymers.
Phthalic anhydride: The chemical product used as a raw material to produce plastici ers for plastics, mainly PVC
(polyvinyl chloride). It is also used to manufacture poiyester resins, alkyd resins, polyols and pigments. Orbia produces
phthalic anhydride at its Altamira petrochemical comptex.
ANIQ: Acronym for National Association of the Chemical Industry (Asociaci n Nacional de la Industria Qu mica) in
Mexico.
A EA: Acronym for the Africa, Middle East and Asia region.
A ANCO: Acronym for Mexichem Amanco Holding, S.A. de C.V., a holding company of PVC pipe producers andLatm
America s leader in water conduction systems.
APAC: Acronym for the Asia-Pacific region.
AST : Acronym for the American Society for Testing Materials.
Intemational Bonds, Notes or Senior Notes � Debt instruments issued by the Company in Dollars in different
international markets and not registered in the RNV. (See Section II of the Cover of this Annual Report) Senior Notes
have a preferentiai payment priority over the rest of the Company s unsecured sovereign debt and are unconditionally
secured by certain subsidiaries of the Company.
B V: Acronym for Bolsa Mexicana de Valores, S.A.B. de C.V. (the Mexican Stock Exchange)
Building Infrastructure ( avin): Business group that is redefining the pipes and fittings industry today thanks to the
creation of innovative solutions with longer shelf life and less installation work. This group, with customers in five
continents, also develops sustainable technologies for water management systems, as well as home waterheating and
cooling systems.
Camesa: rupo Industrial Camesa, S.A. de C.V.
Stock Exchange Certificates or CEBURES: Thenegotiable instruments placed for public investorson the Mexican stock
market, representing the individual paRicipation of their holders in a collective debt oflegal entities or trust property.
CFE: Acronym for the Federal Electricity Commission (Comisi n Federal de Electricidad), which is the agency in charge
of generating, transmitting, distributing, and marketing electricity in Mexico.
Single Issuer Circular: The general provisions applicable to issuers of securities and other participants in the CNBV-
issued securities market.
Clinker: An intertnediate cement product made by mixing limestone, clay and calcined iron oxide ina kiln at about 1,450
degrees Celsius. One metric ton of ctinker is used to make approximately 1.1 metric tons of gray Portland cement.
Chlorine: A pale green, gaseous chemical element belonging to the halogen group. Chlorine is used mainly to
manufacture PVC, paint, insecticides, paper and dyes, as well as to kill bacteria in water.
CNBV: Acronym for the National Banking and Securities Commission (Comisi n Nacional Bancaria y de Valores), a
decentrali ed agency of the Ministry of Finance and Public Credit that supervises and regulatesfinancial institutions and
issuers of securities o ensure their stability and proper functioning in Mexico.
Compounds: Physical miutures of different materials made to achieve combinations of properties that cannot be
obtained from the original materials. In the case of Orbia, at least one of the components in the compounds is polymer
matrices, mainly PVC, but polyolefins, styre�es, and engineering plastics can also be used.
Attachment I: Description of the Applicant Company Page 11 of 204
Attachment 1_Description of the Applicant Company
Acid grade concentrate or acid grade fluorite: Fluorite mineral (calcium fluoride) from which impurities are removed
through a process of selective milling / flotation to comply v�nth a chemical specification of calcium fluoride, 97% minimum
content silica (Si02), 1.1% maximum content calcium carbonate (CaCO3), 1.2% maximum content. It also complies
with a physical particle si e specification. Acid grade concentrate is used to manufacture HF (base for producing
refngerants), aluminum trifluoride, ceramics, propellants, nonstick coatings, among others.
Control (Control roup): The ability of a person or group of persons to perform any of the following acts:
a) Make, directly or indirectly, decisions at general meetings of shareholders, partners or equivalentbodies, or appoint
or remove a ma ority of the directors, administrators or equivalent of a legal entity.
b) Maintain ownership of rights, directly or indirectly, to vote in respect of more than fifty percent of a legal entity s
share capital.
c) Directing, either direcUy or indirectly, the administration, strategy, or ma or poticies of a legal entity,whether through
ownership of securities, by contract or by any other means.
Copolymer: The result of a Nvamonomer polymeri dtion. The most common polymeri ation in the vinyl industry is the
combination of vinyl chloride monomer with vinyl acetate monomer. The products obtained from this polymeri a6on are
called copolymers because Nvo different types of monomer are linked. Copolymers impart different properties to
homopolymers, the main one being a reduction in the softening point of a product for better processing and greater
flexibility. It is used mainly to make floor tiles, packagingsheets and carpet bases.
Cracker: The system in which different petrochemical products are separated using steam at very high temperatures.
Coupon: The interest paid to bondholders on the face value of the bond.
Dollars: The legal tender of the United States, which is the Company s functional and reporting currency.
Data Communications (Dura-Line): Business group operating with the conviction that each organi ation, community
and inhabitantof the planet deserves the chance to benefit as much as possible from modem technology. The Company
produces over 400 million meters of essential and innovative infrastructure a year, inctuding conduits, FuturePath,
cables-in-conduit and fittings, which create the physical routes for fiber optics and other nelwork technologies that
connect cities, homes and people. Dura-Line is the global leader in the manufacture anddistribution of these products in
a highly dynamic industry.
EBITDA: Acronym for eamings before interest, taxes, depreciation and amoRi ation.
ECU Acronym for electrochemical unit consisting of one unit of chlorine and 1.1 units of caustic soda.
EDC: Acronym for ethyl dichloroethane. It is a chlorinated hydrocarbon. It is a colorless liquid with a chloroform-like odor.
The most common use of this is in the production of vinyl chloride, which is used to make polyvinyl chloride (PVC).
USA.: Acronym for the United States of America.
E EA: Acronym for the Europe, Middle East and Africa region.
Ethylene: A gaseous, colorless and flammable hydrocarbon. It is widely used in the petrochemical industryas a raw
material for manufacturing polyethylene and PVC resins, as well as ethylene oxide.
Euro or : The legal tender of the European Union.
Eurostat: The Eurostat Economist Intelligence Unit.
Exploration: Work performed in the ground to identify mineral deposits, and to quantify and assess anyeconomically
exploitable reserves they contain.
Exploitation: Work to prepare and develop the area comprising mineral deposits, as well as work to separate and
extract mineral products in the deposits.
Fluorite: The trade name of the mineral calcium fluoride. It is an important industrial mineral composed of calaum and
fluorine (CaF2). It is used in a wide variety of chemical, metallurgical, and ceramic processes.
Fluorita de xico or FD : Fluorita de M xico, S.A. de C.V.
Fluorocarbons: Chemical compounds containing carbon-fluorine bonds.
Attachment I: Description of the Applicant Company Page 12 of 204
Attachment 1_Description of the Applicant Company
Aluminum Fluoride or AIF3: Aluminum triFluoride, an inorganic compound used in the electrolytic production of
aluminum to lower its melting point, and as a flux.
Phosphates: Phosphoric acid salts or esters used in vanous industries, such as soap, soft drinks, food and water
treatment.
eosynthetics: Materiais composed primarily of polymers such as polypropylene, polyester, polyamide and
polyethylene that are transformed into sheets, mantles or three-dimensional structures to beused in contact with soils or
other geotechnicai materials for different purposes in the world of construction,such as road works, hydraulic works,
erosion control systems and environmental activities, among others. The most common types of geosynthetics used in
engineering are geotextiles, geogrids, geomembranes, geonets, geocomposites and mantles for erosion control.
etallurgical grade: Fluorite ore selected for its calcium fluoride content and sub ected to reduction in si e and
classification, defined in accordance with customer requirements, and used to produce steel andcement.
RI: The lobal Reporting Initiative, an organi ation created in 1997 by the Coalition of Environmentally Responsible
Economies (CERES) and the United Nations Environment Programme (UNEP). The RI developed the Sustainability
Reporting Standards to improve the quality, rigor and usefulness of sustainability reports to be comparable to that of
financial reports based on tlie triple bottom line of economic, social and environmental factors. In2016, tlie RI launched
the first global standards for sustainability reporting that allow all organi ations to publicly report on their economic,
environmental and social impacts and to show how they contribute to sustainable development.
Business group: The Company s divisions made up of one or more of the Comparrys businesses, as defined separately,
with the shared commonality of solutions offered to meet macro demands such as water and food supply.
P or P Index: Acronym for lobal-warming potential which is a relative measure of how much heat can be
trapped by a given greenhouse gas, compared to a reference gas, usually carbon dioxide.
Sodium hypochlorite: A clear, slightly yellow (amber), aqueous solution with a characteristic penetrating and iRitating
odor, containing sodium hydroxide and sodium carbonate. It is widely used for cleaning products.
HDPE: Acro►rym for high density polyethylene. It is a commonly used thermoplastic and the most used of the three
polyethylene s for a wide range of appiications.
HIS-PVC: Acronym for suspension PVC resin with high-impact suspension-PVC propeRies.
Homopolymer: The product generated by combining or polymeri ation of several molecules ofa single type or monomer
and which may have different characteris6cs in accordance with their chemical nature. In the case of PVC resins, the
monomer used for polymeri ation is vinyi chloride (VCM), whose molecules, when oined together, produce what is
called a homopolymer (many molecules of a monomer of the same type chemically linked to each other).
ICIS: Acronym for the Independent Chemical Information Service.
IFRS: Acronym for the Intemational Financial Reporting Standards as adopted by the Intemational Accounting
Standards Board.
IHS arkit: Provider of infortnation and analysis for the chemical and petrochemical sectors, among others.Formerly
called CMAI and SRI.
Ingleside: Ingleside Ethylene LLC.
Invenergy: Invenergy Clean Power LLC.
ISO 9001: A standard developed by the Intemational Standard Organi ation that applies to qualiry management systems
(QMS), focusing on every aspect of quality management that a company needs tohave to manage and improve the qualiry
of its products or services.
Attachment 1: Description of the Applicant Company Page 13 of 204
Attachment 1_Description of the Applicant Company
ISO 14001: A standard developed by the International Standard Organi ation specitying the requirements foran
environmental management system (EMS), to allow an organi ation to formulate its policies andob ectives considenng
legal requirements and significant environmental impacts. It applies to environmental aspects that an organi ation can
control and can expect to influence. It does not establish specific environmental perfortnance criteria.
ISR: Income Tax.
V or oint Venture: means co-investment oint businesses.
alu c means Kalu , S.A. de C.V.
Fluorinated Solutions ( oura): World leader in the development, manufacture and supply of fluorinated products and
solutions. It is the largest producer of Fluorite in the world and has a leading position in the industry of hydrofluonc acid,
aluminum tnfluoride (AIF3), refrigerant gases and medical propellants. Fluorinated Solutions has also started supplying
fluorinated products to the energy storage industry. Fluorine plays a critical role in a wide range of industries, including
automotive, chemical, semiconductor, communications, construction, and pharmaceuticals, among others. It has also
become relevant as a key feedstock for various decarboni ation solut�ons. such as lithium-ion battenes, renewable
energy. and low- WP refrigerants for mobile and stationary applications.
L V: Acronym for the Securities Market Act.
LIBOR: Acronym for the London Interbank Offered Rate.
exico: The United Mexican States.
etspar: A key raw material in steel production, that, when added to slag, becomes a compeb6ve solution in removing
impunties {such as sulfur) bringing benefits to high-end stainless steel. Metspar is a valuable additive in the production
of clinker for the cement industry, increasing productivity and product yield.
Business: The organi ation of several companies and/or functions of the Company that together manufacture and
market products, services and solutions under criteria of vertical integration, lower volatilityof their raw matenals, a focus
on specialry products and higher profitability. Each Orbia business has a Gearmission and the resources to be more
responsive, act quickiy and be closer to its customers.
Precision Agriculture (Netafim): Business group that helps the world grow more with less. Netafim s state-of-the-aR
irrigation systems, services and digital agricultural technologies allow farmers to achieve significantly higher yields and
better-qualiry food while using less water, fertili ers and other supplies. By helping them to grow more with less, Netafim
enables farmers from across the world to feed the planet more efficiently and sustainably.
OECD: Acronym for the Organi ation for Economic Caoperation and Development.
ORBIA : The stock ticker symbol for the Company s shares on the BMV.
Orbfa, the Issuer, the Company, the Entity, the Company or the roup: means Orbia Advance Corporation, S.A.B.
de C.V. and its subsidiaries.
OxyChem: Occidental Chemical Corporation.
PE EX: Petr leos Mexicanos and/or any of its subsidiaries.
Pemex TRI (formerly Pemex Petroqu mica or PPQ): Pemex Transformaci n Industrial is a subsidiary company of
Petr leos Mexicanos. Its main purpose is the refining, transfortnation, processing, import, export, marketing, retail,
preparation and sale of hydrocarbons, petroleum products, natural gas andpetrochemicals.
Peso, Pesos or exican Pesos: The legal tender in Mexico.
DP: ross Domestic Product.
Plastisol: A mixture of an emulsion-type resin (PVC), a plastici er and other addiGves in a viscous liquid state (paste)
at room temperature that has visco-elastic properties and, depending on the reference resin used, may behave like a
dilatant or pseudoplastic. It is usually whitish in color, but this depends to a large extent on the additives used.
P V: Petroqu mica Mexicana de Vinilo, S.A. de C.V. which was a oint venture belween Orbia and PEMEXuntil
November 16, 2018, and is now a subsidiary of the Company.
Attachment I: Description of the Applicant Company Page 14 of 204
Attachment 1_Description of the Applicant Company
Polymer Solutions: Business group that is as universal and dynamic as the materials it produces. It focuseson the
production of general and special PVC resins, and other vinyl polymers with a wide range of applications, creating
sotutions that support its customers everyday life, such as pipes, cables, floors, autoparts, household appliances.
clothing, packaging and medical devices.
PROFEPA: The Federal Attomey for Environmental Protection, a decentrali ed administrative body of theMexican
federal govemment s Ministry of the Environment and Natural Resources (SEMARNAT).
Stock Exchange Certificates Program: refers to (i) the program for issuing and placing a revolving Stock Exchange
Certificates program for an amount of up to ten billion Mexican pesos or the equivalent in UDls,authori ed by the CNBV
on March 15, 2012, through official notice number 153/8167/2012, for a term of upto 5 years and (ii) the program for
issuing and placing revolving stock for a� amount of up to 10,000 millionMexican pesos or the equivalent in UDIs
authori ed on November 3, 2017, by the CNBV through o�cial document number 153/10875/2017, for 5 years (maturity
date: November 3, 2022). These certificates were cancelled during 2021.
Basis point: A common unit of ineasure for interest rates and other percentages in finance. One basis point is equal to
1/100th of 1%.
PVC or Polyvinyl Chloride: A thertnoplasGc resin obtained from the polymeri ation of vinyi chloride. PVC can be
produced using four different processes: suspension, emulsion, mass and solution. PVC resins areused mainly in the
construction industry for cable and wire insulalion, door and window frames, water and sewer ducts and pipes, floors,
tites, etc. It is also used to make, among other things, dolls, balls and infiatabietoys. In the automotive industry, it is used
in door panels, dashboards, seat upholstery, moldings, electricalcables, air and oil filters, automotive sealants and
hamesses. In the textile industry, it is used to make synthetic leather and canvases. In the packaging industry, it is used to
manufacture cylinders and bottles for purifiedwater and cleaning products, films for food wrappers, sheeting for medicine
packaging. In the medical sector,it is the main material used to make bags for serum and blood, as well as other
accessories for healthcare.
Quimir: Quimir, S.A. de C.V., a subsidiary of Orbia, part of the Polymer Solu6ons business group, which produces
industrial and food phosphates.
Reais, Real or R: means the legal tender of Bra il.
Regulation S: means Regulation S under the US Securities Act.
Rule 144-A: means Rule 144-A under the US Securities Act.
Refrigerants: gases used for refrigeration and air conditioning. They are compounds or mixtures of orgarncchemical
compounds containing mainly hydrogen, carbon, fluorine and chlorine.
Credit risk: the possibility of loss of different economic agents due to non-compliance with the payment obligations
contracted by the counterparty that requested monetary resources.
RNV or Registry: means the National Securities Registry of the CNBV.
PVC Resins or Vinyl Resins: plastic resins produced by polymeri ation of vinyl monochloride (VCM).
Extender Resins: PVC resins used in Plastisols as an additive with lwo functions: to help lower viscosity and reduce
formulation costs without affecting Plastisol properties.
Roskfll Consulting: lobal metals and minerals research company.
Brine: An aqueous solution saturated with sodium chloride or common salt.
SEC: US Securilies and Exchange Commission, the US federal agency in charge of regulating the country s financial
markets.
Petrochemical sector: The predominant sector of companies and/or public and/or private entities engagedin the
manufacture and marketing of petroleum products and/or natural gas.
Chemical sector: The predominant sector of companies and/or public and/or private entities manufacturingchemical
products in general.
Attachment I: Description of the Applicant Company Page 15 of 204
Attachment 1_Description of the Applicant Company
Senior Notes: means A type of bond that takes precedence over other debts in the event that the company deGares
bankruptcy and is forced into liquidation.
Caustic soda: The trade name of sodium hydroxide, NaOH, which is widely used in the alumina, soap and detergent
industry and the chemical industry in general.
Suspension: The system in which small partiGes of a solid or liquid are suspended within a liquid or gas. Inthe case of
PVC resins, this refers to the production process in which vinyl monochloride (VCM) is suspended in small droplets in
water to polymeri e and produce PVC resins.
T-Bil1 Treasury Bond of the United States of America: A Treasury bill is a short-tertn debt obligation of the US
govemment, backed by the Department of the Treasury with a maturity of one year or less.
Holder(s): The holders and/or owners of the various securities issued by the Company, including but not limited to
outstanding shares, Stock Exchange Certificates, Sustainable Bonds and/or Senior Notes.
TIIE: Acronym for Interbank Interest Rate of Equilibrium, which is published by Banco de M xico and servesas a
reference for credit contracting in Mexico.
TPA: Aaonym for metric tons per year (one metric ton is equal to 1,000 kilograms or 2,204.6 pounds).
UDIS: Investment Units, ad usted by the inflation rate recogni ed by Banco de M xico.
European Union or EU: The EU is a unique economic and poliGcal union comprising 27 European countriescovering a
large part of the continent, induding Austria, Belgium, Bulgaria, Croatia, Cyprus, C ech Republic,Denmark, Estonia,
Finland, France, ermany, reece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands.
Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden.
VC or CV: stands for vinyl chloride monomer. It is a� important chemical intermediate used almost exclusively to
produce polyvinyl chloride (PVC) resins.
Vestolit: Vestolit, mbH, a subsidiary of Orbia, part of the Polymer Solutions roup and speciali ing in the manufacture
and marketing of resins and derivatives.
VA: stands for World Vinyl Analysis of IHS Markit Chemical World Analysis - Vinyls.
b) Executive Summary
This summary does not purport to contain all the information that may be relevant for making investment decisions
regarding the securities mentioned herein. Investors should therefore read the whole Annual Report, inGuding financiai
information and related notes before making an investment decision. This summary has been prepared in accordance
with and sub ect to the detailed information and financial statements contained in this Annual Report. It is recommended
that special attention be paid to the Risk Factors section of this Report in order to assess an investment decision in
the securities issued by Orbia (See section 5"Capital Markets", item 6, "Stock Market Performance of this Annual
Report).
The Company publishes its financial statements in Dollars. Unless othervvise specified, references in this Annual Report
to $. Dollars or dollars shall be understood in United States dollars, and references to Peso or Pesos shall be
understood in Mexican pesos.
The audited consolidated financial statements as of December 31, 2021, 2020, and 2019 and for the yearsthen ended
have been prepared in accordance with IFRS. The accounting standards comprise various provisions known as IAS
(International Accounting Standard), IFRIC (International Financial Reporting Interpretations Committee) and SIC
(Standard Interpretation Committee).
The figures included in this Annual Report have been rounded to millions of dollars (except as otherwise indicated),
whereas the figures presented in the Company s financial statements that form part of this Annual Report have been
rounded to thousands of dollars (unless othervvise indicated) for convenience ofpresentation. The percentage figures in
this Annual Report have not, in all cases, been calculated based on those rounded figures, but instead are based on the
amounts before rounding. For this reason, the percentage figures in this Annual RepoR may vary from those obtained
by making the same caiculations using the figures in the financial statements. Certain figures shown as totals in certain
tables may not be the arithmetic sum of the figures preceding it, as a result of rounding.
Attachment I: Description of the Applicant Company Page 16 of 204
Attachment 1_Description of the Applicant Company
This Annual Report includes forvvard-looking statements. Such statements are sub ect to certain known andunknown
risks, uncertainties and other factors, some of which are beyond the issuers control, and could cause the results,
perfortnance or achievements expressed or implied in such forvvard-looking statements to differ materially from actual
results. Forward-looking statements feature terms such as Considers, expects, torecasts, pro ects, plans.
estimates, anticipates, and other similar expressions and are contained, among others, in the 'Execufive Summary, "
"Risk Factors," "Discussion and Analysis of FinancialPosition and Operating Results by ManagemenP' and "Business
Overview" sections.
As a result of the new strategy and global reorgani 8tion undertaken by Orbia, and the need to re-launch anidentity and
image consistent with the mission, vision, philosophy and worldwide presence of the Company,on August 26, 2019, the
Extraordinary eneral Shareholders Meeting of Mexichem, S.A.B. de C.V., decidedto approve the change of its corporate
name to ORBIA ADVANCE CORPORATION, S.A.B. de C.V., as such, the investing public should consider that for the
purposes of this Annual Report, the new corporate name is used even for events, information, stock quotes, and
circumstances that occurred before August 26, 2019.
1. The Company
Orbia is a Mexican shareholding business corporation, domiciled in Mexico City. Its main address is Avenida Paseo de la
Reforma 483, piso 47, Colonia Cuauht moc, Alcald e Cuauht moc, Ciudad de M xico, C digo Postal 06500. Mexico.
Driven by purpose and unified by values, Orbia chooses to work on the toughest challenges from field to table, ground
to home, mine to market and lab to everyday life, we rely on our collective ingenuity and our integrated suppiy chain to
transform basic and advanced materials into greener, smarter, more efficient solutions.
The Orbia businesses and affiliated commercial brands have a collective focus on ensuring food security, reducing water
scarcily, connecting communities to data infrastructure, reinventing the future of cities and homes and expanding access
to health and wellness with basic and advanced materials. The Company s business groups are Precision Agriculture,
Building Infrastructure, Fluorinated Solutions, Polymer Solutions and Data Communications that collectively seek
human-centered solutions for global challenges. Orbia has commercial activities in more than 110 countries and
operations in 50, with o�ces in Mexico City, Boston, Amsterdam and Tel Aviv.
The Company� strategy is to 1) harness the power of material, science and innovation to serve customer needs.
address critical wortd problems, and provide sustainability solutions 2) invest in growth, leveraging our uniquely
advantaged positions to bring differentiated and value-added solutions to market 3) maximi e the value of integration
across Orbia and the value chains in which we participate and 4) create value as good stewards of capital and
disciplined operators.
Each business group is discussed in more detail below:
i) Polymer Solutions (Vestolit and Alphagary, represented 39% of Orbia s sales in 2021). Polymer Solutions is as
universal and dynamic as the materials it produces. It focuses on the production of general and special PVC
resins and other vinyl polymers with a wide variety of applications, generating solutions that support the daily
lives of its customers such as pipes, cables, floors, auto parts, appliances, clothing, packaging and medical
devices.
ii) Building and Infrastructure (Wavin, represented 33% of Orbias sales in 2021). This Business roup is
redefining today 5 pipe and fittings industry by creating innovative solutions with longer life and less installation
work. This group, with Gients on five continents, also devetops sustainabte technologies for water management
systems, as well as systems for heating and cooling water in homes.
iii) Precision Agriculture (Netafim, represented 13% of Orbias sales in 2021). Precision Agriculture helps the
world to grow more with less. Precision Agriculture s cutting-edge digital fartning technologies, services and
irrigation systems enable farmers to achieve significantly higher yields and bettervquality food while using less
water, fertiliCer and other inputs. By helping farmers grow more with less, Precision Agriculture enables farmers
around the world to feed the ptanet more e�ciently and sustainably.
iv) Data Communications (Dura-Line, represented 11% of Orbia s sales in 2021). Data Communications operates
under the belief that every organi ation, every community, and every inhabitant on the planet deserves the
chance to benefit to the fullest from modem technology. The Company annuaily produces more than 400 million
meters of essential and innovative infrastructure, including conduit, FuturePath, cables-in-conduit and
accessories, which create the physical pathways for fiber optics and other network technologies that connect
Attachment 1: Description of the Applicant Company Page 17 of 204
Attachment 1_Description of the Applicant Company
cities, homes and people. Data Communications is the world leader in the manufacture and distribu6on of such
products in a highiy dynamic industry. Data Communications is the world leader in conduit and a leading
company in HDPE based products for cable and fiber optics, as well as pressuri ed pipes from natural gas and
other solutions.
v) Fluorinated Solutions (Koura, represented 8% of Orbias sales in 2021). Fluorinated Solutions provides
products, technologies and other applications of fluorinated materials that support modem life in countless
ways. With the world s largest fluorite mine, solid knowledge and vast production experience, this group
develops value-added chemicals, as well as propellants and advanced materials used in a wide range of
applications, inGuding automotive, infrastructure, health and medicine, HVAC and food cold chain.
For more inlormafion on market shares see Section 2, "The Issuer'; item b, "Business Description" for each business
group, of this Annual Report.
In 2021, Orbia s net revenues of $8,783 million increased 37% as compared to 2020. Primary drivers of the year over
year increase included high PVC prices in Polymer Solutions and higher demand in Building Infrastructure.
In 2021, Orbias EBITDA of $2,047 million increased 55% as compared to 2020 and EBITDA margin increased
approximately 280 basis points to 23.3%. The increase in EBITDA was largely driven by Polymer Solutions and Building
Infrastructure.
In 2020, Orbia s net sales were $6,420 million. Revenue decreased by 8% from ihe previous fiscal year due to the
adverse impact of the COVID-19 pandemic, mainly in the second quarter, which was not fully compensated by the strong
recovery in the second half.
In 2020, EBITDA was $1,318 million, a decrease of 3% from 2019 due to the adverse impact of the COVID-19 pandemic.
This impact was mitigated by the sustained recoveryduring the last half of the year, led by Polymer Solutions and Bullding
Infrastructure, complemented by costmanagement initiatives in all the businesses. EBITDA margin increased 100 basis
points to 20.5%.
In 2019, Orbia s net revenues of $6,987 million decreased by 3% as compared to 2020.The decrease was driven
primarily by challenging market conditions in Polymer Solutions, which caused lower prices for caustic soda and PVC.
lower sales in Building Infrastructureand Data Communications, and Fluorinated Solutions being affected by illegal
imports of refrigerant gases to Europe.
The 2019 EBITDA was $1,365 million, 2% lower than that achieved in 2018, due to a reduction in sales, partially offset
by a better product mix in both Data Communications and Precision Agriculture and lower raw material costs. In 2019,
the EBITDA margin was 19.5%, or 14 basis points better than the level achieved in 2018.
The following graphs show the breakdown of the percentage share by business group in total sales for the year 2021,
after inter-company eliminations within Orbia.
Sales by Business Group 2021
Holdfna. 2.5%
Eliminations.
Precision
Aarlcukure, 12.8%
Data
Communicattons.
11.3%
Buildina &
InfrasWcture,
33.3%
Polvmer Solutions.
39.1%
Fluorinated
Solutions, 8.5%
Attachment I: Desc�iption of the Applicant Company Page 18 of 204
Attachment 1_Description of the Applicant Company
Year Ended 31" December.
Sales �'�
Business aroup 2021 2020 2019
PolymerSolutions 3,438 2,171 2,334
Building InfrastruGure 2,922 2,077 2,239
Dala Communications 994 732 749
Precision Agnculture 1,126 972 1,063
Fluorinaled Solulions 744 698 805
Controller 215 184 97
Elimina6ons (656) (408) (300)
Total Orbia Sales 8,783 6,420 6,987
(1) Figures in millions
The products manufactured and marketed by Orbia s five business groups hold leading market positions in the markets
of countries where the Company has a presence.
2. Select Financial Information
The consolidated financial statements have been prepared based on the International Financial Reporting Standards
(IFRS) or IFRS (Intemational Financial Reporting Standards, for its acronym in Engtish) and have been prepared on the
basis of historical cost, except for the revaluation of certain long-tertn assets and financial instruments that are valued
at their fair values.
The following tables present selected financial informa6on of Orbia for each of the periods indicated. This Information
should be read together with the Company s audited financial statements as of December 31, 2021, 2020, and 2019,
including the related disGosures, that are attached to this Report.
Attachment I: Description of the Applicant Company Page 19 of 204
Attachment 1_Description of the Applicant Company
Consolidated stetements of income
(Figures in millfons of US Dollars)
Continuous operations:
Net sales
Cost of sales
ross profit
Selling and devetopment expenses
Administralive expenses
Other cosls, net
Exchange gain
Exchangeloss
Interest expense
Interest income
Change in fair value of redeemable non-controlling interest
Monetary position profit
Participalion in the results of associates
Inwme before income taxes
Income taues
Income from continuing operations
discontinued operations:
Income (loss) from discontinued operalions, Net
Consolidated net income for the year
Consolidated net income for the year:
Conlrolling interest
Noncantrolling interest
Continuous operaUons:
Eamings per share of the conVolling interest
eighted average numberof shares outsWnding
2021
8,783
6,156
2,627
573
600
6
(�B)
110
248
(16)
28
4
��)
1,154
381
773
772
6,987
5,114
7,873
539
468
43
(49)
68
272
(14)
18
(4)
533
206
327
327
657 195 207
115 124 120
772 319 327
$0.33 $0.10 $0.10
1.992,657,096 2,024,791,839 2,067,362,601
2020
6,420
4,651
1,769
507
508
33
(102)
104
239
(�a)
10
1
(�)
479
151
328
(10)
319
2079
Attachment I: Description of the Applicant Company Page 20 of 204
Attachment 1_Description of the Applicant Company
Cansolidated statements of tinancial positlon As of December 31:
(Figures In mlllions of US dollars) 2021 2020 2019
Assets
Cunentasseu:
Cash and cash equivalenfs $782 $875 $586
Accounts receivable, net 1,595 1,325 1,352
Accounls receivable from related paAies 1 5 5
Inventories, Net 1,292 861 834
Advance paymenls 50 60 65
Derivative financial instruments 3 20 0
Assets held for sale 3 10 9
Total curtent assets 3,724 3,156 2,852
Non<urrent assets:
Property, machinery and equipment, Net 3,051 3,186 3,349
Rightof-use assels 346 323 337
Investmenl in shares of associates 40 39 3. 4
Olher assels. Net 104 69 89
deferred taxes 174 200 126
Emptoyee benefit asset 17 13 14
Intangible assets, Net 1,617 1,734 1,766
oodwill 1,514 1,491 1,492
Total noncurrent assets 6,862 7,055 7,205
Totalassets 10,587 10,211 10,057
Liabilities and stockholders equity
Cunent Ifabilides:
Bank loans and current portion of long-tertn debt 240 495 322
Providers 1,046 788 679
Letters of aedit lo suppliers 459 538 585
Accounts payable ta related paAies 1 1 101
Other accounls payable and accrued liabilities 521 467 478
dividends payable 1 3 134
Provisions 29 33 52
Employee benefits 226 160 128
ShoA-term lease liabilities 86 82 78
Derivative finandal instruments 34 14 13
Liabilities associated with assets held for sale - 6 6
Total current liabilities 2,643 2,588 2,577
Attachment I: Description of the Applicant Company Page 21 of 204
Attachment 1_Description of the Applicant Company
Consolidated statements of flna�clal positlon As of December 31:
(Ffgures in millions of US dollars) 2021 2020 2079
Non-current Ifabilitles:
Bank loans and long-tertn debt 3,280 3,131 3,129
Employee benefils 221 274 229
Longterm provisions 17 21 -
Other long-lerm liabilities 41 31 36
Redeemable non-controlling interest 316 274 264
Derivative financial instruments 17 95 67
defened taxes 318 314 335
Long-term finance leases 281 263 267
Long-term income tax 49 42 35
ToUI non-current liabili8es 4,559 4,444 4,385
Totallfabilities 7,782 7,032 6,963
Stockholders equity:
Conlribuled capital
Social capital 256 256 256
Premium on issuance of shares 1,475 1,475 1,475
Update of share capital 24 24 24
1,755 1,755 1,755
Eamed Capital
Accumulated utilities
Redeemable non-controlling inlerest
Reserve for acquisilion of own shares
Other comprehensive income
Total controlling fnterest
Total non-controlling interest
Total Stockholders Equlty
Total liabilities and stockholders equity
966
(241)
851
(594)
981
2,737
668
3,404
i 0,587
1,108
(227)
400
(543)
738
2,493
687
3,180
10,211
1,059
(227)
296
(508)
620
2,375
719
3,094
70,057
Financial indicators
(Figures In millions of US dollars)
Indicators
Investments in property, plant and equipment
Depreciation and amorti ation for the year
EBITDA
Accounts receivable tumover (days)
Average supplier payment tertn (days)
Inventory tumover (days)
2021
286
598
2,047
48
61
63
2020
204
598
1,318
53
61
66
2018
261
542
1,365
51
48
60
Attachment I: Description of the Applicant Company Page 22 of 204
Attachment 1_Description of the Applicant Company
3. Information on the performance of the securities issued by O►bia in the stock market
Dunng the last three fiscal years inGuded in this Annual Report, ORBIA' shares have been part of the BMV s Price and
Quotation Index ( IPC ). Due to the significant dady trading volume of the Company s shares in the Mexican stock
market, as of March 2022, the shares remain in the HI HLY TRADED category. (See section 5, Equity Market item b.
Performance of shares in the Stock Market , of this Annual Report).
Additionally, ORBIA* shares are part of relevant indices such as
Sustainability Index of the Mexican Stock Exchange
FTSE4 ood Emerging Markets Sustainability Index
S P/BMV-INDU RT
S P/BMV-INDU
S P/BMV-CONST RT
S P/BMV IRT MidCap
S P/BMV IRT CompMx
S P/BMV IRT
S P/BMV IPC MidCap
S P/BMV IPC CompMx
S P/BMV IPC
S P/BMV INMEX
S P/BMV DIBOL
S P/BMV DDBOL
MSCI EM
BURSA OPTIMO RT
4. Outstanding events in the period 2021-2019.
2021:
• On January 7, 2021, Orbia announced that, as it had reported on several occasions, in the ordinary course of
business, the Company continually explores opportunities to create value for its shareholders, including potential
alliances, mergers, acquisitions, sales and other strategic transaclions. Accordingly, Orbia evaluated value creation
opportunities, including the possible sale and/or strategic alliances in relation to its Polymer Solutions (Vinyl
Business). Orbia did not enter into any binding contract to carry out any specific transaction and has no current
plans to do so. '
• In early 2021, Orbia announced a partnership with the Resilient Cities Network (R-Cities), the world s leading
network of ci6es. Through the Building Infrastructure, Precision Agriculture and Data Communications groups,
Orbia will work with R-Cities members to develop innovative solutions to current challenges such as transportation
infrastructure, water supply, urban food systems and connectivity, which can improve the quality of urban life. These
initiatives will contribute to the Company s progress towards three Sustainable Development oals.
• On January 19, 2021, Orbia announced the appointment of Sameer S. Bharadwa as the new eneral Director
effective February 1, 2021, after Daniel Mart �e -Valle resigned from said position by mutual agreement with the
Board of Directors. Management.
• On February 25, 2021, Orbia informed the investing public that CAPEX would be belween $350 to 400 million for
the year.
• On March 15, 2021, Orbia reported that Precision Agriculture signed a definitive agreement for the acquisition of
akon Horticultural Pro ects, the Dutch leader in turnkey greenhouse pro ects. The acquisition is synergistic,
combining the global presence and expertise of Precision Agriculture and akon s greenhouse technology. akon
brings unique experience in all aspects of greenhouse pro ect execution, greenhouse manufacturing capabilities
and a proven track record in key verticals.
• In Apnl 2021, the Company entered into an agreement to purchase all of the shares of akon Holding B.V and
akon S.p. .o ( akon).
• On May 6, 2021, Orbia Advance Corporation, S.A.B. of C.V. carried out the issuance and placement of Bonds
Linked to Sustainability in the intemational capital markets: it issued $600 million dollars in senior notes maturing in
2026 (5 years) at an annual rate of 1.875%, and $500 miilion dollars in senior notes maturing in 2031 (10 years) at
Attachment I: Description of the Applicant Company Page 23 of 204
Attachment 1_Description of the Applicant Company
an annual rate of 2.875%. The issue received a Baa3 credit rating from Moody s, BBB- from S P and BBB from
Fitch Ratings.
• Orbia applied the resources obtained to prepay existing debt and for general corporate purposes. With this, Orbia s
debt profile improved significantly by extending the average maturity of the Company s credit liabilities l0 14 years.
with no significant maturities before 2026.
• On May 13, 2021, Orbia announced the acquisition of a maority stake in Shakun Polymers Private Limited
( Shakun ), a private, family-owned company that is a market leader in the production of compounds for the wire
and cable markets in the Indian subcontinent, Middle East, Southeast Asia and Africa. The acquisition took place
on June 22, 2021. Shakun s product development focuses on halogen-free flame retardant compounds and PVC-
based compounds for power and data cables. In addition, Shakun s semiconductive and cross-linkable compounds
extend Alphagary s product portfolio and offer a plattorm for growth to meet customer requirements, which should
bring synergies to the operations of the Polymer Solutions group. Orbia has fully consolidated Shakun s results into
the Polymer Solutions business group.
• On May 26, 2021, the Company made an advance payment of $328 million of its $70 million issuance of Senior
Notes, which would otherwise mature on September 19, 2022. These notes paid an annual interest rate of 4.875%
in semi-annual installments.
• On June 10, 2021, Orbia made the total early amorti ation of the ORBIA 12 Stock Certificates (formerly MEXCHEM
12 ) dated March 21, 2012. The ea�ly amorti ation price was $3,068,891,451.23 M.N.
• On July 21, 2021, at the Issuers eneral Ordinary Shareholders Meeting, the Board of Directors accepted the
resignation of the Director, Anil Menon, and agreed to appoint Mihir A. Desai, a prominent economist from Brown
University and Harvard Universiry, to replace him.
• On August 23, 2021, Orbia announced the appointment of James P. Kelly as Senior Vice President of Finance
(Chief Financial O�cer). Mr. Kelly commenced his duties at Orbia on August 30, 2021, and is located at Orbias
corporate headquarters in Boston, Massachusetts. Mr. Kelly replaced Edgardo uillermos Carlos, who announced
his resignation on June 17, 2021.
• On August 23, 2021, Orbia reported that it made the first issuance of Euro Commercial Paper for an amount of 30
million (thirty million euros), through the placement of promissory notes, at a cost of 0.35%, with a maturity date up
to September 23, 2021. The notes were issued under the Euro Commercial Paper Program established by Orbia
on June 2, 2021, for an amount of up to 750 million (seven hundred and fifty million Euros) with issues that will be
valid for less than one year and will not be listed on any stock exchange (the Program ).
• Orbia carried out the repurchase of shares for an amount of $37 million. In accordance wilh the approval granted
by its shareholders, Orbia atso cancelled 90 million treasury shares.
• On September 21, 2021, Orbia compteted the prepayment of the remainder of its senior note of $750 million due in
2022.
• On November 1, 2021, Orbia s Fluorinated Solutions business acquired Silatronix, a Madison, Wisconsin-based
Company. Silatronix has expertise in fluorosilane additives for Lithium-ion batteries and has an industry-wide
reputation for developing innovative solutions that deliver improved battery safety and performance in a range of
applications, from electric vehicles to stationary, grid-scale storage.
2020:
• On January 10, 2020, the Company informed the investing public that, as part of its strategy, it continuously seeks
business oppoRunities, as well as options for acquisitions, sales, mergers and any other financial transactions that
allow it to maximi e shareholder value. In this context, the Company announced that it was in the process of
analy ing divestiture options or strategicalliances with third parties for its Polymer Solutions business, without there
being certainty or approval on the comple6on of any transaction at the time.
• On March 5, 2020, the Company notified its agent bank with which it had entered into a$1.5 billion Revolving Line
of Credit agreement on June 21, 2019, that the line of credit would be reduced by $500 million, leaving a remaining
available balance of $1 billion. The revolving line of credit bears monthly interest at LIBOR plus 1.05%. The loan
principal is repayable in a single installment upon maturity on June 21, 2024. On March 27, 2020, the Entity drew
down the remaining full amount of the available line of credit, which was repaid during 2020 as follows: $400 million
on September 30, $350 million on October 30, $175 million on November 30 and $ 75 million on December 30.
• In March 2020, the World Health Organi ation ( WHO ) declared Coronavirus disease ( COVID-19 ) a global
pandemic. Orbia took comprehensive measures to protect employees, customers and communities from the risks
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Attachment 1_Description of the Applicant Company
associated with the COVID-19 pandemic, including those summari ed below:
• It maintained strict health and safety measures at all its operating sites.
• It introduced staggered back-to-work protocols, when applicable, for essential sites and facilities_
• It continued restricting all non-essential business travel, as well as promoting remote working for a large
section of employees at a global level.
• It continued using digital tools to work e�ciently and drove innovation while improving digital infrastructure
to adapt, increase volume and satisiy customer needs.
• It increased oniine training and leaming, while extending remote medical support and healthcare access to
all employees.
• It implemented the employee assistance program in certain regions to offer medical and psychological
support, which will continue after the COVID-19 pandemic.
The ma ority of Orbia s facilities and plants remained in operation through the pandemic, and the supply chain was
practically unaffected. The Company also adapted its production processes, streamlining prototype creation penods
to supply essential medical equipment and materials, including the thousands of inhalers that use its propellants or
adaptable critical care equipment, rapid COVID-19 test devices, sanitation tents and health evaluations as well as
medical grade personal protective equipment manufactured with its plastics.
The most significant effects on Orbia S financial perfortnance included a decrease in sales resulting from a deGine
in demand mainly during the months of April and May 2020. Orbia also made use of lines of credit as precautionary
measures in the face of the unceRainty resulting from the COVID-19 emergency.
• On May 29, 2020, Orbia informed the investing pubiic that, due to the impact of the COVID-19 pandemicon the world
economy and capital markets, it had decided to pause efforts related to a possible divestitureor other strategic option
for its Polymer Solutions business. The Company stated that it had decided to wait for a stable environment that
would allow it to maximi e its shareholder value in a potential transaction, adding that the Company believes that
Polymer Solutions is a solid business with aunique global position and strong cash flow generation and that will
continue to drive its sustainable and profitable growth.
• On September 16, 2020, the Company set up a U.K. Commercial Paper Program for 300 million PoundsSterling
through the issuance of promissory notes with the Bank of England and Her Ma esty s Treasury (HM Treasury] under
the Covid Corporate Financing Facility. These promissory notes expired on May 18, 2021 the annual cost of the
equivalent line in US dollars was 0.74%, and they were not listed on any stock exchange. The Company gained
access to this financing option offered by the Bank of England dunng the COVID-19 pandemic due to its operations
and presence in the United Kingdom. This trade paper program reduced the Company s overall cost of financing
a�d the uncertainty caused by the pandemic.
• On November 18, 2020, Orbia completed its first corporate venture capital transacUo� through an investment in
SeeTree, a leading start-up in the agricultural technotogy sector with a focus on tree cultivation. SeeTree uses
military grade telecommunications, surtace sensors, artificial intelligence and machine learning in an integrated
manner to prevent pests in trees and to maximi e productivity at a lowcost. Preasion Agriculture is partnering with
SeeTree to incorporate the company s advanced technotogy into its solutions offenng, This investment represents
a significant step for Orbia and Precision Agriculture towards driving the development of conscious and profitable
agriculture.
• On December 31, 2020, the Company recorded a reserve of $25 million in connection with the investigation of
Vestolit mbH by the European Union competition authorities. On January 15, 2021, a fine of 22.367 million was
paid to the European Union competition authorities, putting an end to the matter.
• In April 2020, to better enable operational and financial decision making and analysis, ihe Company redefined its
business group structure from Vinyl, Fluor and Fluent, to Budding and Infrastructure, Data Communications,
Precision Agriculture, Fluorinated Solutions and Polymer Solutions.
2019:
• On August 26, 2019, at the Company� Shareholder s Meeting, the Shareholder s approved the change of the
Company s corporate name to Orbia Advance Corporation, S.A.B. de C.V. to reflect the new strategy and global
reorgani ation and restructuring undertakenby the Company, and to align its image in accordance with its mission,
vision and philosophy.
• On June 24, 2019, the Company informed the investing public that it had signed the renewal of itsrevolving credit
line for $1,500 million dollars, with a 5-year maturity and upgrading different clauses and conditions in line with its
investment grade rating based on the Standard Poor S ratings ( BBB- global scale and MXAA/MXA-1 national
scale), Fitch Ratings ( BBB global scale and AA (mex) hational scale) and Moody s( Baa3 global scale). The
revolving credit can be used for anycompany purpose, including acquisitions, debt refinancing and the financing of
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Attachment 1_Description of the Applicant Company
commercial transactions, among others. This arrangement replaced a 2014 arrangement with a term of 5 years with
a syndicate of 10 of the most globally renowned banks.
5. Subsequent events (2022)
• On February 1, 2022, Orbia s Building and Infrastructure business, Wavin, acquired 67% of the shares of Vectus
Industries Limited Vectus , a privately held manufacturer of plumbing and drainage pipes and the ma�lcet leader
in water storage tanks in India for $132 million paid in $108 million of cash and $24 million of other consideration
at closing, sub ect to customary working capital and net indebtedness ad ustments.
With this acquisition, Orbia s Building and Infrastructure businesses will operate at the forefront of India s quickly
growing water management industry, supplying customers in the residential, commercial, industrial, infrastructure
and agncultural sectors.
The Company began consolidating Vectus s results as of February 1, 2022.
c) Risk Factors
When deciding whether to invest in securities issued by Orbia, investors must carefuliy consider, analy e, and evaluate
all the infortnation contained in this Annual Report, and in particular, the risk factors described below, which could have
a material adverse effect on Orbia s performance and profitability, its financial situation, or the results of its operatio�s
and its liquidity.
The risks and uncertainties described below are not an exhaustive list. Additional risks and uncertainties of which the
Company s management have no knowledge could also affect business operations. Any of the following risks, should
they arise, could adversely and materially affect the busi�ess, it results of its operations, prospects and financial
condition. In such a case, the market price of the Company s CEBURES (Stock Exchange Certificates, if any are
outstanding), Senior Notes and the shares of ORBIA' may deGine and investors may lose all or part of their investment.
(a) Risk Factors related to Orbia s business
The cyclical nature of the global chemical industry can decrease business results and margins
Some industries in which the Company operates, including the markets in which the Company competes, are cyclical.
Such industnes are sensitive to changes in supply and demand and are affected by the political and economic conditions
prevailing in the different countries and regions of the worid in Orbia has a presence. This cyclical trendcan reduce the
Company s net sales and margins, especially:
• Unfavorable economic changes in business and the general economy may cause demand for the Company s
products to fail particularly those in the residential, commercial or industrial construction industry being
strongly tied to the stability or instability that prevails in each country
• Considering the competitive environment in which Orbia operates, lower demand can put pressure onthe prices
of its products
• The market dynamics of supply and demand for both its products and its raw materials, and the otherraw
materials that affect them, may result in fluctuations in the prices of some or ali of its products or its raw
materials, which could affect its sales or margins
Due to the cyclical nature of the global chemical industry, historically the intemational chemical market hasexperienced
changmg penods of limited suppiy, which has caused prices to increase and profit margins to increase, followed by an
expansion of production capacity, resulting in oversupply with lower prices and profit margins. Orbia sets prices for the
products the Company sells based on internalional market prices. The chemical industries in Europe and Latin America
have become increasingly integrated with the global chemical industry for a variety of reasons, inGuding increased
demand and consumption of chemicals in these regions, as well as the continued integration of regional and global
product markets. The Issuer s net sales and gross margins are tied to global industry conditions that it cannot controi.
The Company is particuiarly sensitive to the economic cycles that affect the construction, infrastructure, agricultural and
automotive industries.
Throughout history, demand has been vulnerable to such circumstances. This vulnerability can lead to significant
changes in the Issuers quarterly operating results or its annual results, limiting its ability to forecast its operating
performance, cash flows and financial position.
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Attachment 1_Description of the Applicant Company
The Company's operations are heavily dependent on the energy and petrochemlcal industries.
The energy and petrochemical industries, including the markets in which the Company operates, are cyclical and have
historically undergone periods of slowdown and sometimes recession. The demand for some of its products and
services. as well as the supply of some of its raw materials depend on the level of investment by companies in the
energy industry, which in turn depends in part on the overall price levels of oil, natural gas and other energy sources.
Oil pnces have been highly volatile in recent years. A continued decline in its customers investments in this industry,
whether due to a decrease in oil or natural gas prices, could cause delays in its customers pro ects, and thus demand
for some of its products and services or a lack of supply of some of the raw materials and cause pressure on the
expected prices of its products or costs of its raw materials, which in tum could have a material adverse effect on Orbia s
operating results, cash flows and financial position.
Some of Orbia s customers or suppliers also depend on oil and natural gas production levels. Interruptions or decreases
in the production of such supplies, due to various circumstances beyond the Company s control, including adverse
weather conditions, accidents, decreased access to the financial system, labor contingencies, work stoppages, stnkes,
or others, may cause delays in customers investment pro ects or increases in the production costs of it s the Company s
raw materials which may impact the Company 9 results from operations, cash flows and financial position.
The Company's Inabllity to meet market needs due to lack of development of new pioducts, pioduction
technologles, access to new techno/ogies, or development of substitutes could adversely affect its compefitive
positfon.
The markets for many of the products produced by the Company require continuous improvements in quality and
pertormance. To remain competitive, the Company must develop and market products that meet market needs in a
timely manner. Additionally, rapid changes in the marketplace may shorten the life cycle of the Company s existing
products, thus impairing the Company s ability to recover its investments in those products. If the Company is unable
to keep pace with technological improvements and market demand, its operating results and financial position could be
adversely and significantly affected.
In addition, development of new technologies could result in the creation of new products or raw materials that will
replace those we currenUy produce or use. If the Company is unable to compete with such new products or access new
needed raw materials, its resuits of operations could be adversely and materialiy affected.
The Issuer s success in the industries in which it operates depends largely on improvements in the products it develops,
implements and that are accepted in the martcetplace. its ability to adapt quickly and to develop new products and
technologies that can be updated according to the evolution of the industry and to offer reasonable pnces to its
customers will determine its competitiveness within the markets in which it operate and to this effect the Company
invested in research and development activities. However, competitors may develop disruptive products or technologies
that are superior, or they may develop more efficient or effective methods for providing related products and services,
or they may adapt more quickly than the Company to new products or related technologies or changing customer
demands. If Orbia s products and technologies are not able to gain market acceptance because it fails to innovate them
or because its competitors offer more attractive products, this may adversely affect its business, financial position and
operating results.
The Company's business is subject to risks generally assocfated wlth lnternational commercial operaUons and
Its net earnings and sa/es could 6e adversely affected by the economic conditions and outlook in the countrfes
in which we operate
Orbia markets its products in more than 110 countries. The Company participates in manufacturing and other
commercial activities on six continents. As a result, the Company is, and will continue to be, sub ect to the risks generally
associated with international manufacturing and distribution, the adverse economic conditions and other political, social
and regulatory conditions in the countries where it conducts business that may impact the demand for its products and,
ultimately, its net earnings and sales, including:
• overnment regulations on manufacturing and/or foreign investment activities
• Modifications to policies on customs or trade tariffs on import or export from and to countries
• Changes in social, political and economic conditions
• Freight delays
• Blackouts or shortages of electricity and other public services
• Restrictions on currency conversion and volatility in foreign exchange markets
• Restrictions on skilled labor and changes in local working conditions
• Restrictions related to the sale of products, including trademarks, in connection with third party intellectual
property rights
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Attachment 1_Description of the Applicant Company
• Difficulties in compiying with contractual obligations in unsdictions outside of Mexico, as well as m
• collecting accounts abroad
• Environmental regulations
• Tax refortns and other laws and regulations
• Recessionary conditions or negative or slow economic growth rates
• Changes in local or intemational interest rates that affect the exchange rate and
• Austerity measures and reduction or elimination of subsidies and incentives to the industnes in which we
operate.
Some of the countries in which Orbia operates have experienced political and social instability in the past and
interruptions or cessation of operations may occur at any of the production faciiities or distribution nelworks in those
countries. Additionaliy, other potential economic risks include: inflation and monetary policies to support it, high energy
and raw material prices, supply disruptions, global economic deceleration and potential recession in Europe, economic
deceleration ahead of expecta6ons in some markets, volatility in financial markets, the impact of financial and economic
sanctions against Russia, the political uncertainty and geopolitical nsks around the world.
The foregoing factors, as well as govemment regulations applicabie to foreign investment and/or the import, export or
sale of products and market protectionist measures coutd adversely affect sales and operations results, and in the past
have caused distributors, intermediaries and customers to reduce their spending and to delay or stop purchasing
products, which could have an adverse effect on net sales, operating results, and cash flows.
Orbia faces intense compeUUon from other suppliers of simllar products
The markets for Orbia products are highly competitive. The Company generally has no or limited control over the
prevailing pricing on intemational markets of the chemical products it sells that are treated with basic products or raw
materials, such as chlorine, caustic soda, resin and fluorite compounds, and fluorite. The competitiveness of these
products is based on price, performance, product quality, product delivery, and customer service. It is difficult to protect
the Company s market position for many of its basic products by differentiating them by being of standardi ed quality,
and the Company may not be able to pass on the cost and price increases associated with those products to customers.
In many cases, the competiGve environments for its various chemicals may vary significantly at any time, and its ability
to ad ust the product mix based on market conditions may be limited due to inherent restrictions on production processes.
Orbia s competitors include larger companies or those well positioned within intemational chemical markets, induding
those in Europe and Latin America, or companies that have greater competitive advantages due to a combination of
several factors, such as greater access to financial resources, benefits derived from integration and economies of scale,
availabiliry of raw materials at lower costs, diversification and risk management. Its main competitors have received
considerable capital investments, which have enabled them to obtain and maintain a significant market share. Such
situations. as well as increased competition, may have adverse effects on its operating results, cash flow or financial
condition.
Fluctuations in the prices of the principal raw materials, including natural gas, elecUlc power, sulfur, ethane,
ethylene, resins, among others, may adversely a/fect the Company's business and operating results.
In recent years, the prices of electricity, natural gas, sulfur, ethane, ethylene, resins, among other raw materials and
supplies, have experienced significant fluctuations in local and international markets. These fluctuations cause
variations in production and sales costs, which in turn are reflected in the margins of the products the Company
manufactures and markets. In addition, prices of petroleum and petroleum products have been volatile, affecting the
selling price of products such as ethylene, VCM and PVC, as well as their production and sales costs.
Although Orbia generally transfers any price increase in raw matenals to its customers, it is not always possible to do
so, so future fluctuations in the prices of electric power, natural gas, ethane, ethylene and sulfur, resins, among others,
which it uses in manufacturing processes and which have recently experienced volatility, could result in variations in
the cost of the supplies the Company uses to produce its products, while variations in the price of oil could, as they
have done in the past, impact the prices of some of its products, which in turn could negatively affect our operating
results and financial position.
Any intenuptlon in the supp/y of raw materlals could affect Orb7a's operatlons
Orbia s ability to achieve its strategic ob �ctives continues to depend, in a large part, on the successful, timely and cost-
effective acquisition of electric power and raw materials such as natural gas, ethane, ethylene, electricity, VCM, PVC,
Polyethylene and other plastic resins. Currently, the Issuer relies on a limited number of suppliers for the production
and delivery of these supplies. Management cannot ensure the stabiliry of the gas supply, nor the availability of supplies
at reasonable prices or that suppliers will continue to supply them. Therefore, in the event of any interruption,
discontinuance or other disruption in the markets or the supply of raw materials or etectric power, including a substantial
increase in the costs thereof, could adversely affect the Company s financial condition and operating results. Similarly,
a decrease in the supply of certain raw materials, or in the number of raw material suppliers, may result in an increase
in the pnces paid for the supply of these raw materials, in which case the operating results and financial position could
also be adversely affected.
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Attachment 1_Description of the Applicant Company
Pioduction capaclty improvements, maintenance and lnvestment in acqulred companfes, generally requlre
sTgni�cant expenditures and the Company cannot guarantee it will achfeve the expected return on these.
Orbia has recently made significant capital investments related to the maintenance of its production capacities,
environmental protection and safety, worker and facility safety, e�ciency and modemi ation of its plants. For example,
during the years 2021, 2020, and 2019, the Company made investments in assets of $286 mdlion. $204 million, and
$261 million, respectively.
In addition, the Company has acquired or established and plans to continue acquiring or establishing companies or oint
ventures to increase its production capacity, although the current strategy is aimed at organic business growth,
complemented by potential one-off and complementary acquisitions.
For more information on acquisitions, see "Select Financial Information. Establishmenf and acquisition of new
businesses.
Orbia may not be able to obtain the expected retum on its investments if unfavorable conditions arise in its product
maAcets. Decisions regarding the timing or manner in which such investments are executed are based on future
pro ections of market demand and other factors that may be inaccurate, and it may not obtain su�cient resources to
make certain necessary investments, which could have an adverse effect on the Company s operating results, includmg
expenses due to impairment of assets. FuAhermore, the Company may not be able to meet its financing obligations if it
does not obtain the expected retum on its investments.
Current pro ects may not be completed on time or at all due to factors such as the inability to obtain financing, regulatory
changes, lack of compliance or availability of contractors and subcontractors and logistical problems, which could have
a material adverse effect on the operating results of the Company including the impairment of assets,
Orbia is exposed to the risk of possible exproprlation or nationalization of the assets !n some of the countrles
in which it operates.
Orbia is exposed to the potential risk of expropriation or nationali ation of its assets located in the different countries in
which it operates.
Some of the countries in which it operates have been sub ect to volatile political conditions in the recent past and the
Company cannot guarantee that local governments will not impose retroactive changes that could affect its business or
eventually force it to renegotiate existing contracts with such govemments. These events could materially affect the
Company financial position and operating results.
The /ssuer's customer base has a certain degree of dependence on certain large customers and the loss of all
or paR of the business with some important customers may adversely aKect its operating resu/ts
In 2021, Orbia s top ten customers combined accounted for 10.9% of its total net sales. The largest smglecustomer
accounted for 2.1% of the total net in the same year. Because Orbias profitability depends on mamtaining a high-
capacity utili ation rate, the loss of all or a substantial portion of an important customer or end users sales volume could
have a negative effect on its sales or operating results. In the event that any of its ma�tlr customers face financial
difficulties, this could affect the operating results by reducing sales or resulting in the inability to collect accounts and
recover the investment made in its production facilities. In addition, a consolidation of Orbia 9 customers could reduce
net sales and profitabiliry, particularty if one of its most important customers were to be acquired by a company relatedto
any of its competitors.
Aocordingy, any negative financial impact resulting from the loss of sales from Orbia s ma or customers couid adversely
affect the Company s operating results and financial position.
Inabllity to effectively manage growth could adversely affect the Company's business, operaUng resu/ts and
financial position.
As a result of the acquisition of new companies and organic growth, the Issuer s EBITDA, has undergone a growth rate
of up to double digits. In addition, the operating income and cash flows have increased substantially, which provides
the Company s management with flexibility to continue to grow. This has resulted, and will continue to result, in a
significant effort in the Company administrative, operational and financial infrastructure.
The integration of Orbia s new businesses and their operations is a complex and demanding process. Prior to each
acquisition, the acquired companies operated independently, with their own business plans, corporate culture, locations,
employees and systems. Any integration of another business with Orbia g own could involve significant difficuities, costs
and delays, including: (1) de-concentration of the management of day-to-day operations (2) a possible incompatibilily
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Attachment 1_Description of the Applicant Company
of corporate cultures and (3) the inability to achieve planned synergies, in addition to costs and delays in implementing
common systems and processes.
Similarly, the Company believes that additional growth will be required to expand the scope of its operations and the
si e of its customer base. Orbia s success will depend in part on the ability of its key executives to effectively manage
this growlh.
To manage the business and grow effectively, Orbia must continue to improve its operational, financial and
administrative processes, controls, systems and procedures, as well as its reporting systems and procedures. In
addition, hinng new staff will increase costs, which could make it difficult, in the short term, to oHset such expenses
against revenues. If it is unable to manage its growth effectively, expenses will increase more than expected, revenues
may decrease or increase at a slower rate than anticipated, and it may not be able to implement its business strategy,
which could affect its operations, financial position and results.
Orbfa has recenUy made and may make important acquisitions that, if not properly integrated, could adversely
affect its operating iesu/ts
Orbia has recenUy made significant acquisitions, and may consider making additional important acquisitions, to continue
its growth. For more information regarding these acquisitions, see the section Investments made in the last three fiscal
years .
Acquisitions themselves involve risks, including the following:
• Acquired businesses may not achieve the expected results
• Changes in the economic context with a growth expectation within the markets where the acquired
companies are present
. Failure to achieve expected synergies and not achieving the expected savings
• Increases in costs, supplies and energy
. Difficulties encountered in the integration of operations, technologies and control systems
• Possible inability to hire or retain key personnel for acquired opera6ons
• Possible inability to achieve the expected economies of scale
• Unforeseen liabilities
• Exercising minority rights in transactions that are not 100% acquired and
• Unforeseen economic competition and regulatory considerations.
The Company faces, and may face in the future, di�cul6es in the integration of operations, accounting systems and
internet technology systems of some of its acquired companies. If the Company is unable to successfully integrate or
manage the acquired operations, it may not achieve the expected cost savings, increased revenues and levels of
integration necessary to offset the significant expenses associated �nnth the integration of the acquired companies. This
could result in lower profitability or impairment charges.
Orbia is exposed to product risks that could cause harm to thiid parties
The Company may be exposed to risks or damages derived from civil liability before third parties, resulting from the use
of its products, as well as litigation of the resulting udicial process. regardless of whether said products are used in a
manner contrary to what is indicated. instructions. The Company may also be exposed to damages related to the use
of its products in medical-grade applications and for the beverage and food and beverage industries.
Orbia has tailored market standard insurance coverage for this type of product risk. However, the safety measures
taken to prevent product risks and insurance coverage may not be adequate to mitigate the risk of all damages that
may occur, in which case the Company s operating results or its financial condition could be adversely affected.
Impacts related to climate change could result in additional regulatory or legal requlrements, as well as
Investments not foreseen by the Company
The Company has carried out different analyses to determine the degree of vulnerabiliry of its operations vwth the
possible effects of climate change.
The effects of climate change identified within the different areas where it operates or has market share are:
desertification and drought, rising sea levels, changes in rainfall pattems, decreased water availability, deforestation
and disease, all phenomena that could affect operating results and financial position, among other factors, due to the
need for addi6onal investments to adapt operaGons to the new conditions, the increase in the price of supplies and
energy, the closure of affected operations and relocation of suppiiers, protection measures as a result of natural
phenomena (for example: construction of dikes in marine installations, flood or fire protection) and the relocation of
facilities to sites with more favorabie conditions and higher environmental regulatory requirements.
Attachment I: Description of the Applicant Company Page 30 of 204
Attachment 1_Description of the Applicant Company
Natural disasters, production hazards, exheme weather and other events could adversely aKect the Company's
operaUons
Natural disasters, such as storms, hurncanes and earthquakes, could disrupt operations, damage infrastructure or
adversely affect the Company s production plants. In addition, Orbia is vulnerable to acts of vandalism or revolts that
could affect the infrastructure and/or its distribution network. Any of these events could increase its expenses or
investments a�d/or result in a force ma eure event under some of its contracts and consequently affect its operating
results and financial position.
Orbia s operations are sub ect to ha ards such as fires, explosions and other accidents related to the manufacture,
storage and transportation of chemicals. These ha ards can range from personal in ury to loss of life, property damage
and/or destruction of equipment and assets, as weil as environmental damage. A material incident at one of its plants
or storage facilities could result in the temporary suspension of operations and could result in significant compensatory
costs and loss of net sales revenue.
Extreme weather events can also have a serious impact on the Company s logistics. Its production facilities could be
isoiated and be unable to receive or ship products by land or sea. Furthermore, the flow of materials could be interrupted
in places away from the location of the Issuer s productive facilities, but that are strategic for the transport of goods (for
example: closed ports in the USA due to hurricanes or inaccessible borders due to floods in Europe). The
Intergovemmental Panel on Climate Change (IPCC) estimates that extreme weather events will increase in number
and intensity. As a result, Orbia�s operating sites are exposed to hurricanes, cyclones, tropical stortns or other events
derived from climate change, and if they are affected by such events, the Company s operating results and financial
position could be affected.
Orbia has Insured its plants against damage caused by accidents or other similar incidents, as well as indirect damage
resulting therefrom, such as a business interruption. However, if losses are incurred as a result of these events, they
may exceed the limits of the insurance policies, or if they do not exceed them, they may not be fully recovered. Damages
that significantly exceed the limits of insurance policies, damages that cannot be recovered for any reason, even if they
are within the limits of the insurance policies, or were not foreseeable or covered by them, could have a material adverse
effect on operations, operating results, financial position and outlook. In addition, even if the Company receives payment
for insurance policies as a result of a loss, facilities could suffer production interruptions while repairs are being
completed, which could materially and adversely affect the operating results, financial position and outlook
La6or disputes could affect Orbia's operatlng results
At the end of fiscal year 2021, approximately 56% of the Company s employees were sub ect to collective bargaining
agreements with labor unions. Over the past three years, it has had no ma or labor disputes at its plants and has been
able to maintain a positive relationship with the unions. However, it cannot guarantee that there will be no temporary
suspension, nor that a strike will not take place, before, during the term of, or upon expiration of collective bargaining
agreements as a result of political or economic conditions, or for any other reason. In addition, it is unable to estimate
the adverse effects that, if any, such temporary suspensions or strikes woutd have on the Issuer s sales, operating
results or financial position. Any temporary suspension, strike or other labor event could have a material adverse effect
on its activities, operating results or financial position.
0�6ia is a holding company and dces not have signl�cant assets other than the shares in lts subsldlaries; as
a resu/t, Tt may not 6e able to meet lts ob/igations
Orbia is a holding company with no independent operations or substantiai assets other than the net worth of its operating
companies. It is therefore dependent on the operating results of its subsidiaries. The abilily to meet its debt and other
obligations depends on the generation of cash flow from its subsidiaries and their ability to make such cash availabte in
the form of interest payments, debt payments, as dividends or otherwise. Each of its subsidiaries is a separate legal
entity and, under certain circumstances, legal and contractual restrictions may limit its ability to obtain cash from its
subsidiaries. In addition, under Mexican law, Mexican subsidiaries may only pay dividends from retained eamings after
a legal reserve has been created and all losses from prior tax years have been absorbed. In addition, the distribution of
dividends may be taxable unless they are made from a profit and loss account that has already been sub ect to tax. If
it does not receive distributions from its subsidiaries, the Company may be unable to make the required principal and
interest payments on its debt or to pay other obligations. Any adverse change in the financial position or operating
results of its subsidiaries could affect its financial position.
Inability to ralse enough capital to finance acquisiUons oi expanslons could delay or impede the
implementaUon of the Company's business sMategy
The Issuer expects that ihe expansion and continued development of its operations will require significant amounts of
capital to finance investments and operating expenses, inGuding working capital requirements, which may not be
obtained in full or at least not on acceptable terms.
Attachment I: Description of the Applicant Company Page 31 of 204
Attachment 1_Description of the Applicant Company
In addition, its operations may not generate enough cash flow to meet its cash needs, or capital requirements may vary
significanUy from those planned. In such cases, additional funding may be required ahead of schedule, or some of the
new development and expansion plans may be delayed, or the Company may miss market oppoRunities. Future lending
instruments, such as credit lines, may contain restrictive dauses and may require us to pledge assets to secure
payments on such credit lines. The inability to obtain additional capital and/or to obtain it on satisfactory terms may
delay or prevent Orbia s expansion and adversely affect its operating results, cash flow and financial position.
Orbfa Ts subject to certain restrlctive covenants limiting what may or may not be performed by virtue of its
credit agreements, which could limit its future business acfivlties
As of December 31, 2021, the Issuer had cost bearing debt totaling $3,887 million ($3,520 million for purposes of
covenants contained in debt contracts and $367 million in leases). with a series of lines of credit and issuances of
securities in the locai and international markets. Pursuant to the agreements governing long-tertn credit facilities, the
Company is obligated to comply with certain covenants that limit its operations and financial decisions. Compliance �nnth
its obligations under the credit agreements could limit the ability to undertake future acquisitions including future
financing or refinancing of debt, which could have a negative impact on the Company s operations, operating results
and financial position.
The Company's abllTty to sell additional shares in order to ralse capital for the expansion of !ts business wfll
depend, Tn part, on the market prlce of !ts shares, and failure to meet market expectations with respect to its
business could have a negaUve effect on fhe market price of our shares and limit its ablllty to sell them
Orbia 9 ability to self-finance through capital depends, in part, on the market price of its shares, which in tum depends
on multiple market conditions and other factors that could change at any time, including:
• Interest from investors
• Financial development
• Analyst reports regarding us and the economic, political and social environment in Mexico, or the countnes
where it operates
• eneral conditions in the capital and debt markets, which depend largely on the cash flows of its operaUons
• Other factors such as changes in govemment regulations or tax laws
• Judicial or administrative proceedings in any urisdicfion in which the Company operates that could have an
adverse effect on its financial position or income and
The inability to self-finance through capital, due to any of the above circumstances or any other circumstance, may
affect its future plans and pro �cts and may also have a negative impact on its operating results or financial position.
Furthertnore, failure to meet market expectations in terms of our future earnings and cash distributions could adversely
affect the market value of our shares and, as a result, its ability to self-finance through capital. Thus, should the Company
be unable to obtain the necessary capital, its operating results could be adversely affected.
Orbla has hedges to mltigate the risk associated with fluctuatlons Jn interest rates and/or forefgn exchange
rates using swaps.
Orbia is exposed to interest rate risk, because a portion of its debt is at a variable interest rate, as well as foreign
exchange risk, because it has debt and investments in cuRencies other than the Doliar. The Company s vulnerability to
interest rates is primarily concentrated in the Interbank Equilibrium Interest Rate (TIIE) and LIBOR, which are reference
rates used for financial liabilities, whereas the Company s exchange rate exposure is primarily due to debt and
investments denominated in currencies other than the U.S. Dollar. A stress test is used to determine the Company s
exposure to fluctuations in interest rates based on total financial debt linked to floating rates that are not hedged. and
exchange rates based on the amounts of principal debt and investments in assets denominated in currencies other than
the U.S. Dollar. Hedging transactions are regularly evaluated to ensure that they are aligned with interest rates and
related risks thereby guaranteeing the most effective hedging strategy is in place, however the Company cannot
guarantee that.
Had the TIIE and LIBOR interest rates increased 100 basis points in each reporting period and all other variables
remained constant, pre-tax eamings for the years 2021, 2020, and 2019 would have decreased by $1 million, $2 million,
and $4 million, respectively. The Company s exposure to Libor and TIIE interest rates on its long-term loans is
insignificant, since most of the bank loans and long- term are at a fixed interest rate.
Orbia perfortns sensitivity analysis for a 10% increase or decrease in US Dollars, against the relevant foreign currencies.
The sensitivity analysis oniy includes monetary items denominated in a cuRency other than the functional and reporting
currency and ad usts their conversion at the end of the period with a fluctuation of 10%. In this way, by weakening the
foreign currency (other than the Dollar) by 10% with respect to the main currencies, the greatest negative effect in terms
of results in 2021, 2020, and 2019 would have been in euros per ($76) miilion, $107 million, and $123 million,
respectively. Second, the effect would have been in Pesos ($21) million, $20 million, and $24 million for the years 2021,
2020 and 2019, respectively.
Attachment I: Description of the Applicant Company Page 32 of 204
Attachment 7_Description of the Applicant Company
The Company cannot assure that the stress tests and hedges it performs are sufficient to cover possible contingenGes
derived from the stress scenarios considered, or from significant fluctuations in interest rates and exchange rates, which
would adversely affect its financial position and operating results.
In addition, transactions with financial derivatives involve certain nsks other than currency and interest rate nsks, such
as counterparty risk (collection risk), risks posed by unusual transactions in underlying or benchmark assets, and nsks
arising from the need to increase the collateral provided, among others. Such events may results in a matenal adverse
effect to the Company s operating resuits and financial position.
Market practices and documentation of derivative financial instruments in Mexico may differ from those in other
countries. The execution and enforcement of these types of operations depends on the Company s abilily to develop
adequate management and control systems and to hire and retain qualified personnel. These factors could further
increase the risks associated with such operations and, as a result, could have a material adverse effect on Orbia s
operating results and financial position.
The Company may not be able to protect its lntellectua/ property rights
The Company may not be able to prevent third parties from using its patents and trademarks without its authori ation
or from othervvise infringing on its intellectual property rights. The intellectual property laws of the various urisdicGons
in which Orbia operates and the enforcement of such laws by the authorities in such urisdictions may not be efficient,
which may affect the Company s ability to protect its rights over its intellectual property. The Company cannot guarantee
that it will be successful if it tries to enforce its intellectual property rights. Because the Company believes that its patents
and trademarks are one of its competitive advantages, if management is unable to enforce these intellectual property
rights, the business could be adversely and substantially affected. In addition, any legal proceedings to enforce Orbia s
intellectual property rights could be expensive and accordingly could adversely affect the Company s operating results.
The Company employs and develop technologies that may iniringe on certaln thlyd-party intellectual property
rights
Although the Company takes measures to ensure that it does not infringe upon third party intellectual property rights,
management cannot guarantee that Orbia s processes and products do not infringe, or have not infringed at any time,
on the intellectual property rights of third parties. Additionally, the Company cannot guarantee that third parties will not
take any legal action for possible infringement on their intellectual property rights which may be successful.
Any legal action or proceeding by third parties could:
• Take a substantial amount of time to be resolved
• Require the diversion of the attention of technical and administrative personnel, as well as the diversion of
financial resources f to defend the Company against such actions
• Require the development of producls and services that do not violate third party intellectual property rights, or
that adapt to royally schemes or licensing contracts and
• Require the use of any product or process that violates third-party rights to cease.
As a result, if any or all of these events were to occur, Orbia s operating results and financial condition could be adversely
affected.
Hlgher financial compensatlon may be requfred to pay emp/oyees foi technological innovation
In some of the countries in which Orbia operates, inventions conceived by any employee during his or her employment
by a company will be considered an invention service and will belong to the employer, as is the case, for example,
with the Israeti Patent law 5727-1967. Thus, the employee who develops an invention service may be entitled to
receive royai6es derived from the profits generated by the employer as a result of the commerciali ation of said
invention service , unless such employee waives his or her right to receive royalties. Although the Companys
employees generally agree to waive such claims, we may face claims for royalties or other compensation relating to
invention service from employees who do not waive their right. As a result of such Gaims, we would be required to
pay royalties or additional compensation to employees, or be forced to litigate such claims, which could adverseiy affect
our business and operating results.
The Company Is subject to legal and administrative proceedings in certain countrles In whlch we operate, the
resu/ts of whlch could adversely affect !ts buslness
Orbia is the plaintiff or defendant in multiple udicial or administrative proceedings regarding it its routine operations in
various foreign urisdictions. The Company is fully committed to complying with applicable laws and regulations in the
urisdictions in which it operates.
However, in the event that such proceedings are initiated and/or the outcome thereof is not in the Company s interests,
and the Company is unable to protect its interests, Orbia� operations, operating resuits or financial position may be
adversely affected.
Attachment I: Description of the Applicant Company Page 33 of 204
Attachment 1_Description of the Applicant Company
The costs of breach of envlronmental, health and safety laws, as wel/ as any contingencles arising in relatlon
to such laws, may lncrease, adverse/y affecting Orbia's operatJons, operating resu/ts, cash flows or Rnanclal
position.
Orbia produces, distributes and transports ha ardous matenals as part of its operations, which involves risks of leaks
and spills that could potentially affect both people and the environment. The Company also produces, distnbutes and
sells products that are dangerous or have certain levels of global wartning potential that may be restricted in the future.
As a resutt, the Company is sub ect to various laws and regulations relating to environmental protection, health and
safety, among other factors, that govem the generation, storage, handling, use, repair, disposal, transport, emission
and discharge of ha ardous materials on land, in the air or in water, as well as the health and safety of our employees.
In addition, chemical producers are sometimes sub ect to unfavorable trade perceptions as a result of the environmental
impact of their businesses, which could have an adverse effect on the Company s operating results, cash flow and
financiat position.
iven the nature of Orbia s products, the Company is required to obtain pertnits from govemment authorities for certain
operations. The Company cannot guarantee that it has, or will always fully comply with such laws, regulations and
permits. If the Company violates or breach these laws, regulations or pertnits, regulators may fine or othenvise sanction
the company. The Company could also be responsible for any consequences arising from human exposure to
ha ardous substances or other environmental damage.
Environmental protection laws are complex, change frequently, and tend to become stricter over time. Although the
Company has budgeted for the capital requirements and operating expenses necessary to continue to comply with
environmental, health and safety laws, management cannot guarantee that the latter will not change or become stncter
in the future, or that regulations appiied in certain countries or regions will also be applied and/or ad usted in other
countries or regions due to the adoption of international treaties. Subsequent changes in or additions to existing laws
or regulations, or the enforcement or apptication of such laws or regulations, could cause the Company to incur
significant unforeseen capital expenditures, which could affect future profitability or financial position. Therefore, the
Company cannot guarantee that the expense of complying with, or the expenses arising from, stricter or different
interpreta6ons of applicable and future safety, health and environmental laws, as well as the Company s responsibilrties
arising from past or future releases of, or exposure to, ha ardous substances, will not adversely affect Orbia s business,
operating results, cash flow or financial position.
Climate risks
Orbia has been an official sponsor of the Task Force on Climate-related Financial Disclosures (TCFD) since 2019, and
the Company has estabtished ambitious climate commitments to contribute to the decarboni ation of the planet.
In 2019, the Company completed its first climate-focused risk assessment, inGuding 12 sites across 3 business groups
in six countries. The main findings of the analysis were the following
Physical risks: The physical risk of Orbia s priority sites is low to medium. This is due to exposure to weather events
such as cyclones, floods, fires, extreme temperatures and water stress.
The analysis was not limited to physical facilities it also considered the impact on togistics and the flow of raw materials.
As an example of the above, in September 2017, as a result of Hurncane Harvey, certain subsidiaries of the Polymer
Solutions business group declared Force Ma �ure in relation to the supply of all their PVC resin suspensions,
copolymers and emulsions produced in Mexico, Colombia and USA because its main supplier of vinyl chloride (VCM)
and other raw materials had declared Force Ma eure.
arket, technological and regulatory risks: In addition to the direct effects of ineteorological phenomena, other
impacts on the business were analy ed regarding govemment or commercial regulations, new market rules or the
emergence of technologies. Using a 2030 hori on, a greater exposure to these risks were pro ected, with some high
business risks derived from a transition to a low-carbon economy. They are likely to include market pressure to use low-
carbon materials, broader regulation of globat carbon prices, or increases in the cost of resources, primarily electricity
and water by 2030. Higher water stress scenarios, for example, could affect water costs. for the Company s operations.
Such scenarios, in tum, can impact the supply chain or produclion processes from a continuity and cost standpoint.
Orbia has used the results of this analysis to develop specific risk mitigation strategies for its businesses. These plans
include reducing the Company s carbon exposure, which complements the Company s commitment to set science-
based targets for emissions reductions and achieve net- ero operations by 2050.
Attachment I: Description of the Applicant Company Page 34 of 204
Attachment 1_Description of the Applicant Company
/n the event that the Orbfa dces not comp/y with legal provislons regarding the prevention of conuption, brlbery
and money laundering, the Company could be subJect to signlHcant flnes and its reputation and operatlons
could be adversely affected.
The Company operates in several countries and is sub ect to complex regulatory frameworks, enforcement of which is
becoming increasingly stnct. The Issuers corporate govemance practices and the processes it uses to ensure
compliance �nnth the legal provisions to which it is sub ect may be insufficient to prevent violations of applicable laws,
regulations and accounting or corporate governance standards. The Company may be affected by violations of its code
of ethics. its anti-corruption policies and its business conduct protocois, as well as instances of fraudulent conduct and
corrupt or dishonest practices by its employees, contractors or other representatives. Failure to comply with applicable
laws and regulatory measures could damage the Company s reputation, lead us to incur significant fines or penalties
and adversely affect the Company 9 operations, its ability to access the financial markets and, therefore, its financial
position.
The use of socfal networks could adversely affect and impact the Company's reputation
The use of social networking platforms and similar media, including blogs, social nerivorking sites and other forms of
communication via the intemet, which allow individual access to a wide audience and interested persons and their
influence as agents of perception and opinion, has grown at a phenomenal rate worldwide. Inappropriate and/or
unauthon ed use of certain sxial media platforms may result in trademark damage or leakage of information that could
have legal implications, including the improper dissemination and/or disclosure of personal data. In addition, negative
or inaccurate comments or infortnation involving the Company sent through social nelworks couid damage Orbia s
reputation, brand image and goodwill.
Consumers value readily available infortnation about retailers, manufacturers and their assets and services, and often
act on that information without further research, verification or considering its veracity. Easy access to infortnation on
social nehvorking platforms and mobile devices is virtually immediate, as is its impact. Social nelworking platforms and
mobde devices immediately publish the content that their subscribers and participants input, often without filtering or
reviewing the accuracy of content. The opportunities to spread information, including false or inaccurate information,
are virtualiy unlimited. Information that concems Orbia, or that coutd seriousty affect Orbia, may be transmitted through
such platforms and devices at any time. This information could be inaccurate and harmful to the Company and could
damage the business. This damage could be immediate and the Company may not have the opportunity to alter it or
even correct it. These platforms may also be used to disGose trade secrets or put other valuable assets at risk, and in
both cases, damage or affect the Company s business, operating results and financial position.
Changes in information technology could adversely affect the Company' s operations
If Orbia s information systems are unstable or obsolete, this could negatively affect the Company s business by reducing
the flexibility of its customer value propositions or increasing operational complexity. Any such consequences could
have a material adverse effect on the Company s business and operating results.
Orbia's operations could be affected by a failure, lntenuptlon or co//apse of its IT (Informatfon technology)
system
The e�cient execution of Orbia s operations is based on the implementation of IT-related processes and systems, which
are used to effectively manage data, communications, network connectivity and other operational and business
processes. Although the Company constantly improves its IT systems and protect its data with advanced secunty
measures, system errors, interruptions or security breaches, such as computer viruses or theft of information or data.
may occur. These failures, interruptions or collapses could have a material adverse effect on the Company s opera6ng
results or financial position.
Security faflures ln Orbia's informatfon system and techno/ogica/ systems and processes could materially
a/%ct !ts subsidiaries, alflllates, suppliers and customers, as well as resUict or adversely affect access to the
Company's networks and operating systems, or expose the Company to slgnf�cant legal, �nancial, operational
and reputatfonal consequences
The execution of Orbia s buslness requires the use and storage of personally identifiable information (PII) from
customers, employees and business partners. This information may include, but is not limited to, data, names,
addresses, telephone numbers, e-mail addresses, contact preferences, tax identification numbers, and account
payment information. Because of Orbia s profle and the amount of PII Orbia handles in its business, and the amount
of strategic industnal and technological infortnation stored in the Company s different intemal systems, the Company�
vulnerable to cyber-attacks and database infiltration.
The Company requires usage of usernames and passwords in order to access its IT systems. The Company also uses
authentication and encryption technology designed to secure the transmission and storage of data and to restrict access
to data and accounts. These security measures are potentially sub ect to third party failures or human errors, alterations,
incorrect password control or other irregularities. For example. outsiders may attempt to fraudulently persuade
Attachment I: Description of the Applicant Company Page 35 of 204
Attachment 1_Description of the Applicant Company
employees or customers to disGose usemames, passwords or other sensitive information that could be used to gain
access to the Company s IT systems, directly affect the Treasury Department and extract sensitive or confidential
infortnation for illegal transactions or extract information that could expose the Company to the risk of claims of violation
of current eneral Data Protection Regulations ( DPR). E-mails with executable attachments containing malicious
soflware that, due to their complexity, are difficult to block and modify the delivery pattern, could lead to database
infiltration.
Orbia invests a significant amount of resources on network securiry, data encryption and other security measures to
protect its systems and data, but these security measures cannot provide absolute protection. If the Company is victims
of infiltration of its intemal systems and are unable to protect sensitive or strategic data, such infiltration could cause a
material adverse change in the Company s business, rela6onships with business partners and customers, and its
operating results and financiai position.
Cy6er-attacks or other disruptlons to Orbia's nehvork or information systems could have an adverse elfect on
the business
Cyber-attacks and disruptions to networks and systems, including the introduction of computer viruses, malicious code,
denial of service, faulty software and other disruptions or unauthori ed access to company systems, have increased in
frequency, range and impact in recent years. The preventive actions Orbia takes to reduce the risk of cyber incidents
and to protect its network and information may not be enough to stop a massive cyber-attack in the future. The costs
associated with a potential massive cyber- attack on Orbia s systems include increased expenses associated with
strengthening cyber security measures and decreased losses associated with disruption of our services, lawsuits, and
damage to our reputation.
Cyber-attacks or other disruptions to our security nelwork or infortnation systems could cause equipment failure or
disrupt our operations. Such failures, even when they occur over a short period of time, could cause significant losses
or declines in ihe market price of Orbia s shares. In addition, potential losses from cyber-attack events and disruptions
to our network could exceed the Company s insurance coverage. Furthermore, cyber-attacks may lead to the
distribution, without the Company s consent, of valuable financial infortnation and confidential data of our customers
and business, resulting in failures to protect the privacy of our customers and business, which could have adverse
effects on our operating results, reputation or financial position.
Orbla's contractTng model for high-density polyethylene (HOPE) products lnvolves cerialn rlsks related to
customer retentfon, which could have a materlal adverse effect on the Company's financial and business
situatfon
Orbia selis a substantial amount of high-density polyethylene (HDPE) products under short-term contractual orders. In
addition, the Company has long-term contracts, particularly with agreements for voice and data telecommunications
products in the U.S., Europe and India, among others. Most of the Company s agreements contain terms and conditions
relating to pncing, inGuding any type of resin transfer provision, and in general Orbia s customers are not required to
purchase a minimum votume, and contracts can generally be terminated without cause and at short notice. As a result,
customers have the ability to discontinue or substantially reduce the purchase of our products at any time. The loss of
customers representing a significant volume of sales, as well as a significant decrease in customer orders for any
reason, changes in manufacturing practices, transfer of part of the business to competitors, an economic recession or
the inability to adapt services to the needs of our customers, can have a material adverse effect on the Company s
financial position.
The operaUons of the Precision Agriculture, Data Communications and Building 8 Infrastiucture business
groups depend on the agriculture, te/ecommunicatlons and construction industries, iespecNvely
Orbia s Building Infrastructure, Data Communications and Precision Agriculture business groups largely depend on
the viability of the construction, infrastructure, telecommunications and agricuitural industries, respectively. A slowdown
in the growth of these industries in the countries in which Orbia operates, or a negative change in the economic and
demographic factors that influence these industries, could have a material adverse effect on the Company s results of
operations, cash flows and financial position.
Changes ln lnvestment levels ln the voice and data telecommunicaUons industry could affect the pioductfon
and sales of products in Data Communicatlons
The different investments required by telecommunications industry participants to implement fiber optic and broadband
communication systems greatiy influence this industry, including the markets in which Orbia s Data Communications
Business competes. Investment in this industry depends on a variety of factors, including:
• Local and federal regulation on foreign investment in telecommunications
• Consumer demand for fiber optics, broadband and wireless networks for products and services
• Regulatory decisions that limit the installation of new networks and improvements to the existing network
Attachment I: Description of the Applicant Company Page 36 of 204
Attachment 1_Description of the Applicant Company
• The rights of way, and permits from local and state govemments, in the countries where we operate, required
to access the construction of new neNvorks
• The evolution and acceptance of new standards in the industry
• Pressures related to competition in the sector, inctuding pnces
• The annual budget cyGes
• Investments in pnvate company pro �cts and their investment cycles
• The impact on industry consolidation
• Access to financing and the general economic conditions of the market
• Price levels
• Existence, creation or improvement of alternative products, new technologies, etc., and
• Political stability.
The lack of investment in voice and data telecommunications, due to any of these or other factors, could have a material
adverse effect on the Data Communication business group s sales, results of operations and financiai condition.
Piecislon Agrlcultuie's sa/es aie highly dependent on the dynamism of the agricultu�al lndusMy, lncluding
government support to this sector.
The sales of Orbia s Precision Agricufture business are cyGical and depend largely on the need for agricultural
production of irrigated crops which, in tum, depends on many factors, including total global crop production,
profitability of agricultural production, including retum on investment for the end users of products, agricultural
product prices, farm incomes,availability of financing for fartners, govemment subsidies for farmers, govemment
policies and support for agricultural infrastructure, water supply and transport, regular rainfall and regional
climate change. The rend of government support for farms, financial aid and policies regarding the ability to use
water for agricultural irtigation can affect the demand for Orbia s irrigation products and irrigation system
solutions. As farm incomes deGine, producers may postpone investments, including the purchase of our
products, or lookfor less expensive irrigation altematives.
In addition, uncertainty or changes in govemment subsidies, policies and govemment support for agriculture may
adversely affect Precision Agriculture�s business, financial position or operating results.
Conditlons in Isreel could afiect Precision Agriculture's business operations
Precision Agriculture is incorporated under the laws of Israel and its main offices and three of its production plants,
including all manufacturing facilities for drip irrigation products, are located there. Precision Agriculture operations in
Israel depend on imported raw materials and the company also exports a significant amount of its products from this
country. In addition, all its infortnation and data are in Israel. Since the creation of the State of Israel in 1948, there have
been multiple military conflicts in which Israel and surrounding countnes have been involved, including opposing Islamic
military operations, as well as incidents of terrorist acts and other attacks, including the Second Lebanon War during
the summer of 2006 and Israeli military campaigns in a a during December 2008, November 2012 and the summer
of 2014.
Political, economic and security conditions in Israel can directly affect Precision Agriculture s operations. This could be
adversely affected by hostilities involving the State of Israel, including terrorist attacks or any other hostility or threat to
Israel, the interruption or reduction of treaties between Israel and its trading allies, a significant increase in inflation or a
significant reduction in economic and financial conditions in Israel. Any present or future conflict, terrorist attack or
tension within Israel s borders or political instability in the region may disrupt intemational business activities, adversely
affecting Precision Agriculture s business and could damage the Company s financial condition and operating results.
In addition, these military conflicts could cause damage the business s production plants in Israel.
Although Israeli law obliges its govemment to pay the reinstatement value derived from damages caused by terrorist
attacks or acts of war, there can be no assurance that the policy of that government will be maintained, or will be
sufficient, to compensate the Company for all expenses it may incur. In addition, indirect damages may not be covered.
Any loss or damage in which Precision Agriculture has been involved, and which has not been paid by the Israeli
govemment, could have an adverse effect on the Company. Certain countries, as well as certain companies and
organi ations continue or plan to participate in the boycott of Israeli companies, companies with significant operations
in Israel, and others. Current and future boycotts, economic strikes or blockades, restrictive laws, policies or practices
involving Israel or Israeli businesses, or citi ens could adversely affect Precision Agriculture s business, financial
condition or future operating results.
Attachment I: Description of the Applicant Company Page 37 of 204
Attachment 1_Description of the Applicant Company
A decrease in prices or agricultural activity caused by weather or other conditions, crop olseases and naturel
disasters could /ead to a decrease in demand for our products and adversely affect the Preclsion Agrlcultuie
business, Fnancial condition or operating results
The Precision Agnculture business needs fartners to have funds available to buy its products. Crop prices are a factor
in boosting sales of the business s products. Several factors influence crop prices and profitability, including weather,
financial markets and water, as well as other supplies. Weather conditions, especially before the planting season, can
significantly affect the purchasing decisions of consumers of irrigation equipment, pro Acts and services in the locations
in which Precision Agricuiture operates. Natural disasters, such as regional floods, hurricanes or other storms, and
droughts. along with crop diseases, can have significant effects on the demand for seasonal irrigation. Drought
conditions, which generally positively affect the demand for long-term irrigation equipment, can adversely affect demand
if water sources are not avaiiable, govemments impose water restriction policies, or if farms reduce land for cuitivation.
Extreme weather conditions over an extended period of time or consecutive seasons, for example due to climate
change, could reduce the availability of funds for farmers to purchase the Precision Agriculture technology and adversely
affect its business, financial position or operating results.
Orbia's operaUons could be disrupted or a/fected as a result of the key management team's duty to perform
milTtary servlce
Some of the employees in the countries in which we operate are required to report for reserve duty, depending on age
and rank within the armed forces. In addition, they may be called to the active reserve service at any time, in emergency
circumstances for extended periods of time. For example, Precision Agriculture s operations could be interrupted by the
absence, for a significant period, of one or more of its key employees as a result of military service. Thus, any duty of
the management team or key personnel to pertortn military service or to report for active reserve service at any time
could cause disruption to the operation of the business and potentially adversely affect operating results or financial
position.
The activitles of key joint venture partners could have a material adverse effect on the Company' s 6usiness.
In the course of business, Orbia enters into strategic partnerships with third parties.
Specifically, Orbia has a 50:50 strategic alliance oint venture with OxyChem for production of ethylene in a company
called Ingleside Ethylene, LLC located in Ingleside, Texas, US,
Additionally. Orbia owns 80% of the capital stock of its Precision Agriculture business, Netafim, with the remaining 203�,
owned by Kibbut Hat erim. Kibbut Hat erim will retain the remaining 20% of Precision Agriculture s capital stock.
Orbia cannot make any guarantees as to how OxyChem, Kibbut Hat erim, or any of its other strategic partners, may
act in the future which and accordingly, the action of such partners may adversely affect Orbia s business and operating
results.
Orbfa's agreements executed with OxyChem, ethane, ethylene and VCM suppllers may be insu�cient to meet
all of the Company opeiational and commercial needs, which may affect production costs due to increases in
the price of our raw materlals or lack of productlon capaclty
The supply contracts entered into with OxyChem, ethane and/or ethylene suppliers or other VCM suppliers may not be
sufficient to meet all of the Companyfs operational and commercial needs, which could have an effect on produc6on
costs due to an increase in the price of raw matenals or the services required, or due to a lack of production capacity
at Orbia s plants that prevents the Company from absorbing costs efficiently, as well as the loss of opportunities to sell
products due to lack of access to the raw material used to manufacture them. Ethane is a raw material used to produce
ethylene, which in tum is used in the production of VCM, the raw material necessary for the manufacture of PVC.
Variations in PVC, caustic soda and/or ethane prices in the future could affect the Company s opera6ng results and
hinder or delay the recovery of the Company s investment in Ingleside.
The Company's mining concessfons may be subject to being declared Invalid, cancellation, suspenslon,
exproprlation or revocaUon, pursuant to applicable legal provisions and/or the Company may not be able to
renew its exlsting concesslons, which could have a material adverse effect on its operallons and �nanclal
positlon
The Company owns the rights to several renewable mining concessions, mostly located in Mexico. In Fluorinated
Solutions, there are several mining concessions that expire gradually from 2029 to 2061, which are renewable pursuant
to the provisions of the Mining Act in Mexico. Fluorinated Solutions will take the necessary steps, pursuant to the
deadlines established by law, to ensure the renewal of the concessions that are due to expire soon. However, the
Company cannot guarantee that such renewals will be granted. Furthermore, and pursuant to Mexican legislation,
Fluorinated Solutions is obligated to verify the investments in exploration and exploitation of these concessions, which
to date have been carried out in a timely manner. PMV has a mining concession for the salt dome in Veracru that
expires in 2043.
Attachment I: Description of the Applicant Company Page 38 of 204
Attachment 1_Description of the Applicant Company
Under Mexican law, mineral resources belong to the Mexican nation, and the Federal ovemment may grant
concessions to individuals to explore and exploit mineral reserves. The Company s mining rights derive from
concessions granted by the Ministry of Economy. The Company s mining operations are mostly located in Mexico and
are sub ect to the regulations and supervision of the respective govemmental agencies. Mexican law stipulates that the
Federal ovemment is entitled to declare the rights to the concessions awarded null, cancelled, suspended or void,
and such concessions may be sub �ct to additional conditions, or they may not be renewed upon expiration in the event
that certain legal grounds are triggered.
Accordingly, the concessions the Company has in Mexico may be revoked without the right to compensation if the
Company is unable to comply with the terms and conditions set forth in the concessions. In addition, the lots of land
comprising the mining concessions in Mexico, as well as the related assets of our concessions, could be expropriated
in the public interest, with a right to compensation, which could be limited to or less than the market value of the assets.
In the event of a dispute regarding the amount of compensation, the Company may request the udicial authority
determine such amount. The compensation shall be covered by the State in Mexican pesos, even if payment in kind is
agreed. Pursuant to the Expropriation Act, the govemment v�nll pay compensation within a period of 45 business days
from the declaration of expropriation in pesos or through the payment of another asset. The Mining Act and its
regulations do not set forth that, if a competent court decides to cancel a concession, the State must pay compensation
to the concession holder. If the rights to Orbia s concessions are cancelled, terminated, suspended or revoked and the
Company is unable to ensure fair compensation, the Company s operating results and financial position could be
adversely affected.
Similarly, Mexican law sets forth that mining concessions �nnll last fifly years, from the date of their registration in the
Public Mining Registry and may be extended for the same amount of time sub ect to certain conditions. Although the
Company plans to apply for such renewals and will comply with all the conditions necessary to obtain them, the
Company cannot guarantee that the concessions will be renewed because the renewal of concessions is sub'�ct to the
govemment s discretion. The Company s inability to renew any of its concessions could have a material adverse effect
on its operations, operating results, financial position and ouUook.
Under the terms and conditions of the concessions, the Company is required to comply with certain obligations under
the Mining Act. Non-compliance may result in administrative sanctions imposed by the Ministry of the Economy or
cancellation of the concessions. This could result in a material adverse effect on Orbia s operations, operating results,
financial posltion and ouUook.
To summari e, in the event of a possible expropriation of mining lots or assets used for the exploitation of mining
concessions, or if the rights contained in concessions are declared null, cancelled, suspended or revoked, or if Orbia is
unable to renew the concessions, or it would not be possibte to receive adequate or timely compensation, the
Company s operating results and financial position may be adversely affected.
The volume of fluorite reserves and production rate may be different than expected
The amount of fluorite reserves in Orbia s mines are determined under standards and practices established for the
mining industry, using geological and engineering data to measure the estimated amounts of fluorite deposits that can
be economically recovered and processed by mining.
The Company has prepared estimates of proven and probable reserves applying methods of evaluation and
assumptions generally used by the mining industry. Although Orbia believes the findings of such studies to be
reasonable, they are sub ect to several uncertainties beyond the Company s control that could have a negative impact
on future levels of fluorite production. Fluorite bodies may not confortn to standard geological expectations, and
estimates may change as new data becomes available. Because fluorite bodies do not contain grades of purity or
uniform rypes of minerals, mineral extraction rates may vary at any time.
Management cannot guarantee that estimates of the Company 9 fluorite reserve quantities will not differ substantially
from the quantities of minerals that will be definitively recovered. In addition, fluctuations in market prices and changes
in operating and capital costs may cause some of the fluorite reserves to be economically unviable for exploitation.
Should this occur, the Company may be unable to obtain enough raw materials to meet its production targets and other
commitments, which would have a material adverse effect on the Company s business and operating results.
lllegal imports of refrigerant gases to Europe affect sa/es of FluorTnated So/utions
The European Union revised the F- AS Regulation in 2014 to gradually reduce the use of hydrofluorocarbons, a family
of synthetic chemical products commonly used in refrigeration, air conditioning equipment, fire protection, aerosols and
plastic foams. Due to the decrease in supply and the rise in price as a result of the application of import taxes to the
region, the illegal trafficking of these products to meet demand through imports from China directly or through Russia,
the Ukraine, Turkey and Albania have occurred.
Attachment I: Description of the Applicant Company Page 39 of 204
Attachment 1_Description of the Applicant Company
The illegal import of refrigerant gases to Europe has decreased the downstream business of the Fluorinated Solutions
for its highest added-value fluor products, and consequently, has decreased that business s revenues in Europe.
Due to environmental and health risks, the European Union authorities have taken actions to combat the illegal traffic
of refrigerant gases. However, the Company cannot estimate how much longer, nor in what quantities, illegal imports
to Europe will continue. The results of the Fluorinated Solutions business group will likely therefore continue to be
affected.
(b) Risk Factors relating to exico and other countries in which the Company has its main operations.
The Company s financial position and operating resuits are exposed to general economic conditions in the countries in
which it operates. Orbia has a presence in various markets such as construction, reirigerants, agriculture�rrigation,
industry, automotive, consumer, telecommunications (voice and data), energy, and urban and rural infrastructure,
among others. The Company actively contributes to the devetopment of Mexico and the countries in which it has an
industrial and commercial presence through its subsidiaries, by focusing on each of its strategic sectors and channeling
its products to intermediate or end consumers. As a result, Orbia has manufacturing and marketing assets and
operations in several countries in the Americas, inGuding: Mexico, Argentina, Bra il, Chile, Colombia, Costa Rica,
Ecuador. EI Salvador, the U.S., uatemala, Honduras, Nicaragua, Panama, Peru, and VeneCuela. In addition, the
Company has operations in Europe, Africa and Asia as a result of the acquisitions of Polymer Building Infrastructure,
Data Communications, Precision Agriculture y Fluorinated Solutions. Orbia has 119 production plants distributed in 50
countnes with a commercial presence in more than 110 countries. Consequently, Orbia s activities, financial situation
and operating results are sub �ct, to a great extent, to the general situation of the economies of the countries in which
it operates and to the purchasing power of their populations.
Epidemics In the countrles where we carry out our production and commercial operaUons or pandemics that
affect all countries could intenupt operatfons by suspendTng acUviBes, breaking supply chains or blocking
product dTstribution chains
Orbia s global operations expose the Company to risks associated with public health crises and outbreaks of epidemics,
pandemics, or contagious diseases, such as the current outbreak of a novel strain of coronavirus ( COVID-19 ). The
COVID-19 pandemic and the associated containment efforts have had a serious adverse impact on the global economy,
including significant disruptions to supply chains and product distribution.
The current pandemic, or any future global health crisis, could matenally affect the Company s ability to adequately staff
and maintain its operations, including in the event government authorities impose mandatory closures. work-from-home
orders and social distancing protocols, and seek voluntary facility closures and impose other restrictions to mitigate the
further spread of disease. A global health crisis coutd also disrupt the Company s supply chain and matenally and
adversely impact the Company s ability to secure supplies for its facilities and to provide personal protective eqwpment
for employees, which could materially and adversely affect its operations.
For example, the COVID-19 pandemic is having a negative impact on the cost and availability of global transportation
and on the availability of semi-conductor chips for the automotive industry. It has also contributed to increased costs and
decreased availability of labor and materials for construction pro ects, which may result in increased costs or delays to
the Company s capital pro ects. There may also be long-term effects on Orbia s customers in, and the economies of,
affected countries. Even if a virus or other iilness does not spread significantly, the perceived risk of �nfection or health
nsk may materially affect Orbia s business.
Any of the foregoing within the countries in which the Company or its customers and suppliers operate could severely
disrupt Orbia s operations and could have a material adverse effect on its business, results of operations, cash flows
and financial condition.
To the extent the COVID-19 pandemic or other widespread health epidemic adversely affected or affects our business
and financial results, it may also have the effect of heightening many of the other risks that could adversely affect our
business such as risks associated with industry capacity u6ti ation, volatility in the price and availability of raw materials,
material adverse changes in customer relationships including any failure of a customer to perform its obligations under
agreements with us, IT security systems risks, and risks associated with worldwide or regional economic conditions.
Changes in governmental pollcles in Mexico and other maJor countries in which the /ssuer operates could
adversely affect the Company's operations, operating results, financial position and ouGook
The Mexican Federal overnment, as well as the governments of other ma or countries where ihe Issuer operates,
including the USA, Bra il, ertnany, the United Kingdom and India, among other countries, have exerted and continue
to exert significant influence over the economies of their respective countries, or the political community in which they
operate. Of net sales to third parties by destination in 2021 classified by geographic area, the Company generated 36%
in Europe, 33% in North America, including 21% in the USA and 11% in Mexico, 19% in South America and 12% in
other countnes
Attachment I: Description of the Applicant Company Page 40 of 204
Attachment 1_Description of the Applicant Company
Accordingly, the actions and policies of the govemments of the countnes in which the Company operates could have a
material impact on the Company, and more generally on the market conditions. pnces and retums of the Company s
securities currently traded on the local and intemational markets.
There can be no guarantee that changes in the policies of ihe govemments of the countries in which the Company
operates will not adversely affect the Company s operations, operating results, financial position and outlook.
The economic, political and socfa/ conditions Tn Mexico, the USA, Germany, the United Kingdom, Colombfa,
Brazfl and Indfa may adversely a/fect the Company's operations
The Company s financial performance may be significantly affected by the economic, political and social conditions in
the markets in which it operates. Several countries in Latin America, inctuding Mexico, Bra il and Colombia, and in Asia,
including India, and recently the United Kingdom, have suffered ma or economic, political and social cnses. The
Company cannot predict whether changes in govemment will result in refortns of government policies and, if so, whether
such reforms will affect the Company s operations.
The Company is subject to exchange conbols in some of the counbfes In whlch lt operates
The Company is curtently sub ect to exchange controls in some of the countnes in which it operates, such as Vene uela,
Bra il, Argentina, India, South Africa and China, among others. These controls restnct access to foreign currencies and
iimit the possibility of transferring funds outside such countries, including funds for interest or principal payments on
outstanding debt. In addition, these controls affect Orbia s capacity to receive dividends and other distributions from
subsidiaries in these countries.
If the Company is prohibited from transferring funds outside of the aforementioned countries or is sub ect to similar
restrictions in other countries in which it operates, Orbia s operating results and financial position could be adversely
affected.
Political, geopolltical and economic developments around the world, and particularly ln the countries ln whlch
the Company operates or to whlch !t sells Jts products and/or services, could adversely affect the Company's
business plans, financfal positfon and opeiating results
Orbia is sub ect to the political, geopolitical and economic developmenis in the countries in which it operates. Such
events may include imposition of trade measures such as new tariHs, economic sanclions from developed countries on
other countries for political reasons, and the termination or suspension of intemational agreements, as well as
geopolitical event such as acts of terrorism, military or artned conflicts, such as the Russian invasio� of Ukraine, or
global pandemics, as discussed earlier.
Any such event may have a material adverse impact on the Company s operations, operating results and financial
condition.
Events !n Mexico or other countries could adversely a/%ct the Mexican and other LaUn American economies,
the market value of the securlUes !n whlch O�bla bades, and its operating iesults
The market value of securities of Mexican companies is affected by economic and maricet conditions in both developed
and emerging countries. Although in such countries they may differ significantly from those presented in Mexico,
adverse economic conditions could expand regionally or investors reactions to events in any of these countries could
have an adverse effect on the market value of securities of Mexican issuers. In recent years, for example, the prices of
Mexican debt and equity securities have on occasion undergone substantial declines as a result of events in Mexico or
in other counVies and markets.
Furthertnore. in recent years, there has been a greater correlation between economic conditions in Mexico and the
economic conditions in the U.S. and the European Union as a result of free trade agreements which resulted in
increased economic activity between these parties. Accordingly, the Mexican economy continues to be strongly
influenced by the US and European economies and, therefore, the termination of free trade agreements, or a
detenoration in economic conditions in, or delays in the recovery of, the economy in the US or Europe, could affect the
economy in Mexico and Latin America. These events could have a material and adverse effect on the Company s results
of operations and income, which could affect its liquidity, financial situation and/or the market price of the securities
issued by the Company.
Inflatlon and govemment measures to resblct lnflatlon and/or reactivate economfes may adveisely affect fhe
economTes of the counfries in which the Company operates, as well as the Company's buslness, its operations
and the market prices of its securitles.
In the past, Mexico and certain countries in which the Company operates, including Argentina, Bra il and Colombia.
have experienced high rates of inflation. Although many of these countries have maintained low inflation rates in the
recent past, except forArgentina, there is no guarantee that this trend will continue. Measures taken by the governments
Attachment I: Description of the Applicant Company Page 41 of 204
Attachment 1_Description of the Applicant Company
of these countries to control inflation have oRen Included maintaining a restrictive monetary policy with high interest
rates, which has restricted the availability of credit and reduced economic growth. Inflation, actions to combat it and
public speculation of possible additional measures have contnbuted significantly to a lack of economic ceAainty in many
of these countries, and increased volatility in stock markets.
These countnes could experience high levels of inflation in the future. Periods of high inflation could reduce the growth
rate of their economies, which could result in a reduction in demand for the Company s products and a reduction in
sales. Inflation may increase some of Orbia s expenses and costs, which it may not be able to pass on to its customers
and, as a result, may reduce its margins and net income. In addition, high inflation generally leads to local increases in
interest rates and, as a result, the costs of repaying debt contracted at variable rates may increase, resulting in a
decrease in net income. Consequently, inflation and its effects on local interest rates may lead to reduced liquidity in the
local capital and loan market, which could affect the Company� ability to refinance its debt in such markets. Any
reduction in sales or net income, and any deterioration in Orbia s financial performance, could affect the Company s
liquidity and financial position.
Foreign exchange fluctuaUons of the currencies of the countries in which the Company operates, compared to
the U.S. Dollar could adversely aKect the Company.
Because Orbia s consolidated financial statements are presented in U.S. dollars, the Company must translate revenues
and expenses, as well as assets and liabilities, into U.S. dollars at exchange rates in effect during or at the end of each
reporting penod. Therefore, increases or decreases in the value of the U.S. dollar against other currencies in countries
where Orbia operates will affed the Company s results of operations and the value of balance sheet items denominated
in foreign currencies. Due to the geographic diversity of the Company s operations, weaknesses in some currencies
might be offset by strengths in others over Gme. Furthermore, the Company has exposure to foreign currency movements
because certain foreign currency transactions need to be converted to a different currency for settlement. These
conversions can have a direct impact on the Company s cash flows.
In addition, the Company exposed to adverse changes in interest rates.
The Company manages both these risks through normal operating and financing activities and, when deemed
appropriate, through the use of derivative instruments. The Company cannot be certain, however, that it �nnll be
successful in reducing the risks inherent in exposures to foreign currency and interest rate 8uctuations.
AntTtrust laws in Mexlco and other countrles in which Orbia operates may Ilmit the Company's ablllty to expand
our operations
In Mexico and in the countries where Orbia operates, antitrust laws and related regulations could adverseiy affect the
Company s abitity to acquire, sell, and execute f�int ventures. The approval of the Federal Economic Competition
Commission in Mexico, and of the authorities of each country on this matter, is required for acquisitions, sales or
significant oint ventures to be carried out. Failure to obtain antitrust authority approvals could result in fines, mandatory
divestiture of assets, termination of key acquisition contracts, or the inability to continue business acquisitions or
conclude those already agreed upon. The Company continues to expand its operations and may face stricter audits by
the competent competition authorities in the various countnes in which we operate or in the countries which we intend
to enter.
Orbia currently has a relevant position in most of the markets in which it operates in both Latin America and Europe,
according to data published by IHS Markit VWA, IHS Markit Chlor-alkali Market Report, Eurostat Economist Intelligence
Unit, and market studies conducted by Orbia. Therefore, as the Company s operations and market position increase,
the risks of limitations from antitrust regulations related to future acquisiGons increases, which could have a material
adverse effect on the Company s financial and operating results and ability to grow.
Breach or the imposltion of stricter government regulations could adversely aKect fhe Company
The Company is sub ect to vanous federal, state and municipal laws and regulations in the countries in which it operates,
including those relating to mining, manufacture, use and handling of ha ardous materials, environmental protection,
workplace safety and consumer protection. Concessions, pertnits, licenses and authori ations from various government
authorities must be obtained, conserved and renewed on a regular basis in order to carry out pro ects and operations.
At all times, the Company seeks to comply with these laws and regulations. Failure to comply with the foregoing would
resuit in fines, plant closures, cancellation of licenses, revocation of authori ations or concessions or other restrictions
on the Company s ability to operate, which could have an adverse impact on its financial position.
Regulations governing the chemical industry have become more restrictive over time. The Company cannot be sure
that new and more restnctive regulations will not be adopted or be applicable, or that there won t be stricter
interpretations of current laws and regulations. Any such event may require incurring additional expenses to meet these
new requirements in so far as possible, which would increase the Company s costs of operation.
Attachment I: Description of the Applicant Company Page 42 of 204
Attachment 1_Description of the Applicant Company
The Mexican Congress and the legislative authorfUes of the countries in which Orbfa has a presence may
approve leglslaUon that results in increases in tax obligatlons
In recent years, the Mexican govemment and some of the governments of the countnes in which the Company operates
have implemented various reforms to the tax laws applicable to companies, including Orbia. Should the Mexican
govemment or any of the govemments of the countries in which Orbia operates carry out tax law reforms that result in
significant increases in tax obligations, Orbia may be required to pay higher amounts pursuant to such changes, which
could have a significant negative impact on our operating results.
In December 2019, the Mexican govemment enacted several reforms to the federal tax laws, which - sub ect to specific
provisions - entered into force on January 1, 2020. The most relevant points include: (1) the income tax rate for
corporations was kept at 30% (2) new provisions were inGuded to implement intemational guidelines, such as the
recommendations issued by the Organi ation for Economic Cooperation and Development (OECD), among others (3)
the powers of the Mexican tax authorities were strengthened (4) a general anti-abuse rule and new transparency
obligations for taxpayers and tax advisors were included (5) additional limitations on the deduclibility of interest were
included (6) tax deductions for payments made to entities resident in a low tax urisdiction were limited (6) additional
rules are included ihat strengthen the applicable Preferential Tax Regime regime.
The Company s business, financial position and operating results could be adversely affected by the abovementioned
changes.
The Company cannot conclude with certainty of what all the final outcomes of such reforms and potential changes to
the tax laws of the countries in which it operates could be on its business, and furthertnore, some governments may
make significant changes to their tax policies in response to their weakened economies. Adverse or unanticipated
taxaUon of the Company s business may have a material adverse impact on the Company s financial position and
operating results.
In addition, taxation in several of the urisdictions in which the Company operates or does business is often complex
and sub �ct to interpretation. The tax position of the authorities could differ from the Company s current or historical tax
position, which could result in the payment of higher taxes on items for which the Company was not previously taxed,
in addition to the conduct of audits of previous years and tax payments, as well as the imposition of additional taxes.
Some of these actions and evaluations could be exhaustive and could result in the imposition of material sanctions.
fines and/or updates. A focused analysis of each of the urisdictions in which the Company operates is required to
evaluate the various fiscal positions of the authority in tum, and thus be able to take the necessary actions. The vanous
unfavorable resolutions taken by the authorities, the payment of additional taxes, the imposition of penalties, the
payment of fines, sanctions, expenses or restatemenls resulting from changes and updates in the tax and fiscal position
of the various authorities in any of the urisdictions in which the Company does business could materially and adversely
affect its operating results, financial position and cash flow.
IFRS differ in severa/ respects from U.S. ftnanc7al reporting standards or many of the Financlal Reporting
Standards that apply in the countries ln which Orbfa operates or in which our securities are traded
In Mexico, the USA and other countries, securities laws and regulations have been enacted to promote full and accurate
disclosure of corporate information to investors. However, the Company is not required to comply with most of the
securities laws in force in the USA or other countries and, therefore, the information reported may differ from and be
presented in a manner that differs from the infortnation available to companies operating or trading in the USA or other
countries that are required to repoR lheir information according to securities listing standards pursuant to such
regulations. The Company 9 financial statements are prepared in accordance with IFRS, which differ from United States
enerally Accepted Accounting Principles in various respects.
(c) Risk Factors related to Securities Issued by the Company.
The market price of outstanding shares can fiuctuate slgnlilcanUy
Volatility in the market price of ORBIA' shares could prevent investors from being able to sell their shares at the same
price or at a higher price than they paid for them. The market price and market liquidity of ORBIA' shares could be
significantly affected by several factors, some of which are beyond the Company 5 control and cannot be directly related
to the Company 5 performance. These factors include, but are not limited to:
• Changes in the market valuation of companies offering simdar products
• Economic, regulatory, political and market conditions in Mexico, the U.S., Europe and other countnes
• Industry conditions or trends
• Emergence of technological innovations that could make products and services less attractive or obsolete
• The introduction of new products and services by the Company or its competitors
• Historical and pro ected quarterly and annual operating results
• Differences between actual or expected resuits and analysts and investors expectations
Attachment I: Description of the Applicant Company Page 43 of 204
Attachment 1_Description of the Applicant Company
• Announcements by the Company or third parties and events affecting operations
• Announcements, results or actlons taken by competitors
• Perceptions of the Company investors or of the services it provides
• Changes in financial or economic estimates by securities analysts
• Environmental events, consumer perceptions of environmental issues and compliance with environmental
laws
• The announcement of significant operations or capital commitments made by the Company
• Changes in laws or regulations
• Currency devaluations and imposition of capital controls
• Incorporation or departure of key management personnel or
• Future sales of shares.
In addition, the securities markets and, in particufar, the securities markets of companies in Mexico and Latin America
have experienced extreme fluctuations in prices and volumes that have often been unrelated to, or disproportionate to.
the operating perfortnance of these companies. Broad market and industry factors could materially and adversely affed
the price of Shares, regardless of actual operating performance.
Relatively low Iiquidlty and high volaUlity of the Mexican stock market could cause share prices and trading
volumes to fluctuate signlficantly
Orbia S shares are listed on the Mexican Stock Exchange. Although the Mexican Stock Exchange is one of the largest
stock exchanges in Latin America in terms of market capitali ation value, it remains relatively smali, liquid and volatde
compared to other foreign stock markets, such as in Europe and the USA. Although the public participates in secunties
transactions through the Mexican Stock Exchange, a significant portion of these transactions are carried out on behalf
of institutional investors. These market characteristics could limit Sharehotders ability to sell their shares and could
adversely affect the market price of the shares. The trading volume of securities issued by companies incorporated or
operating in emerging markets tends to be lower than the trading volume of securities issued by companies incorporated
or operating in more developed countries.
Under Mexican law, shareholders'rights may be more limited, different or vague than in other jurlsdicUons
The corporate affairs of the Company are govemed by the provisions of its artiGes of association and Mexican law,
which may differ from the legal principles that would apply if it were incorporated in any urisdiction in the USA, such as
the states of Delaware or New York, or in any urisdiction other than Mexico. For example, under Mexican law, the
protection afforded to minority shareholders and the fiduciary duties of directors and officers are, in some respects,
lesser than or different to those in the USA or other unsdictions. In particular, the legal regime of the fiduciary duties of
directors in Mexico is not as comprehensive or developed as it is in the USA. In addition, the criteria for detertnining the
independence of directors differ from the criteria applicable under the other laws.
The rights of holders of the outstanding shares who protect their interests in connection with any act by the Board of
Directors. the Company or any of its members or its pnncipal o�cers due to breach of their duty of Ioyaity may be limited
or vaguer than the rights granted in other urisdictions. In particular, any action against the Company s o�cers and
directors can only be initiated by holders of at least 5°Io of the outstanding shares, as opposed to a single shareholder
or group of shareholders and are derivative actions on behalf of the Company rather than the affected shareholders. In
addition, rutes and guidelines on related party transactions and conflicts of interest may not be as well defined in Mexico
as they are in the USA, leaving the shareholders at a possible disadvantage. Furthermore, the duties of loyalty and
diligence of directors and officers are defined only in the LMV and have not been interpreted or defined by the competent
courts to date consequently, the udicial interpretation of the meaning and scope of such duties is uncertain. Recently
several refortns were pubtished in Mexico that allow for the institution of class actions, however, the procedures for
instituGng such actions have not been defined. To date, there has not been a sufficient number of claims relating to
breach of fiduciary duties, whether through class actions or derivative actions, to give rise to legal claims based on
breaches of fiduciary duties or to assist in predicting the outcome of a potential claim. As a result of the foregoing,
minority shareholders of the Company have greater difficulty in practice in deciding whether to exercise their rights
against the Company or its directors, officers or controlling shareholders than they would have as shareholders of a
company incorporated in the United States.
There can 6e no guarantee that Orbla will be able to pay or maintafn cash dividends, and its dlvidend polfcfes
are subject to change. Payment and tlie amount of dlvidends are subject to decisfon by shareho/ders
The Company s Board of Directors must submit its audited consolidated annual financial statements for the previous
fiscal year at Orbia s Annual eneral Shareholders Meeting for approval. Once shareholders approve the Company s
audited consolidated annual financial statements, shareholders allocate the net income for the previous fiscal year.
The dividend policy is recommended by the Board of Directors and approved by the Company s Shareholders Meeting.
While Orbia s principal shareholders continue to own a maf�rity of the shares representing the Company s capital stock,
such shareholders may detertnine whether dividends will be paid and the amount of such dividends. As a result of the
Attachment I: Description of the Applicant Company Page 44 of 204
Attachment 1_Description of the Applicant Company
foregoing, there may be years in which the Company does not distnbute dividends and others in which a substantial
portion of Orbia s eamings is distributed. If the latter occurs, the Company s growth potential could be limited.
Orbia s dividend payment policy also depends on the generation of profits, flow generation, and pro ected investments
in its different business groups. There are several factors that may affect the availability and intervals of cash dividend
payments to Orbia 5 shareholders. The amount of cash available for dividend payments may be affected by vanous
factors, inGuding operating results, financial position, future capital requirements, contractual or legal restnctions
stipulated in Orbia s current or future financings, those of its subsidiaries, and the ability to obtain resources from its
subsidiaries, as well as many other variabtes. Cash available for dividend payments can vary significantly from
estimates. Even when the Company intends to pay such dividends, there can be no guarantee that the Company will
be able to pay or maintain cash dividends or that dividends will increase in the future. The results could differ significantly
from the estimates infortning the Board of Directors iecommendation to the Shareholders Meeting to pay dividends or
ad ust the dividend policy.
There is no dividend payment policy. Until 2017, Orbia applied a criterion of paying up to 10% of the EBITDA for the
corresponding fiscal year as a dividend, but this is not a formally adopted policy since there is no document setting it
forth in writing, rather it was adopted at the request of the controlling shareholder.
In any event, under Mexican law, the Company can only make dividend payments when the losses of previous years
have been paid or absorbed and the payment of the respective dividend is expressly approved by the shareholders. In
addition, and pursuant to Mexican law, prior to a dividend distribution, at least 5% of the Company s net income must
be allocated to the legal reserve fund until such reserve fund equals 20% of Orbia s capital stock. Additional amounts
may be allocated to other reserve funds as determined by the shareholders, including the amount to be allocated to the
share repurchase fund. The remaining balance of retained earnings, if any, may be distributed as dividends.
In 2018, an extraordinary dividend of $150 million was declared, payable during the second half of 2018, the sixth and
last installment payment was made on February 26, 2020, and an ordinary dividend of $168 million was deGared,
payable in four installments during the course of 2019, which was paid in full in that fiscal year.
On December 2, 2019, Orbias shareholders approved the payment of a dividend of $180 million payable in four
installments during 2020.
On March 30, 2021, Orbia s shareholders approved to pay a dividend of $0.10 per share in four installments to be paid
throughout the year.
On Apnl 1, 2022, Orbia Shareholders Meeting approved dividend payments of $300 million payable in four installments
during 2022, comprised of an ordinary dividend of $240 miilion and an extraordinary dividend of $60 million.
lf addiUonal shares are lssued in the future, shares may be dlluted, and the bading price for ORB/A" shares
may decrease
As part of Orbia business strategy, future acquisitions or corporate requirements and other expenses may be financed
by issuing additional capital stock. Any issuance of Orbia s capital stock would result in the dilution of the Company s
investors equiry. In addition, future issues of shares or sales by controlling shareholders, or the announcement of such
an issue or sale, could result in a decrease in the market price of the Shares. Accordingiy, the market price and market
liquidity of ORBIA' shares could be affected by the issuance of additional shares for any of these purposes.
The principal and related shareholders, who control Orbla, may have lnterests that dlffer from the rest of the
shareho/ders and the ho/ders of the Notes
At the time of the issuance of this Annual Report, the Company s pnncipal shareholder is Kalu , which is controlled by
the Valle Perochena family which owns approximately 44.83% of the voting capital stock, so it should be considered to
be a significanlly influential shareholder pursuant to the LMV. The Valle Perochena brothers individually own 0.47%
other shareholders related to the Valie family have 9.27% of the voting capital stock, consequently along with Kalu
they should be considered a group, which will have significant influence over the Issuer, pursuant to the LMV. No
govemmental institution owns more than 5% of the voting capital stoCk.
Posslble breach of the requirements to maintafn a list of securitfes in the Mexican Stock Exchange or to register
them in the NaUonal Securities Reglstry could afiect the price of securities.
Orbia, as a result of the registration of its Shares in the RNV and fheir listing in the BMV, is sub ect to compliance with
various disclosure requirements, among others, in order to maintain such registration and listing. In the event that Orbia
is unable to comply with such requirements, the listing of Shares on the BMV could be suspended or even cancelled.
In such an event, the market price of the Shares and Notes would be adversely affected.
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Attachment 1_Description of the Applicant Company
Lack of a market for outstanding shares or a decrease in the marketabll7ty of shares could affect share prices
Orbia s outstanding shares are part of the sample of shares listed on the BMV whose averages are inGuded in the IPC.
according to the information on the behavior of ORBIA' shares in the BMV.
In accordance with the Marketability Index of the BMV, as of March 2021, the share was ranked among those that are
grouped in the High Marketability category which includes the shares with the most stock exchange activity in the last
six months. Since December 2008, ORBIA' has been included in the High Marketability category.
The Company cannot guarantee that the quotation, the volume, the amount traded and the number of transactions
executed in the BMV will enable it to maintain the current position of ORBIA' as a High Marketability security, nor that
in the face of decrease in the marketability of the share, ORBIA' will remain as part of the sample of the shares that
make up the IPC. A lack of volume, amount traded and the number of shares traded could affect the marketability of
the Company s shares and this could cause the Issuer to be removed from the sample of shares that make up the IPC,
which could negatively impact the Company s share price.
The Company holds slgnificant levels of debt
As of December 31, 2021, the Companys total debt was $3,887 million, comprised of $3,520 of debt contracts for
purposes of covenant calculations and $367 million of capitali ed leases, and its capital was $3,404 million. The
Company s level of debt can have significant consequences for the investor. Among other things, it can:
• Limit the Company s ability to generate sufficient cash flows, or obtain additional financing, for working capital,
capital expenditures, acquisitions or other future general corporate purposes
• Limit the collaterals and guarantees that the Company can offer to obtain additional financing.
• Restrict the Company s ability to pay dividends
. Require a substan6al portion of cash flow from operations to make debt service payments
• Limit flexibitity to plan for or react to changes in operations and industry conditions
• Limit the Company s ability to carry out additional acquisitions
• Place the Company at a competitive disadvantage compared to its less leveraged competitors and
• Increase the Company s vulnerability to the effects of the adverse economic conditions inherent to the industry.
There can be no guarantee that the Company will continue to generate cash Bows in sufficient amounts to service its
debt, meet its working capital and capital expenditure requirements or carry out its expansion plans. If su�cient
operating cash flow cannot be generated, or in the event that additional loans or financing cannot be requested, it will
probably be necessary to sell assets, reduce capital expenditures, refinance all or a portion of existing debt, or obtain
additional financing through equity or debt issuances. If this happens, there can be no guarantee that the debt will be
refinanced, that assets will be sold or that additional financing will be obtained on terms that are acceptable to the
Company. In addition, the capacity to incur additional debt will be limited as stipulated in the credit line agreements.
(See section 3, Financial Infortnation, item c) Relevant Credit in this Annual Report).
Additionally, the Company may incur additional debt in the future. The modalities underwhich the Notes and Sustainable
Bonds were issued allow Orbia and its existing and future Subsidiaries to incur additional debt, as do the vehicles that
govem the Company s existing debt. If the Company incurs additional debt, the above risks could be exacerbated.
Lack of market for notes
The secondary market for Notes and the Sustainable Bonds is limited and there is a possibility that such a market will
not develop. There are several factors to which the price at which Notes are traded is sub ect, such as the level of
general interest rates and market conditions for similar instruments. The liquidity of the Notes and the Sustainable
Bonds may be adversely affected if such a secondary market does not develop and the Holders thereof may not be
able to dispose of their Notes and the Sustainable Bonds in the market. There can be no guarantee that a secondary
market will develop for Notes and the Sustainable Bonds or that, if one does devetop, that it will provide liquidity to
Holders. For this reason, Holders should be prepared to hold on to the Notes and the Sustainable Bonds until their
maturity and assume all risks arising therefrom. Neither Orbia nor the corresponding placement intertnediaries are
obligated to generate a secondary market for the Notes and the Sustainable Bonds, nor do they guarantee that such a
market v�nll develop, therefore the Holders assume the risk that in the future there may not be buyers for such securities.
The contractual documents that govern the Notes, the Sustainable Bonds and the instruments that regulate the existing
debt impose significant operating and financial restrictions, which could prevent capitali ation on business opportunities
presented to Orbia.
The contractual documents that constitute and regulate the Notes, the Sustainable Bonds and the instruments that
govem Orbia S existing debt, contain restrictions that limit the Company s ability to take certain actions in the future and
to participate in certain transactions, either directly or through its subsidiary companies. Furthermore, under some of
the current debt agreements Orbia has entered into, the Company is required to maintain specific financial ratios and
Attachment I: Description of the Applicant Company Page 46 of 204
Attachment 1_Description of the Applicant Company
confirm its compliance at any time. Events beyond the control of the Company may affect its ability to comply with these
obligations and mean that it may not be able to adhere to these limitations and veriy compliance. Failure to pertorm
any of these obligations coutd result in an event of breach, which could, in tum, cause the immediate and accelerated
matunry of all amounts due under such contracts or securities. The rest�ctions set forth in the contracts and secunties
that constitute their debt could limit the Company � ability to take advantage of attractive growth opportunities for
currently unforeseen business, particularly if they were limited to increasing debt or making investments in order to take
advantage of such opportunities.
The contracts and securltfes goveining the debt including the Notes and the Sustainable Bonds, contain cross
default piovisions that may cause all debt issued under such instruments to become due and payable
immedlately as a result of a default event set forth in anofher unrelated debt lnstrument
The instruments goveming the Notes and the Sustainable Bonds contain certain obligations and the contracts or
securities goveming other loans also contain obligations and, in some cases, require Orbia and its subsidiaries to
comply with and demonstrate compliance with certain financial ratios. Any breach of these obligations could result in
an event of default on the corresponding contract or securiry, which in turn could result in the related debt or other
credits established under different instruments becoming immediately due and payable. In such an event, Orbia would
need to obtain financial resources from alternative sources, which it may do under favorable or unfavorable conditions,
at the necessary time, or it may not obtain any resources at all. Altematively, any default event could require Orbia to
sell assets or reduce its operations to satisfy its obligations to its creditors. Past events could affect the Companys
abiliry to grow, its financial position or operaUng results.
Orbia may not be able to obtain the financial resources necessary to finance the consequences of a change of control
offer set forth in the terms of the instruments goveming the Notes and Sustainable Bonds.
Pursuant to the provisions of the contractual documents of the Notes and the Sustainable Bonds, if an event oxurs
that triggers a change of control (as defined in such documents), Orbia will be obligated to offer to purchase each series
of Notes and the Sustainable Bonds at a price equivalent to 101�I of the principal value of each series of Notes, plus
accrued and unpaid interest at the time of purchase. Such events could affect the company s abilily to grow and its
financial position or operating results. In the event of a change of control, Orbia will need to refinance a significant
amount of its debt, including the Notes or Bonds, as well as other loans under other contracts or lines of credit. Orbia
may not have sufficient financial resources available to make the obligatory purchase of the Notes under such
circumstances, and the Company would therefore be in breach of this obligation, which in tum would trigger a cross
default provision as set forth by any other debt instrument. Any debt that Orbia owes in the future may also place
restrictions on the repurchase of the Notes due to the aforementioned change of control.
The debt payment guarantees by Orbfa's subsidlaries may not be lmmedfately enforceable
Each series of Notes and Sustainable Bonds, as well as other financing, are fully and unconditionally guaranteed ointly
and severally by certain subsidiaries of Orbia. These guarantees provide creditors with the basis for filing a direct
payment claim against such subsidiaries however, such guarantees may not be immediately enforceable under
applicable law.
Pursuant to applicable law, in the event that any of these subsidiaries is sub[�ect to a bankruptcy or insolvency
proceeding, any payment of the guarantee granted to Orbia could be considered a fraudulent payment and declared
null and void because the other creditors of said subsidiary would not be given equal treatment. If any of these events
should occur, the likelihood of payment of the Notes or the Sustainable Bonds, or other financing when applicable, and
their respective market value would be materially adversely affected. In addition, pursuant to the Bankruptcy Act and
other applicable legislation in Mexico, if Orbia or any of its guarantor subsidiaries or guarantors are deGared bankrupt,
the payment obligations for Orbia loans or loans its guaranteeing subsidiaries (i) would be converted into Mexican pesos
and from pesos to InvesUnent Units or UDIs (units ad usted to the official inflation rate recogni ed by Banco de M xico),
and would no longer be ad usted to the exchange rate of the Mexican peso to the U.S. Dollar, after the first conversion
(ii) payment would be made at the same time as all other creditors claims (iii) would be sub'�ct to the result of
recognition of priority or preferential obliga6ons and (iv) payment of the Notes, the Sustainable Bonds, orother financing
would be sub ect to preferential payment of certain obligations including tax, tabor and social security debts and credits
with specific collateral, which would take precedence over any other claims, including claims of any investorwith respect
to the Notes and the Sustainable Bonds or such col�ateral. Furthermore, the validity of each guarantee is sub ect to the
existence and validity of the principal obiigation being guaranteed. Because of the foregoing, its perfortnance is not
separate from the guaranteed principal obligation.
A federal court, or in the absence thereof, any other court, may rule in favor of such a determination if it finds, among
other factors, that a guarantor subsidiary exercises its guarantee or grants a lien (or, in some urisdictions, where such
guarantor is obligated to make payments under the pledged assets):
• and such guarantor subsidiary woutd have received compensation less than the reasonable equivalent or a
reasonable value compared to that which it would have received for granting its guarantee or for the granting of a
tien
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Attachment 1_Description of the Applicant Company
• and/or such guarantor subsidiary:
1. was (or was declared) insolvent due to the granting of the guarantee
2. was or was about to conduct a deal or transaction in which its assets constituted unreasonably small capital for
conducting its business
3. intended to incur, or considered that it would incur, obligations that were beyond its capacity to pay at the time
of maturity
4. It was a defendant in a damage proceeding, or already had a udgment issued against it for damages and, in
any event, after the udgment became final, the udgment was not complied with.
If an attempt was made to legally enforce the guarantees, enforcement could be sub ect to a court ruling, and because
the guarantee had been granted for the direct benefit of the Company, and only indirectly for the benefit of the guarantor,
the obligations of the guarantor in tum could be incurred for less than their fair value or fair compensation. A court could
therefore invalidate the obligations under the guarantees and related agreements and subordinate them to the other
debts of the guarantor in tum or take other actions harmful to the holders of the Notes and the Sustainable Bonds.
Although courts in different urisdictions measure insolvency differently, in general, a company would be considered
insolvent if the sum of its debts, including contingent and unpaid debts, exceeds the fair value of its assets, or if the
current value of its assets is less than the amount that would be required to pay the liabilities of its debts, including
contingent and unpaid debts, as they become payable.
If the guarantees cannot be exercised under the above conditions, the Notes and the Sustainable Bonds would be
subordinated to all the liabilities, inciuding the accounts payable, of the guarantor subsidiaries. A court may also issue
a udgment against the holders of the Notes ordering them to reimburse any amounts paid to them under such
guarantees or to exercise the proceeds of the guarantees. If any guarantee or lien were invalidated, the holders of the
Notes or the Sustainable Bonds would no longer have a direct claim against the guarantor subsidiary, but would retain
their rights against the Company and any other guarantor subsidiary, even though there was no guarantee that the
assets of the respective subsidiaries would be sufficient to pay the Notes or the Sustainable Bonds in full.
The provisfons of Mexlcan law may make it df�cult for holders of Notes and Sustaina6/e Bonds to conveK the
amounts paid by the Company to fhe ho/ders in Mexican pesos lnto U.S. dollars or to achfeve recognition of
the full value of such payments
Orbia is obligated to pay the Notes and other credits in U.S. dollars. However, under Mexico s Monetary Act, payment
obligations in Mexico in foreign currencies, either by agreement or by order of a udge, may be made in Mexican pesos
at the exchange rate at the time and place of payment or of the corresponding court. Pursuant to the foregoing, Orbia
will be obligated to pay loans taken out in currencies other than Mexican pesos, as set foRh by Mexico s Monetary Act,
and the Company cannot guarantee that the amounts paid will be converted by the beneficiary into U.S. dollars or that,
if converted, such amount paid will be sufficient to acquire dollars in the same amount of the principat, interest, or
additional payments derived from such instruments or loans in currencies other than Mexican pesos.
Holders of the Notes and Sustainable Bonds may be llmlted ln fhelr abflity to instltute proceedings or lawsults
against the Company in Mexican courts
Orbia and some of its guarantor subsidiaries are companies incorporated under the laws of Mexico. Almost all of its
directors and key executives, as wetl as the directors and key executives of many of its guarantor subsidiaries are
Mexican citi ens and residents. A significant percentage of the Company s assets and those of some of its guarantor
subsidiaries are in Mexico, and a very significant percentage of the Company s sales and those of some of the guarantor
subsidiaries originate from sources in Mexico. Therefore, it could eventually be difficult for holders of Notes and other
debt instruments taken out by Orbia in currencies other than the Mexican peso to serve process and bring legal
proceedings or lawsuits against the Company or its guarantor subsidiaries outside of Mexico or against its directors or
key executives or to enforce udicial rulings issued by courts or tnbunals outside of Mexico s urisdiction, in all matters
relating to avil obligations under laws of urisdiction outs+de of Mexico. including proceedings instituted pursuant to the
civil provisions of U.S. secunties laws or other US laws.
Charging interest on Interest may not be enforceab/e In Mexico
Mexican law does not permit charging interest on interest and, as a result, the accrual of interest in the event of default
on ordinary interest payments on the Notes, the Sustainable Bonds and other loans taken out by Orbia may not be
enforceable in Mexico.
The payment of the Notes and the Sustalnable Bonds, as well as the related guarantees, may be structurelly
subordlnated with respect to the debt obligatfons of the guarantor subsldiarles as well as subsidfaries who are
not guaiantors of Orbla, in the same way other debt that does not have the same guarantee structure would be
structurally subordinated to that whlch does
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Attachment 1_Description of the Applicant Company
The Notes constitute part of Orbia s guaranteed debt and their payment preference is equal to that of other debts, but
they could be structurally subordinated with respect to the payment of other guaranteed credit obligations and also
structurally subordinated to debts contracted by the guarantor and non-guarantor subsidiaries. Although the holders of
the Notes and the Sustainable Bonds have a direct right to claim payment, this right is not guaranteed over the assets
and properties of Orbia or of the guarantor subsidiaries therefore, the payment of the Notes and the Sustainable Bonds
is subordinated with respect to the debt of Orbia and its subsidiaries that have a specific applicable guarantee for
payment up to the value of such assets. In addition, under Mexican law, the payment obligations of the Notes are
subordinated to certain preferences established by law, including wage and salary claims, guaranteed obligations, social
security, workers housing funds, taxes, fees for and expenses of lawsuits. Similar legal preferences may apply in other
urisdictions where subsidiary guarantors have been incorporated. In the event of Orbia� liquidation, such legal payment
preferences will prevail over any other Gaim, including those of any holder of the Notes and the Sustainable Bonds.
A decrease in Orbia's credit rlsk rating and/or lts /oans could adversely affect lts abJlity to access credit markets
If any of the credit ratings are downgraded by the rating institutions, or if the current ratings are sub ect to negative
reviews by the rating agencies, the Company s ability to access the credit markets could be seriously affected and the
associated costs of financing could increase. Changes in credit ratings could also affect the price of the Company s
secunties, including the Notes and the Sustainable Bonds.
d) Other Securities
The secunties that Orbia has registered in the RNV and trades in the BMV are:
i. Ordinary, nominal, without stating a nominal value, freely subscribed shares representing the capital stock of
Orbia Advance Corporation, S.A.B. de C.V., and which grant full corporate and patrimonial rights to all holders
of such shares, listed under the ticker symbol ORBIA', and
Senior Notes
On September 19, 2012, Orbia Advance Corporation, S.A.B. de CV, issued and placed Senior Notes for a
total amount of $1,150 million, in two blocks: one of $750 million, with a term of ten years with a fixed rate
coupon of 4.875% and another of $400 million, at a thirty-year term with a fixed coupon rate of 6.75%. In both
blocks of Senior Notes Interest is paid semi-annually on March 19 and September 19 from its issue date and
until its maturity on September 19, 2022, and September 19, 2042, respectively. The Senior Notes have been
listed on the Luxembourg Stock Exchange and for trading on the market called Euro MTF Market _ These
Senior Notes have not been registered in the National Securities Registry, nor have they been authori ed by
the National Banking and Securities Commission, nor have they been registered according to the regulations
of the U.S. Securities Act of 1933 or US Securities Act, which govems securities operations in that country,
were only offered to buyers considered qualified investors as defined by Rule 144-A or Rule 144-A of the US
Securities Law, in that country, and outside the US, to persons not resident in said country, under Regulation
S under the same US Securities Law.
For this issue of both the $400 million Senior Note due in 2042 and the $750 million Senior Note due in 2022,
Fitch Ratings gave the rating BBB-, Standard Poors BBB- and Moody s Ba1 with a stable ouUook. The
$750 million Senior Note due in 2022 have been fully amorti ed.
On September 17, 2014, the Company issued and placed Senior Notes for a total amount of $750 million for
a term of thiRy years, which accrue a fixed annual rate of 5.875%, payable semiannualiy on March 17. and
September 17 from their issue date and unGl their maturity on September 17, 2044. The Senior Notes have
been listed on the Luxembourg stock exchange and for trading on the market called Euro MTF Market _ These
Senior Notes have not been registered in the National Securities Registry, nor have they been authori ed by
the National Banking and Securities Commission, nor have they been registered according to the regulations
of the U.S. Securities Act of 1933 or US Securities Act, which govems securities operations in that country,
were only offered to buyers considered qualified investors as defined by Rule 144-A or Rule 144-A of the US
Securities Law, in ihat country, and outside the US, to persons not resident in said country, under Regulation
S under the same US Securities Law.
The credit risk rating granted for this issue by Standard Poors was BBB-, by Fitch Ratings BBB, and by
Moody s Baa3 .
On October 4, 2017, Orbia issued and placed Senior Notes for a total amount of $1,000 million in lwo tranches,
$500 million for a tertn of ten years (with maturity on October 4, 2027) and $500 miilion for a term of thirly years,
with maturity on January 15, 2048, which accrue a fixed annual rate of 4.0% and 5.50%, respectively, payable
semi-annually on April 4 and October 4, for the first tranche and on December 15. January and July 15 for the
second tranche. The Senior Notes have been listed on the Luxembourg Stock Exchange and for trading on
the market called Euro MTF Market . These Senior Notes have not been registered in the National Securities
Attachment I: Description of the Applicant Company Page 49 of 204
Attachment 1_Description of the Applicant Company
Registry, nor have they been authori ed by the National Banking and Securities Commission, nor have they
been registered according to the regulations of the U.S. Securities Act of 1933 or the US Securities Act, which
govems securities operations in the same country, were only offered to buyers considered qualified investors
as defined by Rule 144-A or Rule 144-A of the US Securities Act, in that country, and outside the US, to
persons not resident in said country, under Regulation S under the same US Securities Act.
The credit risk rating assigned for this issue maturing on October 4, 2027, are: Standard Poor s BBB-, Fitch
Ratings BBB , and Moody s Baa3 .
The credit risk ratings assigned for the issue maturing on January 15, 2048, are: Standard Poors BBB-, by
Fitch Ratings BBB and Moody s Baa3 _
On May 11, 2021, ORBIA announced the successful closing of its inaugural issuance of Sustainability-Linked
Bonds in the amount of $600 million in senior notes due May 2026 bearing interest at an annual rate of 1.875%.
and $500 million in senior notes due May 2031 bearing interest at an annual rate of 2.875% (the Notes ).
These issues received a credit rating of Baa3 by Moodys, BBB- by Standard Poors and BBB by Fitch
Ratings.
Orbia reporled that on August 23, 2021, it made the fir5t issue of Euro Commercial Paper for an amount of 30
million (thirty million euros), through the placement of the respective notes (promissory notes), at an over cost
of 0.35%, with a maturity date of up to September 23, 2021. The notes were issued under the Euro Commercial
Paper Program established by Orbia on June 2, 2021, for an amount of up to 750 million (seven hundred and
fifty million Euros) with issues that will be valid for less than one year and will not be listed on any stock
exchange (the Program }.
These issues received a credit rating of A-3 by Standard Poor s and F3 by Fitch Ratings.
Orbia is up to date on the submittal, during the last three fiscat years, of all the legal, operational, administrative, and
financial information that it is required to submit, by virtue of the fact that the outstanding shares are registered in the
RNV and listed on the BMV. Similarly, the Issuer is up to date on the submittal during the last three fiscal years of all the
legal, operational, administrative and financial information that it is obliged to submit pursuant to the contracts for the
issuance of international debt to the agent (Deutsche Bank National Trust Co and CI Banco, S.A. Instituci n de Banca
M Itiple), as well as the revolving credit to the agent bank MUF (Bank of Tokyo).
The Issuer provides information to the investing public on an annual basis, which inciudes the reports presented to the
Ordinary eneral Shareholders Meeting approving the results of the previous year, the resolutions of the shareholders
meetings, quarterly infortnation, infortnation on repurchase fund operations and notices of relevant events.
e) Significant Changes to the Rights of the Securities Registered in the Registry
In the last three fiscal years, the securities held by the Company registered in the Registry have not undergone
significant changes to the rights they confer on their holders.
� Destination of Funds
During 2021, 2020, and 2019 fiscal years, the Company did not register securities in the RNV. Nor are there resources
pending application as a result of securities issuances carried out in previous years. (See Section 1, "General
Informafion" item d, "Other Securities", o/this Annual Report).
g) Public Documents
Investors may verify the public documents and information submitted by the Company to the CNBV and the BMV, at the
BMV s o�ces located at Avenida Paseo de la Refortna nDnero 255. Colonia CuauhtCmoc, C.P. 06500, M xico, Distrito
Federal, or on its website: www.bmv.com.mx, or on the CNBV website at the following website: www.cnbv.gob.mx.
Orbia has provided the CNBV and the BMV with the information required by the LMV, the Sole Issuer Circular (CUE),
the intemal regulations of the BMV, and other applicable provisions, therefore such infortnation is available to investors.
Copies of the above documentation and this Annual Report may be obtained upon request from any investor by
contacting the Company s Director of Investor Retations, erardo Lo oya Latap gerardo.lo oya orbia.com, telephone
number(52) 55 5366 4084 or Diana Echemend 8 Echeverr 8 diana.echemendia orbia.com, telephone number (52) 55
5366 4483, Address: Avenida Paseo de la Refortna 483, piso 47, Colonia Cuauht moc, Alcald a Cuauht moc, Ciudad
de M xico, 06500, M xico, or on Orbia s website: www.orbia.com.
Attachment I: Description of the Applicant Company Page 50 of 204
Attachment 1_Description of the Applicant Company
2. THE ISSUER
a) History and Development
i. Company Name and trade name of the Issuer
Orbia or the Company, as it is commercially known, was originally incorporated under the name of rupo Industrial
Camesa, S.A. and in 1984 adopted the variable capital corporation regime. On April 27, 2005, the Company changed
its name to Mexichem, S.A. de C.V. and on December 6, 2006, it adopted the regime of publicly-traded variabte capital
corporation.
At the Company s Shareholders Meeting held on August 26, 2019, it was decided to approve the change of its corporate
name to Orbia Advance Corporation, S.A.B. de C.V. This change reflects the new strategy and global reorgani ation
undertaken by the Company, which implies the re-branding of its identity and image in accordance with its mission,
vision and phitosophy.
ii. Date and Place of Incorporation and Duration of the Issuer
The Company was incorporated by means of public deed number 34,080, dated June 30, 1978, issued by Notary Public
number 112 in and for the Federal District, the first oKcial transcript of which was recorded in the third book of the
Commerce Section of the Public Registry of Property and Commerce for the Federal District, in volume 1066, on page
190 and under number 212. The duration of the Company is indefinite.
iii. Address and telephone numbers of main office
Avenida Paseo de la Reforma 483, piso 47, Colonia Cuauht moc, Alcald a Cuauht moc, Ciudad de M xico, 06500,
M xico
Telephone no.: 52 55 5366 4000
Web address: www.orbia.com
iv. Historical Events
1953
Orbia s origins date back to 1953, when the company Cables Mexicanos, S.A., a manufacturer of wire rope, was
incorporated. It later changed its name to Aceros Camesa, S.A. de C.V.
1978
A holding company called rupo Industriai Camesa, S.A. de C.V. ( ICSA) was incorporated, which controlled Aceros
Camesa, S.A. de C.V. and its subsidiaries. ICSA shares were listed in the BMV in the same year it was incorporated.
1986
ICSA acquired the company Compa a Minera las Cuevas, S.A. de C.V., whose main activity consisted of the
exploitation of fluorite mines in the state of San Luis Potos .
1997
rupo Empresarial Privado Mexicano ( EPM), held by the Valle family, acquired ICSA, which in tum acquired a 50.4%
stake in Qu mica Pennwalt, S.A. de C.V., a company that produces chlorine, caustic soda, hydrochloric acid, resins,
PVC compounds and other derivatives. The French chemical group Elf Atochem held 49.3% of the shares in Qu �ica
Pennwalt, S.A. de C.V.
2003
ICSA acquired 100% of the Mexichem, S.A. de C.V. shares.
2004
In May 2004, Qu�ihica FI or, S.A. de C.V., a producer of hydrofluoric acid, was acquired, and the company s opera6ons
were integrated with that of Compa 2 Minera Las Cuevas, S.A. de C.V. Through this acquisition, the Company became
the largest integrated producer of hydrofluoric acid in the Americas.
In December 2004, the Company acquired rupo Primex, S.A. de C.V., the market leader in Mexico and Latin America
Attachment I: Description of the Applicant Company Page 51 of 204
Attachment 1_Description of the Applicant Company
in the production of PVC resins and compounds, as well as of phthalic anhydride. Through this acquisition, the Company
positioned itself as the leading producer of PVC resins in Mexico and the third- ranking producer in Latin Amenca.
2005
In order to focus on the chemical business, the Company sold its wlre rope business in June 2005.
That same year, the Company changed its corporate name from rupo Industrial Camesa, S.A. de C.V. to Mexichem.
S.A. de C.V. in order to strengthen the strategic positioning achieved by the roup in the chemical sector. The roup s
strategic vision was focused on this sector and sought consolidation and vertical integration of its production chams,
which is why it only acquired companies related to its value chains (which are now business groups).
2006
Qu mica FI or, S.A. de C.V. and Mexichem FI or, S.A. de C.V. merged, with Mexichem FI or, S.A. de C.V. surviving.
The company began its intemational expansion in February 2006 with the acquisition of Bayshore roup, a business
that produces PVC compounds in the United States.
2007
In order to consolidate its PVC business, in February 2007 the Company acquired Amanco Holding, Inc., a PVC pipe
producer and leader in Latin America in water conveyance systems. Through this acquisition, Orbia formed the Fluent
business group, which existed until the 2019 ta�c year, after which the Company decided to separate into three business
groups.
In March that same year, the Company acquired the PVC resin manufacturer Petroqu rhica Colombiana,
S.A. (PETCO).
In June 2007, the Company acquired a 50% share of C.I. eon Andina, S.A., a producer of PVC compounds, located
in Colombia.
2008
In January 2008, the Company acquired 70% of the capital of DV Industria e Comercio de PI sticos Ltda. (Plastubos),
a Bra ilian company speciali ing in the production of rigid PVC pipes for drinking water and drainage, for the housing,
infrastructure, irrigation and electriciry markets. Subsequentiy, the Company exercised the call op6on on the remaining
30%.
In April 2008. the Company acquired 100% of the shares representing the capital stock of Fluorita de R 0 Verde, S.A.
de C.V., along with the production plants located in the municipalities of R o Verde, San Luis Potos and lamos de
Mart r1e , uanaC�ato, as well as the mining concessions to exploit the Fluorita Lilia lI and La Esperan a mines. This
company produces Fluorite concentrates, which are used for consumption by Mexichem FI or, in its plant located in
Matamoros, Tamaulipas.
In June 2008, the Company acquired 100% of the shares representing the capital stock of Quimir, S.A. de C.V., a
Mexican company that produces and markets industrial and food phosphates.
Also, in June 2008, the Company acquired eotextiles del Per , S.A., securing Orbia s position as a leader in the
geotextiles market and at the same time it expanded its offering of other geosynthetic solutions in the Peruvian market.
That same month, the Company acquired the Bra ilian company Fiberweb Bidim Industria e Comercio de Nao-Tecidos
Ltda., which manufactures and sells nonwoven products for eotextiles.
In November 2008, the company acquired Colpo os, S.A., located in Cali, Colombia, which alongside its well drilling,
construction, maintenance and repair activities for water extraction, it designs, builds and installs water management
solutions in applications such as pumping and irrigation systems.
2009
On March 31, 2009, the Company acquired 100% of ihe capital stock of Tubos Flexibles, S.A. de C.V., a Mexican
company that produces PVC pipes and fittings.
In August 2009, the Issuer 5 capital stock was increased by 153,600,000 new shares, representing an increase in capital
of $2,258 million Mexican pesos. In September 2009, a 60,000 MT per year capacity aluminum fluoride plant was
inaugurated at the Mexichem FI or, S.A. de C.V. faciliGes located in Matamoros, Tamaulipas. A$60 million investment
was made in this plant.
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Attachment 1_Description of the Applicant Company
In September 2009, the first placement of Stock Exchange Certificates issued by Orbia was made in the Mexican debt
market for $2,500 million Mexican pesos, for a 5-year term with a 28 Day Interbank Equilibrium Interest Rate (28 Day
TIIE) plus 2.44 basis points under the ticker symbol MEXCHEM 09. The funds obtained were used to refinance debt and
change its maturity profile, with only 15% of its total debt remaining in the short term. On July 20, 2011, Orbia decided
to exercise its right to accelerate all of the Stock 6cchange Certificates of this first placement by paying the holders the
amount set forth in the corresponding instrument plus the premium for accelerated amorti ation stipulated therein.
In October 2009, the Company acquired the remaining 50% of the shares in C.I. eon Andina, S.A., a company that
produces PVC compounds, located in Colombia.
During the month of November 2009, the first placement of Senior Notes in the amount of $350 million over 10 years at
an annual rate of 8.75% was made. The funds obtained were used for general corporate purposes, including working
capital and possible future acquisitions. An amount of $267.1 million was prepaid in September 2012 and settled in
November 2019 upon maturity.
2010
In January 2010 Amanco del Per , S.A. (now Mexichem Per , S.A.) increased its share of the capital stock of Plastisur,
S.A., a PVC pipe manufacturer, from 25% to 98.45%. Plastisur merged with Tuber as y eosistemas del Per , S.A., a
subsidiary of the Company, immediately after Orbia increased its equity interest.
In March 2010, the Company acquired the Refrigerants division of Ineos roup with a presence in the United Kingdom,
the United States, Canada, Japan and Taiwan. Through this acquisdion, Orbia strengthened its global presence in the
refrigerant gas market for the automotive, medical, and construction sectors.
In June 2010, the Fluorinated Solutions business group, inaugurated Hydrofluoric Acid plant II in the city of Matamoros,
Tamaulipas, which has a capacity of 30,000 MT per year and an investment of $40 million. This investment was financed
with the Company� own funds and bank loans.
In October 2010, Orbia acquired 100�k of the shares of Policyd, S.A. de C.V. (a manufacturer of PVC resins) and 100%
of the shares of PI sticos Rex, S.A. de C.V. (a manufacturer of PVC pipes). Included in the payment to the seller for this
transaction were ali the assets, nghts and property necessary for the operation of the Santa Clara Plant, owned by the
Company, located in the municipaliry of Santa Clara, Estado de M xico. Policyd, S.A. de C.V. merged in October 2010
with Mexichem Resinas Vin Iicas. S.A. de C.V, and PI sticos Rex, S.A. de C.V. merged with Mexichem Soluciones
Integrales, S.A.de C.V.in June 2011.
2011
On January 7, 2011. Orbia acquired 100°Io of the shares representing the companies Alpha ary Corporation and
Alpha ary Limited, PVC compound producers located in the United States and the United Kingdom, respectively. This
acquisition, which brought new technologies, gave Orbia the potential to research and develop new products.
On August 31, 2011, the Issuer signed a revolving line of credit for $1,000 million for a term of three years, under a Club
Deal format, at a rate of LIBOR plus 90 basis points, which allowed the Company to increase its financial flexibility and
take advantage of opportunities that arose in its markets to consolidate its strategic growlh plans while improving its debt
repayment profile.
On September 2, 2011, the Company offered and placed the second issue of Stock Exchange Certificates under the
Program with the ticker symbol MEXCHEM 11 (as it had not yet changed its corporate name as of that date nor upon
the issue s maturity), for an amount of $2,500 million Mexican pesos. The principal was due in a single payment on
September 2, 2016, paying a gross interest rate equivalent to TIIE plus 60 basis points. The funds were used to pay the
bridge loan used to accelerate the payment of the issue of MEXCHEM 09 Stock Exchange Certificates, therefore, the
issue did not increase the total amount of active debt, but it did strengthen the financial structure, reduce the financial
cost and modify its long-term maturity profile.
In December 2011, Piastubos, which was acquired in 2008, merged with Mexichem Brasil Industria de Transforma I o
PI sGca Ltda.
2012
In January 2012, the Company acquired 100% of the shares of Fluorita de M xico, S.A. de C.V., a company located in
the municipality of M qui , Coahuila. Through this acquisition, Mexichem gained access to Fluorita s high-purity mining
concessions.
On March 15, 2012, the CNBV authori ed the expansion of the Stock Exchange CeRificates Program for an amount of
up to 10,000 million Mexican pesos or its equivalent in UDIS and for a tertn of up to 5 years as of the date of such
Attachment I: Description of the Applicant Company Page 53 of 204
Attachment 1_Description of the Applicant Company
expansion. Orbia therefore publiGy offered and placed on September 9, 2011, 25,000,000 Stock Exchange Certificates.
and on March 21, 2012, 20,000,000 Stock Exchange Certificates of the MEXCHEM 11 issue, so that this issue would
reach a new total of 45,000,000,000 Stock Exchange Certificates with a par value of 100.00 Mexican pesos each. The
principal was accelerated in a single payment on September 23, 2014.
On March 21, 2012, Orbia made the third issue of Stock Exchange Certificates (ORBIA 12) under the Program, for
30,000,000 Stock Exchange Certificates, with a par value of $100.00 Mexican pesos each, with the matunty date of
March 9, 2022, through a singie payment, for a term of approximately 10 years, paying a gross annual interest rate of
8.12%, which will remain fixed during the tertn of this third issue.
In May 2012, Orbia acquired, through a public offering, 95.7% of the shares of Wavin, B.V., a company located in the
Netherlands. This company produces plastic pipe systems. It has operations in 18 European countries. In March 2013,
the Company acquired the remaining 4.3% of Wavin, B.V. shares.
At Orbia s Ordinary and Extraordinary eneral Shareholders Meetings held on April 30 and May 18, 2012, respectively.
shareholders approved the payment of a dividend of $136 million (1,800 million Mexican pesos), payable from the
Companys CUFIN account. This dividend was paid, according to each shareholders choice, either (i) in kind through
the delivery of one Issuer Share for every 45 Shares of the corresponding shareholder, or (ii) in cash at the rate of $1.00
Mexican peso per Share. In order to facilitate the payment of this dividend, the shareholders authori ed a capital increase
of up to 40,000,000 Shares. As a result, at the May 18, 2012, Shareholders Meeting, shareholders approved the
issuance of 28,029,771 Shares at a subscription price of $45.00 Mexican pesos for each new Share. The corresponding
funds were used to pay the dividend to the shareholders who elected to receive the cash payment. The remaining
11,970,229 shares were issued as payment of the dividend in kind to the shareholders who decided to receive payment
in Shares.
On September 14, 2012, Orbia announced the results of its cash redemption offer for a total of $350 million Pesos on
debt instruments at an 8.75% rate due in 2019 (the Redemption Offer ). In addition, consent was requested from the
holders of debt instruments in order to make modifications to the terms and conditions of such securities. The
Redemption Offer and consent expired on September 13, 2012, and on the expiration date, $267.1 million of the
outstanding amount of the debt inshuments (or 76.32% of those securities) accepted the offer and gave their consent.
The Redemption Offer was settled on September 19, 2012, paying a consideration of $1.245 Mexican pesos for each
Mexican peso of par value plus unpaid accrued interest on the settiement date.
On September 19, 2012, Orbia successfully finali ed the transaction for the issuance of long-term debt instruments, and
due to the excess demand for this issue (over 17 times), it was decided to increase the initial amount of the debt
instruments to be issued, with a resulting value of $1,150 million. The issuance was made in two blocks: one of $750
million for a 10-year term with a fixed rate coupon of 4.875% and another of $400 million for a 30-year term with a fixed
rate coupon of 6.75%.
The Company used the proceeds from the issuance of $1,150 million for corporate purposes and, in general, primarily
to prepay debt as follows: (i) up to $600 million for the prepayment of its revolving credit dated August 26, 2011, and (ii)
up to $436 million to repay long-term debt, of which $333 million (principal of $267 million and premium of $65 million)
has been used to repurchase debt instruments maturing in 2019, through the Redemption Offer that expired on
September 13, 2012, $38.0 million ($484 million Mexican pesos) to repay the loan taken out with BBVA Bancomer and
$65 million to pay a loan from Bancolombia, S.A., and prepaid interest and fees of $16 million. The remaining balance
of $97.8 million was left in the Company s cash.
On October 9, 2012, Orbia concluded its primary public offering of shares through which it increased its authori ed
variable capital stock by issuing 260,000,000 Single Series, Class 11 shares with a price of 60.00 Mexican pesos per
share (par value of $1.3192 Mexican pesos per share and the differential generated a premium on share subscription)
the amount of funds obtained was $1,211 million ($15,600 million Mexican pesos), which are presented net of placement
expenses and their income tax effect of $1,185 million.
2013
In March 2013, Orbia reached an agreement with PolyOne Corporation to acquire 100% of its specialty PVC resin
operations in the United States, assets consisting of two production plants and a research and development center.
Through this acquisition, Orbia entered the speciali ed resin products market with higher margins. The approximate
value of this acquisition was $250 million.
During 2013 Orbia signed the oint venture agreement with Oxy to build an Ethylene Cracker in Texas, USA. This is part
of the vertical integration strategy to capture the competitive advantage of shale gas in NoRh America.
During 2013 PMV, the strategic alliance between Orbia and Pemex began opera6ons in the last quarter of 2013, in line
with the plan to increase the capacity of VCM from around 120 thousand tons/year to more than 400 thousand tons/year.
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Attachment 1_Description of the Applicant Company
2014
On June 30, 2014, the Company took out a$1,500 million five-year revolving line of credit with a rate of LIBOR plus 95
basis points at 1.35 basis points this range depends on the utili ation level and the rating assigned by S P and Fitch.
With this revolving credit, Orbia increased its financial flexibility to take advantage of the opportunities that arise in its
markets to consolidate its strategic growth plans.
On September 17, 2014, the issuance of a$750 million 30-year Senior Note under Rule 144-A / Reg S with a spread of
270 basis points on U.S. Treasury bonds was completed. The Senior Note was payable on maturity. The proceeds were
mainly used to refinance the MEXICHEM 11 issue maturing in 2016 and to fund acquisitions.
On September 19, 2014, Orbia acquired 100% of the shares of Dura-Line Holding Inc. from CHS Capital. Dura-Line,
based in Knoxville, Tennessee, USA, has a strong presence in the telecommunications market in several countries and
regions around the worid. This includes the United States, India, Europe, South Africa and others. This acquisition was
valued at $630 million.
On September 23, 2014, Orbia accelerated all the MEXCHEM 11 stock certificates.
In December 2014, Orbia acquired 100% of the shares of Vesto PVC Holding mbH (Vestolit). Vestolit is the only
European producer of high-impact suspension PVC resin (HIS-PVC) and the second largest producer, also in Europe,
of PVC paste and the sixth largest European producer of PVC resins. Vestolit is in Marl, ermany. Its total installed PVC
capacity is 415 thousand tons per year. This acquisition strengthened the Company s position in the European market.
Additionally, this acquisition gave Orbia access to new technologies and best practices that have improved the
operations of its Polymer Solutions business group. Vestolit was acquired for a total of $219 million euros in cash and
assumed liabilities. As of December 1, 2014, Vestolit was consolidated into the Vinyl Business roup for accounting
purposes.
On December 31, 2014, Mexichem UK Ltd. acquired from E.I. Du Pont de Nemours and Company the exclusive
worldwide rights for the distribution and sale of pharmaceutical grade HFC-227ea/P, for the regulated medical and
pharmaceutical market for medical propellants. This transaction supports the Company s strategy with a focus on global
growth through participation in specialty products. The product is used to safely release various medicines in aerosol
form, including fixed-dose inhalers for the treatment of asthma. The product will be sold under the EPHEX brand,
owned by the Issuer, the world s leading brand of inedical propellants with approximately 75% of the market for medical
inhalers produced worldwide. The acquisition price was $4.1 million.
2015
On May 12, 2015, Orbia inaugurated a new manufacturing plant in Hyderabad, India. The plant produces high pressure
ducts and pipes for the water, telecommunications (voice and data) and gas markets. The new plant is Orbia s fourth
plant in India, along with two others located in oa and one in Neemrana, near Delhi. The location of the Hyderabad
plant in southern India will provide Orbia with a strategic location to export to Southeast Asia, serve customers in
southem India, and capture new business oppoAunities in the region. The opening of the plant is part of Orbia s ongoing
strategy to become a global, vertically integrated chemical company with a focus on specialty products and solutions.
An investment of $3.4 million was made in the plant.
2016
On October 26, 2016, the Company announced the acquisition of ravenhurst Plastics Ltd. ( PL) in Temiskaming,
Ontario, Canada in order to reinforce its global growth model in value-added specialty products. PL supplies high-
density polyethylene (HDPE) piping and ducts for fiber optics as well as construction products in the Canadian market.
The transaction was consolidated into the Fluent business group and had a value of $13 million paid in cash.
On November 28, 2016, Orbia announced the acquisition in the United Kingdom of 100% of the shares of Vinyi
Compounds Holdings Ltd. (VCHL), a leading supplier of PVC compounds serving a wide range of industries including:
building and construction, pipe and profile manufacturing, foolwear and consumer goods. The Derbyshire-based PVC
composite manufacturer, VCHL, generated annual revenues of approximately $40 million at the time of acquisition. Orbia
consolidated VCHL s operations under its Compounds business unit, a leading supplier of PVC compounds, which is
part of the Polymer Solutions business group. This acquisition had a value of 24 million pounds sterling, equivalent to
$30 million paid in cash.
2017
In February 2017, the 50/50 oint venture formali ed on October 31, 2013, beNveen the Issuer and Occidental Chemical
Corporation (OxyChem), the Ingleside Ethylene LLC, began operations on time and on budget of the ethylene cracker
in the OxyChem complex located in Ingleside, Texas, USA. During the second quarter of 2017, the Cracker began
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Attachment 1_Description of the Applicant Company
commercial operations. The Cracker has a production capacity of 1.2 biliion pounds (550,000 metnc tons) of ethylene
per year and provides OxyChem with a continuous source of ethylene for the production of vinyl monochlonde (VCM),
which the Company uses to produce polyvinyi chloride (PVC resins) used to make PVC pipes, among other products.
The total amount invested during 2017 and 2016 alone was $62 million and $350 million respectively (based on asset
accounting and not cash flow). The oint venture also includes the gas pipeline and storage plant in Markham, Texas.
USA.
On March 23, 2017, the Company announced that the U.S. International Trade Commission (ITC) found that imports of
refrigerant gas R-134a were causing material damage to the R-134a production mdustry m the United States. The
decision was the result of a year-long investigation by the U.S. Department of Commerce, which found that imports of
R-134a from China were entering the United States at prices below fair value. On February 22. 2017, the Department
of Commerce announced that imports from China of R-134a engaged in dumping practices and imposed anti-dumping
duties of between 148.79% and 167.02%.
In August 2017, Mexichem Soluciones Integrales Holding, S.A. de C.V. (MSIH), an Orbia subsidiary, reached an
agreement to acquire: i) voting shares represenGng 80% of the subscribed and paid-in capital stock of Netafim, ii) all
non-voting shares representing approximately 0.4% of the subscribed and paid-in capital of Netafim, and iii) certain loans
granted by some of the shareholders of Netafim, Bluedrip S.ar.l, and Netafim Hat enm Holdings, Cooperative
Association Limited, in favor of Netafim.
On September 27, 2017, Orbia successfully completed the $1,000 million 1448 I Reg S bond offenng, The offering
consists of two tranches: $500 million 4.00% fixed rate bonds due in October 2027 and $500 million 5.50°k fixed rate
bonds due in January 2048. The proceeds of the offering were used pnmarily to finance the acquisition of Netafim, L.T.D.
(Netafim).
On December 20, 2017, Orbia announced the decision of PVM shareholders not to rebuild its VCM produc6on capacity.
As a result, the VCM business, the assets and liabilities associated with the production of ethylene and the ancillary
services associated with VCM and ethylene were classified on that date as discontinued operations in its consolidated
financial statements and other statements. Thus, all impacts and recogni ed revenues related to the incident at the VCM
plant are repoRed as discontinued operations. In 2018, $22.8 million of revenue was recorded in the same item of
discontinued operations for complements to the estimates made by Orbia the previous year. In addition, PMV s decision
not to rebuild the VCM plant resulted in the additional cancellation of $196 million related to the assets of the Ethylene
plant and ancillary services related to the VCM and Elhylene plants, which were also listed as discontinued operations.
2018
On January 22, 2018, Orbia announced that it acquired Sylvin Technologies Inc. (Sylvin), which is a manufacturer
speciali ing in PVC compounds based in Denver, Pennsylvania, USA. for $39 million free of cash and debt. Sylvin, on
the date of the announcement, had a 30-year history serving a wide range of industries including: cable, electricai,
industrial, automotive, medical and food product industries. Orbia consolidated Sylvin into the Polymer Solutions
business group under the Compounds business unit. By combining Sylvin s customer-oriented business model, its strong
work force, and application development capabilities with Orbia s global compound business, they wili be able to offer
greater added value to their U.S. customers. Sylvin s key raw materials are PVC resins, plastici ers, and stabili ers,
which shoutd result in synergies with the operations of Orbia s Polymer Solutions business group.
On February 7, 2018, Orbia completed the acquisition of BO% of the shares of Netafim LTD (Netafim), a leading Israeli
company in micro irrigation solutions, after obtaining all government authori ations and fulfilling the prerequisites
required in the Share Purchase Agreement signed in August 2017. The price paid for the acquisition was $1,424 million.
Kibbut Hat erim will retain the remaining 20% of Netafim s capital stock. This iransaction represented a significant step
forvvard in Orbia � long-tertn strategy to position itself as a world leader in speciali ed products and solutions, serving
high-growth markets. Orbia consolidated Netafim in the Fluent business group.
The acquisition was mainly financed as follows: (i) cash of $239 mdiion, (ii) new short-tertn loan of $200 million, and (iii)
cash flows from the issuance of a long-term bond of $985 million.
On July 6. 2018, Orbia announced that in line with its strategy of consolidating key businesses, it reached an agreement
for the acquisition of 44.09% of the shares representing the capital stock held by Pemex in Petroqu mica Mexicana de
Vinilo, SA de CV. (PM�, through its subsidiary PPQ Cadena Productiva, S.L., after approval by the Boards of Directors
of both Pemex and Orbia. The transaction amount was approximately $159.3 million, which is within the valuation ranges
of comparable companies and prior transactions in the petrochemical sector. Orbia completed the acquisition on
November 16, 2018, meaning that, from that date, PMV was exclusively a subsidiary of Orbia and its activity, as of that
date until the date of this Annual Report, only consisted of the operation of the chlorine-soda plant.
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2019
On June 24, 2019, the Company informed the investing public that it had signed the renewal of its revolving credit for
$1,500 million dollars, with 5-year maturity and upgrading different Gauses and conditions in line with its investment
grade rating based on the Standard Poor s ratings ( BBB- global scale and MXAA/MXA-1 national scale),
FitchRatings ( BBB global scale and AA (mex) national scale) and Moody s( Baa3 global scale). The credit could be
used for any company purpose, including acquisitions, debt refinancing and the financing of commercial transactions,
among others. This arrangement replaced the one that was signed in 2014 for a term of 5 years with a syndicate of 10
of the most globally renowned banks.
At the Company s Shareholders Mee6ng held on August 26, 2019, shareholders approved the change of corporate
name to Orbia Advance Corporation, S.A.B. de C.V reflecting the new strategy and global reorgani ation undeRaken by
the Company, to align its image in accordance with its mission, vision and philosophy.
For the Company s management, the fiscal year marked the cuimination of the implementation of a multi- year growlh
strategy based on acquisitions, which significanUy increased the Company s global footprint and market penetration.
The Company defined and announced a new name, purpose, and strategy to reflect its r abilily to meet the most pressing
global challenges and its commitment to advance life around the woAd.
The Company reorgani ed into five business groups fxused on providing customer-driven solutions through the
verticals of Data Communications (Dura-Line), Precision Agriculture (Netafim), Building Infrastructure (Wavin),
Fluorinated Solutions (Koura) and Polymer Solutions (Vestolit and Alphagary). The Company also started to implement
its �lay-to-win strategy to capitali e on organic growth opportunities and generate greater operational and financial
performance.
2020
On January 10, 2020, the Company informed the investing public that, as part of its strategy, it continuously seeks
business opportunities, as well as options for acquisitions, sales, mergers and any other financial transactions that allow
it to maximi e shareholder value. In this context, the Company announced that it was in the process of analy ing
divestiture options or strategicalliances with third parties for its Polymer Solutions business, without there being certainty
or approval on the completion of any transaction at the time.
On March 5, 2020, the Company nolified its agent bank with which it had entered into a$1.5 billion Revolving Line of
Credit agreement on June 21, 2019, that the line of credit would be reduced by $500 million, leaving a remaining
available balance of $1 billion. The revolving line of credit bears monthly interest at LIBOR plus 1.05%. The loan principal
is repayable in a single installment upon maturity on June 21, 2024. On March 27, 2020, the Entity drew down the
remaining full amount of the available line of credit, which was repaid during 2020 as foliows: $400 mitlion on September
30, $350 million on October 30, $175 million on November 30 and $ 75 million on December 30.
In March 2020, the World Health Organi ation ( WHO ) deciared Coronavirus disease ( COVID-19 ) a global pandemic.
Orbia took comprehensive measures to protect employees, customers and communities from the risks associated with
the COVID-19 pandemic, including those summari ed below:
o It maintained strict health and safety measures at all its operating sites.
o It introduced staggered back-to-work protocols, when applicable, for essential sites and facilities.
o It continued restricting ali non-essential business travel, as well as promoting remote working for a large
secGon of employees at a global level.
o It continued using digital tools to work efficiently and drove innovation while improving digital
infrastructure to adapt, increase volume and satisfy customer needs.
o It increased online training and leaming, while extending remote medical support and healthcare access
to all employees.
o It implemented the employee assistance program in ceRain regions to offer medical and psychologicai
support, which will continue after the COVID-19 pandemic.
The maf�rity of Orbia s facilities and plants remained in operation through the pandemic, and the supply chain was
practically unaffected. The Company also adapted its production processes, streamlining prototype creation periods to
supply essential medical equipment and materials, including the thousands of inhalers that use its propellants or
adaptable cntical care equipment, rapid COVID-19 test devices, sanitation tents and health evaluations as well as
medical grade personal protective equipment manufactured with its plastics.
The most significant effects on Orbia s financial performance included a decrease in sales resulting from a decline in
demand mainly during the months of April and May 2020. Orbia also made use of lines of credit as precautionary
measures in the face of the uncertainly resulting from the COVID-19 emergency.
Attachment 1: Description of the Applicant Company Page 57 of 204
Attachment 1_Description of the Applicant Company
On May 29, 2020, Orbia infortned the investing public that, due to the impact of the COVID-19 pandemicon the world
economy and capital markets, it had decided to pause efforts related to a possibie divestitureor other strategic option for
its Polymer Solutions business. The Company stated that it had decided to wait for a stable environment that would
allow it to maximi e its shareholder value in a potenUal transaction, adding that the Company believes that Polymer
Solutions is a solid business with aunique global position and strong cash flow generation and that will continue to dnve
its sustainable and profitable growth.
On September 16, 2020, the Company set up a U.K. Commercial Paper Program for 300 million PoundsSteriing through
the issuance of promissory notes with the Bank of England and Her Ma esty s Treasury (HM Treasury) undeAhe Covid
Corporate Financing Facility. These promissory notes expired on May 18, 2021 the annual cost of the equivalent line in
US dollars was 0.74%, and they were not listed on any stock exchange. The Company gained access to this financing
option offered by the Bank of England during the COVID-19 pandemic due to its operations and presence in the United
Kingdom. This trade paper program reduced the Company s overall cost of financing and the uncertainty caused by the
pandemic.
On November 18, 2020, Orbia completed its first corporate venture capital transaction through an investment in
SeeTree, a leading start-up in the agricultural technology sector with a focus on tree cuitivation. SeeTree uses military
grade telecommunications, surface sensors, artificial intelligence and machine leaming in an integrated manner to
prevent pests in trees and to maximi e productivity at a lowcost. Precision Agriculture is partnering with SeeTree to
incorporate the company s advanced technology into its solutions offering. This investment represents a significant step
for Orbia and Precision Agriculture towards driving the development of conscious and profitable agriculture.
On December 31, 2020, the Company recorded a reserve of $25 million in connection with the investigation of Vestolit
mbH by the European Union compeGtion authorities. On January 15, 2021, a fine of 22.367 million was paid to the
European Urnon competition authorities, putting an end to the matter.
In April 2020, to better enable operationai and financial decision making and analysis, the Company redefined ds
business group structure from Vinyl, Fluor and Fluent, to Building and Infrastructure, Data Communications, Preasion
Agriculture, Fluorinated Sotutions and Polymer Solutions.
2021
On January 7, 2021, Orbia announced that, as it had reported on several occasions, in the ordinary course of business,
the Company continually explores opportunities to create value for its shareholders, inGuding potential alliances,
mergers, acquisitions, sales and other strategic transactions. Accordingly, Orbia evaluated value creation opportunities,
including the possible sale and/or strategic alliances in relation to its Polymer Solutions (Vinyl Business). Orbia did not
enter into any binding contract to carry out any specific transaction and has no current plans to do so.
In early 2021, Orbia announced a partnership with the Resilient Cities Network (R-Cities), lhe world s leading nelwork
of cities. Through the Building Infrastructure, Precision Agriculture and Data Communications groups, Orbia will work
with R-Ci6es members to develop innovative solutions to current challenges such as transportation infrastructure, water
supply, urban food systems and connectivity, which can improve the quality of urban life. These initiatives will contribute
to the Company s progress towards three Sustainable Development oals.
On January 19, 2021, Orbia announced the appointment of Sameer S. Bharadwa as the new eneral Director effective
February 1, 2021, after Daniel Mart ne -Valle resigned from said position by mutual agreement with the Board of
Directors. Management.
On February 25, 2021, Orbia informed the investing public that CAPEX would be belween $350 to 400 million for the
year.
On March 15, 2021, Orbia reported that Precision Agriculture signed a definitive agreement for the acquisition of akon
Horticultural Pro ects, the Dutch leader in tumkey greenhouse pro ects. The acquisition is synergistic, combining the
global presence and expertise of Precision Agriculture and akon5 greenhouse technology. akon brings unique
experience in all aspects of greenhouse pro ect execution, greenhouse manufacturing capabilities and a proven track
record in key verticals.
In April 2021, the Company entered into an agreement to purchase all of the shares of akon Holding B.V and akon
S.p. .o ( akon).
On May 6, 2021, Orbia Advance Corporation, S.A.B. of C.V. carried out the issuance and placement of Bonds Linked to
Sustainability in the intemational capital markets: it issued $600 million dollars in senior notes maturing in 2026 (5 years)
at an annual rate of 1.875%, and $500 million dollars in senior notes maturing in 2031 (10 years) at an annual rate of
2.875%. The issue received a Baa3 credit rating from Moody s, BBB- from S P and BBB from Fitch Ratings.
Attachment I: Description of the Applicant Company Page 58 of 204
Attachment 1_Description of the Applicant Company
Orbia applied the resources obtained to prepay existing debt and for general corporate purposes. With this, Orbia s debt
profile improved significantly by extending the average matunty of the Company s credit liabilities to 14 years, with no
significant maturities before 2026.
On May 13. 2021, Orbia announced the acquisition of a ma onty stake in Shakun Polymers Private Limited ( Shakun ),
a private, family-owned company that is a market leader in the production of compounds for the wire and cable markets
in the Indian subcontinent, Middle East, Southeast Asia and Afnca. The acquisition took place on June 22, 2021.
Shakun s product development focuses on halogen-free flame retardant compounds and PVC-based compounds for
power and data cables. In addition, Shakun s semiconductive and cross-linkable compounds extend Alphagary s product
portfolio and offer a plattortn for growth to meet customer requirements, which should bring synergies to the operations
of the Polymer Solutions group. Orbia has fully consolidated Shakun s results into the Polymer Solutions business group.
On May 26, 2021, the Company made an advance payment of $328 million of its $70 million issuance of Senior Notes,
which would othervvise mature on September 19, 2022. These notes paid an annual interest rate of 4.875% in semi-
annual installments.
On June 10, 2021, Orbia made the total early amorti ation of the ORBIA 12 Stock Certificates (formerly MEXCHEM
12 ) dated March 21, 2012. The early amorti ation price was $3,068,891,451.23 M.N.
On July 21, 2021, at the Issuers eneral Ordinary Shareholders Meeting, the Board of Directors accepted the
resignation of the Director, Anil Menon, and agreed to appoint Mihir A. Desai, a prominent economist from Brown
University and Harvard University, to replace him.
On August 23, 2021, Orbia announced the appointment of James P. Kelly as Senior Vice President of Finance (Chief
Financial Officer). Mr. Kelly commenced his duties at Orbia on August 30, 2021, and is located at Orbias corporate
headquarters in Boston, Massachusetts. Mr. Kelly replaced Edgardo uillertnos Carlos, who announced his resignation
on June 17, 2021.
On August 23, 2021, Orbia repoRed that it made the first issuance of Euro Commercial Paper for an amount of 30
million (thirty million euros), through the placement of promissory notes, at a cost of 0.35%, with a maturity date up to
September 23, 2021. The notes were issued under the Euro Commercial Paper Program established by Orbia on June
2, 2021, for an amount of up to 750 million (seven hundred and fifly million Euros) with issues that will be valid for less
than one year and will not be listed on any stock exchange (the Program ).
Orbia carried out the repurchase of shares for an amount of $37 million. In accordance with the approval granted by its
shareholders, Orbia also cancelled 90 millio� treasury shares.
On September 21, 2021, Orbia completed the prepayment of the remainder of its senior note of $750 million due in
2022.
On November 1, 2021, Orbia s Fluorinated Solutions business acquired Silatronix, a Madison, Wisconsin-based
Company. Silatronix has expeRise in fluorositane additives for Lithium-ion batteries and has an industry-wide reputation
for developing innovative solutions that deliver improved battery safety and performance in a range of applications, from
electric vehiGes to stationary, grid-scale storage.
Subsequent events (2022)
On February 1, 2022, Orbia s Building and Infrastructure business, Wavin, acquired 67% of the shares of Vectus
Industries Limited Vectus , a privately held manufacturer of plumbing and drainage pipes and the market leader in
water storage tanks in India for $132 million paid in $108 million of cash and $24 million of other consideration at closing.
sub �ct to customary working capital and net indebtedness ad ustments.
With this acquisition, Orbia s Building and Infrastrvcture businesses will operate at the forefront of India s quickly growing
water management industry, supplying customers in the residential, commercial, industnal, infrastructure and
agricultural sectors.
The Company began consolidating Vectus s results as of February 1, 2022.
v. eneral business strategy
(See item b) eneral Business Description , Business Strategy Section of Chapter 2: The Issuer in this Annual
Report).
Attachment I: Description of the Applicant Company Page 59 of 204
Attachment 1_Description of the Applicant Company
Driven by purpose and unified by values, Orbia chooses to work on the toughest challenges from field to table, ground
to home, mine to market and lab to everyday life, we rely on our collective ingenuity and our integrated supply chain to
transform basic and advanced materials into greener, smaRer. more efficient solutions.
The Orbia businesses and affiliated commercial brands have a collective focus on ensuring food secunty, reducing water
scarcity, connecting communities to data infrastructure, reinventing the future of cities and homes and expanding access
to health and weliness with basic and advanced materials. The Company s business groups are Precision Agriculture,
Building Infrastructure, Fluorinated Solutions, Polymer Solutions and Data Communica6ons that collectively seek
human-centered solutions for global challenges. Orbia has commercial activities in more than 110 countries and
operations in 50, with o�ces in Mexico City, Boston, Amsterdam and Tel Aviv.
The Company s strategy is to 1) harness the power of matenal science and innovation to serve customer needs, address
critical world problems, and provide sustainability solutions 2) invest in growth, leveraging our uniquely advantaged
positions to bring differentiated and value-added solutions to market 3) maximi e the value of integration across Orbia
and the vatue chains in which we participate and 4) create value as good stewards of capital and disciplined operators.
Each business group is discussed in more detail below:
i) Polymer Solutions (Vestolit and Alphagary, represented 39R�o of Orbia s sales in 2021). Polymer Solutions is as
universal and dynamic as the materials it produces. It focuses on the production of generdl and special PVC
resins and other wnyl polymers with a wide variety of applications, generating solutions that support the daily
lives of its customers such as pipes, cables, floors, auto parts, appliances, clothing, packaging and medical
devices.
ii) Building and Infrastructure (Wavin, represented 33�k of Orbias sales in 2021). This Business roup is
redefining today s pipe and fittings industry by creating innovative soiutions with longer life and less installation
work. This group, with clients on five continents, also develops sustainable technologies for water management
systems, as well as systems for heaUng and cooling water in homes.
iii) Precision Agriculture (Netafim, represented 13% of Orbias sales in 2021). Precision Agriculture helps the
world to grow more with less. Precision Agricultures cutting-edge digital fartning technologies, services and
irrigation systems enable farmers to achieve significantly higher yields and better-quality food while using less
water, fertili er and other inputs. By helping farmers grow more with less, Precision Agriculture enables farmers
around the world to feed the planet more efficiently and sustainably.
iv) Data Communications (Dura-Line, represented 11% of Orbia s sales in 2021). Data Communications operates
under the belief that every organi ation, every community, and every inhabitant on the planet deserves the
chance to benefit to the fullest from modem technology. The Company annually produces more than 400 million
meters of essential and innovative infrastructure, including conduit, FuturePath, cables-in-conduit and
accessories, which create the physical pathways for fiber op6cs and other network technotogies that connect
cities, homes and people. Data Communications is the world leader in the manufacture and distribution of such
products in a highly dynamic industry. Data Communications is the world leader in conduit and a leading
company in HDPE based products for cable and fiber optics, as well as pressuri ed pipes from natural gas and
other solutions.
v) Fluorinated Solutions (Koura, represented 8% of Orbias sales in 2021). Fluorinated Solutions provides
products, technologies and other applications of fluorinated materials that suppoR modem life in countless
ways. With the world s largest fluorite mine, solid knowledge and vast production experience, this group
develops value-added chemicals, as well as propellants and advanced materials used in a wide range of
applications, including automotive, infrastructure, health and medicine, HVAC and food cold chain.
Summary of Corporate and Structural Changes
The Company has implemented the corporate restructuring of some of its subsidiary businesses in order to align,
integrate and optimi e the productive processes of its value chains, and has appointed the management team in charge
of these businesses. The following are the most significant changes that have allowed the Company to create process
synergies and efficiencies:
In 2019 the Company reorgani ed into five business groups focused on providing customer-driven solutions through
the veRicals of Data Communications (Dura-Line), Precision Agriculture (Netafim), Building and Infrastructure (Wavin),
Fluorinated Solutions (Koura) and Polymer Solutions (Vestolit and Alphagary).
Attachment I: Description of the Applicant Company Page 60 of 204
Attachment 1_Description of the Applicant Company
On May 17, 2019, Mr. Sheidon Hirt was appointed Vice President, eneral Counsel at Orbia. Also, on August 5, 2019,
Mr. Edgardo Carlos was appointed Orbia s Chief Financial Officer.
On January 19, 2021, Orbia announced the appointment of Sameer S. BharadwaCBs the new eneral Director effective
February 1. 2021, after Daniel Mart ne -Valle resigned from said position by mutual agreement with the Board of
Directors.
On August 23, 2021, Orbia announced the appointment of James P. Kelly as Senior �ce President of Finance (Chief
Financial Officer). Mr. Kelly commenced his duties at Orbia on August 30, 2021, and is located at Orbia s corporate
headquarters in Boston, Massachusetts. As announced on June 17, 2021, Mr. Edgardo uillermo Carlos announced
his resignation from Orbia, in accordance with agreement with the Board of Directors.
/n the Po/ymer Solutions business group:
The following significant events have impacted the Polymer Solutions business group (fortnerly the Vinyl business
group):
With the acquisition in 2014 of Vestolit and the acquisition in 2016 of Vinyl Compounds Holdings in the United Kingdom,
Orbia entered new maAcets and regions with higher-margin speciaity products. With Vestolit in particular, the Company
included high impact suspension PVC (HIS-PVC) resin and PVC paste. In the case of Vinyl Compounds Holdings, the
Company acquired a leading PVC compounds supplier that deais with a wide range of industries including: building and
construction, pipe and fitting manufacturing, foolwear and consumer goods.
The acquisition of Mexichem Resinas Vin licas in Mexico and in Colombia brought with it the production of suspension
and emuision vinyl resins, copolymer, homopolymer, Blender resins and Extender resins.
On January 22, 2018, Orbia announced the acquisition of Sylvin Technologies Inc. a speciali ed PVC compound
manufacturer based in Denver, Pennsylvania, USA, for $39 million free of cash and debt. Sylvin recorded total sales of
$29 million in 2017. The company has a 30-year history of serving a wide range of industries including: the cable,
electrical, industrial, automotive, medical, and food product industries.
Sylvin s key raw materials are PVC resins, plastici ers and stabili ers, which should bring synergies to the operations
of the Polymer Solutions business group. Orbia consolidated Sylvin in the Poiymer solutions business group.
On July 6, 2018, Orbia announced that in line with its strategy of consolidating key businesses, it had reached an
agreement for the acquisition of 44.09% of the shares representing the capital stock held by Pemex in PMV, through its
subsidiary PPQ Cadena Productiva S.L., after the approval by the Boards of Directors of both Pemex and Orbia. The
amount of the transaction came to approximately $159.3 million, a value within the valuation ranges of comparable
companies and prior transactions in the petrochemical sector. Orbia completed the acquisition on November 16, 2018,
so that, as of that date, PMV was exclusively a subsidiary of Orbia and its activity, as of that date, consisted only of
operating the chlorine-soda plant.
The f�int venture with Oxy incorporated the production of ethylene for the integration of the Poiymer Solutions business
group.
In February 2021, both Nicholas Ballas and autam Nivarthy were appointed Presidents of the Polymer Solutions
business group for Vestolit and Alphagary, respectively. Both occupy the role vacated by Sameer S. BharadwaCwhen
he became Chief Executive Officer of Orbia.
On May 13, 2021, Orbia announced the acquisition of a ma ority stake in Shakun Polymers Private Limited (Shakun). a
private, family-owned company that is a market leader in the production of compounds for the wire and cable markets
in the Indian subcontinent, Middle East, Southeast Asia and Africa. The acquisition closed on June 22„ 2021.
Shakun s product development focuses on halogen-free 8ame retardant compounds and PVC-based compounds for
power and data cables. In addition, Shakuns semiconductive and cross linkable compounds extend Alphagarys
portfolio, offer a platfortn for growth and meet customer requirements, which should bring synergies to the operations
of the Polymer Solutions group of companies. Orbia consolidated Shakun into the Polymer Solutions business group.
In the Fluorinated So/utions business group:
With the acquisition in 2014 of the license to distribute and sell pharmaceutiral grade HFC-227/ea propellant, Orbia
managed to position itself Goser to the end consumer in this business area.
The acquisition of Qu mica FI or added hydrofluoric acid to the product portfotio, which is needed to produce multiple
specialty products in this business group. The integration sVategy for the Fluorinated Solutions business group has
allowed the incorporation of aluminum fluoride products to the product portfotio with its plant in Tamaulipas with the
Attachment I: Description of the Applicant Company Page 61 of 204
Attachment 1_Description of the Applicant Company
acquisition of Ineos Fluor it burst into the refrigerant market with higher value-added products, and the latest acqwsrtion
of Fluorita de M xico gave it access to the highest punty fluonte woridwide.
In early 2018, Sameer S. Bharadwa , president of the Compounds business unit (part of the Polymer Solutions business
group), also took over as president of the Fluorinated Solutions business group. Sameer participated as a member of
the Advisory Board of the Fluorinated Solutions business group from 2010 to 2016 demonstrating in-depth knowledge
of the business group.
In February 2021, regg Smith was appointed President of the Fluorinated Solutions (Koura) business group, occupying
the post vacated by Sameer S. Bharadwa when he became Chief Executive O�cer of Orbia.
In November 2021, Fluorinated Solutions acquired Silatronix, a Madison, Wisconsin-based Company. Silatronix has
expertise in fluorosilane additives for Lithium-ion batteries and has an industry-wide reputation for developing innovative
solutions that deliver improved battery safety and performance in a range of applications, from electric vehicles to
stationary, grid-scale storage.
In the Precision Agriculture business group:
On February 7, 2018, Orbia completed the acquisition of 80% of the shares of Netafim LTD (Precision Agriculture), a
leading Israeli company in micro irrigation soluGons, after obtaining all govemment authori ations and fulfilling the
prerequisites required in the Share Purchase Agreement signed in August 2017. The price paid for the acquisition was
$1,424 million. Kibbut Hat erim will retain the remaining 20% of Netafim s capital stock. This transaction represented
a significant step forward in Orbia s long-term strategy to position itself as a world leader in speciali ed products and
solutions, serving high-growth markets.
The Company believes that the acquisition of Precision Agriculture is transfortnational and will further push its strategy
toward specialty solutions, products and services, positioning the Company as an innovative leader in the high-growth
market of precision irrigation. By acquiring Precision Agriculture, Orbia has become a leading developer of solutions for
addressing two of the mega-trends facing the world: food and water shortages, and responding to the need to increase
crop yields and meet the highest sustainabiliry standards with respect to fertili ation. Precision Agriculture has a long
history at the forefront of creating smart solutions in the irrigation market. This acquisition gives Orbia access to this
smart technology, which can be used in water supply and in other sectors, providing a platform from which it can
generate smart industrial solutions based on existing production lines that serve the infrastructure, housing, and data
communication markets as well as other sectors. The Issuer believes that this acquisition will also strengthen its global
presence and impact in key growth markets and allow it to grow in the replacement market and diversify and expand
the end markets in which it sells its products.
aby Miodownik is President of this acquired company as of March 1, 2020.
On March 15, 2021, Orbia reported that Precision Agriculture, signed a definitive agreement for the acquisition of akon
Horticultural Pro ects, the Dutch leader in tumkey greenhouse pro ects. The acquisition is synergistic, combining the
global presence and expertise of Precision Agriculture and akon s greenhouse technology. akon brings unique
experience in all aspects of greenhouse pro ect execution, greenhouse manufacturing capabilities and a proven track
record in key verticals.
In April 2021, the Company entered into an agreement to purchase all of the shares of akon Holding B.V and akon
S.p. .o ( akon).
In the Data Communicafions business group:
With the 2014 acquisition of Data Communications (Dura-Line ), Orbia established a new Business roup related to
development in the telecommunications sector and with excellent positioning in North America, Europe and India.
With the acquisition in 2016 of ravenhurst Plastic, Inc, a private Canadian plastic tube manufaclurer located in Ontario,
Orbia entered the Canadian telecommunica6ons maAcet with specialty polyethylene products.
Orbia also included in its portfolio high density polyethylene (HDPE) products in conduit pipe solutions, pipe protectors
and pipes for telecommunications (voice and data), as well as in the energy and infrastructure industry.
Peter Ha du took over as president of the Data Communications business in 2018.
In the BulldJng 8 Infrastructure business group:
Marteen Roef, who was serving as President of Wavin Europe, took over as President of Building Infrastructure in
2018.
Attachment I: Description of the Applicant Company Page 62 of 204
Attachment 1_Description of the Applicant Company
The acquisition of Wavin in May 2012 added new technologies and products. especiaily in the following areas
• Water management and conveyance through roof drainage via siphon, rainwater infiltrationlattenuation units
and filters.
• Heating and cooling of surfaces by means of roof heating systems and undertloor coolmg systems. Indoor
heating and cooling solutions.
• High-spec systems for heating and cooling water, as well as high-spec systems for Floors and waste
containment.
• Water treatment systems.
The Building Infrastructure lobal Leadership Team was established in 2019, bringing together the individual regional
units (EMEA, LafAm, APAC) into a global Building Infrastructure organi ation, while the regional organi ational
structure was largely retained.
In June 2020, Building Infrastructure s global head office was opened at Schiphol Amsterdam and in October 2020
the transformation into a fully global and integrated organi ation was announced. The Business roup brought together
the individual regional units and created a global organi ation with a global leadership team and global functions.
Bankruptcy
As documented in the Company s audited financial statements, the Company does not fall within any of the
circumstances established in Articles 9 and 10 of the Commercial Bankruptcy Act, and has not declared bankruptcy. nor
is the Company sub ect to any bankrupty risk.
Judicial, administretive or arbitration proceedings
Pursuant to the relevant information criteria set forth in Annex N of the Sole Issuer Circular, the Company and
its subsidianes are not, nor are they highly Iikeiy in the future to be involved in any relevant udicial,
administrative or arbitration proceeding that are different from those which are a normal part of the course of
business, and which have, had or could have a significant impact on the operational result or financial position
of Orbia or its business groups.
Effect of Laws and Government RegulaUons on Buslness Development
The Company s operations are sub ect to the laws and regulations of the countries in which it operates.
Orbia
The shares representing the Issuer s capital stock are publicly traded on the Mexican Stock Exchange (BMV), and it
therefore adheres to the following laws and regulations: (i) Stock Market Act, in Mexico (ii) the general provisions
applicable to security issuers and other securities market participants issued by the National Banking and Securities
Commission (CNBV) (iii) the eneral Provisions applicable to Companies and Issuers Supervised by the National
Banking and Securities Commission which contract External Audit Services for Basic Financial Statements (iv) the
Internal Regulations of the BMV, and (v) the eneral Business Organi ations Act.
Business groups
The Company� five business units operate in 50 countries, in all of which they adhere to the following general laws and
regulations:
• Regulations of an international, national, and local nature, primarily in financial aspects, monetary
policies, access to the currency markets. They must comply with administrative requirements to obtain
pertnissions to operate facilities, plants, to import and export of raw materials and finished products.
They must comply with labor regulations at some sites that are influenced by unions and environmental
regulations.
• Laws regulating health, safety, environment, unfair competition and monopolies, municipal construclion and
oning, local licenses and pertnits for facilities. With respect to intemational commerce, customs regula6ons.
control of imports and expoRs, specifically related to quotas, tariffs and anti<iumping protections, as well as
govemment policies and regulations related to commerce, sales of products, manufacturing operations and
relationships with customers, distributors and competitors.
• Finally, all the business groups comply with anti-corruption laws, such as the U.S. Foreign Corrupt Practices
Act (FCPA) and other similar laws.
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Attachment 1_Description of the Applicant Company
• The COVID-19 pandemic affected the following aspects of the Company s business.
o Lockdown restrictions established for non-essential economic activities.
a Migration of ob tasks from the Company s plants and facilities to remote work.
o Regulations on safety protocols impacting the Company s plant operations.
o Customer performance.
o Product shipments.
More specificaliy, some of Orbia s business groups may be subBct to specific laws and govemment regulations. For
more infortnation on these regulations, see part v. Applicable Legislation and Tax Situation of Section b) Business
Description of this section.
Investments ade in the Last Three Fiscal Years
Orbia 5 strategy has historically been to grow through acquiring companies with whom they are able to create synergies
and in recent years has focused on capital expenditures to encourage organic growth. The Company can maintain high
levels of efficiency and low production costs while improving its leadership position in the markets in which it operates.
The following table shows its capital expenditures for the periods indicated.
Inveatment Items
Investments in property, plant and equipment (CAPEX)
Proceeds from the saie of machinery and equipment
Investment in olher assels and intangible assels
Invesiment on a permanent basis
Sum
Figures in mil6ons
Year ending December 31:
2021 2020 2019
286 204 261
(�8) �2�) (23)
27 31 36
48 4 -
344 218 274
Furthermore, the Company is constanUy making investments in technology in order to penetrate and grow downstream
businesses and become closer to consumers to offer them high value-added products, as well as differentiated solutions
and services.
Acquisitions and new businesses established during the years ending December 31, 2021,2020 and 2019 included:
1. On February 1, 2022, Orbia s Building and Infrastructure business, Wavin, acquired 67% of the shares of
Vectus Industries Limited Vectus , a privately held manufacturer of plumbing and drainage pipes and the
market leader in water storage tanks in India for $132 million paid in $108 million of cash and $24 million of
other consideration at dosing, sub �ct to customary working capital and net indebtedness ad ustments.
With this acquisition, Orbia s Building and Infrashucture businesses will operate at the forefront of India s
quickly growing water management industry, supplying customers in the residential, commercial, industnal,
infrastructure and agricultural sectors. �
The Company has begun consolidating Vectus s resuits as of February 1, 2022.
2. On November 1, 2021, Orbia s Fluorinated Solutions business acquired Silatronix, a Madison, Wisconsin-
based Company. Silatronix has expertise in fluorosilane additives for Lithium-ion batteries and has an industry-
wide reputation for developing innovative solutions that deliver improved battery safety and peAormance in a
range of applications, from electric vehicles to stationary, grid-scale storage.
3. On May 13, 2021, Orbia announced the acquisition of a maCdrity stake in Shakun Polymers Private Limited
( Shakun }, a private, family-owned company that is a market leader in the production of compounds for the
wire and cable markets in the Indian subcontinent, Middle East, Southeast Asia and Africa. The acquisition
took place on June 22, 2021. Shakuns product development focuses on halogen-free flame retardant
compounds and PVC-based compounds for power and data cables. In addition, Shakun s semiconductive and
cross-linkable compounds extend Alphagary s product portfolio andoffer a platform for growth to meet
customer requirements, which should bring synergies to the operations of the Polymer Solutions group. Orbia
has fully consolidated Shakun s results into the Polymer Solutions business group.
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4. On March 15, 2021, Orbia reported that Precision Agriculture signed a definitive agreement for the acquisition
of akon Horticultural Pro ects, the Dutch leader in tumkey greenhouse pro ects. The acquisition is synergistic,
combining the global presence and expertise of Precision Agriculture and akon s greenhouse technology.
akon brings unique experience in all aspects of greenhouse pro ect execution, greenhouse manufacturing
capabilities and a proven track record in key verticals.
5. On November 18, 2020, Orbia completed its first corporate venture capdal transaction through an investment
in SeeTree, a feading start-up in the agricultural technology sector with a focus on tree cultivation. SeeTree
uses military grade telecommunications, surface sensors, artificial intelligence and machine learning in an
integrated manner to prevent pests in trees and to maximi e productivity at a low cost. Precision Agriculture is
partnering with SeeTree to incorporate the company s advanced technology into its solutions offering. This
investment represents a significant step for Orbia and Precision Agriculture towards driving the development
of conscious and profitable agriculture.
The following table shows the acquisitions made from 2019 to 2021, with the sales (in millions of Dollars) by each
company pnor to its acquisition.
Acqulskion Company Product Business roup
date
Agricullural technology
1&Nov-20 SeeTree space services and digital Precision Agricullure
agricullure
1-Apr-21 akon HoAicultural Pro ects' reenhouses Precision Agricullure
22-Jun-21 Shakun Polymers Private Compounds Polymer Solutions
Limited
1-Nov-21 Silatronix Fluorosilane addiUves for Fluorinaled
Lithium-ion battenes Solutions
1-Feb-22 Vedus Pipelines Building
Infrastrudure
(') Indude akon Holding B.V. and akon Sp. .O.O
Public Offerings
During the last three fiscal years, the Company has not been the sub ect of any public offering for control of the
Company, nor has it made any offer to assume control of other companies whose shares are listed on the Mexican
Stock Exchange or on any other foreign stock exchange.
Orbia has not made public offerings of debt or equity in the last three fiscal years.
b) Business Description
Business Strafegy
Driven by purpose and unified by values, Orbia chooses to work on the toughest challenges from field to tabie, ground
to home, mine to market and lab to everyday life, we rely on our collective ingenuiry and our integrated supply cham to
transform basic and advanced materials into greener, smarter, more efficient solutions.
The Orbia businesses and affiliated commercial brands have a collective focus on ensuring food security, reducing water
scarcity, connecting communities to data infrastructure, reinventing the future of cities and homes and expanding access
to health and wellness with basic and advanced materials. The Company s business groups are Precision Agnculture,
Buitding Infrastructure, Fluorinated Solutions, Polymer Solutions and Data Communications that collectively seek
human-centered sotutions for global challenges. Orbia has commercial activities in more than 110 countnes and
operations in 50, with offices in Mexico City, Boston, Amsterdam and Tel Aviv.
The Company s strategy is to 1) harness the power of materiai science and innovation to serve customer needs, address
critical world problems, and provide sustainability solutions 2) invest in growth, leveraging our uniquely advantaged
positions to bring differentiated and value-added solutions to market 3) mauimi e the value of integration across Orbia
and the value chains in which we participate and 4) create value as good stewards of capital and disciplined operators.
Orbia expenenced one of its most challenging years in 2020 due to the COVID-19 pandemic, which continued through
the year 2021. Each of its 22,350 plus employees worked responsibly to keep operations running, allowing rt to fulfill its
customer commitments. The Company worked diligently to protect its work teams health, safety and wellbeing by
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applying strict COVID-19 protocols. The Company introduced remote working for almost half its staff and supported its
employees and their families, as well as the communities in which it operates, at all times.
Despite the context it faced, Orbia achieved very positive financial results, exceeding the expectations it had at the start
of the pandemic. The management team acted quickly and decisively from the staR, mobili ing its work teams by
leveraging technology, operating its operating facilities always with employee health as the priority, preserving capital,
controlling costs and increasing connectiviry with its customers.
Orbia 9 portfolio of businesses showed its resilience, achieving particularly posi6ve financial results in the second part
of the year. The core of this performance was the consistent execution of the strategy in addition to the recovery of the
markets covered.
During, the years of 2020 and 2021, the Company continued to prioriti e customer-centric approaches by analy ing
and adopting commercial and operational strategies designed to meet the demand of its markets, capitali e on organic
growth opportunities and deliver superior operational and financial performance.
During the year 2021, despite the challenges presented by the COVID-19 pandemic, the Company con6nued with the
implementation of the following strategies:
A purpose-driven g/obal growth model
In 2021, Orbia continued creating innovative solutions for different macro-trends affecting communities and cities across
the world, such as:
i) rowing middle class with greater urbani ation and population density.
ii) rowing food and water scarcity.
iii) Connectivity, Intemet of Things and digitali ation.
iv) Climate change.
These macro-trends present challenges for our customers that our businesses seek to identify and mitigate, always
with their needs in mind. Thus, the Company decided to put the customer at the center of the strategy in order to develop
solutions that are increasingly speciali ed, technological and innovative.
Commitment to safety, environmental and social responsibility
The Issuer continues to position itself as a leader in Sustainabiliry and Corporate ovemance. The following milestones
were reached in 2021:
• Environment: The Company continued driving life cycle evaluations. For example, it was found that dnp
irngation has a significantly smaller carbon footprint than traditional irrigation methods. In addition, the use of
recycied polymers increased at Building Infrastructure and Precision Agriculture.
• At Fluorinated Solutions, the Company received authori ation for its third refrigerant recovery plant in Mihara,
Japan. Sulfur oxide emission also decreased by 28% compared to our baseline, on course to achieve the goal
of a 60% reduCtion for 2025.
• In 2021, Fluorinated Solutions developed, communicated, and implemented its organi ation-wide sustainability
program, based on ten foundations and four pillars that focus on community engagement environmental
perfortnance Sustainable Products and Solutions and Communications as a Responsible Company.
• Fluorinated Solutions participated in the planning of the board of trustees for the inclusive and participatory
construction of the Community Development Plan of La Salitrera, which will be completed in 2022. One of the
results derived from this dialogue was the installation of another community extension o�ce in the E itlo Santa
Catarina.
• In 2021 at the Fluonnated Solutions mines, water consumption from all sources was 34% lower compared to
� 2020. We calculate that a single molecule of water is used an average of 6.7 times in the process, maintaining
a rate of 84% of reused process water.
• At the Fluonnated Solutions chemical facility in Matamoros, northeastern Mexico, a significant contribution is
being made to the city s road infrastructure by establishing partnerships with local authorities to implement a
modet for sustainable circular management of sulfate by-product of calcium that is used as a road base and
stabili er of sub-bases.
• During 2021, Orbia obtained the following achievements
0 10% reduction in H Scope 1 2 emissions vs. 2019 baseline.
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o New oal to reduce Scope 3 emissions by 30°Io by 2030.
0 28% increase in renewable energy compared to 2020. Renewabte energies now represent 6% of the
total etectrical consumption.
o The first investment m green hydrogen was made in Verdagy.
o During 2021, Orbia achieved 20°k less process waste directed to disposal than 2020.
o In 2021 the Company reducted water withdrawal intensity by 6%.
• Social Responsibility. Orbia made and continues to make an effort at all its businesses to support its
stakeholders and their families in overcoming the COVID-19 crisis from a comprehensive perspective that
incorporates medical and mental heaith assistance. During the year 2020, the company made historic
contnbutions to avil society organi ations like UNICEF, Doctors Without Borders, CARE and others to support
efforts that make a reduction in infections possible as well as population assistance in some of the most
vulnerable areas. Orbia oined the Alliance Tent Partnership for Refugees in the fall of 2020 and set up an
alliance with Resilient Cities Nelwork, which represents the world s leading urban resilience nelwork.
• In relation to Soaal Responsibility, the company s achievements during 2021 were as follows:
❑ 19% less of total recorded incident rate than 2020 for employee and contractor.
0 22% women in leadership roles representing 33°/, of leadership hires.
�� During year 2021, WASH proects provided access to water to more 30,000 people in Bra il,
Colombia. Ecuador, Mexico and Peru.
• Corporate ovemance. The Company introduced a new ES incentive as part of the management team s
compensation applicable from 2021. The Board also selected lwo new independent board members, bringing
the percentage of independents to 67% and 25�o women. The company is working with leading headhunters
to hire independent board members with relevant management skills so that they can din as other board
members leave in the coming months.
This adds to different efforts that we have been making in recent years and that we summari e below:
• In 2019, Orbia oined the Water Mandate of the United Nations lobal Compact, with which a commitment to
progress was made in 6 areas regarding water management. Today the Issuer is part of a select group of 175
companies worldwide that have oined said pact.
Finally, the Issuer complies with the new lobal Reporting Initiative ( RI) guideline criteria based on the Materiality
Disclosure requirements and independent third-party review of relevant indicators. In effect, this independent third party
assures the data in the report in accordance with the ISAE 3000 standard for assurance. In addition, the Issuer has
begun to align the infortnation in the sustainability report with the requirements of the Sustainability Accounting
Standards Board (SASB), as well as climate-related risks and opportuniGes within the Task Force on Climate-related
Financial DisGosures (TCFD) framework since 2019. The Issuer has set long-term goals that it monitors year after year.
A continuous focus on highly eKcient operations, reducing volatility through vertical integration and improving
proCtability through resource optimization
The Company s vertical integration strategy has reduced exposure to any price volatiliry of the main raw materials.
Fluorinated Solutions, for example, is 100% integrated from the exploitation of fluorite to the production of refrigerant
gases while since February 2017, the Polymer Solutions business group is approximately 70% integrated with the
Ethylene group and has thus achieved significant integration from salt extraction to PVC production, which has allowed
and will allow Orbia to improve profitability through better cost management. In addition, Orbia focuses on continuously
improving the return on invested capital in order to achieve and maintain it above its weighted average cost of capital.
A confinuous focus on the deve/opmenf of specialty and value-added products
The Issuer wiil continue to use its competitive advantage to develop new and advanced production processes through
its 19 research and development centers. These centers develop new products focused on the needs of its customers,
making products available to customers in the markets in which they participate. Orbia will also continue to develop and
implement its own technologies and processes for its own benefit. For example, the Company has its own technology
to produce PVC resins, PVC pipes, compounds, plastici ers and HF purification. These technologies allow it to produce
pipes that uniquely meet, the requirements of most infrastructure and construction pro �cts in which we compete. Orbia
has developed solutions based on fluor compounds for the cement industry that allow for the optimi ation of Clinker
production, whose benefits are not only economic but also reduce the Company 5 environmental impact by reducing its
carbon footpnnt.
Polymer Solutions strategy is focused on expanding the core business as a ma or global PVC manufacturer,
strengthening its position in regional markets and retaining the top position in specialty resins, capturing global demand
growth.
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The expansion of Polymer Solutions core business allows it to enter new markets in Asia and Africa and expand
specialty resins capacity through access to technology and development capabilities in all segments.
Polymer Solutions will strengthen the low-cost position by capturing additional vatue through diversified nsk and a
significantly diverse geographic production footprint, enabling a better position on the PVC industry s cost curve.
By continuing to invest in research and development and leveraging the unique products it offers in specialty resins.
Polymer Solutions will continue to develop a best-inclass product portfolio by consistently launching customer-focused
products and services.
Orbia s strategy will also be equally focused on sustainability, having developed a portfolio of sustainable products.
solutions and business models.
Maintaining an agile and solid financia/ strucfure
Orbia seeks to maintain a solid and flexible financial base that will allow it to achieve its growlh ob ectives. The Company
operates by seeking to maintain at a net debUEBITDA ratio of approximately 2.0 in the long-term. If in the past Orbia
needed to exceed this ratio due to a pro �ct, the pro ect must generate value, make strategic sense with the Company s
business, meet the profitability conditions required by its corporate governance bodies, and present a plan to return to
levels of around 2.0 net debUEBITDA in a period of less than 18 months. Orbia will maintain and continue to implement
financial strategies, inGuding a conservative debt profile, a conservative hedging structure, as weli as strategies to
hedge exposure to foreign exchange rates, and thus be able to continue executing its growth strategy.
Implementing a unique business culture
Orbia s current operations are the result of over 30 business acquisitions that have positioned the Company as a leader
in different countries, regions, and markets, through the integration of diverse companies and work cultures. In this
regard, the Issuer considers that a unified business culture is important for meeting the ob ectives set by the Company
itself and the market. Orbia is proud to establish and spread among its companies its mission, vision, unique values,
and strict adherence to its Code of Ethics as part of this organi ational culture so that its employees are not only aware
of it, but also apply it to their daily lives.
i. ain activlty
Orbia is a Mexican shareholding business corporation located in the Americas, Europe and in some countries in Asia
and Africa. Orbia is a leading provider of products and solutions in multiple sectors, from the construction, infrastructure,
agriculture and irrigation, health, transportation, telecommunications, and energy and peVochemical sectors, among
others. It is one of the world s largest producers of plastic pipes, fittings and irrigation droppers, as well as fluorite.
Driven by purpose and unified by values, Orbia chooses to work on the toughest challenges from field to table, ground
to home, to market and lab to everyday life, the Company relies on its collective ingenuity and our integrated supply
chain to transfortn basic and advanced materials into greener, smarter, more efficient solutions.
With a global presence, Orbia employs more than 22,350 people in 50 countries in which it has 119 production plants,
concessions for the exploitation of 2 fluorite mines in Mexico, 8 training academies, and 19 research and development
laboratories. It generated sales in 2021 of $8,783 million.
With more than 50 years of history and more than 40 years of listing on the Mexican Stock Exchange, Orbia applies a
business model based on vertical integration, organic growth and strategic acquisitions through which it has direct
access to raw materials and its own technology, allowing it to compete in a global environment. As a result, Orbia offers
a wide range of materials, products, solutions, and finished products that contribute to the success of its customers and
improve people s qualily of life.
Orbia s operations consist of five business groups: Precision Agriculture, Data Communications, Building and
Infrastructure: Fluorinated Solutions and Polymer Solutions. Betow is a more detailed description of each Business
roup:
1. Polymer Solutions Business roup (Vestolit and Alphagary).
This business group consists of six manufacturing processes: (i) basic chemicals inGuding ethylene, chlorine, caustic
soda and their derivatives, VCM, EDC and specialty chemicals (ii) phosphates used in food and beverages, soaps and
detergents, fertili ers and food supplements (iii) the Vinyl Process, which produces general resins used for pipes and
fittings, cable. flexible and rigid films, bottles, medical devices, etc. (iv) specialty resins used for flooring, wallpaper,
coatings, among others (v) the Plastici er Process that produces phthalic anhydride and a wide variety of plastici ers
used in the processing of plastic resin and (vi) the Compound Process, which produces plastic resins used to produce
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products with different applications such as medical products, industrial and consumer products, products for the
construction industry, among others, and calcium- inc stabili er used in the processing of PVC.
The Polymer Solutions group had net sales of $3,438 million in 2021, $2,171 million in 2020, and $2,334 million in 2019,
which represented approximately 39%, 34% and 33% of Orbia s total sales in those years. Orbia owns the nghts to a
salt dome in Mexico with more than 30 years of potential reserves, a 50% share in an ethylene production oint venture
in the U.S. and a 25% share in a brine production oint venture in ermany. It operates modern production facilities for
chlorine, caustic soda, PVC resins, and compounds. It is the largest producer of specially resins, and the sixth largest
producer of PVC resins in the world.
2. Fluorinated Solutions Business roup
The process of this business group is divided into 3 stages: (i) the Fluorite Process, which consists of the extraction of
fluorite, used for the production of hydroHuoric acid in the cement, steel, ceramic and glass industries, (ii) the
Hydrofluoric Acid and Aluminum Fluoride process, used for the production of refrigerant gases, downstream and in the
aluminum industry and (iii) the Refrigerant and Propellant ases process, used in air conditioning and medical
applications. This business group includes the mining concession for the worid s largest fluorite mine with an installed
annual production capaciry of approximately 1.8 million TPA, representing approximately 18% of the world s annual
fluorite requirements. The mine has proven reserves of about 62 million tons (34 years) according to the latest intemal
estimate. In 2021, 2020, and 2019, this business group s sales were $744 million, $698 million and $805 million,
respectively, which represented approximately 8%, 11% and 12% of Orbia s total sales in those years.
3. Building Infrastructure Business roup
Building Infrastructure (B I) is a provider of innovative solutions to the global Construction and Infrastructure industry.
Backed by more than 60 years of product development experience, the company is tackling some of the world s toughest
challenges relevant to ensuring safe and efficient water supplies, sanitation and hygiene, climate-resilient cities, and a
better building performance. Building Infrastructure is focused on creating positive change in the world by building
heaithy and sustainable environments and collaborating with city leaders, engineers, contractors and installers to help
make cities future-proof and buildings comfortable. and energy efficient. Building Infrastructure has more than 10,500
employees in 37 countries around the world. Building Infrastructure is headquaRered in Amsterdam, the Netherlands.
The Building Infrastructure business group is integrated as part of the acquisitions made by Orbia of Wavin in 2012
and Amanco in 2007. Since 2019, this business group has operated under the global leadership of Business
Infrastructure, as a worid leader in PVC pipe systems and solutions, while being the market leader in Europe and Latin
America.
In 2021, 2020 and 2019 Building Infrastructure had sales of $2,922 million, $2,071 miflion and $2,239 million,
respectively, which represented approximately 33%, 32% and 32% of Orbia s net sales for each of those years,
respectively.
4. Data Communications Business roup
Data Communications operates with the conviction that each organi ation, community and inhabitant of the planet
deserves the chance to benefit as much as possible from modern technology. The Company produces over 400 million
meters of essential and innovative infrastructure a year includingconduits, FuturePath, cables-in-conduit and fittings
which create the physical routes for fiber optics and other network technologies that connect ci6es, homes and people.
Data Communications is a global leader in the manufacture and distribution of these produds in a highly dynamic
industry.
The company has positioned itself as a leader in the production and distribution of pipes, fittings and solutions for cable
and fiber optics for voice and data transmission, as weil as pipes for the transportation and distribution of certain
materials, mainly in the U.S. / Canada and AMEA regions.
This group recorded net sales of $994 million, $732 million and $749 million, equivalent to approximately 11%, 11%
and 10% of Orbia s total sales for fiscal years 2021, 2020 and 2019, respectively.
5. Precision Agriculture business roup
Netafim is aimed at high growth markets and produces solutions to address two global mega-trends: growing water and
food scarcity.
The Company is the global leader in the production and sale of smart micro-irrigation solutions, with 62 subsidiaries
and 17 plants located in Israel, Turkey, the Netherlands, Spain, South Africa, Mexico, Bra il, Peru, Chile, China.
Colombia, Australia, India and the United States, serving more than 110 countries.
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Precision Agriculture offers agriculture, civil engineering and pro ect solutions related to water management, use and
control in agricultural, livestock and aquaculture activities. All this allows it to offer the widest variety and diversity of
solutions that adapt to customers heeds.
Precision Agriculture s sates in the 2021, 2020 and 2019 periods were $1,126 million, $972 million and $1,063 million,
respectively. Precision Agriculture contributed to Orbia s consolidated revenues for the same fiscal years the equivalent
of 13%, 15% and 15%, respectiveiy.
Competitive Advantages
Orbia focuses on creating value for its stakeholders, including its shareholders, customers and suppliers, and
employees through the development and continuous improvement of its products and services, starting with its basic
raw materials. Through vertical integration of the market for products with higher added value, it seeks to obtain better
results. The main competi6ve advantages are as follows:
Vertically lntegrated operations with direct access to raw materials fhat create economies of sca/e and reduce
operating expenses
Orbia, a leader in the markets in which it participates, is known for its strategy focused on low-cost production through
constant investments in its own state-of-the-art technology the integration of its basic raw materials in its lwo main
production chains creation of synergies in logistics, purchasing, systems, treasury, human resources and other
functions, and constant development and implementation of cost-efficiency pro ects. Orbia is one of the largest pipe
producers in Europe and Latin America, and it is the leader in the production of PVC resin in Latin America, according
to IHS Markit.
In the Polymer Soiutions business group, Orbia is partially integrated to its main raw material, ethylene, and thus the
production chain is integrated from the extraction of salt to the production of plastic compounds. It has facitities for the
production of salt for industrial consumption, ethylene, chlorine, soda, VCM chlorine derivatives, PVC and specialty
resins, as well as compounds, in addition to being integrated to one of the main raw materials for the manufacture of
plastici ers phthalic anhydride.
Fluorinated Solutions business group, has its own fluorite mine, making it the only fully integrated global producer of its
raw material. This integration gives Fluorinated Solutions an unparalieled competitive advantage, not only in Mexico but
also woridwide. Fluorinated Solutions is the only company in the world with a vertically integrated value chain, from the
extraction of fluorite, through hydrofluoric acid, to the production and sale of refrigerant gases and medical propellants
in the Amencas, Europe, and Asia.
The main raw materials of the Building Infrastructure, Data Communications and Precision Agricuiture business
groups are PVC resin, polyethylene and, to a lesser e�ent, propylene. These are supplied at the best price available
on the market, either through purchases from third parties or through vertical integration with the Polymer Solutions
business group in the case of PVC, which represents an important competitive advantage, particularly in times of
shortages such as during the latter half of 2020 and the first half of 2021.
Over the past 19 years, Orbia has acquired companies or formed oint ventures to vertically integrate its operations and
increase access to the raw materials needed for its operations.
Leading positlons ln PVC and plastic pipe markets in Latln America and Europe and the global fluorite market
Orbia is one of the largest pipe producers in Europe and Latin Amenca, a leader in the production of PVC resin in Latin
America, according to IHS Markit, and maintains a leading position worldwide. The Company believes that the primary
markets for such products in the infrastructure and construction industries could experience sustained growth over the
next few years, paRiculariy in the LaUn America and Asia Pacific regions.
Of the net sales to third parties by destination in 2021 classified by geographical area the Company generated 36% in
Europe, 33% in North America, where the US was 21 % and Mexico 11% in South America 19% and in other countnes
12%. See Note 25 of the audited consolidated financia/ statements included in the Appendices /or further detaiL In the
last seven years, the Company has expanded its operations throughout the Westem Hemisphere, the Middle East, and
Africa, so it now has production facilities in 10 Latin American countries, in addition to facilities in the United States,
Canada, Japan, and China, the United Kingdom, Oman, South Africa and Israel. The emerging markets in which Orbia
sells its main products from the Building Infrastructure and Polymer Solutions business groups, en dy attractive growth
pro �ctions in infrashucture and construction due to a significant housing deficit, insufficient infrastructure, lack of access
to water and sanitation, electricity and other factors. In developed countries, the greatest challenge is to maintain and
improve transport, water, elecVicity and tetecommunications networks extensively.
Thus, the Issuer expects a sustained demand for PVC in the coming years in line with IHS Markit reports (World Analysis
2021 - vnyl) and estimates an annual growth rate until 2031 at an average of 3.4%.
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Additionally, Orbia has a strong presence in the American. European, and Asian markets due to its unique position
within the Fluorinated Solutions business group. The Issuer has the concession rights for the exploitation and extraction
in Mexico from the worid s largest fluorite mine, and has modern plants for the production of HF and refrigerant gases.
which allows it to forge solid relaGonships with strategic market participants. In addition, the proximity to the end
fluorochemicals market in the U.S. provides a competitrve advantage. The Company frequently enters into long-term
dollar-denominated contracts with reputable international customers to sell fluorite and the HF it produces. The
Company s global positioning will allow it to explore opportunities in order to supply more value-added products.
Our proven abflity to Integrate and operate acquired companies throughout the Americas, Europe, the Middle
East, Asfa and Afiica
While since 2003, Orbia has grown rapidly by consolidating 32 finali ed business acquisitions, the current management
team s strategic focus is centered on organic growth and seeking synergies beriveen the existing businesses.
Successful acquisitions have contributed to the significant growth of Orbia � net sales and EBITDA, making it a leader
in the industries in which it operates.
Thus, Orbia s geographical diversification, like its growing focus on added-value and specialty products, has changed
the Company s profile considerably, from a company based on commodities and chemical products, to a company
increasingly based on innovative and specialty products, which has made it more and more resilient in the face of
constant changes in the global economy.
A management team with extenslve industry experience
Orbia s key executives have extensive experience in leadership positions in top-tier global companies, with an average
of more than 10 years experience in similar industries and more than 20 years of professional experience. The
management team has a proven track record of operating successfully in the industry, and identifying and integrating
strategic acquisitions to grow and strengthen the businesses.
Strong re/atfonshlp wlth major suppllers and customers through long-term contracts
Orbia has established long-lasting relationships with its main suppliers through long-term product supply contracts.
which allow it to ensure the supply of domestic and foreign raw materials and inputs. Orbia has, in turn, defined,
according to growth potential and si e, the market segments it wishes to participate in and, through the signing of long-
term contracts, has positioned itself amongst its suppliers strategic clients, lending the company a competitive
advantage that is di�cult for its competitors to match.
Innovation through research, development and patented productfon processes
Orbia has a product research and development resources with people and facilities that allow it to innovate processes
and products that are tailored to its customersrneeds. The Company has its own technology for its production processes
which places it at the forefront of technology since it has developed in its different production chains, unique designs
that give it advantages over its global competitors. The Company s 19 research and technology centers are located in
Mexico, the U.S., the Netherlands, Italy, India, the C ech Republic, the United Kingdom and Israel and focus on the
development of new products and the alignment of processes to achieve safety and the optimi ation of its production
chain. Additionally, in the Fluorinated Solutions business group, cutting-edge technology for fluorite purification has
been developed in the hydrofluoric acid process. This innovation has succeeded in lowering the annual production cost
of HF. In total, the Company has more than 500 patented products.
Climate Change Summary
The Company has carried out different analyses to determine the degree of exposure to the possibie effects of climate
change on its operations.
The effects of Gimate change identified within the different areas where it operates or has market presence are
desertificaGon and drought, rising sea levels, changes in rainfali pattems, decreased water availability, deforestation
and disease. all phenomena that could affect operating results and financial position, among other factors, due to the
need for additional investments to adapt operations to the new conditions, the increase in the price of supplies and
energy, the closure of affected operations and relocation of suppliers, protection measures as a result of natural
phenomena (for example: construction of dikes in marine installations, flood or fire protection) and the relocation of
facilities to sites with more favorable conditions and higher environmental regulatory requirements.
Please refer to the Risk Factors section for more details regarding the potential business impacts from severe weather
events.
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Since the Intergovemmental Panel on Climate Change (IPCC) predicts that extreme weather events will tend to grow
in intensity and number, Orbia has been designing contingency plans that seek to nortnali e operations as soon as
possible. Redundant transportation options, different routes and logistic means or emergency inventories are some
specific areas that are considered in the plans. If Orbia manages to operate with minimal disruption dunng such events,
it will have a clear advantage over the competition, lacking these measures.
In addition to the co�sideration of the risks derived from climate change that can have negative impacts on operations,
climate change also presents certain opportunities that align well with Orbia � business model as follows:
a. Resilient operations and low-impact mitigation:
o Durability and positioning as a result of consumer preference for companies committed to canng for
the environment and social responsibiliry.
o We continually identiry ways to decarboni e by optimi ing manufacturing processes, transitiornng to
low-carbon and renewable energy sources, and exploring opportunities in carbon capture and
hydrogen. In parallel, our sites are adapting to the physical risks of climate change, including changing
weather patterns, as well as business interruption and social disruption.
b. Solutions to promote a climate resilient economy:
Orbia s business groups are constantly developing products and services with better environmental performance that
help our clients make measurable progress against their own climate change goals. Our solutions conVibute to urban
and rural resilience and support the transition to a low carbon and circular economy, inciuding materials and products
that promote alternative energy, resource e�ciency and green buildings. More detaits are available in our Orbia
Sustainable Solutions report.
c. Driving new business for a net ero world:
Our culture encourages the exploration of new technologies, companies and strategic acquisition opportunities, investing
human and financial capital to support new business models that will have a long-term positive impact. Climate Tech is
a focus area of strategic investments made through Orbia Ventures, our corporate venture capital fund.
Integrated Companies
December 31, 2021
Country
Equity Stake
roup
Polymer Solutions (Vestolit and Alphagary):
Mexichem Derivados, S.A. de C.V.
Mexichem Compuestos, S.A. de C.V.
Mexichem Resinas Vin Ilcas, S.A. de C.V.
Vesrolit mBH
Mexichem Specialty Compounds, Inc.
Mexichem Specialty Compounds, Ltd.
Mexichem Resinas Colombia, S.A.S.
Mexichem Speciality Resins, Inc.
C.I. Mexichem Compuestos Calombia, S.A.S.
Petroqu rtiica Mexicana de Vinilo, S.A. de C.V.
Ingleside Ethylene LLC
Sylvin Technologies Inc.
Fluorinated Solutlons ( oure):
Mexichem FI or, S.A. de C.V.
Mexichem FI or Comercial, SA. de C.V.
Fluorita de M xico, SA. de C.V.
Mexichem FI or Inc.
Mexichem FI or Canad Inc.
Mexichem UK Ltd.
Mexico
Mexico
Mexico
ermany
USA
United Kingdom
Colombia
USA
Colombia
Mexico
USA
USA
Mexico
Mexico
Mexico
USA
Canada
United Kingdom
100 %
100%
100%
100%
100%
100%
100%
100%
100%
100%
50 %
100%
100%
100 %
100 %
100 %
100 %
100 %
Attachment I: Description of the Applicant Company Page 72 of 204
Attachment 1_Description of the Applicant Company
- roup
Mexichem FI or Japan Ltd.
Mexichem FI or Taiwan Ltd.
Building and Inirastructure ( avin):
Mexichem Amanco Holding, S.A. de C.V.
Mexichem Soluciones Inlegrales, S.A. de C.V.
Mexichem uatemala, S.A.
Mexichem Honduras, S.A.
Mexichem EI Salvador, S.A.
Mexichem Nicaragua, S.A.
Mexichem Costa Rica, S.A.
Mexichem Panam , S.A.
Mexichem Colombia, S.A.S.
Pavco de Vene uela, S.A.
Mexichem Ecuador, S.A.
Mexichem del Per , S.A.
Mexichem Argenlina, S.A.
Mexichem Brasil Industria de Transforma ; o PI stica, Ltda.
Wavin Nederland B.V.
Wavin Belgium N.V.
Wavin (Foshan) Piping Systems Co. Ltd.
Nordisk Wavin A/S
Norsk Wavin A/S
Wavin France S.A.S.
Wavin mbH
Wavin Hungary Kft.
Wavin Ireland Ltd.
Wavin Italia SpA
UAB Wavin Baltic
Wavin Romania s.r.l.
000 Wavin Rus
AB Svenska Wavin
Wavin TR Plastik Sanayi Anonim Sirketi
Wavin Ltd.
Warmafl oor ( B) Ltd.
Data Communications (Dura-Line):
Dura-Line Holdings, Inc.
Mexichem Canada Limited
Precision Agricullure (Netafim):
Netafim, LTD.
Holdings:
Mexichem Soluciones Integrales Holding, S.A. de C.V.
Country
Japan
Taiwan
Mexico
Mexico
uatemala
Honduras
EI Salvador
Nicaragua
Costa Rica
Panama
Colombia
Vene uela
Ecuador
Peru
Argentina
Bra il
Netherlands
Belgium
China
Denmark
Norway
France
ermany
Hungary
Ireland
Itay
Lithuania
Romania
Russia
Sweden
Turkey
United Kingdom
United Kingdom
USA 100%
Canada 100%
Israel 80%
Mexico 100%
Equlty Stake
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
95%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100 %
100 %
100%
100%
100%
100%
100 %
This section Main Activity of the Annual Report describes in detail the topics (ii) Distribution Channels, (iv) Main
Customers and (viii) Market Information (numbering is in accordance with the numbering in Annex N, Instructions for
preparing the Annual Report) of the Sole Issuer Circular for each of the business groups and their respective businesses
and/or processes and products:
Attachment 1: Description of the Applicant Company Page 73 of 204
Attachment 1_Description of the Applicant Company
ii. Distribution Channels
iv. ain Customers
vfif. arket Information
(a) Polymer Solutions business group (Vestolit and Alphagary)
(a.1) Sait-Chlorine-Soda-Ethylene-VCM process
(a.2) Chlorine-Caustic Soda process
(a.3) Vinyl and Compounds process
(b) Building Infrastructure business group
(c) Data Communications business group
(d) Precision Agnculture business group
(e) Fluorinated Solutions business group
(e.1) Fluorite Process
(e.2) Hydrofluoric Acid (HF) and Aluminum Fluoride (AIF3) Process
(e.3) Refrigerant ases and Fluorocarbons Process
(a) Polymer Solutions business group (Vestolit and Alphagary) (formerly Vinyl or Chlor-Vinyl Chain)
The process begins with the extraction of salt, by in ecting water into the salt dome, converting it into brine, which is
then transpoRed by pipes to the plant which converts it into chlorine and caustic soda by applying an electric current.
Chlorine is combined with ethylene to form vinyl chloride monomer (VCM), which is polymeri ed to produce polyvinyl
chloride (PVC). CurrenUy Orbia is self-su�cient in VCM for its plant in ermany and obtains the necessary VCM for the
production of PVC in Amenca from OxyChem, although it also has supply contracts with other suppliers in smaller
amounts, a situation that is expected to continue in the future. Ingleside began the ethylene cracker start-up process in
February 2017, starting commercial operations in the second quarter of 2017, allowing Orbia to reap the benefits of
vertical integration of the Polymer Solutions business group for PVC, which in tum will allow Orbia to reduce its PVC
production costs.
PVC is a versatile plastic that has countless everyday uses, such as: pipes for transporting drinking water and for
irrigation coatings for electrical conduction cables profiles for constructing windows, doors, facades or entire houses
tiles, floors, furniture coverings, automobile parts and household appliances, clothing and foolwear, containers and
packaging, medical devices, adhesive tapes, and many others.
This business group also produces plastic resin compounds, specially formulated to meet the specific requirements of
customers who transform this polymer into end use goods. Compounds incorporate the various additives necessary for
the processing of plastic resins, and those required to obtain the functional properties unique to each use.
PVC resins can be combined with other additives to make value-added products such as compounds, pipes and
coatings.
The main production chain of lhe Polymer Solutions business is as follows:
Attachment I: Description of the Applicant Company Page 74 of 204
Attachment 1_Description of the Applicant Company
� Building and
Construction
Brine Chlor-Alkali i�d�sr��ai
(Salt}
PVC Resins Compounds
(Alphagary)
.� -
Specialiy Resins
Medical Devices
Ethylene
_ = Automotive
Feedstoek `�P��i � � �reted �
In addition to what is shown in the graph above, the Polymer Solutions business group produces and sells by-
products denved from the production of chlorine and caustic soda.
The Polymer Solutions business group has 26 sites with 35 plants operating in Mexico, Colombia, the United States,
the United Kingdom, ertnany and India, focused on the production of PVC and specially resins, compounds, VCM
(only in ermany) and various derivatives such as chlorine and caustic soda, in addition to the ethylene cracker in a
oint venture with OxyChem and the salt mine. Polymer Solutions has 19 ISO 9001 certified sites and 15 ISO 14001
certified sites in addition to seven certified SARI (Responsible Care) sites and four are Clean Industry certified sites. In
2021, Polymer Soiutions sites migrated from ISRS (Intemational Safety Rating System) certification to ISO 45001
Currently, 12 sites are ISO 45001 certified and 10 sites are ISRS. These plants meet strict standards for safety, health
and environmental protection throughout the entire manufacturing life cycle.
The Polymer Solutions business group consists of the following subsidiaries:
• Mexichem Derivados, S.A. of C.V. and Mexichem Derivados Colombia, S.A.S. and Petrochemical Mexican
Vinyl, S.A. of C.V. that produce chlorine, caustic soda and speciali ed chlorinated products such as sodium
hypochlorite, hydrochloric acid and other speciali ed chemicals
• Mexichem Resinas �n Iicas, S.A. de C.V., and Mexichem Resinas Colombia, S.A.S, leaders in Latin Amenca
in the production of PVC resins
• Mexichem Specialty Resins Inc., a leader in the production and marketing of specialty resins
• Quimir, S.A. de C.V., a producer of industrial and food phosphates
• Mexichem Compounds, S.A. de C.V., and Mexichem Compuestos Colombia S.A.S., producers of compounds
and plastici ers
• Mexichem Specialty Compounds (formerly Alphagary Corporation and Alphagary Ltd.), manufacturers of PVC
and PVC-free compounds
• Vestolit mbH, a producer of chlorine, caustic soda and high-impact suspension PVC resin (HIS-PVC) and
paste PVC resin
• Ingleside Ethylene LLC, which began producing ethylene in February 2017 and entered into commercial
operation in the second quarter of the same year
• Vinyl Compounds Holdings Ltd. (VCHL), a leading supplier of PVC compounds.
• Sylvin-Technologies Inc. A speciali ed manufacturer of PVC compounds.
• Shakun Polymers Private Limited, a leading player in the field of compounding for the wire and cable industry.
From 2019 to date the Polymer Solutions Business roup has made the following acquisitions and executed the
following investments:
Shakun Polymers Private Limited. On June 22, Orbia s Polymer Solutions business acquired a ma drity stake of
Shakun Polymers Private Limited (Shakun), a private, family-owned company that is a market leader in the production
of compounds for the wire and cable markets in the Indian subcontinent, Middle East, Soulheast Asia and Africa. With
its investment, Polymer Solutions is expanding its product and regional footprints as Shakun will continue to provide
next�eneration materials designed to meet the high safety and pertormance standards in the Asian and African
markets.
Shakun s product development focuses on halogen-free flame retardant compounds and PVC-based compounds for
power and data cables. In addition, Shakun s semiconductive and cross-linkable compounds extend Alphagary s
product portfolio and offer a platform for growth to meet customer requirements, which should bring synergies to the
Attachment I: Description of the Applicant Company Page 75 of 204
Attachment 1_Description of the Applicant Company
operations of ihe Polymer Solutions group. Orbia has fully consotidated Shakun s results into the Polymer Solutions
business group.
Sales
In 2021, Polymer Solutions business group sales and EBITDA were $3,438 million and $1,134 million, respectively,
representing a 58% increase in revenue and a 145% mcrease in EBITDA, both compared to the previous exercise. In
2020, sales were $2,171 million and EBITDA was $462 million, representing a 7% decrease in sales and a 4.2%
increase in EBITDA, compared to the prior year. In 2019, Polymer Solutions had net sales of $2,334 million and EBITDA
of $443 mdlion, representing decreases of 5.1% and 16.4%, respectively, compared to the previous year.
In fiscal years 2021, 2020, and 2019, Polymer Solutions contributed 39%, 34%, and 36% of the Company s net sales
as well as 55�0, 35%, and 34% of its consolidated EBITDA, respectively.
In 2021, the Poiymer Solutions group had an outstanding performance driven by higher PVC market prices due to strong
global demand and the tight environment.
The table below shows the Polymer Solutions business group s production and sales volumes for 2021, 2020 and 2019.
Year ending December 31:
Volume Sold �'�
Polymer Solutions 2021 2020 2019 2021
Derivatives(3) 1,004 937 860 q�7
Resins 1,425 7,414 1,515 2,437
Compounds Z5� 226 232 680
Eliminations (49) (43) (41)
Total, Polymer Solutions 2,638 2,535 2,565
(1) Thousands o( tons.
(2) Figures in millions ol dollars.
(3) Consolidates tha Derivalives sales in Ihe stralegic interasts of the Issuer.
Sales n�
2020
350
1,402
466
2019
370
1,486
513
(95) (47) (35)
3,438 2,171 2,334
Sales by Product 2021
Derivatives
Compounds 12%
1996
Resins
69%
Inlormafion exduding infer-chain f2nsaUions wifhin fhe same business group
Attachment I: Description of the Applicant Company Page 76 of 204
Attachment 1_Description of the Applicant Company
(a.1) Salt-Chlorine-Soda-Ethylene-VCM Process
Orbia has plants for the Salt-Chlorine-Soda process in Mexico where it produces chlorine, caustic soda, salt,
hydrochloric acid, sodium hypochlorite in Colombia where it produces sodium hypochlorite and in ertnany where it
moslly produces chlorine, caustic soda and VCM. It also has plants that produce industrial and food phosphates.
Likewise, in a 50/50 oint venture with OxyChem, the Issuer produces ethylene in a cracker located in Ingleside, Texas.
Products
Chlorine: It is mainly used for the production of long-life products such as VCM, which is the basic raw material for
PVC production, titanium dioxide production (raw material for white paints), bleaching of cellulose in the pulp and paper
industry, production of agrochemicals, water treatment, disinfection and purification, and chemical and pharmaceutical
industry in general.
Caustic soda: It has several applications including: the production of oils, soaps and detergents, regeneration of ionic
exchange resins for water treatment, washing of glass bottles, bleaching of cellulose in the pulp and paper industry,
production of refined sugar, dyeing of cotton fabrics, production of agrochemicals, manufacture of gelatins, cleaning
products in general, among others.
Sodium hypochlorite: It is mainly used for the manufacture of liquid bleach, as a general saniti er, for the treatment
and purification of water, manufacture of industrial catalysts, for bleaching and deinking paper, among others.
Hydrochloric acid: It is used for the production of high fructose which in tum is used as sweetener in the soft drink,
candy and brewing industries it is widely used for drawing and pickling metals, and is used in the pharmaceutical
industry for the production of inedicines, manufacture of pigments and dyes, and manufacture of ferric chloride, which
is used in the lithography industry, among others. It is widely used for the manufacture of plastics and rubber, in the oil
industry, and ceramics, among others.
Ethylene: Ethylene is the most important segment of the peVochemical industry and is converted into a large number
of final and intermediate products such as plastics, resins, fibers and elastomers, inGuding polyethylene (PE) and
polyvinyl chloride (PVC), soivents, coatings, plastici ers and antifree es, among the most wideiy used.
VC : Vinyl chloride monomer is used almost entirely (96-98%) in the manufacture of polyvinyl chloride or polyvinyl
chloride resin (PVC), a very versatile product that has applications in the medical and construction sectors, as well as
in cable sheathing, piping, rigid and flexible profiling, and toys.
Industrial and food phosphates: Used mainly for the manufacture of detergents, feRili ers, animal feed, ceramics,
water treatment, textiles, toothpastes, beverages, sausages, dairy products and bakery.
Plants and Mines (See Section 2, 'The Issuer'; item x, "Description of its Main Assets" of this Annual Reporl).
Raw Materials
The main raw materials in the Salt-Chloro-Soda Process are: salt, natural gas and electricity,. In Mexico, these raw
materials are obtained through long-term supply contracts, with periodic reviews, with the National Water Commission
(water), and the Federal Electriciry Commission (electric power). There have been supply agreements with Iberdrola
since 2015, contracts have been signed for the supply of electricity to Mexichem Resinas Vin Iicas and Quimir since
2015, and in 2019 two contracts were signed for the supply of electricity to PMV and Mexichem Derivados Pemex
Industrial Transformation (natural gas), with the exception of salt, which is extracted from the concession for the
exploitation of the salt dome that the Company has.
Sa/es and Marketing
Orbia has long-tertn contracts with some customers, for which it has established sales schemes that promote Ioyaity
through discounts for volume acquired during specific periods of time. Long-term contracts represent approximately
70% of chlonne sales and 54% of causGc soda sales and provide for the use of a price fortnula based on North Amencan
reference prices provided by IHS Markit and ICIS. The remaining volume is sold on the spot market at pnces calculated
by reference to the prevailing sales price at that time. In Europe, 100% of the chlorine produced is used to produce
VCM and derYvatives while caustic soda is sold to third parties.
Main Clients
The clients of the Salt-Chloro-Sose-Ethylene-VCM Process are concentrated mainly in the following secondary sectors
(1) the petrochemical, secondary chemical, agrochemical and pharmaceutical industries (2) PVC resin production,
plastics processing, (3) soap and detergents, cellulose and paper, matches, and polymers such as polyurethane
products for hygiene and cleaning of hospitals and homes, (4) water treatment, bottling, and metal-mechanical industry.
Attachment I: Description of the Applicant Company Page 77 of 204
Attachment 1_Description of the Applicant Company
Distribution Channels
The products of the Salt-Chionne-Soda-Ethylene Process are basic raw materials and are mainly marketed directly to
industries as a business-to-business model that use them as inputs to produce other products. Sales are made through
the group s sales force to direct customers. inter-company, and distributors, which in turn sell to end customers mainly
in the same business to business model.
Distribution Contracts
The sale of Salt-Chlorine-Soda-Ethylene Process products is made directly and through distributors. Almost 7% of sales
through distributors are made through service agreements.
Cyclic behavior
The chemical industry within the scope of raw materials production behaves in accordance with the international
economy expansion and contraction cyctes, and the supply and demand conditions of the main raw materials, which
can have a significant impact on prices.
Competitive Position
The Company maintains its leadership position in the domestic market. Regarding the impoR of caustic soda, which
competes with domestic production, the business has a favorable competitive position because it has a guaranteed
suppiy due to local production as opposed to the supply imported for logistical reasons. However, in the face of a
constant soda supply mainly from the U.S., competitiveness could be affected.
Market Share
The following graph shows Orbia s participation in the caustic soda market in Mexico during 2021:
Mexico: Caustic Soda Market Share
vestolic
38%
Others
62%
Source Orbia market research based on ANI� and IHS Markit impoA-export repans.
The total capacity in the caustic soda market in North Amenca is 15.9 million metnc tons.
Attachment I: Description of the Applicant Company Page 78 of 204
Attachment 1_Description of the Applicant Company
North America: Caustic Soda Production
Westlake
19%
ShintK
8%
Fwmosa Plastks
6%
�Y
l9x aa,
� xx
Covestro
- 2%
(YDSA
2%
OtMn
97i
Olin
33%
Source IHS Markit
In Europe, caustic soda is mainly consumed and produced locally due to the high cost of Vansportation and storage.
The market is highly fragmented, with local producers competing in specific geographic markets. Orbia competes with
integrated producers in the production of caustic soda such as Nourvon, Covestro and Dow Chemicals.
In 2021 the total chlorine capacity in Europe reached 12.1 mdiion tons. The following graph shows the main producers
of chlorine, graph based on the IHS Markit report.
Europe: Chlorine Production
eau
CdvlSlro 6% y�rpya
11% 5%
Noutyon
5%
Dow �
IS% Vinndit
4%
Wanhua
3%
KernOne
` 3%
Orbia
Uin�i ple�
�I%
�owv� 2%
I6% PCC Ro1Jta
2%
an�.s
xax
Source IHS Marlut
The intemational market share of these products for Orbia is not substantial since it only exports its excess production.
(a.2) Process Chlorine and Caustic Soda
Raw Mate�ials
Salt-Chlorine-Soda (alkali or chlor-alkali) is a term that refers to the chemisiry of chlonne and caustic soda, produced
mainly by electrolytic processes. Chlonne and caustic soda are co-products that result from the disintegration of salt
into components by means of the electrolysls process. This process produces a fixed ratio of chlorine and causlic soda,
which is referred to as an Electrochemical Unit (ECU). An ECU mainly consists of 1 unit of chlonne and 1.1 units of
caustic soda. The main materials used in this process are electricity and salt, electriciry being the main cost.
Attachment I: Description of the Applicant Company Page 79 of 204
Attachment 1_Description of the Applicant Company
Although chlorine is used in many chemical processes, its main use is in the production of vinyl resins for the
manufacture of PVC. Caustic soda is used in the production of pulp and paper, organic chemicals, soaps and
detergents, textiles, oils and aluminum process.
The chlor-alkali industry is cyclical due to the direct impact of economic growth on demand, where periods of low
profitability and low growth are often followed by penods in which attractive margms ustify capaGry expansion. In
general, the demand for chlorine depends on the construction sector, while the demand for caustic soda depends on
the manufacturing sector.
Most chlor-alkali producers are regional, with Dow Chemical Company being a notabte exception, as it is a multinational
and global company with a strong presence in North America and Europe.
According to an IHS Markit study, 2020 Chtor-Alkali 2022 World Analysis Chlor-Alkali, chlorine consumption is expected
to show an annual increase of 2.1 % woAdwide.
Traditionally, chlorine demand drives the chlor-alkali production rate as chlorine plants are often integrated by facilities
producing chlorine derivatives such as vinyl and PVC resins. The demand for chlorine is highly dependent on the
demand for vinyl (particularly PVC resin). Since most of the chlor-alkali production is not composed of users of caustic
soda, their demand may vary significanUy.
Main Customeis
In the US, the production of vinyl, particularly PVC resin, represents the largest use of chlorine in the USA. As shown
in the following graph, in 2021, 45% of the chlorine produced in the manufacture of PVC resins. PVC is one of the most
versatile polymers and is wideiy accepted as it can be molded for a variety of uses in the construction industry, including
rigid and flexible tubing, tubing connectors, flexible coatings, wire/cable accessories, and more. wire/cable coatings,
among other applications.
United States: Chlorine Oemand
Organics
264c
Water Treatment
7%
� Inwganics
5%
Chlainated
Intermediates
496
Pulp & Paper
Others �
Vinyls 13%
45M
Fuente IHS Markd
Caustic soda in the USA is used in a large number of industrial applications in the manufacture of organic chemicals
(27%) such as propylene oxide and epichlorohydrin, in inorganic chemicals (26%) such as 6tanium dioxide and
aluminum, as well as in the production of pulp and paper (17%). In 2021 the total productive capacity of soda in the US
was 14.8 million tons per year and of chlorine 14.0 million tons. of chlorine.
Attachment I: Description of the Applicant Company Page 80 of 204
Attachment 1_Description of the Applicant Company
Unites States: C. Soda Demend Unked States: Hlstorlc C. Sode Demand
12,OOD
aulp 6 Papa
17f� Soaps6 Detergents 10.317 ]0.322 10.175
� 10% 10.000 9.535 9.610
Wate
Treatmmt
�% � BA00
Tecllle
Inagsruc 3% � 6.000
Chemkds � ,�p�m'y
i6% 1% >
Ochen 4A�
12%
I,000
dgsnk
Chemkah �
27% 2017 IO1B ]019 7020 H121
Fuente: IHS Markil
In Mexico, soda has a large number of industrial uses, including organic (23%) and inorganic (24%) chemical products,
as well as in the production of soaps and detergents (23%). The total production capacity of soda in Mexico in 2021 was
594,000 tons, and chiorine is 551,000 tons, while the Issuer5 production of soda and chlorine, in the same year, in
Mexico was 206,000 and 184,000 tons, respectively. In 2021, the demand for chlorine in Mexico was 214 thousand tons,
while the demand for soda was 418 thousand tons according to IHS Markit.
Mexico: C. Soda Demand
Swps & 4�
Pu1p6Paper Dctergents �
1% 23%
350
Inorganic
�• � �
Chemicah � 2�
Mexico: Historic C Soda Demand
I4±s W�tM Treatment o 20D
II% �
150
100
Te�q'e 50
7%
Qyank Chemicals '�m�° 0
23% � 2017 7�Y6 HII9 2029 i071
Source: IHS Markit
In the last 20 years there has been a significant change in the use of technologies for chlorvalkali production. Membrane
cell technology mtensified its use in the mid-1980s, which it has superseded in the 1980s, replacing mercury cell
technology because membrane technology inherenUy brings improved environment and reduces energy costs. In
Westem Europe, mercury-based chlor-soda production has been converted to membrane cell technology since 2018.
Some chlor-soda plants with asbestos-based diaphragm cells are modifying this material for another mercury-free
polymer. asbestos and its operation is still in force, it is approved and regulated by their respective corresponding
govemments. Orbia does not use mercury technology in its mercury technology chlorine processes.
The production of soda in Europe in 2021 reached 9.7 million tons, presenting an increase of 1.6% compared to 2020
Attachment I: Description of the Applicant Company Page 81 of 204
Attachment 1_Description of the Applicant Company
Europe: Chlorine Demand
Organics Water Treatment
39% 3% Inorgan(cs
' 1%
Chlarinated
Intermediates
8%
Pulp & Paper
0%
Others
13%
�nyls
36%
Fuente IHS Markil
Chlorine and caustic soda prices
In North America, buyers of chlorine tend to concentrate, while consumers of caustic soda are generally more
fragmented. Some of the largest buyers of chlorine have multi-year supply contracts, which include maximum prices
and/or discounts to mitigate price volatility in the Spot Market.
(a.3) Vinyl and Composite Process
Products
The main products of the Vinyl Process are PVC Resins and plastic Compounds used to manufacture pipes and fittings,
profiles and floors for the construction industry, as well as upholstery, films, bottles, containers, footwear and
applicaGons for the medical field such as bags for blood, diaiysis and catheters.
eneral PVC Resins: It is one of the most versatile and low-cost thermoplastics due to the vanely of its end-use forming
technologies. It is strong and light, flexible, cost effective and safe. The Vinyl Process serves vanous applicaUons,
mainly for the building and construction sector, pipes and accessories, profiles, wires and cables, window frames,
medical devices, containers, among others.
Specialty PVC Resins: These resins are intended to serve core applications of floonng, wallpaper, textile and technical
coatings, automotive and artificial leather, as well as other specialty sub-segments where these resins provide unique
capabilities.
The foliowing are results of the Vinyt Process:
PVC resins with very diverse applications, mosUy for the construction sector, such as cable coatings, window frames,
pipes for carrying drinking and sanitary water and in other sectors, such as toys, balls, containers, hoses, chairs,
decorative items, house, automotive industry and more.
In the Composites Process, materials are produced for:
Materials for cables, flexible profiles, shce in ections, automotive use, computer circuit holders, in ection of accessories
for pipes and the like, bottles of punfied water, production of containers and packaging by bionentation process,
containers for edible oils, vinegar, detergents, cleaners, uices, sauces, coffee powder, among others.
P/anls (See Section 2, 'The Issuer'; item x, "Description of its Main Assets'; of this Annual Report).
The production capacity of the vinyl and compounds manufacturing process as of December 31,2021 there was an
average of 1.8 million tons of PVC resin and 412,000 annual tons of compounds.
Raw Materia/s
The main raw material used in the Vinyl Process is VCM. Orbia buys VCM ftom third paRies such as Westlake and
OxyChem. According to its installed capacity for the production of PVC at the end of 2021 in its Vinyl Process, the
Attachment I: Description of the Applicant Company Page 82 of 204
Attachment 1_Description of the Applicant Company
Company required more than 1.8 million tons of VCM for all its plants (1.4 million tons in America and 0.4 million tons
in Europe). In America, the Company maintains an integration of approximately 85% to Ethylene, while considering the
production capacity of PVC in ertnany, its global integration is approximately 65%.
At the production plant in Europe ( ermany), the most important raw material purchased from third parties is ethylene,
which is purchased through two current supply contracts with prices set monthly, while brine is obtained from S W and
electricity from Evonik Industries.
Sa/es and Markefing
For the sale of vinyl and composite products, Orbia maintains long-term contracts with its main clients and sales
schemes that promote toyalty through discounts for votume acquired in specific periods of time. Long-term contracts
are for continuous renewal and provide for the use of price formulas based on intemational references. Some of these
references influence the cost of VCM, which allows Orbia to maintain differentials belween the cost of VCM and the
price of PVC throughout the cycles. On the other hand, these contracts provide their Gients with adequate market
conditions and competitive prices. Approximately 45% of PVC Resin sales are made under this scheme, allowing Orbia
to have a solid marketing base. The remainder is sold on the Spot Market at the reference price at the time of sale.
Orbia has an important product marketing nelwork to serve the national market and a considerable number of countries
with high development potential, gaining a presence in the main regions of the world. The wide diversification in the
sale of these products allows Orbia to maximi e its income and reduce risks.
Main Cusfomers
PVC products are used by customers in the manufacture of pipes and connections, flexible and rigid profiles, upholstery,
flexible and ngid films, boriles and containers, synthetic flooring, blinds, laminated polystyrene, the toy industry, footwear
and articles for the medical industry, among others. Including inter-company sales, the Vinyl and Composites business
that is part of the Polymer Solutions business group represents 39% of Orbias total sales and the most important
customer represents 1.1 %, so there is no dependency on one or more customers, given that the loss of these would
not matenally adversely affect the results of operations or financial situation.
Distribution Channels
The products of this process are marketed directly to the industries that use them as inputs for the production of other
products. All sales of the Composites Process are made through the Company s sales force in its own branches and
through distributors.
Distribution Contracts
The sale of PVC is typically directly to customers, however, there are some disVibution contracts for the
commerciali ation of the products mainly in Europe, North America and Asia.
Cyclic behavior
Orbia is the largest producer of polyvinyl chloride (PVC) in Latin America and lhe sixth largest in the world, as well as
the largest producer of specialty resins worldwide. The global PVC market is linked to the construc6on industry, which
depends on the contraction or expansion of the economies of the world s regions and countries.
lobal demand for PVC is strong and supply is restricted, leading to high utili ation of industry capacity. PVC demand
is expected to grow at a CA R of 3.5% from 2021 to 2026 and then 2.4% through 2031 driven by strong construction
and infrastructure activity globally, adding 17 million tons of demand belween now and 2031.
PVC supply additions are limited over the next 5 years in low-cost producing regions such as the US C and the Middle
East. In addition, barriers to entry are high due to the complexity of investing in and operating ethylene/chlor-
alkaliNCM/PVC assets.
Competitive Position
The Vinyl Process:
It maintains the strategy of vertically integrating its business to be competitive in the markets it serves, investing in
pro�cts that have the purpose of ensuring the national and international competitiveness of its products, as well as the
development of speciali ed and differentiated products.
In the recessionary stages of the national and international economic cycle, demand may be reduced and oversupply
generated, affecting the international prices of the products manufactured by the Company. The products manufactured
and traded by the Issuer compete in global markets and are therefore sub ect to the supply and demand trends of such
Attachment I: Description of the Applicant Company Page 83 of 204
Attachment 1_Description of the Applicant Company
markets and, therefore, to intemational prices that may affect profit margins, based on the e�ciency levels of each
producer. The vertical integration strategy has allowed the Company to consume a high percentage of intertnediate
products for final processes, reducing the impact of a decrease in the prices of basic products.
The suppiy and co-investment contract with OxyChem, and the acquisition of Policyd (a ma or resin producer in Mexico)
have contributed to a strong position in the PVC market. In addition, with the latest acquisition of Vestolit in Europe,
Orbia increased its portfolio of specialty products made to measure with high-impact suspension PVC resins (HIS-PVC).
Orbia is the only producer with this technology in Europe and, with the current capacily, it is also the largest producer of
specialty resins in the world.
The Company is a leader in the general resins segment in Mexico and Colombia, and is aiso a leader in the special
resins segment in Europe and the U.S. The main competitors in the PVC market in Latin America and Europe are Shin-
Etsu. Westlake, Formosa, INEOS, and OxyChem.
Worldwide PVC resin producers by company in 2021 (Average annual capacity)
Place
1
2
3
4
5
6
7
8
9
10
Company
Shin-Etsu
Wesllake
Fortnosa roup
INEOS
Xin iang hongtai
Ofiia
Oxy
Hubei Yihua
Beiyuan Chemical
Others
Total
Capacity (1000 Tons)
4,440
3,470
3,164
2,315
1,970
1.797
1,683
1,350
1,250
37,701
59,140
arket Share
8%
6%
5°h
4%
3%
3%
3%
2%
2%
64%
100%
Souree IHS Mark�t
Market Share
In 2021, Orbia s share of the Mexican PVC resin market was 449'a, as shown m the graph below:
Mexico: PVC Market Share
Source IHS Markd y Orbia
p� Others
Westlake 3% 5%
4%
Formosa Vestolit
18% �%
Shintec
26%
Attachment I: Description of the Applicant Company Page 84 of 204
Attachment 1_Description of the Applicant Company
The total market capaciry of PVC resin in Mexico was 471,000 metric tons in 2021.
Orbia s market share in Mexico for compounds, phthalic anhydnde, and plastici ers is shown below.
Medco: Cnmw� /�uAet SMn
an...
l�%
TmN
13%
�l��Y
3'%
EIQSA
H4 ♦
\
inll%':
M�dm: Ph[NOc ANryAAM MaAW SAan
�DESIi
��
Source: Orbia market study based on ANIQ impoA-axport repoAs
General lndustry In/ormation
�luP
�l%
--� M.�000w.iaa«sMs�eisna.
IOEL1EqSA
3x 1'-
`�Vh+[HY
�]%
Imp1
�9+
Orbia focuses on the manufacture of products that are used in the construction, housing, infrastructure.
telecommunications, water supply, automotive, sewage, and drainage and irngation industries, among others. In
addition, it participates in industries that use chlonne, caustic soda, chlorine derivatives and resins. It also manufactures
transformed products, including pipes and fittings for the transportation of fluids such as water and other PVC
compounds.
PVC resin
PVC is manufactured by polymeri ing VCM, which is formed from the oint reaction of ethyiene and chlorine. PVC resin
has multiple applications such as pipes and connectors for conveying water (particularly for use in housing and
sanitation), profiles, films and sheets, bottles, coating of wires and cables, and floors, among others.
PVC is the third most used plastic in the world after polyethylene and polypropylene. According to IHS Markit, global
demand for PVC reached approximately 49.2 million metric tons in 2021, which is largely supplied to the construction
sector. Pipes account for more than 45% of all PVC consumption globally. The estimated average annual growth rate
of PVC demand until 2031 is an average of 3.4%.
PVC is a versatile plastic that has numerous applications for everyday use, such as: pipes for the transport of drinking
water, sewage or water for irrigation, coatings for electrical cables, profiles for the consVuction of windows, doors.
facades or entire houses, tiles, floors, fumiture coverings, auto parts and appliances, clothing and footwear, containers
and packaging, medical devices, adhesive tapes and many others.
In the PVC producGon chain, vertical integration is a priority issue that, if not carried out, can lead to the disappearance
of non-integrated PVC producers. In addition, the vertical integration of manufactured products can affect this industry.
Non-integrated PVC producers are expected to face significant challenges in competing with integrated consumers,
who typically have significantly lower production costs.
The PVC industry is greatly affected by changes in energy prices, particulariy natural gas, from which ethane is derived,
which is the main feedstock used to produce ethylene in North America, and crude oil from the from which different
types of naphtha and other hydrocarbons are derived, which are the main raw materials used to produce ethylene in
Europe and Asia.
In addition to mature markets for the industry such as the United States and Western Europe, Orbia focuses on markets
that are en oying steady growth in areas such as govemment investment and infrastructure and construction pro ects
in countnes such as Mexico, Colombia, India, Bra il and Turkey.
Within PVC applications in Mexico, Colombia, USA, India and Bra il, most of the production is for pipes and accessones.
while in Westem Europe and Turkey, the most relevant segment is profiles, with pipes and accessories occupying the
second place in these countries, as shown in the following graphs.
Attachment I: Description of the Applicant Company Page 85 of 204
Attachment 1_Description of the Applicant Company
United Stater PVC Appltatlons
Vrofae, �ik.611i�)
riM 65hae� iilu 6 NQI 31K
t3% '
w e B [,ey
3a
Batks
0%
others
17%
v�a a vnun.
�6%
6A00
5.000
�, �.000
� 3A00
�
>
2,000
1.000
0
West Europe: VVC Applfwtions
a,sao
vroPoa (rk, a ttitl
3e% <.000
� Wire 8 Ubk 3•�
8% 3ppp
�
Botlks � 2.500
. � 2AW
film6Shwt�iki6f[14) p�hKy � ��
19% Il%
IA00
500
Pipe & Fininys �
IS%
Mexico: PVC Applications
Pwf.les (Fk. & RIQ� �
]0% wre & Gde
l3% 500
Film & Sheet�Frez & Riy)
1�% Botlks
4'A �, �00
E �
a
ane.s ' :a
Vipe & Fittuigs 1�'
4i% 100
0
Colombia: PVC Applications
Fitrn & Sheet (ffea & Rigl Profiles (Fle� & Rig� :50
10% 8%
Wne 8 Uble =�
- 7%
Bo��ks
_ 0% Fe 150
Pipe 8 Fitt6�ys
55%
E
� 700
an�.:
io%
w
0
United States: Hlstoric PVC Demand
Attachment I: Description of the Applicant Company Page 86 of 204
2017 2018 I019 I020 2021
West furope: Historic PVC Demand
7017 2018 3019 ]020 1021
Mexico: Historic PVC Demand
]017 1018 2019 ]OHI 7411
Cdombia; Historic PVC Demand
xo�r ta�a mi9 xom :mi
Attachment 1_Description of the Applicant Company
Pipe & fitem�
73%
India: PVC Appllwtions
Film & Sheet (Fle� & Ria) India: Historic PVC Demand
11% Profiles IFlea & Wg) a,oao
e%
3.SOD
�re & Gble
6% 3�
Bottks
1% � 2.Soo
anen �i :.000
sx �
�.soo
�.oao
S00
0
:oi� :me :ais :mo �m�
Brezll: Historlc PVC Oemand
Brexil: PVC Appliwtlons 1A00
1,2A8
Vrofiks(flex6Ply) ���
Film & Sheet (fle� & Rig) - i5% 1.031 1.065 7.657 1.031
10% IA�D
� � 800
tYre & UEk � �
9U6 �
`Bottks 400
1%
OIMR ]OO
7%
Pipe & ifttings 0
<� 1017 2018 2019 2010 20i1
Turkey� PVCAppllwtlons
Turkey: Historic PVC Demand
Profiks (Ha & Rq1 I20D
r0%
Wire B Gbk I,OOD 957
�x 85° aw e:� �
eao
eomes �,
�% �
60U
Film d SheW (ika & Wy� - Oehefs � <pp
7% Ii%
]OD
Pipe 6 Fin4�ys �
� 2017 191� iC1'1 7Pf0 1ptl
Source IHS MarWt
Orbia focuses on markets with high growth potential, where PVC consumption per capita is increasing, and in mature
markets where PVC consumption per capita is stable at high levels. The following graph shows the PVC consumption
per capita of the main countnes and/or regions where Orbia sells PVC resins:
i0.0 PVC CeneumeNen ear Cnella fKe/eAnenl
I8.0
16.0
10.0
12.0
10.0
8.0
6.3
6.0
OA
]A
0.0
Global
Fuente: IHS Markd
IS 1
98
5.9
� � 36
UnrtedStates WestEurope Medco Bratil
2021
9.3
39
23
Cqlombu 7urkey �n6i�
Attachment I: Description of the Applicant Company Page 87 of 204
Attachment 1_Description of the Applicant Company
(b) Building Infrastructure Business roup
Building Infrastructure is a global provider of plastic piping systems and innovative solutions for the construction and
mfrastructure industries, with a broad product portfolio. Specific product segments are used for drainage solutions,
stormwater management solutions, potable water solutions, indoor weatheri ation solutions, and flooring and landfill
systems. In order to keep the product portfolio up to date, Building Infrastructure has a lobal Technology and
Innovation Center in the Netherlands, including a pilot plant, an accredited laboratory and a design center.
In Europe, Building Infrastructure operates 24 production plants and 7 Research and Development facilities, with
4,200 employees. Building Infrastructure is the market leader in Europe, has a broad product portfolio with nearly
32,000 items, has a significant local presence and is committed to innovation and technical support for the solutions it
offers. All these elements represent a benefit for its customers.
In Latin America, Building Infrastructure has 24 production plants that operate with 6,100 employees and in which it
manufactures 38,000 aAiGes. It markets its products through its weli-positioned brands Pavco, Amanco and Plasligama
(ali of them now associated with the Wavin brand). Due to its experience and technical speciali ation, as well as its
perception of a high level of quality, Building Infrastructure is the market leader in Latin America.
In the Asia Pacific region, Building Infrastructure has relaunched its activities and started new facilities in Indonesia
and India in 2020, as a base for future growth and becoming a true global player. In 2021, Building Infrastructure
acquired 2 brownfield production facilities in Neemrana and Hyderabad from Data Communications, expanding its
production capaciry in the region to overcome import bartiers. Building Infrastructure employs 270 employees
throughout the Asia Pacific region.
Sales of the Building Infrastructure group of businesses during the years 2021, 2020, and 2019 represented 33%,
32% and 35% of consolidated revenues. The Building and Infrastructure roup also contributed 21 %, 20% and 20% to
Orbia s consolidated EBITDA during the same period. Detailed revenue data by region is shown below.
Year ending December 31:
2021 2020 2079
Building Infrastructure
business group "�
Europe / Asia Pacific 1,606 1,195 1,227
Latin Amenca 1,330 883 1,032
Eliminations (14) (7) (14)
Total Building Infrastruclure 2,922 2,071 2,239
(1) Figures in millions ot dollars.
During 2021 Building Infrastructure continued to execute the strategy, benefiting from the rapid growth of value-added
products such as Aquacell, AS , SiTech , Tigns KSIM5, to expand both sales and profitability, offsetting sudden pnce
increases of the raw matenal, through the use of appropriate pricing strategies.
That said, after unusually high volume in the second quarter, record lows in stock availability largely disrupted operations
in the third quarter. This situaGon, combined with the scarcity of raw materials, meant that products could not always be
delivered to customers. Beginning in the the second quarter of 2021, Building Infrastructure benefited from being part
of Orbia and from the growing collaboration with other business groups (in this case, Vestolit and Alphagary), as many
of the competitors ran out of stock.
Despite this fiercely competitive business environment, key milestones such as market share growth in most markets
were achieved. New entrants were also welcomed with the acqwsition of another factory in Neemrana, India, which will
help accelerate market access for our sustainable products and solutions to serve India s growing urban population.
In 2021, Building Infrastructure also launched the first ear Up 4 global marketing campaign in 25 countnes,
including Latin America, which aims to create customer loyalty and brand preference among installers. The purpose is
to make the change to Wavin products and the concept of the campaign is to install trust .
Producfs
The market segments served by Buitding Infrastructure business group:
Attachment I: Description of the Applicant Company Page 88 of 204
Attachment 1_Description of the Applicant Company
avin Hot Cold Systems: The Hot Cold business unit is focused on serving five main applications: Potable Water,
Fire Spnnkler, Industrial, Radiator Heating Piping Systems, Indoor as. All of these systems are inherent in a variety of
buildings, in residential, non-residential and commerciai buildings. To serve these markets, Building Infrastructure
offers a broad portfolio of pipes and fittings. These systems inGude flexible, rigid, and semi-rigid piping in vanous
materials, connection techniques, pipe wall constructions, and diameters. APAC, Latam, EMEA countries have different
installation habits and legislative requirements. Our ob ective is to have adequate solutions for the market, but at the
same time benefit from economies of scale. That requires extensive market research and a deep understanding of
market dynamics. But Building Infrastructures offering goes far beyond products. We provide a wide range of
additional services such as design and calculation, BIM models, service life assessment tool, drinking water quality and
hydraulic performance. Over time it will continue to build smarter ways to manage drinking water in buildings.
Building Infrastructure s drive and commitment: Today, with more than 2 billion people on earth still without access to
fresh water, Building Infrastructure s goal is to make our solutions available worldwide. The business s approach to
innovation is to avoid overly complicated solutions and to remove all barriers to installing them. This also means that
we actively share our knowledge to help our customers.
Similarly, the quality of drinking water is of great importance. Therefore, Building Infrastructure actively contnbutes to
the supply of safe water by raising product standards to the highest level. All Building Infrastructure systems are made
from approved materials and help customers design their systems the right way. By offering high quality systems with
the correct design specifications, B I s customers can limit the risk of bacterial contamination in their water systems
during use.
avin Indoor Climate Systems: Building Infrastructure is continually strengthening its position in the indoor climate
segment in Europe by expanding the dedicated Building Infrastructure organi ation to serve the ma or European
markets.
The company develops, manufactures and sells various systems that provide a better and healthier indoor climate for
people with energy reduction as a key factor.
The key systems are:
1. Water-based underfloor heating systems, inGuding pipes, flooring solutions, collectors and distnbution
systems.
2. A water-based roof cooling system that provides healthy cooling of buildings with low energy consumption and
no operating noise (altemative to air conditioning systems).
3. Thermal interface units for District energy (Calefa),
4. Ventilation systems with heat recovery (Venti a) including units, ducts and accessories to make a complete
installation.
5. Various ranges in control systems, including high-end Sentio, which is a sophisticated control system that
connects ali systems seamlessly.
These systems focus on ease of installation, long-term reliability, and connectivity through control systems that are the
key differentiators in the market. Within indoor air conditioning systems, Building Infrastructure targets the newly built
residential market. At the same time, the business is experiencing an increase in the light commercial building business
and renovation market, including Precast.
avin Soil aste: Soil Waste products contribute to Building Infrastructure s purpose in two areas: improved
construction performance and improved sanitation and hygiene. The product range covers all segments of the value
pyramid with low, medium and high specification PP, PE and PVC systems. Its broad product portfolio can cover the
most diverse requirements of customers around the world. Whether in a competitively priced market or a high qualiry
pro(�ct, Building Infrastructure has a ready solution with a wide range of products, technical support and high levels
of service to offer our customers.
The ability to develop value-added products such as PVC allows the business to set trends in markets such as LATAM
and APAC. resuiting in differentiation from the competition. In EMEA, it B I is increasing its market position with
products such as SiTech and AS that meet the highest demands. B I s customers appreciate the fresh designs,
performance and quality of our product. Whether for social buildings, multi-family homes in urban settings, or five-star
hotels in tourist destinations, the Wavin Soil Waste portfolio is always the right choice.
Building Infrastructure is well positioned for the challenges of the future. It is a pioneer in the development of 100%
plastic wastewater systems. It has extensive knowledge of the segment that it takes advantage of to develop various
applications for its own and industrial constructions. These capabilities are combined with B I s sound and fire
protection expertise to offer a full range of products.
avin s Stormwater anagement: We live in a changing world. Cities continue to grow as the urbani 8tion trend
continues, resulting in increasingly harsher surfaces on the environment. Ciimate change is having a profound effect
with increasingly intense rains and periods of drought. The result of the combination of shorter and sharper rains with
Attachment I: Description of the Applicant Company Page 89 of 204
Attachment 1_Description of the Applicant Company
more roofs and paved roads is a higher risk of urban flooding To manage this risk, there is a growing demand for
improved stortnwater and stortnwater drainage solutions.
Building Infrastructure is a leading global player helping towns and ci6es manage flood risk, control groundwater
deplehon, and manage urban heat stress within the urban environment through a broad portfolio of products and
technical expertise.
PoMolio: Building Infrashucture offers a wide range of solutions for surtace water management. QuickStream
Siphonic Roof Drain is used for the efficient drainage of large roofs, while gutters, troughs and drainage channels can
be used to collect other hard surfaces. Below the surface, Building Infrastructure offers transportation through X-
Stream , Novafort and land drainage piping systems with access through Tegra manholes. Water quality can be
improved by removing debris, sediment and oits with Tegra Road ullies and Certaro filters, while AquaCell and Q-
Bic Plus can be used to allow collected water to infiltrate back into the ground or stored and released at a controlled
rate to avoid overioading the piping system.
Sustainability: Developing systems in plastic means that a pro ect life of up to 100 years can be achieved with the added
benefit of being recyclable at end of life. A significant portion of Building Infrastructure s stormwater portfolio is already
produced from 100% recycled plastics from post-industrial applications.
Making cities more iiveable and lovable: Building Infrastruclure plays a role in making cities more liveable through the
introduction of trees into the urban environment. Trees play an essential role in promoting health and social well-being
by helping to reduce the effects of urban heat build-up, eliminating air pollution, encouraging physical activity and
reducing stress.
To help trees grow faster and give them a chance to live i� harsh urban environments, this business segment offers
Wavin TreeTanks . In these underground boxes, a safe one is created in which the roots can grow as in the natural
environment while collecting water and valuable nutrients to support their growth. The healthy growth of these trees
helps rapidiy cool temperatures in city centers (heat island effect) making our cities more sustainable.
avin Foul ater Systems: Foul Water Systems is one of Building Infrastructure s foundations and achieved
unprecedented results in 2021 in both revenue and profit. Building Infrastructure Develops, produces, markets and
selis plastic pipes, fittings, manholes, manholes and related materials to create a healthy and sustainable underground
infrastructure. Its diverse teams with colleagues in Asia Pacific, Latin America and Europe share knowledge and closely
cooperate with each other to deliver quality to customers. Tailored to customer requirements, Building Infrastructure s
solutions made of polyvinyl chloride (for example, Novafort in Latin America) and polypropylene (for example, Acaro
and Tegra in Europe) are used as combined sewage for dirty and stortn water or installed as separate systems. True
black water goes to water treatment facili6es, while rainwater, with limited filtering, goes to lakes, canals, and rivers or
is used locally to water trees and parks. In this way we contribute to the resilience of the city.
Building Infrastructure emphasi es sustainable products made from recycled materials, such as its multilayer pipes
under the names Recycore , EcoTP and U3, in countries where legislation allows it. In other countries, it lobbies for
the indusion of recycling to be approved. Durability, reliability and ease of installation are key to their products. And
circularity reigns at Building Infrastructure: any innovation is guided by it.
Foul Water Systems solutions support Building Infrastructure s commitment to improving sanitation and hygiene
around the world.
Sustainability. Building Infrastructure s holistic sustainability strategy is based on six global programs (of which four
are action-focused and lwo are supportive). Each program has Gear goals and ambitions for 2025 in line with Orbia s
goals. Its goal is to become an industry leader in sustainability by 2025. Building Infrastructure focuses on:
1. Innovation (Offer innovative solutions to help our Gients adapt to Gimate change).
2. Circular economy (Contribute to the increase in the use of recyGing and the recyclability of products).
3. E�vironmental Impact (Reduction of the environmental footprint for Gients and in our operations).
4. Social inclusion (creating a positive impact on (local) communities and embracing diversity)
5. Reports (Reports on the performance of sustainability programs to stakeholders).
6. Public affairs (active participation in the development of policies to increase the impact of our sustainability
activities).
Annually Building Infrastructure implements between 100 to 200 pro ects.
Raw Materia/s
During 2021, for the Building Infrastructure business in Latin Amenca, approximately 66% of the cost of sales in the
manufacture of its products was PVC resin and CPVC resin. The Company buys 55% of this raw material from USA
and other regional suppliers where logistics costs or tariffs make sense, while the rest is obtained from the PVC resins
subsidiary of the Polymer Solutions business group (Vestolit), of its operations in Mexico and Colombia.
Attachment I: Description of the Applicant Company Page 90 of 204
Attachment 1_Description of the Applicant Company
In the case of Building Infrastructure s business in Europe, 54% of its raw materials are Polyolefins: Polyethylene
(PE) and Polypropylene (PP), while the remaining 46% is PVC resin (virgin and recycled) and additrves, of which which
the Polymer Solutio�s business group contributes approximateiy 11%.
Main Customers
Building Infrastructure s main customers are from the construction and infrastructure industryincluding construction
companies, installation companies and underground contractors, as well as municipal govemments, cities and gas and
water companies that carty out public works. Including intercompany sales, Building Infrastructure business group
represents 33% of Orbia s total sales and the most important customer represents 7.2%.
Distribution Channels
Building Infrastructure distributes its products to end consumers (installers, contractors and engineers, and specifiers)
directly, through distributors, or through businesses speciali ed in construction, dealers, plumbing specialists, civil
engineering specialists or retail DIY businesses.
In Europe, Building Infrastructure primarily uses indirect distribution that is, its products are shipped to the wholesalers
or retailers, who have both centrali ed distribution and storage centers, as weli as muitiple points of retail sale. Building
Infrastructure products are availabte at approximately 65,000 points of sale in Europe, which include direct and indirect
distribuGon.
In Latin America, B I s products are distributed through over 50,000 points of sale with more direct contact with the end
consumer, as well as through construction companies.
Cyclic behavior
Building Infrastructure s business performance is influenced by the economic cycles in each of the countries in which
we operate, particularly the cyGes present in the construction and housing sectors. Additionally, in Europe, there is a
seasonal effect related to the winter season during some months of the first and fourth quarters, in which lower levels
of sales are generated.
In 2021, the COVID-19 pandemic and industry-wide raw matenal shoRages had a significant impact on Building
Infrastructure s perfortnance throughout the year. The great efforts applied to continue supplying its customers in the
best possible way in these challenging circumstances have strengthened its market position in the regions where it
operates. Building Infrastructure made the well-being of its employees and customers a priority by adopting new ways
of working, investing in safety measures and providing support to families affected by the Covid-19 virus.
Competitive position
Building Infrastructures market leadership has been built on the backing of its very well positioned brands: Wavin
(with 66 years of history), Amanco, Pavco, Plastigama, while benefiting from an important track record in product
development innovative systems and solutions. Taking innovation as a reference, Building Infrastruclure offers a wide
portfolio of products and solutions, such as those aimed at solving so�alled customer pain with reliable service level
pertormance. The close links established with customers have been reinforced in recent years through proactive
commercial campaigns, as well as through the use of digital tools such as Building Information Modeling (BIM)
throughout all regions, improving the service to our customers.
Market share
The Building Infrastructure business in Latin America holds about a 31 share of the PVC pipe market, based on the
companyCs own estimates, and the company also estimates that, in this region, it holds a significant share of the
wholesale markets where it has a presence, since in most of the countries it is the market leader. For the European
market, B I estimates that it holds a market share of 14% for a wide range of applications for the interior and extenor
design of buildings, as well as infrastructure.
(c) Data Communications business group (Dura-Line)
Data Communications develops and markets high-0ensity polyethylene (HDPE) products and has positioned itself as a
leader in the production and distribution of conduits and accessories, as well as cable and fiber optic conduit solutions
for voice and data, and pipes for industries. of infrastructure.
Data Communications has 16 production facilities located in North America, Europe, India and Oman. Its clients are
large North American corporations, as well as muitinational companies that rely on the high qualiry of the products and
services it offers.
Attachment I: Description of the Applicant Company Page 91 of 204
Attachment 1_Description of the Applicant Company
Data Communications has positioned itself mainly in the United States and Canada regions, as well as in the Asia,
Middle East and Africa (AMEA) region.
The Data Communications business group contributed 11%, 11% and 12% to Orbia s consolidated revenues in fiscal
years 2021, 2020 and 2019, respectively and 7%, 13% 11% of Orbia s consolidated EBITDA. Revenues in millions of
USD for all three years are shown below.
Year ending December 31:
2021 2020 2079
Data Communications Business roup �'� 94'1 732 749
(1) Figures in millions.
Producfs
Telecommunicalions. The Company produces advanced engineered conduit, microduct and cable conduit solutions for
the telecommunications (voice and data), electrical engineering and cable television markets, and offers multiple conduit
solutions under the Dura-Line brand. Offering a microduct solution primarily for use in broadband and cable N and
telecommunications applications, its SIIICORE ducts are made with a high-density polyethylene (HDPE) acket and a
solid poiymer shell. The conduit has an outer acket and a slip-on center that eliminates the need for lubrication, reduces
friction and protects the cable before, during and after installation. The Tornado Plus Conduit product is specifically
designed to facilitate better installation by creating an air chamber that allows cable to be installed over long distances.
The company is a leader in the development and manufacture of small diameter ducts. These patented solulions provide
flexibility to the network through the installation of fiber that increases the growth of data networks without the need for
additional trenching.
Through its CableCon line of products, Data Communications is the leading provider, both by volume and sales, of pre-
installed cable conduit solutions in North America. CableCon is a system in which fiber optic, coaxial or power cables
are pre-installed during production at our factory, reducing installation costs for customers. CableCon s consumer growth
has been achieved through Data Communications s ability to customi e the solutions it offers its customers with products
that fit their needs.
The Company has developed a new line of micro-duct solutions designed to be used inside and outside buildings in
order to improve network capabilities in companies. Orbia s technology provides a comprehensive solution to meet future
growth needs with affordable installation costs. Through the CableCon product, the Company is the leader in driving
solutions in North America based on volume and sales.
It also sells a wide range of accessories for users in the telecommunications sector (voice and data) such as connectors,
fiber optic woven tapes, cable television, and equipment installa6on. Accessories are designed to streamline and
improve the installation of pipe and duct solutions.
Raw Materials
For Data Communications US/Canada and AMEA business, the primary raw materiai is highiiensity polyethylene resin,
the price of which is substantially sub cct to fluctuating market conditions. Polyethylene resins are traded worldwide. A
determinant in the price of resin is the price of oil, which usually experiences volatility. Purchases of this raw matenal
are made from a small number of local suppliers. enerally, these contracts have a duration of beNveen one and two
years. The Company has a long-standing business relationship with regional resin suppliers, with an average tenure of
eleven years. In tertns of prices, contracts with suppliers are based on market prices according to the applicable region.
Main customers
Data Communications business customers belong to the telecommunications and infrastructure industries, which include
large and small construction companies, installers, as wetl as telecommunications and energy companies.
Disfribution Channels
Data Communications distributes its products to more than 1,700 customers, both directly and through distnbutors in
more than 50 countries.
Attachment 1: Description of the Applicant Company Page 92 of 204
Attachment 1_Description of the Applicant Company
Cyclic behavior
Normaliy, the first and fourth quarters of each year have low sales levels due to the winter in the northem hemisphere.
However, weather conditions in recent years have varied in such a way that sales perfortnance may be affected in
different ways.
Compefitive position
The Data Communication s business main compeGtive advantages are its presence in regions such as the United States,
and countries such as India, Oman and Canada, having an extensive distribution network, as well as greater brand
recognition. The business group faces strong intemational competition in the countries in which it participates.
The competitors in the US/Canada and AMEA are Perfortnance Pipe (a division of Chevron Phillips Chemicai Company),
LP, Blue Diamond Industries, LLC, JM Eagle, and to a lesser extent small regional manufacturers, in addition to some
European companies. such as abo Systemtechnik mbH (dba abocom), Emetelle and Hexatronic. In developing
countries, the competitive landscape is much more fragmented when compared to the US, Canadian or European
markets.
Market share
The Data Communications business group considers that this information is of strategic importance, and it therefore
reserves the right to disclose it.
(d) Precision Agriculture business group (Netafim)
Precision Agriculture is aimed at high-growth markets and it produces solutions to address hvo ma or global trends: the
increasing scarcity of food and water.
The Company is a global leader in the production and sale of precision irrigation solutions, with 62 subsidiaries and 17
plants located in Israel, Turkey, The Netherlands, Spain, South Afnca, Mexico, Bra il, Peru, Chile, China, Colombia,
Australia, India and the United States, serving over 110 countries.
Precision Agriculture offers agricultural, civil engineering and pro ect solutions related to the handling, use and control
of water in agricultural, farming and aquacultural activities. All this allows it to offer the widest range and assortment of
solutions that adapt to the needs of its customers.
The products operate under the Netafim brand, which is recogni ed in the key agricultural markets and is a symbol of
its proven history as a pioneer and innovator in the agricultural imgation market. Since the introduction of the world s
first commercial drip irrigation system in 1966, Precision Agriculture has invested years of research into micro-watering
to maximi e the benefits of the technology. As a result of this investment, we have been pioneers in the key technological
advances made in micro-irtigation, such as low-pressure drippers and drippers with pressure compensation. We have
become a world leader in advanced micro- irrigation by helping the world grow more with less , as demonstrated by our
customers who, generally, achieve greater crop yields while using less water, as well as less land and power resources,
allowing for reduced use of other inputs like labor, nutrients and crop protection.
Precision Agriculture contributed 13%, 15%, and 17% to Orbia s consolidated revenues for the years 2021, 2020 and
2019, respectively and 7%, 14% and 13% to EBITDA, respectively during the same periods.
Sales
Year ending December 31:
2021 2020 2018
Precision Agriculture � �Z6 972 1,063
business roup �'�
(1) Figures �n Millions.
Products
Precision Agriculture s technologically advanced micro-irrigation solutions consist primarily of drip-based watering
solutions, but we also sell sprinklers and micro-sprinkler products. This business provides services primarily to the
agricultural market, while certain products are used for landscaping and mining appiications.
Attachment I: Description of the Applicant Company Page 93 of 204
Attachment 1_Description of the Applicant Company
The broad range of Precision Agriculture s product portfolio includes drippers, drip lines, strategic system components
(such as filters, valves and air valves) and advanced digital technology for agriculture. Advanced digital crop technology
offers solutions for watering and feRirrigation, and in 2018, we launched an integrated digital agriculture system to the
market that has monitoring, analysis and control capabilities. We also provide end- taend solutions that include the
provision of bulk water, feasibility and design studies, implementation, post- sales support and system maintenance.
Also, lhrough our leading presence in the irrigation market, we have built a base of in-depth agricultural knowledge and
we offer agronomic services and support to help their end users maximi e the productivity of their systems.
Raw Maferials
For the Precision Agnculture business, the main raw matenals are polyethylene (PE) resins in different grades and
products made from PVC resins.
Main Customers
The main customers of the Netafim business group are individual and large corporate farmers. Most of these end users
are served and supplied through large and medium si ed wholesale distributors. Precision Agriculture s top ten
customers together represent about 2.55'0 of Orbia s consolidated total revenue.
Distribution Channe/s
Precision Agriculture distnbutes its products directly and through a global network of more than 3,000 distnbutors in
more than 110 countnes.
Cyclic behavior
Precision Agriculture s seasonality depends on the Gimate of the countries in which it operates, with the second quarter
of each year bemg the one with the highest demand, followed by the fouAh quarter, while the first and third quarters are
weaker. In Europe, an mcrease in demand for the company s products is observed in the spring months. The countries
of the southern hemisphere experience greater demand in the months of September and October, which is the
beginning of the spring season there. Finally, in December there is an increase in the demand for its products driven by
an increase in sales in the US and India.
Competitive Position
Precision Agriculture s main competitors are Jain Irrigation, Rrvulis, Irritec, Toro, Met er and smaller local competitors
in the countnes where it is present.
Market Share
Precision Agriculture has an approximate market share in precision irrigation products of 35% in North America, 40°Io
in Latin America, 35% in Europe and 20% in AMEA.
(e) Fluorinated Solutions Business roup ( oura)
Fluorinated Solutions is a wo�ld leader in the development, manufacture and supply of fluorinated products and
solutions. It is the largest producer of fluorite in the world and has a leading position in the industry of hydrofluoric acid,
aluminum trifluoride (AIF3), refigerant gases and medical propellants. Fluorinated Solutions has also started supplying
fluorinated products to the energy storage industry, a key growth segment in the coming years, and is perfectiy poised
for this. The launch of Koflyte , a new brand for its next-generation electrolyte additives and casolvents, the acquisition
of Silatronix, a leading battery technology start-up, and Orbia s investment in Ascend Elements, a lithium-ion baltery
recycler of closed cycle and manufacturer, are the first steps to enter these markets. Fluorine plays a critical role in a
wide range of industries, including automotive, chemical, semiconductor, communications, construction, and
pharmaceuticals, among others. It has also become relevant as a key feedstock for various decarboni ation sotutions,
such as lithium-ion batteries, renewable energy, and low- WP refngerants for mobile and stationary applications.
The value chain of this Business roup originates in calcium fluonde, better known as fluorite, a non-metallic mineral
that acts as a Flux, among other applications.
Concentrated fluorite (with a minimum concentration of 97%), without impurities, is known as acid grade and is used in
the production of hydrofluoric acid, which is obtained through chemical processes using sulfuric acid from sulfur.
Fluorinated Solutions competes with China in the production of this acid.
Fluorinated Solutions owns several mining concessions in Mexico. The largest concession is located in the state of San
Luis Potos and has the only known fluorite mineral body in the world. Fluorinated Solutions has the largest proven
Attachment I: Description of the Applicant Company Page 94 of 204
Attachment 1_Description of the Applicant Company
reserves, equivalent to 1/8 of the world s reserves. Operating from two locations in the state of San Luis Potos ,
Fluorinated Solutions s mineral production is three times that of the second largest producer of fluorite.
Environmental and sustainability issues are strongly integrated into Fluorinated Solutions plans for mineral extraction
and processing to ensure that its environmental and sociai responsibility goals are achieved. The use of screening
equipment for Metspar has enabled better utili ation of the mineral resource, and significant investments have been
made in Acid spar processing to use substantially less water per metric ton produced and go to paste or dry-related
instead. of the traditional wet-related practice industry.
Fluorinated Solutions supplies approximately 20°k of the worldwide demand for fluorite, either directly or through its
distribution networic. It is the number one player in the Amencas and Europe and has a significant presence in Asia
Pacific. Fluorinated Solutions sells fluorite to a variety of customers in different industries, including ma dr manufacturers
of Fluorinated products, some of the largest steel mills in the world, and several of the largest players in the Latin
American cement industry.
Fluorinated Solutions has been a world leader in promoting the use of Metspar for cement companies, since it allows
to reduce the clinker content per ton of cement, thus helping the industry to reduce CO2 emissions.
The dynamics of the fluorite market have changed significantly since 2018, as China, the largest producer by country,
went from being a net exporter to a net importer of Buonte. This situation has caused an opening of new markets in Asia
Pacific and an increase in mineral pnces. Although the Covid-19 affected the demand for fluorite in 2020 and the first
half of 2021, the market recovered in the second half of 2021.
In the medium and long term, several extemal ana�ysts and intemal pro ections agree that the total global demand for
fiuorine will continue to grow faster than DP due to several megatrends, most notably the transition to clean energy
and increased digitali ation.
Fluorite in its natural state (whose concentration ranges between 50% and 90%), is used in the steel, cement, glass
and ceramic industries, helping to eliminate impunties in the manufacture of steel, improving the structure molecular
weight of Ginker in cement and, generating energy savings, among the main benefits. This type of fluorite is called
metallurgical grade.
Hydrofluoric acid is mainly used in the manufacture of refrigerant gases and propellant gases for air conditioning,
refrigerators, free ers and medical applications for the treatment of respiratory diseases. It is also used as an input in
the production of gasoline and aluminum fluoride, the pickling of stainless steel, in nuclear fuels, in the manufacture of
integrated circuits, in the manufacture of speciali ed plastics such as fluoropolymers and in ihe production of fluorinated
salts such as lithium salts, which are used in batteries. Fluorinated Solutions is one of the world s leading producers of
hydrofluoric acid.
The Company is one of the world s leading suppliers of refrigerant gases, primarily R-134a gas, used primarily in the
automotive and refrigeration industries. R-134a gas is also used as propellant gas in medical devices such as inhalers
for asthmatics, an application in which Fluorinated Solutions has nearly 75% of the world market. Fluorinated Solutions
is committed to the development of refrigerant gases and medical propellants with low global warming potential (L WP),
investing in research and development through oint ventures.
Eight operating plants established in Mexico, the United Kingdom, the United States, Taiwan and Japan were added to
Fluorinated Solutions, of which 6 are certified in accordance with ISO-9001, 4 with ISO-14001, 3 with OHSAS 18001, 1
with TS 16949, 1 with Clean Industry Certification by the Federal Attomey s Office for Environmental Protection
(Mexico), 1 with Integral Responsibility certification by ANIQ and 3 with ISRS (Intemational Safety Rating System) levels
5 to 7. The 4 chemical process plants of this business group are signatories of the chemical industrys voluntary
commdment to Responsible Care.
The oversupply of production in China resulted in an average reduction of 16% in the prices of acid grade fluorite from
January 2015 to January 2018. This situation is mainly caused by a worldwide overproduction of atuminum and
re(rigerant gases, mainly from China. Similarly, from 2015 to early 2018, aluminum prices decreased 6%, so aluminum
producers have had to operate below production cost and Gose several aluminum plants.
From 2012 to 2016, fluorite prices experienced a steady negative trend. However, the market situation changed
dramatically in 2016 when China, the world s largest fluorite producer, significantly reduced its production capacity due
to the implementation of new environmental laws. The decrease in Chinese fluorite production resulted in a restructuring
of the supply chain and an increase in global prices.
In 2018, fluo�te reached prices close to $500, the highest vafues in 6 years. In 2019, the average fluorite price stabili ed
at around $350 USD/T. In 2020, the fluorite supply chain was affected by the shutdown of various consumer indusUies
caused by the COVID-19 pandemic. Due to the low demand for refngerants and other fluoro-compounds, the average
prices for fluorite dropped 17% over the course of the year. In the third quaRer of 2020, fluorite exports were observed
at prices below $250/ USD/T. The average price in 2020 was $300 USDlT.
Attachment I: Description of the Applicant Company Page 95 of 204
Attachment 1_Description of the Applicant Company
Orbia is currenUy the world s largest producer of fluorite and integrated HF, excluding China. In addition, the Company
is one of the world s largest producers of hydrofluoric acid (HF), considering the operations in Mexico, and the largest
supplier in the U.S. Spot Market.
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The Ftuorinated Solutions business group is one of the world s largest integrated refngerant producers. Orbia also
continues with its commitment to supply new generation refngerants, which are more environmentally friendly.
Sales generated by the Fluorinated Solutions business group represented S%, 11% and 12% during 2021, 2020 and
2019, respectively, of Orbias consolidated sales. With respect to the Issuers consolidated EBITDA, Fluorinated
Solutions contributed 123�, 19% and 24%, respectively for the years 2021, 2020 and 2019.
Sa/es
Fluorinated Solutions s votumes and sales in the last three fiscal years have been as follows:
Attachment I: Description of the Applicant Company Page 96 of 204
Attachment 1_Description of the Applicant Company
Fluorinated SoluUons
Acid rade, Metallurgical rade Fluorile, Add rade, HF and ALF3
Refrigerant and Medicai ases
Eliminations
Fluorinated Solutions Total
(1) Millions of Tons
Years ending December 31:
Volume Sold (1) Sales
2027 2020 2079 2027 2020 2019
1,042 1,052 1,121 421 432 474
51 53 57 344 310 379
i26) cz5) cz5) c2�) ('�) i5o)
1,075 1,080 7,752 744 698 805
(e.1) Fluorite Process
The activities of this process focus on the exploitation of fluorite, which is commerciali ed in two basic presentations: (Q
metallurgical grade, used in the production of steel, ceramics, glass and cement and (ii) acid grade, used in the
production of hydrofluoric acid, which is the main raw material for the manufacture of virtually all compounds containing
organic and inorganic fiuorite, including fluorocarbons, fluoroelastomers as well as aluminum 8uoride for the production
of aluminum.
Products
Fluorite (metallurgical and acid grade).
Fluorite is produced and consumed in two grades: metallurgical grade and acid grade.
Metallurgical grade, or Metspar, is mineral with a certain natural concentration of fluorine that varies depending on the
application. It is a crucial raw material in the production of steel and cement. Metspar enables the removal of impurities,
especially sulfur, when added to slag to produce stainless and low carbon steels. It is also a valuable addiGve in the
production of clinker for the cement industry, increasing productivity and product perfortnance. Acid rade, or Acidspar,
has a minimum concentration of 97%, and is obtained through flotation processes from minerals with a lower initial
concentration. It is primarily used throughout the world to produce hydrofluoric acid, the chemical precursor to most
fluorinated products.
P/ants and mines
(See Section 2, "The /ssue�", item x, "Description of its Main Assefs'; of this Annual Reporf).
Raw maferials
The main suppliers of raw materials in Mexico are the National Water Commission (water). Iberdrola and the Federal
Electricity Commission (electric energy) and Pemex Transformaci n Industnal (natural gas).
Sales and marketing
Fluorinated Solutions maintains long-term contracts with its main metallurgical-grade and acid-grade fluorite customers,
in which sales schemes have been established to promote customer loyalty for specific periods of time. Long-term
contracts (belween 3 and 5 years) provide for the use of a price fortnula based on international reference prices, which
provides Fluorinated Solutions with long-term stability
Main customers
Flourinated Solutions main customers are in the iron and steel, glass, ceramics, aluminum, cement and chemical
industries (fluorocarbons for refrigeration, propellants, foaming agents, thermoplastic polymers and others). Fluorinated
Solutions 10 largest customers represent 5% of Orbia� total sales. No single customer for this process represents more
than 1% of the Company s total sales and, therefore, there is no dependence on one or more customers, since the loss
thereof would not have a material adverse effect on the Company s results of operations or financial position.
Distribution Channe/s
Fluorite process products are marketed through distributors worldwide, as well as direct plant deliveries, via rail, ocean,
and trucking. All sales are made through the sales force or distributors.
Attachment I: Description of the Applicant Company Page 97 of 204
Attachment 1_Description of the Applicant Company
Freight is managed through long-term contracts with trucking, railway and maritime companies, in which a consideration
is estab�ished represented by a fixed portion (rent) in some cases, and a variable poAion in some cases. which includes
a price per kilometer or mile traveled, which is linked to the price of fuel, which guarantees a reliable and continuous
supply for the operation of the plants.
Distribution contracts
Sales through distributors are made through long-term contracts, who purchase the described Fluorite products directly
for resale in the markets in which they are present.
Cyclic behavior
The Fluorite process of the Fluorinated Solutions Business roup shows low cyclical behavior on a regular basis.
Competitive Position
Fluorinated Solutions produces 1.8 million tons of fluorite in two different locations and with rail access to the cities of
Altamira and Tampico, which are woAdwide distribution ports. As a point of reference, according to a study performed
HCA Consulting, China produces approximately 4.8 million tons in more than 650 mines, currently being the world
leader in the production of fluorite and representing Fluorinated Solutions greatest competition in the country as a
whole.
Competitive strengths of Fluorinated Solutions include its continuous investments in productivity, positive labor union
relationships, high quality of ore extracted from its mines requiring lower leveis of additional processing and long-tertn
customer contracts.
Market share
The chart below shows the distribution of fluorite reserves around the world in 2021. Based on data from the USA
eological Survey, Chinese sources, and internal analysis by the Business Intelligence team, global reserves equal
approximately 331 million metnc tons:
fluorspar Reserves, 2021
US/Canada �TAM
4% 3�'
MOngoli.� ��
7%
M�ddle East /
Africa
7%
�
Eutupe SpythAlrim •
i0% 13%
Source US S internal report and analysis.
Fluorinated Solutions maintains a significant 18�o share of the global fluorite market and exports around 80% of its
production worldwide. China has a 63% share of the world market, Mongolia 8% and South Africa 4%, these countries
being its biggest competitors. Five countries, China, Mexico, Mongolia, South Africa, Vietnam and Spain consistently
account for more than 90% of the world s Fluorite production.
China became a net importer of fluorite for the first time in 2017 and it has now maintained this position for three
consecutive years.
Attachment I: Description of the Applicant Company Page 98 of 204
Attachment 1_Description of the Applicant Company
Worid Fluorite Production (2021)
Monxolia, 8
South Ahlca. 4%
Euroue.3%
Vietnam. 2%
USA & Unada, 1%
Source HCA Consulting and intemal anatysis {2a21}
Others. 49i
% Macim (Fluwfnated
SoluHonsl, 35%
, Y
;�
China. 6376
(e.2) Hydrofluoric Acid (HF) and Aluminum Fluoride (AIF3) Process
Hydrofluoric acid (HF) is produced by reacting fluonte (CaF2) �nnth sulfuric acid. Once produced, the hydrofluoric acid is
sub ected to various stages of distillation untd it reaches a purity of 99.99%, which is necessary to meet the high
standards demanded by the market. Sulfuric acid is made by Fluonnated Solutions starting from sulfur, which, once it
comes into contact with air at high temperatures and with water, is converted into sulfunc acid. Fluorinated Solutions is
one of the largest producers of HF worldwide.
Aluminum fluoride is an essential element for the manufacture of aluminum, and is produced by the reaction of
hydrofluoric acid (HF) with aluminum hydroxide. From its Matamoros plant, Fluorinated Solutions suppiies several of
the main global aluminum producers.
Products
Acid grade fluorite is a mineral with a minimum calcium fluoride concentration of 97%. By making it react with sulfunc
acid, which comes from sulfur, hydro8uoric acid is generated it is mainiy used in (1) the manufacture of refrigerant
gases and propellant gases for air conditioning, refrigerators, free ers and medical applications for treatment of
respiratory diseases, (2) the manufacture of highly speciali ed plastics known as fluoropolymers, (3) the manufacture
of aluminum fluoride, (4) the manufacture of high octane gasolines, (5) Geaning of inetallic surfaces such as the pickling
of stainless steel, and in other uses to a lesser extent, such as the manufacture of uranium fluoride for the nuclear
industry, the manufacture of integrated circuits and fluorinated salts for a wide variety of applicatio�s.
P/ants
(See Section 2, "The Issuer", item x, "Descripfion of ifs Main Assets", of tliis Annual Report).
Fluorinated Solutions owns and operates one of the largest HF plants in the world, located in the city of Matamoros,
Tamaulipas, Mexico, with an annual installed capacity of 143,000 tons. The plant is strategicaliy located to have easy
access to its main raw materials in Mexico and exports 97% of its production of hydrofluoric acid, mainly to the USA, as
well as 100% of its production of aluminum fluoride. The Matamoros plant is opereted with the highest technology in
compliance with all applicable regulations.
Raw materia/s
The main raw materials used in the production of HF are acid grade fluonte and sulfur. Fluorite has traditionally been
obtained from the San Luis Potosi mine and, to a lesser extent, through purchase from third parties.
Sa/es and markeling of hydrof/uoric acid (HF) and aluminum f/uoride
The Issuer has several long-term HF supply contracts with its ma or customers in North America. Aluminum fluoride is
sold to customers through purchase orders or contracts with a term of less than or equal to one year.
Attachment I: Description of the Applicant Company Page 99 of 204
Attachment 1_Description of the Applicant Company
Fluorinated Solutions Business Group HF Market Share
The Issuer estimates that global demand for hydrofluonc acid (HF) in 2021 amounted to 2.8 million metric tons, of which
approximately 73%was produced in China, 14% in the USA and Mexico, and 10% in Europe. In 2021, global demand
for HF was still affected by closures in consumer industnes, but pnces recovered compared to the previous year.
Fluorinated Solutions competes in the HF inarket with Do-Fluoride and other ma or Chinese producers and Honeywell
International and Solvay.
The chart below shows a breakdown of global HF production capacity, with a current total production capacity of
approximately 2.8 million metric tons (1.0 million metnc tons is held for AIF3 aluminum fluoride production)
HF production capacity 2021
anaR. ax
Soafn. 2%
Germanv. 4%
India. 5%
usa.�x
China. 67l4
Source Intemal Analysis, HCA Consulting 2021), Roskill Consulhng Fluonle RepoA 2021}
(e.3) Refrigerant ases and Fluorocarbons Process
Fluorocarbons
Fluorinated or fluorocarbon hydrocarbons are aliphatic compounds that have fluorine atoms or a combination of carbon
and fluorine in their structure. They have a highly developed industrial application: they are used as anesthetics in
medicine, as a propellant gas in aerosols, they are also used as degreasers in metallurgy, as electrical and electronic
contact cleaners, but their most important use is as refrigerants in air conditioning systems. and domestic and industrial
refngeration.
Fluorocarbons were originally developed in the 1930s and were widely used for refrigeration, air conditioning, aerosol
sprays, foam blowing, fire protection, and solvents. Both pure aqueous solutions and mixtures of fluorocarbons are
common in these applications.
Fluorocarbons have unique production processes, but all require HF as a key feedstxk. In the last decade, the
production and demand of Fluorocarbons has been significantiy transfortned by environmental legislation, which has
focused on eliminating the production of chlorofluorocarbons (CFCs) to protect the o one layer and ultimately reduce
the use of hydrofluorocarbons (HFCs) to reduce gtobal warming. impact of gases in the atmosphere. As the use of
HFCs is phased out around the world, new generations of refrigerants are being introduced to accelerate the transition
to low-carbon solutions. It is important to distinguish belween non-feedstock and feedstock applications of
fluorocarbons, as the production of some CFCs, HCFCs and HFCs for feedstock use is still permitted with appropriate
measures to minimi e environmental impact.
Refrigerants: Fluorocarbons combine good thertnodynamic propeRies (with boiling points below target-typical
temperatures, high heat of vapori ation, moderate densiry in liquid fortn, and high density in gas phase) with a safe
nature (low toxicity and flammability) and noncorrosive.
Propellants The total volume of fluorocarbon refrigerants in 2021 was estimated at 900,000 metric tons. China remains
the leading producer (73%), followed by the USA (21 %).
Attachment I: Description of the Applicant Company Page 100 of 204
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Attachment 1_Description of the Applicant Company
Fluorinated Solutions has lwo refrigerant production plants, one in St. abriel, Louisiana, and the other in Mihara,
Japan, for 134a, an HFC used primarily for automotive and stationary refrigeration. Fluorinated Solutions s refngerant
portfolio is complemented through alliances and supply agreements with other Fluorocarbon producers.
Fluonnated Solutions is one of the world s leading suppliers of refrigerant gases, mostly marketed under the Klea
brand. It sells both directly, especially to OEMs, and through its distnbution nelwork, mainly to the aftermarket segment.
It is a leader in Europe and a ma tlr player in America, Japan and India.
Fluorinated Solutions has one of the largest shares of HFC consumption within the European regulation of fluorinated
gases. However, this historic legislation, aimed at progressively reducing the consumption of HFCs, is compromised by
significant illegal imports of HFC products. Fluorinated Solutions actively participates in the European Fluorocarbons
Technical Committee (EFTCC) as one of the member companies working collectively to fight this illegal HFC business
and preserve the intent of F- as regulation.
Fluorinated Soiutions is committed to the development of Low lobal Warming Potential (L WP) refrigerant gases,
investing significantly in research and development to design a new portfolio that will provide a material improvement
on currently available products, benefiting industry and the environment alike. mid to long term. Some new L WP
products have already been introduced in 2021, such as Klea R473A, R456A, R448A and LFR3, with several more
in the pipeline for the next few years.
Covid-19 affected refrigerant gas demand in 2020, but the market recovered in 2021. Demand is expected to remain
strong for the next several years, especially as new L WP products are rolled out.
Medical Propellants: Fluorite-based propellants are used to safely deliver a variety of inedications in aerosol form,
including use in inhalers for the treatment of asthma. Fluorinated Solutions acquired the exclusive woridwide nghts to
sell and distribute the product to the regulated medical and pharmaceutical market under its EPHEX brand, the global
brand of inedical propellant gases contained in around 75% of inhalers produced worldwide.
Fluorine-based propellants are used to safely deliver a variety of inedications in aerosol form, including use in MDIs
(metered dose inhaiers) for the treatment of asthma and other lung diseases. They are produced by puritying certain
HFCs to medical grade in accordance with pharmaceutical specifications and c MP standards.
As the use of HFCs is phased out around the world, new generations of inedical propellants are being sought to
accelerate the transition to low-carbon solutions. Fluorinated Solutions is leading the industry in this transition to L WP
medical propellants with the development and commerciali ation of HFA-152a.
The total volume of inedical propellants in 2021 was 11,000 metric tons. Fluorinated Solutions supplies 70% of the
world s needs for medical propellants. Other producers in China and India also produce medical propellants.
Fluorinated Solutions has a medical grade purification plant for 134a at Runcorn in the UK. This facility is the only one
of its kind to have received an FDA audit as well as UK Medicines and Healthcare Products Regulatory Agency (MHRA)
inspections for c MP compliance. Fluorinated Solutions selis medical propellants under its EPHEX brand, supplying
most of the world s phartnaceutical companies.
Fluorinated Solutions has been a leader in the introduction of low WP medical propellants based on HFA-152a, and
is working with global phartnaceutical companies on this transition. In 2020, Fluorinated Solu6ons announced the
commissioning of a new ephex 152a c MP medical propellant production facility, also in Runcorn.
The demand for medical propeilants increased during Covid-19, as certain MDIs were used in the critical care of Covid-
19 patients. The demand remained stable during 2021 and is expected to continue to grow in the following years due
to megatrends such as urbani ation and the growth of the population with certain medical conditions such as asthma
and COPD.
Energy Store: The ourney to net- ero emissions is creating one of the biggest business oppoRunities in the coming
years, requiring significant investments in capital, people, and technotogical development to effectively reduce carbon
emissions. Energy storage applications, especially lithium-ion battenes, are critical enabling technologies in the global
conversion of fossil fuels to renewable energy sources.
Cobalt, lithium and nickel are some of the critical materials used in cathodes and other key battery cell components.
Fluorine is another important element currently used in battery electrolytes and binders its unique properties make it
indispensable in battery technology.
Fluorinated Solutions is developing materials, technologies and solutions that improve battery performance, cost and
safety while ensuring a safe and reliable battery supply chain. In December 2021, it launched Koflyte , a new brand
for its next-generation electrolyte additives and co-solvents, facilitating better pertormance and safely in lithium-ion
batteries. A range of Koflyte products is currently under development and will soon be ready for sale. These include
polyfunctional ether compounds for high-energy lithium-ion batteries and cyclic polyether compounds that, when used
Attachment I: Description of the Applicant Company Page 101 of 204
Attachment 1_Description of the Applicant Company
as co-solvents, can facilitate safe, stable, and energy-e�cient cycling of lithium metal anodes with various cathode
chemistries.
The launch of Koflyte has been the latest move for Fluonnated Solutions as it executes a comprehensive energy
materials strategy. In November 2021, Fluorinated Solutions announced the acquisition of Silatronix, a leading battery
technology startup with unique expertise in fluorosilane additives for lithium-ion batteries. This foilowed the
announcement in October that Fluorinated Solutions and Orbia had led a$70 million investment round in Ascend
Elements (formerly known as Battery Resourcer), a recycler and manufacturer of closed-loop lithium-ion battenes.
Plants.
(See Section 2, "The Issuer'; item x, 'Description of its Main Assets", of this Annual Report).
Raw materials
The main raw material used in the production of refrigerant gases is HF, which comes mosUy from the plant in the city
of Matamoros for producGon of refrigerant gases at our plant in St. abriel in the state of Louisiana, USA, and is mainly
imported from third parties for production of refrigerant gases in the city of Mihara, Japan.
Sales and marketing of refrigerant gases
Fluorinated Solutions seils refrigerants worldwide through regional distributors, key to the aftertnarket, mainly without a
contract or with a short-term contract. It sells directly to OEM (original equipment manufacturers) on short- term
contracts.
Medical thrusters are sold in bulk direcUy to phartnaceutical companies under contract and packaged for business
through agents and distributors without contract.
Main cuslomers:
The Fluorinated Solutions Business roup s represents about 4.3% of Orbia s total sales. No single Fluorinated
Solutions customer represents more than 1% of the Company s total sales and, therefore, there is no dependence on
one or more customers, since the loss of such customers would not have a material adverse effect on the Issuer s results
of operations or financial position.
Distribution Channe/s
Fluorinated Solutions markets its products directly to customers and with some distributors.
Distribution Contracts
Most sales are made directly to customers and do not have distribution contracts.
Cyclic behavior
The Fluoric Acid Process and Refrigerant ases market are not cyGic.
Compefitive Position
The main competitive advantage of the Hydrofluoric Acid and Refrigerant ases Process lies in the vertical integration
with respect to its main raw material, 8uorite, which it obtains from its mines in Mexico, giving it long-term viability by
having a guaranteed supply, which differentiates it from the main non-integrated producers dependent on fluorite s
extemal supply.
As previously mentioned, China is the main producer of fluorite worldwide, and China s strategy has consisted of using
this mineral to manufacture finished products in this industry, such as fluorocarbons and fluoropolymers, thus
significantly reducing the supply of ore that is metallurgical or acid grade worldwide.
However, Fluorinated Solutions has a strategic and unique geographic location that gives it access to the North
American market (one of the main consumers of hydrofluoric acid and other fluorochemicals in lhe world), which gives
the Company a sustainable competitive advantage that is difficult to match. In addition, Fluorinated Solutions proximity
to such an important market for such products as the North American market represenis a significant competitive
advantage Hnih respect to the strict transportation regulations applicable to hydrofluoric acid.
F/uor Indusfry Overview
Fluorochemicals are compounds containing the chemical element fluorine, which obtained by mining and processing
fluorite they are used in refrigerant gases, Fluoropolymers and 8uoroelastomers.
Attachment I: Description of the Applicant Company Page 102 of 204
Attachment 1_Description of the Applicant Company
In 2021, worldwide production of fluonte was approximately 8.4 million metnc tons according to US S and HCA
estimates and intemal analysis.
World Fluorite Production (2021)
Othen, 4% Mexico IFluwtnated
Monaolla, 8% Solutbnsl. 15%
South Afrip.4% ,�
Eurooe.3% i
Vietnam.2% '
USA & Canada. 3%
China. 63%
Source HCA Consulling and intemal anaysis (2021)
In 2021, the leading country in fluorite production was China, accounting for 63% of the world s annual produc6on. Just
five countries worldwide (China, Mexico, Mongolia, South Afnca and Vietnam) accounted for 92% of production.
The ma ority of acid grade fluorite is consumed in the production of HF, required for the manufacture of fluorochemicals,
followed by use in the production of aluminum and the manufacture of steel. The gtobal consumption of acid-grade
Fluorite was affected during 2020 due to the drop in demand for HF and refrigerant gases. caused by industrial closures
related to the COVID-19 pandemic _
Fluorinated Solutions is the worlds largest fluorite producer, accounting for approximately 969'0 of Mexicos active
production capaciry, equivalent to 1895 of the world s annual fluorite needs.
HF is the most important chem;cal derived from fluonte. The world s largest HF production capauty is in China, followed
by North Amenca and Westem Europe.
Global production capacity of hydrofluoric acid (thousands of inetric tons from 2019 to 2021)
China
North Amenca
Europe
Asia
Mexico
1,947
220
257
167
196
2021 2020 2019
2,017 2,017
220 220
257 257
166.5 166.5
196 196
Rest of the Wortd 131 127 127
Total 2,988 2,984 2,914
Source Roskdl Consulting 2019. HCA Consul6ng 2021, Inlemal Analysis.
Do-Fluoride in China, the largest producer of HF in the world, has about 10% of the world s capacity. Excluding China,
Fluorinated Solutions was the largest producer of HF in the world during 2021 followed by Honeywell adding the US and
erman plants. The ma onty of Fluorinated Solutions production is exported to the US where it is consumed for the
production of fluorocarbons and other applications.
eneral Description of Industrial Processes of the Issuer
Orbia has different technologies for manufactunng its products. In many cases, it uses its own technologies, such as
PVC production, fluorite purification, compounds and piping, among others.
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Attachment 1_Description of the Applicant Company
The main processes for the manufacture of the Company s most important products by business and business group
are explained below:
(a) Polymer Solutions Business roup (Vestolit and Alphagary)
Within the Polymer Solutions business group, the main production processes are Chlonne-Soda and PVC Resin. The
processes are described below.
Ch/orine-Soda Process
Chiorine and Caustic Soda are obtained mainly by electrolysis of Sodium Chloride (NaCI) in aqueous solution, called
the chlor-alkali process. The industry employs three methods mercury cell etectrolysis, diaphragm cell electrolysis and
membrane cell electrolysis. Orbia uses diaphragm and membrane electrolysis cells.
Ethylene Process
The industnal process for the production of Ethylene is carned out using ethane from cryogenic units, which is fed to
pyrolysis ovens also called Crackers. During the cracking of ethane in the ovens (Crackers) ethylene, hydrogen and
other hydrocarbons are produced, products that are subsequently separated at low temperatures for use and to achieve
the purification of ethylene to polymer grade.
Orbia in its strategic association with OxyChem in Ingleside has been producing ethylene since February 2017.
VCM Process
VCM is manufactured from chlorine and ethylene. These raw materials are reacted in a catalytic reactor to form an
intermediate product called dichloroethane (Ethylene Dichloride or EDC). Purified dichloroethane undergoes thermal
decomposition to produce VCM.
VCM is produced at Vestolit s facilities in ermany.
Vinyl Process
In the production of PVC, three basic processes are used worldwide for the polymeri ation of VCM: by suspension, by
emulsion and by mass. Orbia uses only the first two processes, of which approximately 77% of its production is obtained
by suspension and 23% by emulsion. Both processes are explained below:
PVC by suspenslon
This is the most widespread and used process in the world. Using this method, VCM is combined with water in the
presence of a suspending agent. Water and VCM are added in a reactor with agitation to form a suspension of VCM in
an aqueous phase. Once mixed, this suspension is stable until polymeri ation begins, which occurs when a VCM-
soluble starter is added to the mixture.
PVC by Emulsion
The preparation of PVC Resins by dispersion (inGuding those made by the micro-suspension process) are generally
used in the formulation of Plastisols for coatings and molds. In the dispersion polymeri ation process the VCM, water,
emulsifier and catalyst are loaded into a stainless steel reactor where they are stirred. The reaction occurs under
moderate pressure and temperature in a reactor with cooling to remove the heat generated during polymeri ation.
The dispersion resin process is often more complex than suspension technology. The polymeri ation cyGe time can be
2 to 3 times longer than in the suspension process. Catalysts are more water soluble than VCM.
Compounds
Plastic resins are used for the manufacture of Compounds the resin is combined with other additives through a mixing
process in order to obtain a mixture that integrates the appropriate quantities in the entire mixture. From this part of the
process, a dry blend is obtained, and it is cooted to a certain temperature and through various steps and processes it
is converted into pellets for sale.
(b) Building Infrastructure business group ( avin)
Orbia/Building Infrastructure operates in Europe and LATAM about 50 manufacturing plants that operate extrusion
lines, in �ction molding machines, rotational molding, assembly equipment and dedicated lines for geotextiles.
Although it masters the usual technologies for PVC, PP, PE and other materials, Orbia/Building InfrasUucture is also
a world leader in a unique technology for producing pipes that transport drinking water. This extrusion technology is
called Biaxial where the pipe undergces a biorientation of its molecules axially and longitudinally, generating a structure
of laminar layers, providing the pipe with significantly greater mechanical resistance compared to conventional pipes
and flexibility that makes them practically unbreakable.
Integrating our customers concems regarding sustainability, we are also progressively introducing recycled materials
in our products, where regulations allow, to further hamess the circular approach we seek.
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Attachment 1_Description of the Applicant Company
Last but not least, Orbia/Building Infrastructure operations are innovating by:
• Progressively growing in the space of manufacturing systems incorporating electronics and sensors, pawng
the future for more technology content.
• Offering customers prefabricated systems, ready for site mtegration.
(c) Data Communications Business roup (Dura-Line)
The Data Communications business manufactures speaali ed ducts for the telecommunications sector using its primary
raw material, which is polyethylene. The manufacturing process for the telecommunications ducts consists of using
virgin polyethylene with certain additives to then run them through a one or two stage extrusion process, depending on
the product to be manufactured. These ducts are prepared and customi ed specifically for customers with
telecommunications sector specific requirements.
(d) Precision Agriculture Business roup (Netafim)
This business group manufactures drip irrigation pipes using polyethylene and different additives through an extrusion
process, which results in flexible pipes that the drip points are inserted into at specific intervals. The pipes are drilled at
each drip point.
(e) Fluorinated Solutfons Business roup ( oura)
The different industrial processes of the Fluorinated Solutions Business roup are described below:
Fluorite Process
Fluorite ore is extracted from the mine, along with some impurities such as carbonates and silicates. The ore is crushed
and ground to small particle si es to separate impurities.
The ground material must meet a certain particle si e, so it is classified with the help of cyclones, screens and
separators, the part that does not meet the required specifications is returned to grinding.
The Gassified material is conditioned by adding oleic acid, depressants and ad usting the pH. This is done in order to
carry out the flotation process, where the fluorite is concentrated and the impurities are separated.
Concentrated fluorite is found in an aqueous medium and it is necessary to separate it. With the help of a settler and
rotary filters, the solids are separated from the water, thus obtaining the acid grade fluorite.
The main stages for obtaining fluorite are:
Exploration: This phase consists of locating, evaluating quality and quantirying mineral reserves.
Planning In this stage, the preparation, development, tumbli�g, extraction, hauling and manteo, (extraction of ore to
the surface by means of double-drum electric winches), as well as services (water, electricity, compressed air,
ventilation, workshops, canteens, etc.), mining equipment and operations personnel are all planned for.
ine Production: Drilling and ore tumbling activities are carried out by means of controlled blasting, extraction by
means of speciali ed equipment from the mined area to the loading bays, hauling by truck to the primary broken area,
where the ore is sent to the shafts. of extraction (manteo), to deposit it on the surtace to the preparation and crushing
plants.
Preparation and Crushing Plants: In these plants, the ore extracted from the mine is received, where it is screened
to obtain the metallurgical grade ore in its different si es and obtain fine by-product (product of -3/4 }, which are the raw
material premium for processing plants.
Processing Plants: In these plants, the fine material fed to a quality of at least 97% puriry in CaF2 (acid degree) is
concentrated.
Hydrofluoric Acid Process
The manufacture of hydrofluoric acid consists of reacting fluorite with suifuric acid, and from this reaction hydrogen
fluoride, better known as hydrofluoric acid, is obtained.
Sulfuric acid is obtained from the oxidation of sulfur into sulfur dioxide S02, to convert it into sulfur trioxide S03 and
subsequently obtain sulfuric acid.
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Attachment 1_Description of the Applicant Company
Aluminum Fluoride Process
The production of aluminum fluoride is based on hydrofluoric acid, which evaporates and overheats before being
in ected in gaseous form into a pair of double bed fluidi ed reactors. In the reactors, it contacts and reacts with aluminum
hydroxide, which is in solid form, to produce aluminum Fluoride. This product leaves the reactor in solid form at high
temperature (700 C) so it must be cooled before being sent to storage and transport. Aluminum fluonde is used in the
production of inetallic aluminum.
Refrigerant ('aas Process
Refrigerant gases are fluorocarbons that are produced by the fluoridation of trichloroethylene with hydrofluoric acid.
Once the reaction takes place, the hydrochloric acid that is produced as a by-product must be removed and the product
must be distilled. Fluorocarbons are used in air conditioning equipment for automobiles.
if. Distribution Channels
See Section 2J "The Issuer", ifem b, 'Description of Business" 'Main Activity" for each Business Group, of this Annual
Report.
iii. Patents, Licenses, Trademarks and other contracts
a) Patents and Licenses
Orbia holds rights to over 2,250 patents, including current patents and patents in the process of registration.
The Company has more than 4,600 trademarks, inGuding current trademarks and trademarks in the process of
registration.
The Company also has technology licenses in Mexico, Bra il, Colombia, the Netherlands and several other countnes,
which are cunently used, or will eventually be used, in its operations. Most of the patents relate to the development of
new products and processes for manufacturing and will expire by 2027. Orbia renews the registration of its brands on a
regular basis. Although Orbia believes that its patents and trademarks are a valuable asset, thanks to its broad range of
products and services, it does not believe that the loss or expiration of any patent or trademark would have a matenal
adverse effect on its results of operations, financial condition or the continuity of its business.
b) Researoh, Development (R D) and Innovation
Orbia recogni es the importance of innovation and development to remain a leader in its markets. Investments and
actions in R D are aimed at improving the performance of its products for the benefit of customers and complying with
stricter regulations in the different geographic markets where we compete. We maintain 19 research and development
centers with a technology center focused on developing technology to create products, improve processes and
applications that positively impact the qualily of life of users through comprehensive products and solutions.
The Polymer Solutions business group has research and development centers located in the USA (4), Mexico (2),
Colombia (1), ermany (1), United Kingdom (2) and India (1) to be completed in April 2022 The Fluorinated Solutions
(Fluorine) business group has R D centers in the United Kingdom (1), the United States (1) and Mexico (1). The Building
Infrastructure business group has an R D center located in the Netherlands, as weli as 8 academies. The Data
Communications business group has three R D centers located in the United States, the C ech Republic and India.
Finally, the Precision Agriculture business group has an R D center in India. The Company opened an innovation lab
in San Francisco, Califomia to explore innovative enhancements to our existing products and/or new non�xisting
products for all business groups.
Orbia has a Technology Committee (Innovation Board) located in the Netherlands in its Building Infrastructure
business to create synergies between Europe and Latin America (focusing on satisfying the global market it serves and
transferring technology between both regions. The result has been that lobal solutions have been created and a
technical team has been executing relevant technological changes in manufacturing processes.
The strategy in the R D centers is focused on increasing the profitability (rate of retum) of the pro�ects and covering
customer requirements by geographic region, even if necessary, pro ects are created in the countries that require it. This
approach by region has aliowed the research and development centers to better meet the technological needs of
customers.
Orbia maintains its strategy of migrating to higher vatue-added products in its five business groups: in Polymer Solutions
with the assets of Mexichem Specialry Resins, Mexichem Speciairy Compounds, focused on high-end plastic
compounds, and Vestolit, the largest producer of PVC resins. of high impact, for example, the Company is developing
a new generation of safer, more durable flexible PVC resins that use less energy to produce final products or the
development of better retardant solutions for the production of cables in Building Infrastructure, through the
Attachment I: Description of the Applicant Company Page 106 of 204
Attachment 1_Description of the Applicant Company
Technological Committee and its R D centers, generating innovative products such as heating systems controlled
digitally through mobile phones (SenGo) or cyGe paths made of recycled plastic (PlasticRoad), in the Dura business -
Line with high�lensity polyethylene products through conduit and pressure pipe solutions for telecommunications (voice
and data) and energy, while in its Precision Agriculture business through its agricultural solutions NetBeat digital with
technologies that aliow farmers and farmers controlling their crops through their mobile phone through the installation of
systems (NetBeat) that allow the Company to support them with the support of agronomists and technologists who,
through said digital technology, advise them on the administration of nutrients, fertili ers and irrigation and in general in
the management of their field during the production process in Fluorinated Solutions (Koura) with the development and
commerciali ation of inedical grade propellants and fluorocompounds for the cement industry.
Orbia invested $68.5 million, $61.6 million, and $55.7 million in R D in 2021, 2020 and 2019, respectively.
Specific innovation at Orbia 9 businesses inciude recent developments in Wavin highlighted below.
Innovation on the move: Within Wavin Technology Innovation, innovation is driven to provide inspiring solutions to the
challenges that matter: building healthy and sustainable environments. Its global innovation team is growing rapidly with
smart, creative, young and dynamic experts from around the world. The goal is to create change and drive disruptive
human-centric innovations with maximum impact towards a better world, together with its customers and R D/industry
partners worldwide. We develop solutions from idea to market launch for your strategic global markets with multi-
disciplinary pro ect teams in locations around the world. Building Infrastructure s customers have a central role in the
development oumey: inspiring, challenging, improving, validating, and reviewing their solutions under development.
They aim for a portfolio of products with minimal environmental impact, based on recyGed and/or non-fossil plastics,
reduced material content, design for recycling and minimal energy consumption.
At its main facility in Dedemsvaart NL, Building Infrastructure houses, among others, several well-equipped accredited
mechanical, appiication and analytical laboratories, a Virtual Simulation Laboratory (CAE), field test facilities (a test
house and outdoor areas), prototyping facilities, a pilot plant with extrusion and in ection molding lines, and much more.
The main plastic technologies we use are PP, PE, PVC, PPSU and PB.
In 2021 the business launched several new solutions in the field of inechanical ventilation for a healthy indoor climate
(Venti a). They also brought to market a unique, sustainable, circular climate-smart infrastructure solution, PlasticRoad.
Parking spaces have been reali ed in three different cities in the Netherlands, along with the most sustainable car-
sharing parking space in ihe country. PlasticRoad and Orbia inaugurated the first PlasticRoad pilot in Latin America
(Mexico City). A bike/trail proving ground was set up at Building roningen.
c) Brands
• The trademarks owned by Orbia are registered either directly by the Company or by its subsidiaries in various
countries in which it operates or may start operations.
• The main brands under which Orbia markets its products are:
PolymerSoludons Busineas f:..roup
Line of bus(nesa Brand
PVC Resins Primex, Petco, I lavil
PVC Spedalty Resins Vestoht
Compounds Provin, Polivisol, Vndex B, I tablend
Specially Compounds Alphagary, Alphaseal, Evoprene, araflex y Smokeguard
Plastici ers MexiFlex, I lablend, Lugatom
New Ecotek, Frtek, Vnyltek, Escontek
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Attachment 1_Description of the Applicant Company
Buildfng InfrasWcture Busfnesa roup
Line of business Brand
Civil Construction, Infrastrudure Amanco, Pavco, Plastigama, Plastubos
eosynthetics. Amanco, Pavco, Bidim
Plastic piping systems and solutions for customers in lhe civil Amanco, Pavco, Plastigama, Colpo os, Plastubos, Aquacell,
conslruction, agriculture and wholesale sectors, plumbing AS , Chemidro, Climasol, Hep 2 O, HepVO, �-Bic, QBB, Tegra,
dealers, home developers, large inslallers, telecommunications Tigris, Pilsa, Smartfix, Sitech , Quickslream, Ekoplastik,
companies, utililies and munidpalities, architects, speci(ying SupeAemp, Warmafloor, Warmawall, Wavin
engineers.
Data Communicadons Busineas roup
Line of business Brend
Telecommunications, Energy, InGastrudure. Dura-Line
Precision AgricuHure business ..;roup
Line of business Brand
Irtigation Netafirn
Fluorinated SoluBons Business .roup (� oura)
Line of business Brand
Medical Propellants ephex, Respia
Refrigerants Klea, Arcton
Batleries/Electrolytes KoOyle
Currently, globali ation forces companies to differenGate themselves from others in order to compete in the international
market for this reason, brands are important for the development of the Company, as they are distinctive signs that
denote qualiry of the products marketed under them.
The brands are distinctive signs which allow to identify the diverse producls that the Company offers in the market.
These brands are fundamental assets to the business and maintaining a good reputation is essentiai to attracting and
retaining customers.
The trademarks listed above are valid at the time of this publication and are penodically renewed.
d) Concessions
Within the Polymer Solutions and Fluorinated Solutions, the Company has rights to several renewable mining
concessions. These are valid and sub ect to being renewed in accordance with the applicable Mming Law of
Mexico.
Additionally, Polymer Solutions holds two valid port concessions. One for its operating port in Altamira M xico
and the second one for its operating port in Cartagena, Colombia.
iv, ain Customers
See Section 2) "The Issuer'; ifem b, 'Descnption o/ Business" "Main Activity" (or each Business Group, of this Annual
Report.
Orbia s top ten clients combined represented 10.9 of its consolidated net sales in 2021. Orbia s largest individual
customer represented 2.1°,6 of its total net sales in 2021, and so there is no dependence on any one or vanous
Attachment I: Description of the Applicant Company Page 108 of 204
Attachment 1_Description of the Applicant Company
customers, since the loss of these would not matenally adversely affect the Company s results of operations or financial
condition.
v. Applicable Legislation and Tax Situation
The Company s operations are sub ect to the laws and regulations of the countries in which it operates.
Orbia
The shares representative of the Issuer s capital stock are publiciy traded on the BMV, and are therefore sub cct to the
following laws and regulations: (i) the Stock Market Act in Mexico (ii) the eneral Provisions Applicable to Securities
Issuers and Other Participants in the Securities Market issued by the CNBV (iii) the eneral Provisions Applicable to
Entities and Issuers Supervised by the National Banking and Securities Commission (CNBV) and that Engage
Independent Audit Services for their Basic Financial Statements (iv) the Internal Regulations of the BMV and (v) the
eneral Business Organi ations Act.
Business groups.
The Company s five business groups operate in 50 countries and are sub ect to the following general laws and
regulations in all of them:
• Regulations of an intemational, national and local nature, primarily in financial aspects, monetary policies, access
to the currency markets. They must comply with administrative requirements to obtain pertnissions to operate
facitities, plants, and to import raw materials and finished products. They must comply with labor regulations at
some sites that are influenced by unions and environmental regulations.
• Laws reguiating health, safety, environment, unfair competition and monopolies, municipal construction and
oning, local licenses and permits for facilities. With respect to intemational commerce, customs regulations,
control of imports and exports, specificaliy related to quotas, tariffs and anti-dumping protections, as well as
govemment policies and regulations related to commerce, product sales, manufacturing operations and
relationships with customers, distributors and competitors.
• Finally, all of the business groups comply with the laws against corruption such as the U.S. Foreign Corrupt
Practices Act (FCPA), and other similar laws.
Specifically, some of Orbia s business groups may be sub ect to specific government laws and regulations. Below is a
summary of the effects that these laws and regulations have on the development of the Company s business, for each
one of its business groups:
1. Polymer Solutions (Vestolit and Alphagary)
Polymer Solutions business is sub ect to environmental laws and govemment regulations that require it to carry out its
supply, transportation and disposal operations of raw materials and finished products in accordance with environmentally
friendly standards and care for industrial safety. This regulation is stnct and non-compliance can lead to financial losses
for the business group.
Considering the nature of the chemicals business, the business group is sub ect to a multitude of regulatory requirements
in 6 main urisdictions in ermany, USA, Mexico, Asia, India, UK and Colombia. Polymer Solutions business is sub ect
to environmental laws and govemment regulations that require it to carry out its activities of supply, transportation and
disposal of raw materials and finished products in accordance with standards that respect the environment and protect
indust�al safety. These rules are strict and violations can lead to financial loss for the business group.
Vestolit operates vinyl resin production sites in NoRh America, South America and Europe, with global sales. Vestolits
business is sub ect to environmental laws and regulations that require the company to source, store, transport and
dispose of its raw materials and products in accordance with ecological and safety standards.
The current administration of Mexico is making and proposing significant changes in various aspects of the Mexican
legal framework. The President recently introduced bills to reform the electricity sector, giving prionty to the state-owned
utility company and virtually banning outsourcing. Both changes have caused concem in the pnvate sector.
2. Fluorinated Solutions ( oura)
Fluorinated Solutions operates mining pro ects located in Mexico and that are sub ect to many laws and government
regulations on various matters, inciuding, but not limited to: exploration, development, production, payment of taxes and
royalties for extraction, environmental aspects, labor standards, maintenance of Gaims and mining concessions, land
Attachment I: Description of the Applicant Company Page 109 of 204
Attachment 1_Description of the Applicant Company
use, terntonal claims of local inhabitants, use of water, waste disposal, power generation, protection and remediation of
the enwronment, Gaims for the conservation of historical and cultural resources, industrial safety, occupational health,
and the handling and disposal of toxic substances and explosives.
The roup s refrigerant chemicals operations are located in Mexico, the United States, the United Kingdom and Japan.
The manufacturing processes of these products are sub ect to the specific health and safety regulations of each country.
Our refngerant products are also govemed by various environmental laws and regulations. Worldwide, many countnes
have signed the Kigali Amendment to the Montreal Protocol, which addresses climate change, limiting and progressively
reducing the impact of global warming caused by this class of products. Regional blocs of countries and some individual
countries have also adopted their own regulations in terms of control mechanisms and phase-out schedule. The
company also produces a medical propellant that is sub ect to country-specific medical regulatory controls, such as
those of the US Food and Drug Administration. The EU is currentiy consulting on the definition and possible future
control of substances known collectively as PerFluoroAlkySubstances (PFAS). Although Fluorinated Solutions does not
produce or use PFAS chemicals as they are commonly defined, the company monitors legislative and regulatory
processes that may affect our business to contribute to those processes.
3. Data Communications (Dura-Line)
Data Communications is present and has operations in the AMEA and Asia Pacific regions, as well as in the U.S. and
Canada. In the normal course of its business, Data Communications is regulated by the general government laws and
standards mentioned in the paragraphs above.
This business group does not report any specific additional standards that affect the development of its operations.
4. Building Infrastructure ( avin)
Building Infrastructure is a company with presence and operations in the EMEA, Asia Pacific, and Latin Amenca
regions. In the nortnal course of business, Building Infrastructure is sub ect to the general govemment laws and
regulations listed above at the beginning of this Section.
Due to COVID policies, the company suffered freight disruptions impacting the availability of containers and, therefore,
disturbances in the delivery of materials.
During 2020, the Nethertands and Panama issued specific regulations on sustainability that had an effect on the
development of this business group. These regulations are listed below:
Netherlands
• Use of raw materials and economy without waste or residues (circular products, discharge / removal and
recycling).
• Top / CO2 and compliance with the Paris Climate Agreement (which means 40% less CO2 emissions in the
year 2030, compared to the emission of the year 2020). The NetheAands has set its goal to reduce CO2
emissions by 55% by 2030 compared to 2020.
• Nitrogen IegislaGon which impacts the construction industry.
• Health / Reach Other. Support of the European Union towards the obligation to recycle PVC. (REACH)
• For Hygienic Aspects Within Permitted Limits (WNL), for products that are in contact with drinking water, such
as PVC, PE and Tigris).
• Transparency in sustainable production, for example EPD (Environmental Product Declaration
Environmental Product Declaration), LCA (Life Cycte Assessment Life Cycle Assessment), MKI (Milieu
Kosten Indicator Environmental Cost Indicator). As well as in the so-called Eco labelling or Environmental
Labeling.
Panama:
• The President of the Republic and the Minister of the Environment of Panama signed Executive Decree No.
100 of October 20, 2020, which creates the National Program Reduce Your Footprint , which also regulates
Chapter II of Title V of the Single Text of Law 41 of July 1, 1998, which will govem the preparation of national
mventories of H reenhouse as emissions by sources and absorptions by carbon sinks, in order to
execute a strategy for the management and monitoring of the economic and social development of the low-
carbon country.
5. Precisfon Agriculture (Netafim)
Precision Agnculture is an Israeli company with presence and operations in the AMEA, Asia Pacific and Latin America
regions. In the regular course of its business, it is sub[�ct to general govemment taws and regulations as described in
the preceding paragraphs. However, it is also regulated by specific regulations that have an effect on the operations that
Precision Agnculture carries out:
Attachment I: Description of the Applicant Company Page 110 of 204
Attachment 1_Description of the Applicant Company
• Agricultural activity is sub ect to environmental laws or regulations, which may impact the operations of end
users and/or the demand for Precision Agriculture products. The adoption of �ew environmental laws may
require Precision Agncuiture to remove or recycle its products or impose obligations related to climate change
concerns, as well as its final consumers, and the eventual impossibility of recovering the potential costs
associated with the development of those regulatory scenarios, and could represent costs and adverse impacts
for Precision Agriculture s business
• Compliance with laws that sanction corruption is especially important, as Precision Agriculture operates in
countries or regions where laws criminali ing bribery and bribery are strictly enforced, Laws that may conflict
with local customs and practices, particularly in markets imgation of emerging countries.
Tax Situation
Income Tax
Income tax (ISR by its acronym in Spanish) is based on taxable income, which differs from the gain reported in the
consolidated income statement and other comprehensive income. due to items of taxable income or expense or
deductible in other years and items that are never taxable or deductible. The Company s current tax liabitity is calculated
using the tax rates enacted or substantially approved at the end of the reporting period by the countries in which the
Company and its subsidiaries are located. The following table shows the legal income tax rates applicable for 2021 in
each of the countries in which we operate.
Country �: Country -.
Argentina 30 Japan 31
Australia 30 Kenya 30
Austria 25 Lithuania 15
Belgium 25 Morocco 31
Bra il 34 Mexico 30
Canada 27 Nicaragua 30
Chile 27 Oman 15
China 25 Norway 22
Calombia 31 Panama 25
Costa Rica 30 Peru 30
Denmark 22 Poland 19
Ecuador 25 Uniled Kingdom 19
EI Salvador 30 C ech Republic 19
Estonia 20 Romania 16
Finland 20 South Afnca 28
France 28 Swit edand 21
ertnany 34 Itay 24
reece 22 Singapore 77
uatemala 25 Sweden 21
Honduras 25 Taiwan 20
Hungary 9 Turkey 25
Attachment I: Description of the Applicant Company Page 111 of 204
Attachment 1_Description of the Applicant Company
Country Country
India 25 Ukraine 18
Indonesia 22 Vene uela 34
Ireland 13 �etnam 20
Israel 23 Uruguay 25
Slovakia 21 Republic of Serbia 15
Spain 25 Russia 20
The Nethertands 25 Thaiiand 20
United States af America 21 Rwanda 30
' Tax rate is a blended effective tax rate comprised of both a federal tax and a local tax. The actual blended rate
can vary depending upon the municipality, province, or canton which each have differing tax rates within the
particular country.
�' Tax rate is based upon progressive rates. The actual effective rate can vary depending upon the amount of
taxable income and the corresponding tax brackets that apply.
In the ordinary course of business, Orbia applies various treaties to avoid double taxation and is responsible for making
tax withholdings.
VI. Human Resources
Orbia s global headcount at the end of last three years is summari ed below:
Personnel 2021 2020 2019
Unioni ed employees and temps �p.qg� 12,095 12,426
Non-unioni ed g.g�g 9,593 9,697
Total 22,350 21,688 22,123
°k Unioni ed emptoyees and lemps 580�0 56 % 56 %
% Non-unioni ed qqo�o 44% 44 %
Total 100 100 100
Headcount in 2021 largely retumed to pre-pandemic levels.
During the tast 3 years, there has been no labor conflict with a material impact on the Company s operations. The
Company maintains a positive relationship with the unions, which is characteri ed by mutual understanding and support
to achieve significant changes for the roup s companies. Unioni ed workers of the subsidiary companies are a�liated
to the corresponding unions and labor centers in each locality. In addition, each plant has a specific function that
coordinates the labor relationships for that site.
Orbia administers its labor relations in accordance with applicable labor Iegisiation in the locations in which it operates
and by use of a set of global policies, procedures, and Code of Ethics.
Orbia is aware that in order to become a world-class company, its people play a critical role. Accordingly, the Company
has transformed its talent management model to implement best market practices to attract, retain, evaluate, develop,
compensate, and recogni e its talent. Orbia has a salary structure based on the principles of intemal equity based on
ob specifications and extemal competitiveness. Specifically, geographic salary market data and macroeconomic
indicators are reviewed periodically to ensure that the Company remains competitive.
Certain subsidiaries of the Company have defined benefit plans funded for qualifying employees of its subsidiaries,
Defined benefit pians are administered by a fund legally independent of the Entity. There is a pension fund board which
is responsible for investment policy in relation to the fund 5 assets.
In its Code of Ethics, Orbia includes its posiGon regarding diversity, establishing it as an important pillar for the success
and strengthening of the Company. The diversity and inclusion policy launched in 2018 aims to create a culture that
Attachment I: Description of the Applicant Company Page 112 of 204
Attachment 1_Description of the Applicant Company
incorporates different ideas and perspectives to enable its employees to have the opportunity to pertorm to their fullest
capaciry. Orbia hopes to achieve this obective by acting in accordance with applicable legislation and fostering
commurncation, dialogue and collaboration.
vii. Environmental Performance
Sustainabflity Model and Commitment to safety, social and environmental responsibflity
At Orbia, sustainability is deeply embedded in our businesses, a core component of our growth strategy, and dnves our
culture. From how we operate to the highest standards, to how our solutions help address today s pressing challenges.
to how our investments are targeted for long-term positive impact. We believe that advancing solutions to improve the
quality of life around the world brings business success, as well as social and economic value to all those connected
direclly or indirectly with our activities. Our purpose-driven approach to addressing the worid s most pressing challenges
drives our business agenda and our strategic approach to sustainability.
Orbia puts purpose into action as a leader in sustainability, with a science-based commitment to address climate change.
It has bold, measurable goals, transparency on our progress, including our alignment of short-term with long-term goals.
Orbia s strategy is based on three pillars, supported by specific action programs, which are transcribed below:
Sustalnable solutions Impactful undeAakings to mauimi e our impact for a net
Provide solutions that improve the resilience of people, sociery positive future.
and the planet.
Our solutions help solve some of the world 5 most pressing Our investments aim to:
challenges: • Support lhe development of new businesses and
• Increase food availability, using less water, land and technologies ihrough Orbia Ventures.
energy. • Drive the transition to a net- ero emissions woAd
• Bwld smaA, safe, sustainable and regeneralive cities. while strengthening our business value through
• Connect and empower communities lhraugh beller stralegic acquisitions.
access to data. • Advancing innovative technologies that will have
• Support innovation to offer advanced health long-tertn impad by promoting ciralarity, Gimate
lechnologies. technology, agricuflure and food technology, smaA
Read how our solulions contribute to addressing the UN SD s citles, and energy storage.
here.
Resoonsible business
Operating according to the highest standards, accountability, responsibility and transparency.
- Corporate ovemance and Risk Management
- Ethics and Compliance
- Health and sewriry
- Environment
- people and community
- Slakeholder paAicipalion
Materiality
At the beginning of 2016, Orbia completed its first global materiality analysis, through which it idenGfied the most relevant
issues for stakeholders based on their economic, social and environmental impacts. In 2019, given the acquisition of
Netafim and the transformation into 5 business groups, a new materiaiiry analysis was carried out at the business group
level and then aggregated at the Orbia level.
Below is the materiality matrix. The top 10 material issues identified for Orbia are:
1. Health Safety
2. Innovation
3. Solutions for resilience
4. Talent development, engagement and retention
5. Investments in local communities
6. Emissions
7. Qualily and safety of the products.
8. Sustainable sourcing
9. The circular economy
10. Use and discharge of water •
Attachment I: Description of the Applicant Company Page 113 of 204
Attachment 1_Description of the Applicant Company
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Sustainabiliry strategy and goa/s
Orbia contnbutes to sustainable development at a global level through its wide range of products, services and solutions
that allow us to solve some of the worid s greatest challenges. We are committed to responsible business growth, aligned
with compliance with the regulations of all the countries where we have a presence. We continualiy seek to minimi e
any risks identified in your production processes and products. Similarly. Orbia works to reduce the environmental
footprint of the products and services it offers, generating the greatest value for its stakeholders, with the least possible
impact. See the Sustainabddv Policv for more details about its commitment.
Orbia s long-term sustainability ob ectives are shown below:
Additional detaits regarding Orbia s sustainability initiatives and perfortnance in recent years can be found at the
Company s Sustainability Reports included at Sustainabdity Policies,
In addition, in line with the Company s purpose of promoting life throughout the world, it has identified the United Nations
Sustainable Development oals (SD s) to which it can contribute as a company. Specifically, the organi ation has
identified which of the 17 SD s which represent the greatest opportunity for Orbia to make an impact as shown below:
Attachment 1: Description of the Applicant Company Page 114 of 204
Attachment 1_Description of the Applicant Company
SD� How Orbia Can ake an Impaet
2: ero Hunger
Our greatest contribu6on to ensuring gtobal food securiry is through our
precision irtigation systems, which allow fartners to produce more with less
water.
Through our Precision Agriculture business group, we are the giobal
leader in precision irrigalion and feAigation solutions, which enable
fartners to grow more food eKciently using less water, as well as other
scarce resources.
3: ood Health and ell-Being We are a world leader in solutions for the healih sedor. Ourfluorine-based
products provide propellant gases for metered-dose inhalers. Additionally,
our PVC resins are widey used in applicalions aaoss the spedrum of
heallhcare infraslructure, facilities and devices.
6: Clean ater and Sanitation Our broad porttolio of produds, services, and technology for the planning,
design, construc6on, moniloring, and maintenance of water and sewage
management systems ensures the most efficient use and distribution of
water for residential, industrial, and municipal use. We develop innovative
soiutions for urban drainage and rainwater harvesting that allow betler
adaplation to Gimate change. We participate in social responsibiliry
pro Bcls wilh our communities through initiatives such as the Waler Funds
in Latin America, which allow us to prolect and conserve water sources,
as well as hydrographic basins. In addition, we have adopted eHicient use
practices within our operations, where the ma ariry oi our plants have
closed water cles.
7: Affordable and Clean Energy Products, services, pro ects ortechnologies that support the development,
delivery of renewable energy and altemative fuels or address growing
energy demand and minimi e impacts on the environment, such as
Fluorinated Sotu6ons s low WP refrigeranls and propellants or Gimate
solutions for interiors b Buildin Infrastructure.
8: Decent ork and Economic rowth We are a fair and decent employer for our neaAy 22,350 employees
around the world. We offer employment oppoAunilies to members of the
communities in which we operate, seeking to improve their quaiiry of life
and conUibule lo local economic development. Likewise, we provide our
employees wilh the conditions and environment they need to reach their
olential throu h our lalent and leadershi develo ment ro rams.
9: Industry, Innovation and InfrasWcture Our products contribute to the development of reliable, resilient and qualily
infrastructure that promoles economic development and human well-
being. We oHer sail management solutions for the structural improvement
of road infrastrudure works, which signficanUy reduces lhe use of ineA
materials, such as gravel, and increases the quality and life cyde of
ro Bds.
17: Sustainable Cities and Communitles We produce malerials thal contribule to improving construdion. PVC is a
low-maintenance, long-lasling building material due to its strength and
durabilily. We offer solutions for the inslallation of fiber optic cable al the
intra-urban and inter-urban level, which serve to connect the world and
improve access to high-speed and high-pertortnance infortnation
technolo ies.
12: Responsible Consumption and Producdon We develop products or services thal generate lower nel carbon emissions
than altemative products. We also invest in processes or technologies that
produce substantially lower amounts of greenhouse gas emissions lhan
conventional methods.
13: Climate Action Products, services, processes and lechnologies that use the EaAh'S
timited resources sustainably and minimi-e impacts on the environment.
We constantl invest in the decarboni -ation of our o erations.
In 2019, the Company completed its first climate-focused nsk assessment, including 12 sites across 3 business groups
in six countries. The main findings of the analysis were the following.
Physical ►isks: The physical risk of Orbia s priority sites is low to medium. This is due to exposure to weather events
such as cyclones, floods, fires, extreme temperatures and water stress.
The analysis was not limited to physical facilities it also considered the impact on logistics and the flow of raw materials.
As an example of the above, in September 2017, as a resuit of Hurncane Harvey, certain subsidiaries of the Polymer
Solutions business group declared Force Ma eure in relation to the supply of all their PVC resin suspensions,
copolymers and emulsions produced in Mexico, Colombia and USA because its main supplier of vinyl chloride (VCM)
and other raw materials had declared Force Ma eure.
Attachment I: Description of the Applicant Company Page 115 of 204
Attachment 1_Description of the Applicant Company
arket, technological and regulatory risks: In addition to the direct effects of ineteorological phenomena, other
impacts on the business were analy ed regarding govemment or commercial regulations, new market rules or the
emergence of technologies. Using a 2030 hori on, a greater exposure to these risks were pro ected, with some high
business risks derived from a transition to a low-carbon economy. They are likely to include market pressure to use low-
carbon materials, broader regulation of global carbon prices, or increases in the cost of resources, primarily electricity
and water by 2030. Higher water stress scenarios, for example, could affect water costs. for the Company s operations.
Such scenarios, in turn, can impact the supply chain or production processes from a continuity and cost standpoint.
Orbia has used the results of this analysis to devetop specific risk miUgation strategies for its businesses. These plans
include reducing the Company s carbon exposure, which complements the Company s commitment to set science-
based targets for emissions reductions and achieve net- ero operations by 2050.
Opportunities: In addition to the consideration of risks resulting from climate change, opportunities for Orbia were also
analy ed, such as solutions for resilience that allow adaptation to Gimate change or replacementof products by others
with lower carbon footprint. Orbia already has a range of products that provide resilience to high rainfall, for exampie, or
solutions to replace water piping systems or instailation of fiber optic ducts, without affecting or minimi ing the impact
on traffic and operation of a city It is also the leader in precision agriculture, which, due to the higher productivity per
hectare and the eificient use of agrochemicals, minimi es the growth of the agricultural frontier and therefore
deforestation, while eliminating or minimi ing the pollution of rivers and aquifers by runoff and leaching, as well as
greenhouse gas emissions. Similarly, we have started an effort to reptace propellant and refrigerant gases with others
with alower greenhouse effect. These are ust a few examples of what the Issuer is doing at present, and as a result of
the Gimate nsk study, we estimate that the adoption of products and solutions that take into accountthe oppoRunities of a
more carbon-regulated context and that allow the Company to face the onslaught of Gimate change will be accelerated.
Water is a fundamental part of the Company 5 operations, from the consumption of water in the extraction process and
in its operations, to the solutions and products we provide for collection, distribution, sanitation and irrigation. Therefore,
all but one of Building Infrastructure, Precision Agriculture and Data Communications plants have a closed circuit.
Through Precision Agriculture, we offer solutions or precision irngation systems that help reduce water consumption in
the agricultural sector, which, it should be noted, is responsibte for about 70% of water consumption.
The Company s Buitding and Infrastructure group offers solutions for better water management as well as more efficient
building solutions. As an example, our range of rainwater management products can prevent flooding or at least minimi e
impacts, while also contributing to help replenish urban water tables. In addition, our trenchless pipe renewal
technology helps reduce losses in water distnbution networks in large cities.
Fluorinated Solutions is developing products to improve the performance and reusability of power storage batteries.
Awarols, Certi�cations and Dlstinctions
Orbia is proud of the recognition our sustainability efforts and achievements have received from outside organi ations.
Details can be found at: httos:/Iwww.orbia.com/sustainabilitv/esa-indices-and-external-recoanitionf
Orbia has been a member of the FTSE4 ood Sustainability Index since 2015. At the end of 2018, Orbia was setected
as a member of the FTSE4 ood Emergmg Index in its first edition of the sustainability index for emerging markets, after
demonstrating good environmental, social and corporate govemance practices.
The company was inGuded for the first time in the S P Sustainability Yearbook 2021, of companies that meet
sustainability criteria.
The Issuer is also a member of the Dow Jones Sustainability Index (DJSI) and a member of the S PIBMV Total M xico
ES Index of the Mexican Stock Exchange. In 2021, our total score increased by 5%, reFlecting a commitment to
continually improve our ES pertormance across all aspects of our business.
These are some of the awards, recognitions and certifications that Orbia and its business groups received during the
year:
Distinctions:
• Member of the S P Sustainability Yearbook in 2021
• Member of the Dow Jones Sustainability Index (DJSI) MILA since 2019
• Member of the S P/BMV Total Mexico ES index of the Mexican Stock Exchange since 2012
• Member of the FTSE4 ood index since 2015
• EcoVadis Silver Medal
• Boscars Awards 2020
• The Forest Conservation Award granted by Reforestamos M xico to Orbia in 2020.
Attachment I: Description of the Applicant Company Page 116 of 204
Attachment 1_Description of the Applicant Company
• CAMACOL Social Responsibility Award to Pavco Wavin Colombia
• PREAD Recognition District Environmental Excellence Program in Colombia for commitment to environmental
management and pertortnance
• Xpossible Colsubsidio Awards to Pavco Wavin Colombia
• Ekos de Oro, for being the most efficient company in the Plastics and Rubber sector in Ecuador
• reen Award in Costa Rica for the use of renewable energy
• Carbon DisGosure Pro ect (CDP) Ciimate Change score B
• Maala Award for Business Diversity 2020
• Latin Trade Index Americas Sustainability Award 2019
• Ideas that Change the World Award 2019
Certificatfons:
• ISO 14001: Environmental Management Systems
• ISO 50001: Energy Management
• EMAS: Environmental Management System in the European Union
• ESOS (Energy Savings OppoRunity Scheme)
• Clean Industry awarded by the Environmental Authority of Mexico
• OHSAS 18001: Occupational Health and Safety Management Systems
• ISO 45001: Occupational Health and Safety
• ISRS (International Safety rating system) Intemational safety rating system
• Certificate in Self-management in Safety and Health, Ministry of Labor and Social Welfare (STPS)
• IQNet SR10 Social responsibility management system in ermany.
• IRA (SARI initals in Spanish): Comprehensive Responsibility Management System granted by the National
Association of the Chemical Industry in Mexico
• Mexico without child labor
• Family-responsibie company, awarded by the Ministry of Labor and Social Welfare of Mexico
• Kosher Certificate, granted by Calidad Kosher, S.C.
• ISO 9001: Quality Management Systems
• ISO 22000: Food Safety Management
• NSF NSF International is an ob ective, nonprofit, independent product testing and certification agency that sets
global performance standards for a wide variety of household and industrial products
Other ES certifications:
• Carbon Disclosure Procct: In 2021, Orbia obtained a B rating (Management Level) for our performance in both
Climate Change and Water Securily in the CDP evaluation.
• Ecovadis: Orbia Coined the Ecovadis platform in 2019. In the 2020 evaluation, we maintained our silver rating,
ranking among the top 18% of companies evaluated. Through this Ecovadis assessment we can understand,
compare and share our company s sustainability perfortnance with stakeholders.
viii. arket Information
For more information see Section 2, "The Issuer", item b, " Business Overview", sub-item i"INain Activity" of each
business group, in this Annual Report.
ix. Corporate Structure
The Issuer is part of a business group with 228 subsidiaries as of December 31, 2021. The organi ation chart provided
below shows the most impoRant Orbia subsidiaries in yellow, the assets and revenue of which, on an individual basis
for each one, exceed 10% of ihe total consolidated assets and/or 10% of the total consolidated revenue. based on the
Company s audited consolidated financial statements for fiscal year 2021.
Attachment I: Description of the Applicant Company Page 117 of 204
Attachment 1_Description of the Applicant Company
Polymer Solutions
Business Group
I
MezicMem Resinas
Vinlilas, S.A. de GV.
(Meziw)
I
Mazkham Ethylane
Hddl� Corporatlon
(USA)
I
Ingleslde Ethylane LLG
(USA)
Orbia Advance Corporation, S.A.B. de GV.
(Mexico)
I
Building & Fluorinated predsion Agriakure
Infrastrudure ����o� Business Group
Business Group Business Group
Me�khem� ludonas
Integnles Hold6ig,
S.A. de C.V. (MeKI[o)
WaWn, B.V.
(Netharfands�
MexkhemFluor, "
S.A. de C.V. Nenflm, Ltd.
(Meziw) (�s�)
Fluo/fta de M�zico,
S.A. de C.V.
(Metico)
Mezidrem Fldor
Inc (USA)
MaxkhemUK Ltd.
(UN)
MaxlchamFhiw
lapan Ltd (lapan)
Medd�emFldor
Taiwan Ltd
(Talwan)
The table below shows the shareholding structure of the Issuer s most significant subsidiaries.
x. Description of ain Assets
Data
Communira8ons
Business Group
Dure-Une Haldings, lnc
(USA)
Listed below are the main assets of Orbia s business groups, all of which are free from liens or encumbrances of any
kind, since none of them constitute any guarantee of financing, except for those assets that are being acquired through
financial lease contracts which serve as a natural guarantee for the fulfillment of the obligation to pay the amount of the
respective lease, and which represent a total amount of $367 million. All assets are insured, are in good working
condition and there are no environmental issues that affect their use.
The following table shows the information on Orbia s main produchon plants. In accordance with the provisions of article
33, subparagraph b), numeral 1, of the Single Issuer Circular, the Company has detertnined that the information on the
percentage of uGli ation of the installed capacity of the Polymer Solutions business plants is strategic, and accordingly
has reserved the right to disclosure of this information.
Attachment I: Description of the Applicant Company Page 118 of 204
For more information on 'Yhe acfivities of the subsidiaries" see Section 2, 'The /ssuer'; item b, "General Description of
the Business", sub-item i. "Main Acfivity' for each business group, in this Annual Report.
Attachment 1_Description of the Applicant Company
i�sauea
capacity
Counhy or Number of Type ot Thouaanda � o/ uae In
Business group Process Region PIaMs Asset Products M TonsNear 2021
PolymerSdulions Chlonne- Bnne 250(1) N.D
Soda Mewco 7 Mine
Polymer Soluhons Chlonne- Mebw 2 Plant Chlonne, Caustic 895 NIA
Soda Soda, Denvadves
Polymer SoluUons Chlonne- Colombia 1 Plant Chlorine. Caustic 50 N/A
Soda Soda, Deriva6ves
PolymerSolWions Chlonne- ermany 2 Plant Chlonne, Caushc 970' N/A
Soda Soda, Denvahves
Polymer Solulions Chlonne- Mewco 4 Plant Phosphates 146 N/A
Soda
Polymer Sduhons Elhylene EUA 1 Plant Ethylene 550 N/A
Chloro-
Soda
PolymerSolutions Vinyl Mexico 5 Plant PVCresins 781 N/A
Polymer Sdutions Vinyl Colombia 3 Plant PVC resms 500 N/A
Polymer SduUons Vinyl EUA 2 Plant PVC resms 116 N/A
Polymer SduUons Vinyl ertnany 2 Plant PVC resms 400 N/A
Polymer Sdutions Vinyl Mexico 2 Plant Compounds 68 N/A
Polymer SduUons Vinyl Colombia 1 Plant Compounds 22 N/A
Potymer Sduhons Vinyl EUA 3 Plant Compounds 83 N/A
Polymer Sdutions Vinyl Unrted 2 Plant Compounds 93 N/A
Itingdom
PolymerSdWons Vinyl d�a 4 Plant Compounds 38 N/A
Polymer Solutions Vinyl Mewco 2 Plant Compounds 108 N/A
Building Wavin Lahn 24 Plant Pipes and 773 61%
Inhastrudure LaNm Amenw Connections
Building Wavin Europe 24 Plant Pipes and 750 52%
Inhastrudure Europe Connections
Data Dure-Line EUA, 13 Plant Ducts, HDPE 258 73%
Communicahons Canada miuoduds
US/Canada
DaW Dure-�ne India, 6 Planl Ducts, HDPE 93 60%
Communiwhons Oman, miaoducts
AMEA South
Afnca,
China
Precision Agriculture Precision Amencas 6 Planl Pipeline 45 l.mes 87%
Irrigation
Precision Agnculture Precision AMEA 6 Plant Pipe and drippers 40 I,mes 80%
Irtigation
Precision Agriculture Preeision India 2 Plant Pipeline 23 Unes 29%
Imga6on
PrecisionAgnculture Precision APAC 3 Plant Pipeline 23Unes 85%
Irrigation (excluding
India)
Fluorinated Solutions Fluorile Mewco 2 M,nes Aud and 7,700 100%
metalNrgical
grade fluonte
Fluorinated Solutions Fluorite Mexiw 3 Plant Aud rade 9000 100%
Fluonte
Fluorinated Solutions HF Mewco 2jz� Plant HydroNuonc aad 144 64%
Fluorinated Solutions AIF3 Mewco 7 Plant Alummum Nuonde 64 95%
Fluorinated Solu6ons Refrigerent EUA. 1 Plant Fluonnated 39 69%
ases hydroearbons and
re(rigerents
Fluorinated SoluUons Refrigeranl Japan 1 Plant Fluonnated 21 64%
ases hydrocarbons and
rehigerents
�'� m�/hour
�'+ A producbve unit lhat indudes 2 plants
The following describes the Company s most significant fixed assets with the following plants as part of ds Building
Infrastructure, Data Communications and Precision Agriculture business groups.
Attachment I: Description of the Applicant Company Page 119 of 204
Attachment 1_Description of the Applicant Company
• /n LaUn America. Bui/ding 8 Infiastructure owns and operates 24 plants in 12 countries in Latin America, with a
combined installed production capacity of 773,000 tons of PVC extracts, PVC, in ected polyethylene products and
polyethylene products, using state-of-the-art transformation technologies.
• In Europe. Building 8 Infrasvucture owns 24 manufactunng plants and sales and distribution points in 25
countries in Europe, with a combined installed production capacity of 750,000 tons. It has procedures in place to
comply with the standards established by ISO 9000 and ISO 9001, which are reviewed and certified by independent
certirying companies. These plants operate in accordance with regionally established health and safety policies,
complying with ISO 12001 and similar standards.
• /n Norih Amerlca. Data CommunicaUons owns 13 manufacturing and assembly plants located in the US and
Canada. It has procedures in place to comply with ISO 9001 standards, as well as other relevant standards for the
competent authorities, which are reviewed and certified by independent companies. Design pracGces are sub �ct to
various regulatory tests to ensure products meet or exceed customer expectations and applicable regulatory
requirements.
• ln EMEA. Data Communications owns 4 manufacturing and assembly plants located in Europe, India, and Oman.
It has procedures in place to comply with ISO 9001, ISO 14001, OHSAS 18001 standards, Undervvriters Laboratory
and Bureau of India Standards certifications, as well as other relevant standards for competent authorities, which
are reviewed and certified by independent companies. Design practices are sub ect to various regulatory tests to
ensure products meet or exceed customer expectations and applicable regulatory requirements.
• Precisfon Agriculture owns 17 manufacturing and assembly plants located in Israel, Turkey, the Netherlands,
Spain, South Africa, Mexico, Bra fl, Peru, Chile, China, Colombia, Australia, India and the US, with a sold volume
of 7 billion meters in fiscal year 2021.
Additionally, in 2021 the Company carried out different permanent investments that are part of maintenance and organic
growth which totaled $204 million.
Orbia asserts that there are currently no regulatory measures that affect the use of its assets, which guarantees
compliance with all regulatory requirements in all its facilities.
So that Orbia s operations are not suddenly affected, it is a policy to have predictive preventive maintenance programs
applied to its assets inGuding machinery y and other equipment. The ob ective of this is to maintain the facilities in
optimal conditions, comply with govemment standards and regutations in accordance with each country, and if
necessary to identify corrective maintenance measures to be executed. The Company allocates approximately 1.7% of
its sales to preventive, predictive and corrective maintenance. All these resources have been financed through the
Company s own cash Flow.
Insurance
Orbia has contracted, at the holding company level, for all the companies that make up the roup, the following
coverage usually required and based on the standards for the mining, chemical, petrochemical and industrial industries:
A. ultiple business insurance (assets and business interruption), which covers:
• Wide fire coverage, inGuding hydro meteorologicat risks, earthquake and volcanic eruption covering: building,
contents (machinery and equipment), inventories and gross profit.
• Technical branches, covering machinery breakage, electronic equipment, (underground) mobile equipment without
circulation plates.
The values declared for this insurance have been reported considenng the replacement value for fixed assets and the
last purchase price for inventories. ross profit has been determined based on the approved budget for 2021 and the
sums insured vary according to the values of each company.
B. Cargo transport insurance that covers all shipments where there is an insurable interest (purchases, sales, inter-
warehouses, etc.).
C. Civil lfa6ility insurance that covers damages (including pollution) to third parties in their property and persons, as
well as damages caused because of such direct damages.
D. Civil llabflity lnsurance for directors and civil servants, which protects such persons against claims by third parties
ansing from wrongful acts committed in the exercise of their functions.
E. Crime Insurance that covers damages as a result of criminal acts, both intemal and external.
F. Credlt Insurance whose ob �ctive is to cover the risk of non-payment or prolonged default by debtors.
In addition to the aforementioned insurance, each subsidiary has insurance policies according to its particular needs,
or to comply with contractual obligations and/or with the applicable legislation in the localiry where it is located.
Attachment I: Description of the Applicant Company Page 120 of 204
Attachment 1_Description of the Applicant Company
Although management believes that we have adequate and sufficient coverage in accordance with industry practices,
there is the possibility that insurance coverage against possible unforeseen losses and other liabilities may not be
su�cient m some cases. extremely catastrophic or very unpredictable. Likewise, in the event that the losses derived
from a claim exceed the insured limit, the result would have an adverse effect on Orbia s financial results in the form of
higher costs which may not be anticipated.
The following companies and their affiliates and/or subsidianes that are part of Orbia, have, for the most part, contracted
similar insurance schemes independentiy and outside the insurance contracts contracted and controlled at the holding
company level: Netafim Ltd, Dura-Line Holdings. Inc., Vestolit mbH, Wavin BV, Sylvin Technologies, Mexichem
Speciaity Compounds, Mexichem Brasil Ind stna de Transforma o PI stica Ltda and Mexichem Trading Comercio,
Importacao e Exportacao S/A
xi. udicial, Administrative or Arbitral Proceedings
With the exception of the information provided in regard to Data Communications, based on the infortnation relevance
criteria established in Annex N of the Sole Issuers Circular. the Company and its subsidiaries are not, and there is no
high probability that they will be in the future, involved in any relevant proceeding of udicial, administrative or arbitration
nature, that are different from those that are a nortnal part of the course of business and that have, had or could have
a significant impact on the operating results or the financial position of Orbia or its business groups.
Nolwithstanding the foregoing, in compliance with applicable regulations, internal policies and good practices, the
Company and its subsidiaries maintain some reserves to meet the obligations that may arise as a result of the
proceedings in which it or its subsidiaries are party.
As far as the Company and its subsidiaries are aware, as of December 31, 2021, none of its shareholders, directors
and main officers are part of any udicial, administrative andlor arbitration procedure that could affect the results of the
operation or the financial situation of the Issuer in a material adverse manner.
Likewise, neither the Company nor its subsidiaries are part of any tax proceedings that could affect the results of the
operation or financial situation of the issuer in a material adverse manner.
xii. Shares representing Capital Stock
As of December 31, 2021, the Company does not have open positions in derivative instruments that can be settled in
kind whose underlying assets are ORBIA' shares.
In the fiscal years 2020 and 2019, Orbia did not modify the number or amount of outstanding shares representing its
share capital.
At the ordinary shareholders meeGng held on July 21, 2021, the shareholders agreed to cancel 90,000,000 Class II
ordinary shares, without par value, which represented the vanable part of the Entity s capital stock. On December 24,
2021, the Company canceled 90,000,000 of its own shares, which was authori ed at the meeting of July 21, 2021. Said
shares were acquired through the use of the resources authori ed by the Ordinary eneral Meeting of Shareholders
for the Repurchase Fund. and that the Issuer bought in the stock market, charged to its stockholders equity.
As of December 31, 2021, the Entitys capital stoCk is represented by 2,010,000,000 ordinary registered shares with
voting rights, issued and outstanding, without par value. In 2020 and 2019, the share capital was represented by
2,100,000,000 shares. The fixed part of the Entitys capital stock is represe�ted by registered Class I shares without
withdrawai nghts. The variable part of the Entity s capital stock is represented by Class II nominative shares, without
par value and may not exceed ten times the minimum fixed capital stock. An analysis of the Entity s capital stock as of
December 31, 2021, 2020 and 2019 is as foliows:
December 31, 2079, and 2020
Subseribed eapital Number of shares Amount
( _; Illions of dollaro)
Classl 308,178,735 $38
Classll 1,791,821,265 219
Total 2,100,000,000 257
Attachment I: Description of the Applicant Company Page 121 of 204
Attachment 1_Description of the Applicant Company
Decembar 31, 2021
Subscribed capital Number of shares Amount
( .Illions of dollars)
Class I
Class II
Total
xiii. Dividends
308,178,735 $38
1,701,821,265 219
2,010,000,000 257
During the last three years (2019, 2020 and 2021) Orbia has decreed the payment of dividends in cash, as follows
ene►al
Shareholde►s
eeUng
Aug-20-18
Nov-26-18
D(vidend Number of
Declared in Paymenffi
millfons of USD
150 5 payments
168 4 payments
Payment
Dates
Dec. 24, 2018 ($50 million), from May 29, 2019
to Feb. 26, 2020 ($100 million)
Feb. 27, May 29, Aug. 28, Nov. 27, 2019
Deo-2-19 180 4 payments Feb. 26, May 27, 2020, Aug. 26 and Nov. 25
Mar-30.21 200 4 payments Apr. 14, 2021, Jul. 14, 2021, Sept. 15, 2021 and
Dec 15, 2021
In the Ordinary and Extraordinary Annual Shareholder Meeting held on April 23, 2019, after the explanations offered by
the Secretary of the Meeting on the reasons and effects of the respective proposal, the extension of the payment term
of the extraordinary dividend declared in the Ordinary Shareholders Meeting held on August 21, 2018 for the remaining
$100 million was approved, so that the payment may be concluded within the 12 (twelve) months following the
Shareholders Meeting held on April 23, 2019. The above with the ob ective of aligning the Company s cash flows to the
current cyGe.
During the eneral Ordinary Stockholders Meeting of Orbia held on November 26, 2018, it was agreed to pay a dividend
equivalent to $168 million to be distributed among the outstanding shares, discounting the amount corresponding to the
shares that are in the Company s repurchase fund in each partial payment. The dividend will be paid in Mexican pesos
in four equal instaliments, each equivalent to $42 million during the 12 months following such meeting, for outstanding
shares, exGuding those shares held by the Company as a result of the share repurchase program on each of the
payment dates, at the exchange rate published in the Official Federal a ette by the Bank of Mexico. On November
27, 2018, the Company notified that each of the four installments will be paid on each of the following four dates
February 27, May 29, August 28 and November 27, 2019.
The Company s shareholders approved, at an Ordinary eneral Meeting held on December 2, 2019, the payment of a
cash dividend in the amount of $180 million, in four payments. The first was on February 26, 2020, the second on May
27, the third on August 26 and the fourth on November 25, 2020.
The Issuers eneral Ordinary Shareholders Meeting held on March 30, 2021, authori ed the payment of a cash
dividend in the amount of $0.10 dollars per share payable in four installments in 2021, the first of which was made on
April 14, 2021.
The declaration, amount and payment of divide�ds are approved by the Ordinary eneral Shareholders Meetings, on
the recommendation of the Board of Directors, and dividends may only be paid from profits withheld from accounts
previously approved by the shareholders, provided that a legal reserve has been created and any losses from previous
fiscal yeare have been paid or absorbed.
The distribution of Orbia s dividend payments depends on the generation of profits, flow generation and the investments
pro[�cted in its different business groups. (See Section 1, "General Information," subsection c, "Risk Factors,"
subsection c, "Risk Factors Related to Securities /ssued by the Company.')
The amount and payment of Future Orbia dividends, if any, will be sub ect to applicable law and depend on a variety of
factors that may be considered by the Board of Directors or shareholders, including future operating results, financial
condition, capital requirements, invesUnents in potential acquisitions or othergrowlh opportunities, legal and contractual
Attachment I: Description of the Applicant Company Page 122 of 204
Attachment 1_Description of the Applicant Company
restrictions on current and future debt instruments and the ability to obtain funds from subsidiaries. Such factors may
limit the ability to pay future dividends and may be considered by the Board of Directors in recommending, or by
shareholders in approving, the payment of future dividends.
There is no dividend payment policy. In recent years Orbia has paid a dividend of around 10% of the EBITDA of the
corresponding fiscal year, even though it is not a formally adopted policy and there is no document that establishes it.
At the Ordinary Shareholders Meeting on March 30, 2021, it was agreed to pay a cash dividend to the shareholders of
the Company at the rate of USD$ 0.10 (ten cents) per outstanding share with the right to collect dividends, m four
partialities payable throughout 2021 that will come from the Company s Net Tax Profit Account.
Attachment I: Description of the Applicant Company Page 123 of 204
Attachment 1_Description of the Applicant Company
3. FINANCIAL REPORTIN
a) Selected Consolidated Financial Information
The follownng tables present selected consolidated financial information for Orbia for each of the penods indicated. This
information should be read in con unction with and is sub �ct in its entirety to the complete terms of Orbia s audited
financiai statements as of December 31, 2021, 2020 and 2019, including the related financial statement disclosures.
The consolidated financial statements of the Company and its subsidiaries for the years ending December 31, 2021,
2020 and 2019 have been prepared in accordance with the International Financial Reporting Standards (IFRS), issued
by the Intemational Accounting Standards Board (IASB).
Orbia s functional currency is the U.S. dollar and it publishes its financial statements in this currency. Unless othervvise
specified, references in this Annual Report to $, Dollars or tlollars shall be construed as references to U.S. dollars
and references to Peso , Pesos or Mexican Pesos shall be construed as references to Mexican pesos. See nofes
on the audited financial sfafemenfs in Section 7, 'Annexes'; "Consolidated Financial Statements'; in this Annual Report.
The comparability of the financial information presented in the following table, as well as that of the Audited Consolidated
Financial Statements, may be affected by certain events that occurred in the years 2021, 2020 and 2019.
The financial figures inGuded in the section of the Annual Report have been rounded to millions of Dollars except for the
figures for eaming per share and number of shares, which are expressed in units, or when othervvise indicated, while
the figures presented in the Company s audited financial statements that are presented in the Annexes of this Annual
Report have been rounded to thousands of Dollars (except where othervvise indicated), for convenience of presentation.
The percentage figures in this Annual Report have not been, calculated on the base of the figures rounded to millions
of Dollars, but rather on lhe base of such amounts before rounding. For this reason, the percentage figures in this Annual
Report may vary from the percentage obtained when performing the same calculations using the financial statement
figures. Certain financial figures, such as the totals in certain tables, may not be the result of adding up the figures prior
to rounding.
There are factors of an uncertain nature that may make Orbia s past perfortnance, as shown in the financial statements,
not indicative of its future performance. Such factors are described in detail in Section 1, "General lnformation'; item c,
"Risk Factors„
A few notable events that affect the financial figures that are presented, analy ed and commented on in this section are
the following
(1) Establlshment and acquisition of new business -
In the last three years, Orbia established and acquired the businesses outlined below:
2021
During 2021 Orbia made the acquisition of three companies that represented an approximate amount of $64 million
dollars, as a whole. In accordance with the provisions of IFRS 3, the disclosure of additional information to that presented
in the notes to the audited financial statements and to this Report was not considered relevant.
i_ Investment in akon Horticultural Pro Bcts On April 1, 2021, the Precision Agriculture business segment
acquired akon Horticultural Pro ects, the Dutch leader in tumkey greenhouse pro ects. The acquisition is
synergistic, combining the global presence and expertise of Precision Agriculture and akon s greenhouse
technology. akon brings unique experience in all aspects of greenhouse pro ect execution, greenhouse
manufacturing capabilities and a proven track record in key verticals.
ii. Investment in Shakun Polymers Private Limited. On June 22, 2021, Orbia acquired the maority of the
outstanding shares of Shakun Potymers Private Limited (Shakun), a private, family-owned company that is a
market leader in the production of compounds for the wire and cable markets in the subcontinent. Indian, Middle
East, Southeast Asia and Africa. Shakun s product development focuses on halogen-free flame retardant
compounds and PVC-based compounds for power and data cables. With this investment, Polymer Solutions
expands Alphagary s product portfolio and regional presence as Shakun will continue to offer next-generation
materials designed to meet the high safety and perfortnance standards required in the Asian and African markets.
There is a put / call option related to the acquisition under the agreement between the shareholders in respect of
the minority or the non-controlling party of shareholders who retain a portion of the capital of Shakun. Orbia
believes that this investment will bring synergies to the operations of the Polymer Solutions business group, in
which Shakun s operations will be consolidated.
iii. Investment in Silatronix, On November 1, 2021, Orbias Fluorinated Solutions business acquired Silatronix, a
Madison, Wisconsin-based Company. Silatronix has expertise in fluorosilane additives for Lithium-ion batteries
and has an industry-wide reputation for developing innovative solutions that deliver improved battery safety and
pertormance in a range of applications, from electric vehiGes to stationary, grid-scale storage.
Attachment I: Description of the Applicant Company Page 124 of 204
Attachment 1_Description of the Applicant Company
xo2o
i_ Investment in SeeTree - On November 18, 2020, Orbia completed its first corporate venture capital transaction
through an investment in SeeTree, a leading start-up in the agricultural technology sector with a focus on hee
farming. SeeTree uses military-grade telecommunications, surtace sensors, artificial intelligence and machine
leaming in an integrated way to prevent tree pests and maximi e productivity at a low cost. Precision Agriculture
is partnenng with SeeTree to bring SeeTree s advanced technology to Precision Agriculture s solution offering.
This investment represents a significant step for Orbia and Precision Agricuiture, to the extent that it allows us to
promote the development of conscious and profitable agnculture.
(2) Subsequent event, not included in the ilnancfal informatfon presented:
On February 1, 2022, Orbias Building and Infrastructure business, Wavin, acquired 67% of the shares of Vectus
Industries Limited Vectus , a privately held manufacturer of plumbing and drainage pipes and the market leader in
water storage tanks in India for $132 million paid in $108 million of cash and $24 million of other consideration at closmg,
sub ect to customary working capital and net indebtedness ad ustments.
With this acquisition, Orbia s Building and Infrastructure businesses will operate at the forefront of India s quickly growing
water management industry, supplying customers in the residential, commercial, industrial, infrastructure and
agricultural sectors.
The Company has begun consolidating Vectus s results as of February 1, 2022.
Consolidated stetements oi income
(Figures in millions of US Dollars)
Continuous operations:
Net sales
Cost of sales
ross profit
Selling and development expenses
Administrative expenses
Other costs, net
Exchange gain
Exchange loss
Interest expense
Interest income
Change in fair value of redeemable non-controlling interest
Monetary posilion profit
PaAicipation in the results of associates
Income before income taxes
Income taxes
Income from conlinuing opera6ons
discontinued operations:
Income (loss) from discontinued operations, Net
Consolidated net income for the year
Consolidaled net income for the year:
Controlling interest
Noncontrolling interest
Continuous operations:
Eamings per share of the controlling inte►est
eighted averege number of shares outstanding
2021
8,783
6,156
2,627
573
600
6
(�8)
110
248
(16)
28
4
(�)
1,754
381
773
772
6,967
5,174
1,873
539
468
43
(49)
68
272
(14)
18
(4)
533
206
327
327
657 195 207
115 124 120
772 379 327
30.33 a0.10 $0.10
1,992,657,096 2,024,791,839 2,067,362,601
2020
� 6,420
4,651
1,769
507
508
33
(102)
104
239
(70)
10
1
(�)
479
151
328
(10)
319
2019
Attachment I: Description of the Applicant Company Page 125 of 204
Attachment 1_Description of the Applicant Company
Consolidated statements of financial positlon
(Figures in millions ot US dollars)
Assets
Current assets:
Cash and cash equivalents
Accounts receivable, net
Accounls receivable from related paAies
Inventones, Net
Advance paymenis
Derivative financial instruments
Assets held for sale
Total cunent assets
Noncurrent assets:
Property, machinery and equipment, Net
Right-of-use assets
Investment in shares of associates
Other assets. Net
deferred taxes
Employee benefit asset
Inlangible assets, Net
oodwill
ToWI noncurrent assets
Totalassets
Liabilities and stockholders equity
Current liabilides:
Bank loans and curzent portion of long-term debt
Providers
Letters of credit to suppliers
Accounts payable to related parties
Olher accounts payable and accrued liabilities
dividends payable
Provisions
Employee benefits
Short-term lease liabilities
Derivative financial inslruments
Liabilities associated with assets held for sale
Total current liabilities
As of December 31:
2021 2020 2019
$782
1,595
1
1,292
50
3
3
3,724
$875
1,325
5
861
60
20
10
3,156
$586
1,352
5
834
65
0
9
2,852
3,051
346
40
104
174
17
1,617
1,514
6,862
70,587
240
1,046
459
1
521
1
29
226
86
�
2,643
3,186
323
39
69
200
13
1.734
1,497
7,055
70,271
495
788
538
1
467
3
33
160
82
14
6
2,588
3,349
337
3. 4
89
126
14
1,766
1,492
7,205
10,057
322
679
585
101
478
134
52
128
78
13
6
2,577
Attachment I: Description of the Applicant Company Page 126 of 204
Attachment 1_Description of the Applicant Company
Consolidated stetements of flnanclal positlon
(Figures in millions of US dollars)
Non-current Ifabilities:
Bank loans and long-tertn debt
Employee benefits
Longtertn provisions
Other long-term liabilities
Redeemable non-controlling interesl
Derivalive financial instruments
deferted taxes
Long-term finance leases
Long-term income tax
Total non-current Iiabilities
ToWI liabflities
Stockholders equity:
Contributed capital
Social capital
Premium on issuance of shares
Update of share capilal
As of December 31:
2021 2020 2019
3,280
221
17
41
316
17
318
281
49
4,539
7,182
256
1,475
24
1,755
Eamed Capital
Accumulated u6lities
Redeemable non-conlrolling interest
Reserve for acquisition of own shares
Olher comprehensive inwme
Total conVolling interest
Total non-controlling interest
Total Stockholders Equity
Total liabilities and stockholders equity
966
(241)
851
(594)
987
2,737
668
3,404
10,587
3,131
274
21
31
274
95
314
263
42
4,444
7,032
256
1,475
24
1,755
1.108
(227)
400
(543)
738
2,493
687
3,180
10,271
3,129
229
36
264
67
335
267
35
4,385
6,963
256
1.475
24
1,755
1,059
(227)
296
(508)
620
2,375
719
3,094
70,057
Attachment I: Description of the Applicant Company Page 127 of 204
Attachment 1_Description of the Applicant Company
Net debt to EBITDA:
As of Decamber 31,
( illions of dollars) 2021 2020 2019
Liability with cost 3,520 3,626 3,451
circulating portion 240 495 322
longterm debt 3,280 3,131 3,129
Cash and cash equivalents 782 875 586
Net debl" 2,738 2,751 2,865
EBITDA' 2,047 1,318 1,365
Net debt to EBITDA ratio 1.34 2.09 2.10
• For purposes of Ihis calculation real EBITDA is wnsidered. which onty �ncludes EBITDA of businesses acqwred as ol their dale ol ineoryoration in
Orbia s eonsolidation.
Financial indicators
(Figures in millions of US dollars)
Indicaton
Investments in property, plant and equipment
DepreciaGon and amorti ation for the year
EBITDA
Accounts receivabietumover(days)
Average supplier payment lerm (days)
Inventory tumover (days)
2021
286
598
2,047
48
61
63
2020
204
598
1.318
53
61
66
2019
261
542
1,365
51
48
b) Financial information by business group, geographical area and expoR sales
The main historical sales indicators by business group are shown below:
Sales by Business roup �'� 2021 2020 - 2019
Polymer Solutions 3,438 39 2,171 34 2,334
Fluorinated Solutions 744 8 698 11 805
Building Infrastructure 2,922 33 2,071 32 2,239
Data Communications 994 11 732 11 749
PrecisionAgnculture 1,126 13 972 15 1,063
Controlling Entiry 215 2 184 3 97
Eliminations (656) (7) (408) (6) (300)
Total 8,783 100 6,420 100 6,987
60
33
12
32
11
15
1
(4)
700
Attachment I: Description of the Applicant Company Page 128 of 204
Attachment 1_Description of the Applicant Company
Operatlng income by Business : ;roup �
Polymer Solulions
Building Infrastructure
Data Communicafions
Precision Agricufture
Fluonnated Solutions
Controlling Entity
Eliminations
Total
2021
876
183
283
102
46
(23)
(��)
1,449
60
13
20
7
3
�Z)
(�)
100
2020
224
193
127
140
89
(53)
0
720
2019
210
267
142
116
92
(3)
0
823
31
27
18
19
12
i�)
0
100
Sales by geographical area of origin, for the years 2021, 2020 and 2019, are presented below:
Net sales by reglon where customers are located
2021 2020
United States of America $1,838 $1,382
Northwest Europe 1,462 1,040
Southwest Europe 1,148 839
Africa, Middle East and Asia 645 703
Mexico 971 633
Bra II 653 455
Central and Eastem Europe 395 286
Colombia 441 271
Central America 277 190
Peru 231 136
Southeast Europe 172 122
Ecuador 139 91
Canada 96 65
Other rest of lhe world counlries 68 55
Chile 86 51
Argentina 81 45
Israel 46 40
Other Latin American counlries 31 14
Vene uela 4 1
Total 8,783 6,420
Sales by destlnaUon region
Region 2021 2020
Europe 3,177 2,286
North Amenca 2,905 2,081
South America 1,634 1,050
AMEA 691 743
Others 376 259
Total 8,783 6,420
Figures in milhons
25
32
17
14
11
�o�
0
100
Attachment I: Description of the Applicant Company Page 129 of 204
2079
$1 414
1.113
932
796
665
516
285
319
226
164
142
105
66
87
47
47
42
22
1
6,987
2079
2.472
2,145
1.198
838
335
6,987
Attachment 1_Description of the Applicant Company
c) Relevant Credit Report
Histoncally, the growth strategy through capital investments and, especially, with the acquisition of companies that offer
synergies of vertical integration and add value to the basic raw materials of the Issuer, has been supported by the
contracting of long and short-term loans, which have been repaid using the cash flows generated by the operation of the
subsidianes.
Historically, Orbia s credit requirements have driven by acquisition oppoRunities rather than normal operational factors.
That growth strategy has changed under the current management team that is focused on organic growth opportunities.
It has been the Company s policy to reduce its leverage levels once it has utili ed its credit to to maintain its net debt to
EBITDA ratio of approximately 2.Ox Net Debt / EBITDA, to protect the roup s position in potential future recessionary
or lower growth cycles. At the end of the 2021 financial year, this ratio stood at 1.34 times.
As of December 31, 2021, the Company s future interest-bearing long-term debt payment obligations, net of related
placement expenses, are as follows:
Payable during-
2022 $240
2023 25
2024 38
zozs and thereafter z�n
3 280
Orbia s treasury function has maintained the policy of maintaining sufficient liquidity to guarantee the necessary financial
flexibility to commit to strategic growth pro ects at the overall Orbia tevel.
Due to the nature of its operations, Orbia and its subsidiaries maintain bank and investment accounts in both local
currencies, for the countnes where it has operations, as well as in U.S. dotlars.
Both the Company and its subsidianes have no relevant tax debts as of December 31, 2021.
Orbia s net outstanding debt as of December 31, 2021 was $2,738 million.
Short-term indebtedness
As of December 31, 2021. Orbia has access to revolving lines of credit with an undrawn balance of $1,000 mdlion.
As of the date of this Annual Report, the Company has uncommitted short-term lines of credit with several banks, which
are mainly used to improve its working capital. Credit lines include short-term financing lines and letters of credit. among
others, consisting mainly of letters of credit for payment with raw material suppliers.
Orbia s short-term debt represents $240 million at the end of fiscal year 2021.
Financial indebtedness
The table below presents selected infortnation regarding the Company s outstanding indebtedness as of December 31
of the most recent three fiscal years.
Attachment I: Description of the Applicant Company Page 130 of 204
Attachment 1_Description of the Applicant Company
Summary of loan agreements denominated in U.S. dollars, euros and other currencies: 2021
Issuance of a 30.year Intemational Bond for $750 million, beanng semiannual mterest at a fixed
rate of 5.875%. The toan principal is repayable in a single installment upon maturity in September $750
2044.
Issuance of a 10.year Intemational Bond for $750 million, bearing semi-annual Interest at a fixed
rate of 4.875°h. The loan principal is repayable in a single installment upon maturiry in September -
2022. This loan was fulty repaid in September 2021.
Issuance of a 14year Intema6onal Bond for $500 million, bearing semi-annual inlerest at a fixed
rate of 4.00°h. The loan principal is repayable in a single installment upon maturity in October 500
2027.
Issuance of a 30.year Intemational Bond for $500 million, bearing semi-annual interesl at a fixed
rale of 5.50%. The loan principal is repayable in a single installment upon maturily in January 500
2048.
Issuance of a 30.year Intemational Bond for 3400 million, bearing semi-annual interest at a fixed
rate of 6.75%. The loan principal is repayable in a single installment upon maturiry in Seplember 400
2042.
Issuance of a 5-year Intema6onal Bond for $600 million, bearing semi-annual interest at a fixed 600
rate of 1.875%. The loan prindpal is repayable in a single installment upon maturily in May 2026.
Issuance of a 10-year Intemational Bond for a500 million, bearing semi-annual inlerest at a fixed 500
rate of 2.875%. The loan principal is repayable in a single installment upon maturiry in May 2031.
Issuance of Commerciat Paper Program for up to 750 million through the issuance of notes
with maturity less than one year. As of December 31, noles have been issued for 101 million 115
wilh maturity in March 2022.
Bank of England
Issuance of Commercial Paper far 300 million. The loan s discount rate is 0.60%, and malured _
on May 18, 2021.
Rabobank
Syear bank loan for $75 million, bearing quarterty interest at a variable rate (1-month LIBOR 50
7.85%) The loan principal is repayable quarterly, and matures in March 2024.
IFC
Bank loan for a40 million, bearing interest at a variable rate (1-month LIBOR 1.95%). The loan 29
malures on June 28, 2024.
Bank loan for 1,520 million Indian rupees, bearing interesl at a fixed rate of 8.3275%. The loan ZO
matures on June 15, 2029.
Bank loan for 107 million Turkish lira, bearing interest at a fixed rate of 16.45°Io. The loan matures 6
on June 15, 2024.
MUF
5-year bank loan for $50 million, bearing quarterly interest at a variable rale (3-monlh LIBOR
2.00%) The loan principal is repayable quarteriy, and matures on March 25, 2024. This loan was '
fully repaid in March 2021.
Scotiabank
7-year bank loan for E200 million, bearing quarteAy interest at a variable rate (1-month LIBOR
0.496%). The loan principal is repayable in a single installment upan matunry. The Entiry repaid
$49 million in December 2019. The loan was refinanced by changing the maturiry date to June "
2020 and with a new variable rate (1-month LIBOR 0.35%) This loan was repaid in full in June
2020.
Other 55
exican peso denominated loans:
10.year strudured note for 3,000 millian, bearing semi-annual interest at a fixed rate of 8.12%.
The loan principal is repayable in a single installment upon maturity in March 2022. This loan was
fully repaid in June 2021.
Bancomext
Term loans for 3,000 million and 69,443,000, bearing quaAeAy interest at the TIIE rate 0.825 %
and TIIE rate 0.71 %, respectively. The loan prindpal is repayable on a semi-annuai basis, from "
September 2017 to March 2021.
2020 2019
$750 $750
750 750
500 500
500 500
400 400
409
60 70
40 _
15
39 46
151
38 42
150 159
15 49
Attachment I: Description of the Applicant Company Page 131 of 204
Attachment 1_Description of the Applicant Company
Summary of loan agreemenffi denominated in U.S. dollars, euros and other currencies: 2021
Citibanamex
6-monlh bank loan for 1,566 million, bearing monthly interest at a variable rate (28-day TIIE _
0.15 %) The loan principal was repaid in a single installment upon maturily in May 2020.
BBVA Bancomer
6month promissory note for 1,000 million Mexican pesos, bearing monthly interest at a variable
rate (28-day TIIE 0.55%). The note � principal is repayable in a singie installment upon maturiy 49
in June 2022.
Less - Bank loans and current portion of long-term debt
Less - Debt issue costs
3,573
(240)
i`.�)
3,280
Some of the Company s outstanding debt is sub �ct to certain covenants which are outlined below.
2020 2019
83
3,666 3,501
(495) (322)
(40) (50)
3,131 3,129
Positive Covenanfs Negative Cove�anb Cauaes of Early ;:aturity
Deliver periodic financial information and Do not modify the predominanl line of Failure to pay principal and/or interest
infortnation on relevant events business
Simultaneously wilh each delivery of Nol to merge or liquidate, ar sell Deliver false or incorred relevant
financial stalements, issue a ceAificate by impoAant assets except that, at the time infortnaUon
the Company signed by a financial officer of this and immediately afler it is applied,
certifying that no default has occurted in lhere is no Defaull and that lhe Issuer
the contrads subsists as a co oration.
Issue a document by the Company signed Neilher the Company nor any of its If the early malurity of any instrument or
by a finandal officer when it becomes Subsidiaries may carty out sale and conVact is dedared ihat evidences, or
aware of the filing or commencemenl of leaseback operations, except for derives in, a debt of lhe Issuer (or
any action, lawsuit or praceeding by, or temporary term leases, inGuding any subsidiaries) that, individually or as a
before, any arbitralor or govemment renewal thereof, of no more than three whole, amounts to an amount equivalent
authority against or that affects a years, and with the exception of leases in any curtency to at least US530 million
company of lhe Issuer that is reasonably between lhe Company and a Subsidiary. per a later period greater than 30 (fhirty)
expected to result in a Material Effecl or behveen Subsidiaries) unless the net Business Days
proceeds from the sale and leaseback is
at least equal to the fair value of the
property.
Preserve, renew and maintain in full force Do not constilute encumbrances except If the Company or any of its impoAant
and effect its legal existence and the for permitted encumbrances subsidiaries initiates a process of
necessary pertnils to carty out ils insolvency or bankruptcy and that
operations subsists more than 60 days
Use lhe funds for the agreed destination No company will pay dividends when Failure to comply in an amount greater
lhere is an Event of Default, or when such than $50 million in the payment of
payment triggers one. principal or interest on a debt
Be up to date wifh yaur labor and fiscal Do nol enter into operations with Failure lo comply wilh any obligation to do
obligations, inGuding the payment of a(filiates unless they are in market terms or not to do in the conesponding contracl
taxes. or in ceAain exceptions. or insUument
Maintain a pari passu payment prioriry Not modify its shareholding struGure in If lhe Company does nat pay the fees of
with resped to other contraded debts such a way that it implies that the current the Mexican Instilute of Sodal Security,
ma Oriry shareholders of the bortower no Instilute of the National Fund for Workers
longer control 51% (fifly-one percenl) of Housing (in Mexico) or Retirement
the shares representing the share capital Savings System (in Mexico) in an amount
of lhe bortower. realer lhan $50 million
Maintain register and account books in If a change of control occurs
which the complete and correcl entries
are of all transadions related lo their
business and adivilies
Compliance with applicable legislation Acceleration of other debt for more than
$50 million
Attachment I: Description of the Applicant Company Page 132 of 204
Attachment 1_Description of the Applicant Company
PoslUve Covenanffi Negative Covenanffi Ceuses of Early atuNty
The Issuer will keep its assets in good if a udgment is entered against the
condilion to carty out its operations, will Company that imposes the payment of an
insure them and will comply wilh the amount greater than $50 million and that
necessary payments to the different subsists more lhan 30 days
insurers.
If any of the obligors sues the banks for
the invalidiry of the credit
If the Company or any material subsidiary
is unable to pay its debls
Do not allow the personnel designated by
the bank to carty oul inspections of ils
records in order to detertnine compliance
with the obli ations
The Company is in compliance with all its covenants as of the date of this Report.
Additionally, some of Orbia s financial instruments inGude other restrictions inGuding the following:
a) Certain restrictions for the existence of new liens.
b) Maintain a consolidated interest coverage ratio no greater than 3.0 times.
c) Maintain a ratio of net debt to earnings before interest, taxes. depreciation and amorti ation of around 2.0 times.
d) Ensure and maintain property, machinery and equipment in good operating conditions.
e) Comply with all applicable laws, rules, regulations and provisions.
The Company has assumed the obligations of the companies acquired under the financing operations, as a result of
the mergers belween them and the Company.
In the last three fiscal years, the securities that the Company has registered in the Registry have not undergone
significant changes in the rights granted to their holders.
The Senior Notes or International Bonds issued in the years 2021, 2012, 2014 and 2017, establish restrictions on the
encumbrance or mortgage of properties, assets or securities of the Issuer or its subsidiaries they also establish
restrictions for the sale and subsequent lease of assets relevant to the operation of the business (except temporarily)
likewise, the tertns of the Senior Notes stipulate limitalions to the consolidation, merger or transfer of assets of the
Issuer.
Hedgtng of forelgn currency obllgaUons
Orbia is exposed to market, operational and financial nsks derived from the use of financial instruments such as interest
rate, credit, liquidity and foreign exchange risk, which are managed centrally. The Board of Directors establishes and
monitors the policies and procedures to measure and manage these risks.
Exchange nsk management - The Company carries out transactions denominated in foreign currency consequenUy,
it is exposed to Fluctuations in the exchange rate, which are managed within the parameters of the approved policies
using, where appropriate, forward exchange rate contracts, when they are considered effective.
The book values of the monetary assets and liabilities denominated in foreign currency to which the Entity is mainly
exposed, at the end of the repoAing period, are as foliows.
Assets Liabllitles
2021 2020 2019 � 2021 2020 2078
Euros 217 197
Bra Ilian real 623 752
Mexican pesos 2,789 2,029
Colombian pesos 365,372 288,536
Sterting pounds 79 93
Foreign cunenaes expressed m mAlions
150
408
1,817
230,941
108
1,301
358
6,560
475,322
114
1.154
416
6,347
219,561
127
1,360
243
6,854
186,266
157
• Instruments used
The Company subscribes, on a case by case basis, a variery of derivaGve financial instruments to manage its exposure
to foreign exchange risk and interest rates, and ensures that no derivative instrument can be considered speculaGve.
Orbia utili es the following instruments:
Attachment I: Description of the Applicant Company Page 133 of 204
Attachment 1_Description of the Applicant Company
Principal Only-Swaps Contrects - In accordance with currency swap contracts, the Company agrees to exchange
Oollar-Euro cash flows of the principal and a fixed rate in dollars, established in said contracts, which allow the Entity to
mitigate the risk of vanations in exchange rates due to the exposure generated by its investment in euros due to the
acquisition of its subsidianes in Europe Wavin and Vestolit.
Cunency Swaps Contracts (Cross Currency Swaps) — According to the currency swap contracts. Orbia agrees to
exchange Peso-Dollar flows calculated on the amounts of the notional amounts and the interest established in said
contracts, to cover the exposure of its bank debt and in stock certificates in pesos.
Interest rate swap agreements - In accordance with the interest rate swap agreements that cover bank debt, the Entity
agrees to exchange a variable interest rate for a fixed interest rate.
Forwards conbacts and Exchange rate forwards and options — Orbia enters into Forwards and Exchange rate
options in different currencies other than its functional currency in order to hedge the foreign exchange exposure in
balance sheet items and results. The hedged items other than the Entity s functional currency are mainly denominated
in: Euro (EUR), Pounds ( BP), Israeli Shekel (ILS), Indian Rupee (INR), South Afncan Rand ( AR) and Turkish Lira
(TRY), among others. These contracts have a maturity period of less than one year.
Orbia is an entity whose functional currency is the US dollar. Orbia has issued: debt in Euro Commercial Paper for 101
million pounds maturing in March 2022.
The following financiai instruments have been formally designated as hedging transactions for accounting purposes, as
follows:
Swaps:
• 5 Principal Only-Swaps U.S dollar-Euro, designated as hedging relationships on a net investment for
subsidiaries in Europe.
• 1 Cross Currency Swap U.S dollar- MXN, to hedge bank debt exposure in Mexican pesos.
• 1 Interest Rate Swap in U.S dollar, to exchange variable interest rate for a fixed interest rate.
Forwards:
• As of December 31, 2021, the Entity has 107 active forward contracts.
Orbia has detertnined that its hedging strategy is highly effective as of December 31, 2021, 2020 and 2019. The Entity
uses the tatio analysis method using the hypothetical derivative model to simulate the behavior of the hedged item, in
which the changes in the fair value of the hedging instruments are compared with the changes in the fair value of the
hypothetical derivative that would result in a pertect hedge of the hedged item.
As of December 31, 2021, 2020 and 2019, the fair value of the Foreign Exchange Swaps represents a liability of $48
million, $102 million and $79 million, respectively. Changes in the fair value of these swap contracts were recogni ed
in other comprehensive income and as gains (losses) on foreign exchange transactions.
See Note 12. c of the audited consolidated financial statements inGuded in the Appendices for further detail.
• Hedging or trading strategies implemented
Due to its activities in the national and intemational spheres, the Company is exposed to risks of foreign exchange
fluctuations, volatility of prices of inputs from the chemical industry, as well as financial risks related to the financing of
its pro ects.
The Issuers policy is to use certain hedges that ailow it to mitigate the volatility of the prices of certain raw materials
and interest rate and exchange rate risks in financial operations, all of them related to its business.
Derivatives are initially recogni ed at fair value on the date the derivative contract is signed and are subsequently
measured at fair value at the end of the reporting period. The Company designates certain derivatives either as hedges
of fair value, of recogni ed assets or liabilities or firtn commitments (fair value hedges), hedges of highly probable
forecast transactions, or hedges of foreign currency risk of firtn commitments (hedges of cash Flows), or hedges of the
net investment in a foreign operation.
Note 11 of the Consolidated and Audited Financial Statements included in Section 7, Annexes of this Report, includes
detaits on the fair value of the derivative instruments used for hedging purposes.
Attachment I: Description of the Applicant Company Page 134 of 204
Attachment 1_Description of the Applicant Company
Lease flnancial liabllities
The folloHnng tables shows lease activity for the previous two years:
Lease Ilabllftles
Balance of the lease liability as of anuary 1, 2019
Liabilities from new leases
Cash oulflow for lease payments
Eifed of currenq wnversion
Balance of the lease liability as of December 31, 2020
Liabilities from new leases
Provisions
Cash ouHlows for lease payments
Effect of currency conversion
Balance of the lease liability as of December 31, 2021
ShoA-term lease liabilily
Long.tertn lease liabilily
Figures m millions
Amount
346
83
(89)
6
345
141
���)
�9�)
���)
367
86
281
Leases underlFRS 18 CLeases
atu►ity analysis
2021
$86
55
42
43
141
$367
2020
$82
53
42
35
132
$345
2019
$78
56
41
32
138
$346
One year
Two years
Three years
Four years
more than fouryears
Figures in millions
The Company also recogni ed the follow expenses related to its leases in the past lwo fiscal years:
Inlerest expense for lease liabililies
Expense related to short-tertn leases
Expense relatedtolow-value asset
leases
Figures �n millions
2021 2020
$18 $14
31 25
1 1
$49 $40
d) anagement s Discussion of the Results of Operation and Financial Situation of the Issuer
The following discussion is based on and should be read in con unction with Orbia s audited consolidated financial
statements and notes thereto, which have been prepared in accordance with IFRS. This management analysis of the
Company s results of operations and financial situation must be read in con unction with its audited consolidated
financial statements for the fiscal years ended December 31, 2021, 2020 and 2019, and their respective explanatory
notes inGuded in this Annual RepoR, as well as with the information inGuded in the sections "See Section 3, "Financial
Information'; subsection a, "Selected Financial Information'; of this Annual Report.
This section contains statements regarding future or anticipated events, which are sub ect to various risks. Actual results
could differ materially from the results discussed in this section in the context of future events for various reasons,
including those factors indicated in "Section 1, "General Information, item c, "Risk Factors"of this Annual Report.
Attachment I: Description of the Applicant Company Page 135 of 204
Attachment 1_Description of the Applicant Company
The financial figures contained in this Section have been prepared in accordance with International Financial Reporting
Standards ( IFRS or IFRS ), with the US dotlar as the functional and reporting currency. Unless othervvise specified,
figures are reported in millions.
Figures and percentages have been rounded and may therefore not add arithmetically.
i. Operating Results
2021 Fiscal Year. Conso/idated Income Statement
During fiscal year 2021 Orbia achieved solid financial results with record numbers in sales and EBITDA. The high levels
of performance were achieved in accordance with the corporate purpose of promoting life around the wo�ld, in an
economic environment still affected by the pandemic and uncertainty. The Company established its focus on execution
as well as organic growth and through the acquisitions of its business groups. The outstanding financial results were
achieved thanks to the dedication pf the 22,000 employees to add value to Orbia s clients and shareholders.
In addition to record highs in revenues and cash flows, Orbia maintained a healthy balance sheet and rewarded its
shareholders through dividends and share buybacks.
Consolidated statements of income
(figures in millions oi US Dollars)
Continuous operations.
Net sales
Cost of sales
ross profit
Selling and development expenses
Administration expenses
Other expenses, Net
Exchange gain
Exchange loss
Interest expenses
Interest inwme
Change in fair value of redeemable noncontrolling interest
Monetary position profit
PaAicipation in the results of associates
Eamings before income taues
Income taxes
Income from continuing operations
Discontinuous operafions:
Income (loss) from discontinued aperations, Nel
ConsoUdated netincomeforthe year
Consolidated net income for lhe year:
Controlling interesf
Noncontrolling interest
Net Sales
2027 2020 VaNatlon
8,763
6,156
2,627
573
600
6
(�$)
110
248
(16)
28
4
(�)
1.154
381
773
6.420
4,651
1,769
507
508
33
(102)
104
239
(10)
10
1
(�)
479
151
328
36.8
32.3%
48.5
13.0%
18.0%
(82.5 % )
(23.3 % )
5.9 %
3.9%
54.5%
186.9%
182.1 %
68.7 %
140.8%
152.8 k
135.2°k
(0) (10)
772 319
657 195
115 124
772 319
(96.1 %)
142.2
237.5%
(7.3%)
142.2
Orbia s revenues grew 37% dunng 2021, reflecting the recovery of ihe global economy and a growing demand for the
Company s products. The main reasons for the year-on-year increase include the strong resuits of Polymer Solutions
due to higher PVC prices and Building Infrastructure which benefited from higher demand.
By region, the sales growth in Europe was 39%, North America was 40% and South Amenca was 5696,
Attachment I: Description of the Applicant Company Page 136 of 204
Attachment 1_Description of the Applicant Company
The revenue change by business group was as follows
• Polymer Solutions: 2021 sales grew 58% compared to the pnor year to $3,438 million.
• Fluorinated Solutions: 2021 sales grew 7% compared to the pnor year to $744 million.
• Building Infrastructure: 2021 sales grew 41% compared to the prior year to $2,922 million.
• Data Communications: 2021 sales grew 36% compared to the prior year to $994 million.
• Precision Agriculture: 2021 sales grew 16% compared to the pnor year to $1,126 million.
Cost of sales
The cost of sales grew 32% in 2021 to $6,156 million, due mainly to the higher cost of raw materials and higher volumes
sold, and, to a lesser extent, to increases in freight and labor costs in all business groups.
Gross proFt
Due to the significant increase in revenue only partially offset by the smaller increase in cost of sales and operating
expenses, Orbia recorded an operating profit of $1,449 million in 2021 which was 101% higher than the prioryear, while
operating margin grew from 11.2% in 2020 to 16.5% in 2021.
EBITDA
During 2021, EBITDA of $2,047 million increased 55% compared to 2020 and EBITDA margin increased approximately
280 basis points to 23.3%. The increase in EBITDA during 2021 was mainly due to Polymer Solutions and Building
Infrastructure.
Net flnancial expense and variation In fhe exchange rate
The net financial cost of 2021 was $265 million, an increase of 15% compared to 2020, derived from foreign exchange
losses related to the depreciation of the Turkish Lira, the Mexican Peso and the Colombian Peso, as well as the impact
of the valuation of the put options held by the minority shareholders of the operating entities of Netafim and Shakun
Polymers. Additionally, the increase inGudes a non-recurring charge associated with early debt withdrawal during the
year.
Income tax
During 2021, taxes were $381 million, an increase of 153% compared to 2020. The full-year tax rate was 33.0%,
representing an increase of approximately 160 basis points compared to 2020. The increase in taxes and the tax rate,
are mainly due to the impairment of certain tax assets, an increase in profit before taxes, and the geographic mix of
profits. In addition to these factors, for the full year, foreign exchange losses incurred in Mexico are included in the
Company s tax calculations, as well as inflationary ad ustments in tax profit in Mexico.
Ma%ority net income
During 2021, the Company s controlling net income increased by 238% compared to 2020 to reach $657 million. The
ma ority net margin incomed increased from 3°ti in 2020 to 7.5°k in 2021. Both increases are driven by the movements
in the other mcome statement line items discussed above.
Fiscal Year 2020. Consolidated Operating Results
Amid the global impact of the COVID-19 pandemic, Orbia s business model demonstrated its resilience, achieving high
profitability and robust free cash flow generation.
The Company s consolidated statements of income for 2020 compared to 2019 are included below.
Attachment I: Description of the Applicant Company Page 137 of 204
Attachment 1_Description of the Applicant Company
Consolidated statements of income
(Figures In mllllons o( US Dollars)
Continuous operations
Net sales
Cost of sales
ross profit
Selling and development expenses
Administration expenses
Olher expenses, Net
Exchange gain
Exchange loss
Interesl expenses
Interest income
Change in fair value of redeemabte non-controlling interest
Monetary position profit
Participation in the results of associates
Eamings before income taxes
Income taxes
2020 2019
6,420
4,651
1,769
507
508
33
(102)
104
239
(10)
10
1
��)
479
151
328
Variatlon
c8-+�r
(9.1%)
(5.6%)
(5.9°h)
8.6%
(22.9%)
105.8%
53.4%
(12.3 % )
(28.7%)
(47.5 % )
(1051.0%)
(79.1 % )
(10.0%)
(26.6%)
0.4%
Income from conlinuing operations
Disconfinuous operafions:
Income (loss) fram discontinued operations, Net
Consalidated net income for the year
Consolidaled net income for the year:
Controlling interest
noncontrolling interest
Net Sales
6,987
5,114
7,873
539
468
43
(49)
68
272
(14)
18
(0)
(4)
533
206
327
(10) (0)
379 327
195 207
124 120
319 327
8925.2 %
(2.5 % )
(5.8%)
3.3%
(2.5%)
Orbia s net sales in 2020 were $6.42 billion. Revenues decreased 8% compared to the previous year, due to the
negative impact of the COVID-19 pandemic, mainly in the second quarter. which was not fuily offset by the strong
rebound in the second half of the year.
The revenue change by business group was as follows:
• Polymer Solutions: Net sales were $2,171 million, down 7% from 2019, due to lower sales volume as a result of the
pandemic and the availability of VCM, partially offset by higher derivatives volume, mainly in the cleaning industry.
• Fluorinated Solutions: Net sales totaled $698 million, down 13% from 2019, as a result of the impact of illegal imports
in the refrigerant business to Europe and the impact of COVID -19 on global volumes and prices.
• Building Infrastructure: Revenues from this business group fell 8% to $2,071 million due to the impact of the
COVID-19 pandemic in the second quarter, which was partially offset by the recovery in the second half of the year.
• Data Communications: Net sales decreased 2% to $732 million, reflecting pro ect delays due to COVID-19 primarily
m Europe, India, the Middle East and Latin America, partially offset by increased sales in USA and Canada.
• Precision Agriculture: Sales of $972 million, down 9% from 2019, mainly due to the impact of COVID, especially
dunng the first half of the year, which was partially offset by strong growth in the US, Middle East, China and
Australia in the remainder of the year.
Attachment I: Description of the Applicant Company Page 138 of 204
Attachment 1_Description of the Applicant Company
Cost of sales
Cost of sales decreased from $5,114 million in 2019 to $4,651 million in 2020 due mainly to the impact of lower sales
as result of the COVID-19 pandemic. As a percentage of sales, cost of sales decreased from 73.2% in 2019 to 72.5%
in 2020 or a reduction of 74 basis points as a result of additional cost containment efforts.
During 2021, the Company reclassified certain amounts related to Direct Storage and Shipping of approximately $78
million in 2020 and $85 million in 2019, from the selling, general and administrative expense account to cost of sales.
Gross pro�t
ross profit for 2020 decreased to $1,769 million when compared to the figure of $1,873 miliion in 2019, which
represented a decrease of 5.6%.
Operating expenses
Operating expenses remained relatively flat in 2020 vs. 2019.
EBITDA
In 2020, EBITDA totaled $1,318 million, down 3% compared to 2019 due to a sustained recovery starting in Q3 led by
Vestolit and Wavin, which was complemented with cost management initiatives across ali businesses. EBITDA margin
increased 100 basis points, reaching 20.5%.
Net Hnancial expense and variation in the exchange rate
In 2020, net financing costs decreased 16% to $231 million. This reduction was mainly due to a more efficient financing
strategy in terms of lowercosts, and leverage at the end of 2020 and a significant reduction in interest rates. Additionally,
Orbia had additional non-recurring charges related to its lines of credit in 2010 that did not recur in 2020.
/ncome tax
2020 income taxes were $151 million, down from $206 million in 2019.
Majoilty net lncome
In 2020, Orbia s net income decreased 5.8% to $195 million while the maarity net margin increased 8 basis points to
3.0%.
Operating results by business group
The following tables show the results of each of our business groups and the reconciliation of these with our
consolidated results of operations for the periods mentioned below.
Year ended December 31, 2021
Cost of OperaUng
Business roup Net sales S91e$ ross profit expenses EBITDA
PolymerSolutions 3,438 2,344 1,094 218 1,134
Fluorinated Solutions 744 473 271 88 244
Building Infrastructure 2,922 2,183 739 456 424
Data Communicalions 994 765 229 127 134
Precision Agriculture 1,126 804 322 275 746
Controlling Entily 215 106 109 133 (18)
Eliminations (656) (519) (136) (119) (17)
Total 8,783 6,156 2,627 1,178 2,047
Attachment I: Description of the Applicant Company Page 139 of 204
Attachment 1_Description of the Applicant Company
Year ended December 37, 2020
Business roup Net sales Cost ot ross proflt Operatlng EBITDA
sales expenses
PolymerSolutions 2,171 1,764 406 182 462
Fluorinated Solutions 698 407 291 98 254
Building Infrastructure 2,071 1,565 506 380 261
Data Communications 732 498 235 94 173
Precision Agriculture 972 643 329 240 181
Controlling Entity 184 109 75 128 (14)
Eliminations (408) (334) (74) (74) -
Total 6,420 4,651 1,769 7,048 1,318
Business roup
Polymer Solutions
Fluorinated Solutions
Building Infrastrudure
Data Communicalions
Precision Agnculture
Controlling Entiry
Eliminations
Total
Year ended December 31, 2019
Cost of OperaBng
Net sales 881eS ross pro8t expenses
2,334 1,900 434 224
805 434 371 104
2,239 1,718 520 379
749 544 205 89
1,063 716 347 255
97 (1) 98 102
�soo� ��sa� ��02� ��02>
6,987 5,114 1,873 1,050
Polvmer Solutions Business rouq
Polymer Solutlons ���
Net sales
Cost of sales
ross profit
Operating expenses
EBITDA
(1) Figures in Mdlions of Dollars
Net sa/es
Year ended December 31,
2021 2020
3,438 2,171
2,344 1.764
1,094 406
218 182
1.134 462
EBITDA
443
325
272
146
179
1,365
2021 sales in Polymer Solutions grew 589t, to $3,438 million. Polymer Solutions maintained PVC price leverage,
resulting from robust demand in the construction industry and a continued tight supply/demand environment. Sales
performance in key markets exceeded pre-pandemic levels, complemented by increased compounds pnces and the
inclusion of the ma onty interest of Shakun Polymers beginning in the second quarter of 2021.
Cost of sales
Polymer Solutions cost of sales increased 33%, from $1,764 million in fiscal year 2020 to $2,344 million in 2021, and i
decreased as a percentage of sales from 81% in 2020 to 68% in 2021, as sales prices outpaced the increase in raw
material costs.
Attachment I: Description of the Applicant Company Page 140 of 204
Attachment 1_Description of the Applicant Company
Gross proiJt
The gross profit of the business group increased 169% in 2021 to $1,094 million. while gross margin increased from
19% in 2020 to 32% in 2021 due to higher sales prices that outpaced the increase in raw material costs and higher
demand.
Operating expenses
In 2021, the business group s operating expenses increased 20% to $218 million due to higher incentives, however
decreased from S% as a percentage of sales to 6% in 2021 as the operating expenses did not outpace increases in
revenues.
EBITDA
Full year 2021 EBITDA of $1,134 million increased 145% and EBITDA margin increased 1,170 basis points to 33.0%
compared to 2020 driven by the robust sales growth discussed above.
Fluorinated Solutions Business roup
Year ended December 31,
Fluorinated Solutlons (. .oura) �'� 2021 2020
Net sales 744 698
Cost of sales 473 407
ross profit 271 291
Operating expenses 88 98
EBITDA 244 254
(1) Figures m Milhons of Dollars
Net sales
Fluorinated Solutions revenues for 2021 were $744 mdlion, an increase of 7% compared to fiscai 2020. The growth in
sales re8ected an improvement in the product mix and prices of all product lines, especially in refrigerants, hydrofluoric
acid and metaliurgical grade Buorite.
Cost of sales
The cost of sales of this business group increased 16°h in 2021 from $407 million in 2020 to $473 million in 2021. The
increase reFlected higher costs of raw materials and freight, as well as strategic investments to promote business growth.
In 2021, the cost increase exceeded the impact of higher p�ices and a more favorable product mix.
Gross profit
In 2021, the cost of sales increase exceeded the sales impact of higher prices and a more favorable product mix which
caused gross profit to decrease 7% to $271 million and the business groups operating margin to decrease from 42% in
2020 to 36% in 2021.
Operating expenses
Fluorinated Solutions operating expenses decreased 10% in 2021 to S88 million due to lower expenses related to
consulting and extemal services.
EBITDA
Fluorinated Solution s EBITDA decreased 4% to $244 million and EBITDA margin decreased approximately 360 basis
points to 32.9% compared to 2020, reFlecting the higher raw matenal and supply chain costs and strategic investments
to support the growth of the business.
Attachment I: Description of the Applicant Company Page 141 of 204
Attachment 1_Description of the Applicant Company
Buildinq Infrastructure Business roua
Building .. Infrastructure �'�
Net sales
Cost of sales
ross profit
Operating expenses
EBITDA
(1) Figures in Millions of Dollars
Year ended December 31,
2021 2020
2.922 2.071
2,183 1.565
739 506
456 380
424 261
Net sa/es
In 2021, Building Infrastructure sates were $2,922 miliion, representing growth of 41 % compared to the previous year,
The performance was in line with a more normali ed market environment, following a period of logistical disruptions and
product shortages eartier in the year. Sales volumes during the first half of the year were particularly strong as the
business benefited from being able to source PVC through the Polymer Solutions business during this period of raw
material shortages. The second half of the year saw a return to a more nortnali ed market environment, with increased
availability of PVC.
Cost of sa/es
For 2021, the cost of sales of the business group increased 39% to $2,183 million compared to $1,565 million in fiscal
year 2020 due mainly to higher raw material costs.
Gross pro�t
Building Infrastructure gross profit increased 46% to $739 million in 2021., whereas the gross margin of this business
group increased from 24% in 2020 to 25% in 2021 as the business group was able to increase sales volumes and
prices.
Operating expenses
Building Infrastructure operating expenses as a percentage of sales decreased from 18% in 2020 to 16% in 2021 as
the business group was able to manage costs during this period of sales growth.
EBITDA
2021 EBITDA of $424 million increased 63% and EBITDA margin increased approximately 190 basis points to 14.5%
compared to 2020, driven by the strong sales volumes and effective cost management measures discussed above.
Data Communications Business . roua
Year ended December 31,
Data Communicatlons �'� 2021 2020
Net sales 994 732
Cost of sales 765 498
ross profit 229 235
Operating expenses 127 94
EBITDA 134 173
(1) Figures in Millions ot Dollars
Net sa/es
Data Communications revenues increased 36% in 2021 to$994 million driven by sales growth in North Amenca and
Europe due to higher prices reflecting input cost increases. continued strong market demand, enhanced sales coverage
and new fiber deployment pro �cts.
Attachment I: Description of the Applicant Company Page 142 of 204
Attachment 1_Description of the Applicant Company
Cost of sales
Cost of sales increased 54% in 2021 to $765 million following histoncally low raw material prices in 2020.
Gross profit
Data Communications gross profit decreased 2% in 2021 to $229 million while the gross margin of the business group
decreased from 32% in 2020 to 23% in 2021 driven by the lag in pass-through of higher raw material costs, and an
unfavorable comparison to a historically low year for raw material cost.
Operating expenses
Data Communications operating expenses grew 35%to $127 million in line with the general sales growth of the business.
EBITDA
2021 EBITDA reflected the lag impact incurred during the first three quarters of the year, during which price ad ustments
were unable to fully offset the impact of cost increases. These results contrast with the extraordinary levels of the EBITDA
margin achieved during 2020, which were due to historically low prices in raw materials.
Precision Aqriculture Business roua
Year ended December 37,
Precision Agriculture �'� 2021 2020
Net sales 1,126 972
Cost of sales 804 643
ross profit 322 329
Operating expenses 275 240
EBITDA 146 181
(1) F�gures m Millions of Dollars
Net sales
Precision Agriculture s sales in 2021 increased 16% to $1,126 milllon, due to growing demand in most parts of the world,
with the exception of India, which continues to show weakness due to COVID-19. The recent acquisition of the business
group, akon Horticultural Pro ects, also contributed to the growth in sales.
Cost of sa/es
Cost of sales in 2021 increased 25% to $804 million due to an increase in raw material costs and freight expenses dunng
the year that was not passed through fully in customer prices.
Gross profit
As a result of the increased costs outpacing revenue growth, the Business roup s gross profit decreased by 2% during
2021 to $322 million while gross margin decreased from 34% in 2020 to 29% in 2021.
Operating expenses
Precision Agriculture operating expenses increased 15% to $275 million in 2021 commensurate with the growth in sales
and also impacted by non-recurting items including certain provisions recorded in India.
EBITDA
EBITDA was $146 million, decreasing 20% and EBITDA margin decreased 570 basis points to 13% compared to 2020
as the business experienced increasing raw material and transportation costs throughout the year, which have not yet
been fully reflected in selling prices. Additionally, EBITDA was impacted by approximately $26 million of one-time
charges related to a pro ect in Ethiopia and provisions recorded in India due to sustained pressure from COVID-19 and
decisions by local govemments to delay certain pro'�cts. Excluding non-recurring impacts, the EBITDA margin for the
year was 15.2%, representing a decrease of approximately 340 basis points compared to 2020.
Attachment I: Description of the Applicant Company Page 143 of 204
Attachment 1_Description of the Applicant Company
Year ended December 31, 2020, compared to year ended December 31, 2019
Polvmer Solutions Business roup
Year ended December 31,
PolymerSolutlons�'� 2020 2018
Net sales 2,171 2,334
Cost of sales 1,764 1,900
ross profit 406 434
Operating expenses �� 182 224
EBITDA 462 443
(7) Figures in Milhons ot Dollars
Net sales
In 2020, Polymer Solutions net sales were $2,171 million, a decrease of 7% compared to 2019, due to lower volume as
a result of the pandemic and the availability of VCM, partially offset by higher volume of Derivatives, mainly m the
cleaning products sector.
Cost of sales
Cost of sales decreased 7.1% to $1,764 million in fiscal year 2020, which was in line with the decrease in sales. Gross
pro�t
The gross profit of this business group as a percentage of sales remained consistent at approximately 19% in both 2020
and 2019.
Operating expenses
Operating expenses decreased 18.5% to $182 million in 2020, as a result of cost containment efforts in the business.
EBITDA
Polymer Solutions EBITDA was $462 million, increasing 436 compared to 2019. EBITDA margin was 21.3%, increasing
229 basis points, due to higher PVC margins, mainly in the last quaRer, as well as lower electricity costs.
Fluorinated Solutions Business rouo
Fluorinated SoluUons ( :oura) �'�
Net sales
Cost of sales
ross profit
Operating expenses jz�
EBITDA
(1) Figures in Millions of Dollars
Net sa/es
Year ended December 31,
2020 2018
698 805
407 434
291 371
98 104
254 325
In 2020, net sales totaled $698 million, down 13%, as a result of the impact of illegal imports on the refngerant business
in Europe and the impact of COVID-19 on global volumes and prices.
Cost of sales
The cost of sales of this business group decreased 6.335 in the year outpacing the decrease in sates despite significant
operational improvements.
Attachment I: Description of the Applicant Company Page 144 of 204
Attachment 1_Description of the Applicant Company
Gross profit
ross profit decreased 21.5"Ie in 2020 to $291 million due to the impact of lower net sales discussed above.
Operating expenses
The operating expenses of the Fluonnated Solutions decreased 6.1% dunng the year as a result of cost containment
measures in the business.
EBITDA
The 2020 EBITDA for Fluorinated Solutions was $254 million, a reduction of 22�k compared to the figure of $325 million
registered in the year 2019. The 2020 EBITDA margin was 36.4%, decreasing 389 basis points. Throughout the year,
significant operational improvements were made, and costs were managed in a manner to offset difficult market
conditions.
Buildinq Infrastructure Business roua
Building .. InfrasWcture
Net sales
Cost of sales
ross profit
Operating expenses
EBITDA
(i) Figures in M�Ilions ol Oo&ars
Net sa/es
Year ended Deeember 31,
2020 2019
2.071 2,239
1.565 1,718
506 520
380 379
261 272
Net revenues of $2.071 million decreased 8% on the back of severe COVID-19-related impacts in the second quaRer,
which partially reversed in the second half of 2020.
Cost of sales
Cost of sales decreased $153 million or 9%, generally in line with decrease in new sales. Additionally, the Company
reclassified certain amounts related to Direct Storage and Shipping for approximately $78 million in 2020 and $85 million
in 2019, from the selling, general and administrative expense account to cost of sales account.
Gross proBt
Building Infrastructure gross profit in 2020 decreased by 2.7°k due to lower sale as discussed above.
Operating expenses
Operating expenses remained relatively flat in 2020 when compared to 2019.
EBITDA
EBITDA totaled $261 million, decreasing 4%, while the margin stood was 12.6%, increasing 58 basis points. EBITDA
for the second half of 2020 was better than the previous year, due to cost savings, effective price management and the
continued change of the product mix towards value-added products.
Attachment I: Description of the Applicant Company Page 145 of 204
Attachment 1_Description of the Applicant Company
Data Communications Business roua
Data Communications �'�
Net sales
Cost of sales
ross profit
Operating expenses
EBITDA
(1) Figures m Millions ot Dollars
Year ended December 31,
2020 2019
732 749
498 544
235 205
94 89
173 146
Net sales
In 2020, net sales decreased 2% to $732 million, reflecting pro ect delays due to the effects of the pandemic in Europe,
India, the Middle East and Latin America, partially offset by increased sales in USA and Canada.
Cost of sales
During the first half of 2020, the prices of some raw materials decreased, which, in addition to the cost and expense
containment program implemented, helped reduce cost of sales 8.6%.
Gross profft
ross profit increased 15% driven by the reduction in the cost of sales.
Operating expenses
Data Communications operating expenses increased 6% to $94 million, which included non-cash writeoffs associated
with the footprint optimi ation initiative at this business.
EBITDA
2020 EBITDA of $173 million increased 19%, driven by a favorable product mix and lower raw material costs m the first
haif of the year. EBITDA margin of 23.7% expanded 381 basis points.
Precision Aqriculture Business roun
Precislon Agriculture
Net sales
Cost of sales
ross profit
Operating expenses
EBITDA
(1) Figures in Millions o( Dollare
Year ended December 31,
2020 2019
972 1 063
643 716
329 347
240 255
181 179
Net sales
In 2020 Precision Agriculture net sales totaled $972 million, for a decrease of 9%, mainly due to the impact of the COVID-
19 epidemic, especially during the first half of the year, which was partly offset by strong growth in the US, Middle East.
Africa, China and Australia.
Cost of sales
Cost of sales decreased 10% to $643 million due to the cost of some inputs decreasing in the first half of 2020,
Attachment I: Description of the Applicant Company Page 146 of 204
Attachment 1_Description of the Applicant Company
Gross proflt
The Precision Agriculture business generated a gross profit of $329 million m 2020, which represented a decrease of
5% driven by the negative impact of COVID-19 in the year 2019.
Operating expenses
Precision Agriculture achieved a 6% reduction in its operating expenses from $255 million in 2019 to $240 million in
2020.
EBITDA
EBITDA amounted to $181 million, increasing 1%, mainly driven by higher gross margins, reflecting commercial and
operational excellence initiatives, as well as lower operating expenses. The EBITDA margin was 18.6%, increasing by
178 basis points.
ii. Financial Condition of the Company, Liquidity and Capital Resources
Orbia continued to strengthen its balance sheet during 2021, generating free cash flow of $572 million during the year.
The Company s leverage ratio decreased from 2.09 times to 1.34 times, year over year.
Working capital increased by $479 million during the year, reflecting higher sales prices and increased inventory costs.
Throughout 2021, Orbia made CAPEX investments of $311 million, an increase of 36% compared to 2020.
The average maturity of the Companys debt is 14.8 years, while the average cost of debt is 4.1%. The next relevant
expiration for Orbia is in 2026.
Orbia paid back $365 million to shareholders, through dividends of $199 million and share repurchases of $166 million.
In accordance with the approval granted by its shareholders, the Company has canceled 90 million of its shares in treasury
during the year 2021.
In 2021 Orbia decreased its loan balance by $94 million when compared to the prior year.
In fiscal year 2021 Orbia covered its liquidity needs using its generation of cash Flows from ordinary business operations,
financing through loans and the issuance of debt securities in international markets.
Liquldity Ratlos 2021 2020 2019
Current assets / short-term liabilities 7.41 1.22 1.11
Current assets - inventories / shoA-lerm liabili6es 0.92 0.89 0.78
Current assets / total liabilities 0.52 0.45 0.41
The Company has financing needs mainly related to the following ob ectives:
• Working capital
• Payment of interest, from time to time, related to the current debt
• Capital investments related to its operations, construction of new plants, maintenance of facilities and
expansion of plants
• Funds required for the acquisition of companies that align with Orbia 5 strategy
• Payment of dividends and
• Repurchase of shares.
As descnbed above, Orbia s main sources of liquidity have histoncally been the following:
• Cash generated from the Company s operations
• Cash from short, medium and long term financing
• Capital increases and
• Disposal of assets, property or business of the Company.
Planned sources and uses of cash
At the close of 2021, Orbia has access to a committed Revolving Line of Credit with an available balance of $1,000.
Additionally, the Company has a Commercial Paper Program for up to 750 million, of which as of December 31, 2021
it had drawn down 101 million, for which it can issue 649 million with maturities of less than one year.
Attachment I: Description of the Applicant Company Page 147 of 204
Attachment 1_Description of the Applicant Company
Cash Flows
Cash flows generated by (used in) operating activities
In 2021, 2020 and 2019, Orbias cash flows from operating activities were $1,235, $1,093 and $1,083 million,
respectively.
In 2021, cash flows generated by operati�g activities derived mainly from:
• $1,752 million of income before income taxes, depreciation and amorti ation
• A reduction of $563 million due to net changes in working capital
• $248 million for interest paid and
• An increase of $202 million in other items.
In 2020, cash flows generated by operating activities derived mainly from:
• $1,077 million of income before income taxes, depreciation and amorti ation
• An increase of $92 million due to net changes in working capital
• $239 million interest paid and
• An increase of $314 million in other items.
In 2019, cash flows generated by operating activities derived mainly from:
• $1,075 million of income before income taues, depreciation and amorti ation
• A decrease of $(136) million due to net changes in working capital
• $272 million interest paid end
• An increase of $128 million in other items.
Cash flows generated by (used in) investing activities
In 2021, 2020 and 2019, cash flows used in investing activities were $(344) million, $(219) million and $(274) million.
respectively.
In 2021, the cash flows generated by (used in) investing activities were:
• Acquisition of subsidiaries, net of cash acquired $(48) million
• The acquisition of machinery and equipment for the amount of $(286) million
• Investment in other assets and intangibles $(27) million and
• The sale of machinery and equipment for the amount of $18 million.
In 2020, cash flows generated by (used in) investing ac6vities consisted of:
• The acquisition of machinery and equipment for the amount of $(204) million
• Investment in other assets and intangibtes S(31) million
• The sale of machinery and equipment for the amount of $21 million and
• The acquisition of participation in associate $(4) million.
In 2019, cash flows generated by (used in) investing activities consisted of:
• The acquisition of machinery and equipment for the amount of $(261) million
• Investment in other assets and intangibles $(36) million and
• The sale of machinery and equipment for the amount of $23 million.
Cash flows generated by (used in) flnancing activities
In 2021, 2020 and 2019, cash flows generated by (used in) our financing activities were $(962) million, $(562) mdlion
and $(894) million, respectiveiy.
In 2021, our main uses of cash flows generated by (used in) financing activities consisted of:
• $(271) million in interest payments
• $(97) million for lease payments
Attachment I: Description of the Applicant Company Page 148 of 204
Attachment 1_Description of the Applicant Company
• $(200) million in dividend payments
• $(135) million for distribution to non-controlling interest in capital of subsidiary
• $(166) million for the acquisition of own shares and
• $(94) million in payment amounts net of credits.
In 2020, the main uses of cash flows generated by (used in) financing activities consisted of
• $(231) million in interest payments
• $(89) million for lease payments
• $(230) million in dividend payments
• $(142) million for distribution to non-controlling interest in capital of subsidiary
• $(42) million for the purchase of shares and
• $173 million in net amount of loans obtained.
In 2019, the main uses of cash flows generated by (used in) financing activities consisted of:
• $(276) million in interest payments
• $(92) million for lease payments
• $(218) million in dividend payments
• $(151) million for distribution to non-controlling interest in capital of subsidiary
• $(40) million for the purchase of shares and
. $(117) million paid in net loan amounts.
Effect of the galn (/oss) on the exchange rate of our cash and cash equlvalents.
In 2021, 2020, and 2019 the effect of the foreign exchange gain (loss) on our cash and cash equivalents was $(22)
million, S(24) million, and $(29) million, respectively.
Contingent asset
As of December 31, 2021, there are no relevant Contingent Assets.
Contingent liabillty
From time to time, the Entity is a party to certain tegal matters, including those discussed below.
Natural Gas Distribution Maffer
On April 20, 2021, Dura-Line Corporation s natural gas distribution business stopped the shipment and sales of small
diameter natural gas distribution (N D) pipelines, defined as distribution pipelines. (N D) 1.5-inch and smaller, sold for
use primarily in the U�ited States, for the purpose of investigating a possible quality problem. This issue does not affect
larger diameter N D pipe (ie 2 inches or larger) or Dura-Line Datacom guide products.
The natural gas distribution business, now operated through PolyPipe LLC ( PolyPipe ), and its advisors have
conducted a comprehensive analysis of the issue. As part of that analysis, PolyPipe has determined that the affected
N D pipe had short, locali ed segments where the pipe walls thinned below specification. PolyPipe has further
determined that the problem occurred intermittently and estimates that it affected less than 1% of the smali diameter
N D pipe produced by Dura-Line at its plant in ainesville, Texas. PolyPipe has concluded that the issue would impact
the amount of time the affected pipe is expected to withstand constant intemal gas pressures over the course of its use
and that it would impair the performance of the affected pipe if the pipe were to be damaged. sub ected to axial load.
However, PolyPipe has had no reports of bugs, leaks, or other performance issues associated with this issue.
PolyPipe has informed its N D customers and relevant regulators and will continue to communicate and collaborate
Gosely with potentially affected parties and others as appropriate and necessary. Polypipe has resumed shipping and
selling small diameter N D pipe at its Envin, Tennessee facility with improved monitoring, production and quality
processes. PolyPipe is allowing its direct and indirect customers to retum potentially affected pipe for a refund.
PolyPipe has received compensation claims from certain direct and indirect customers for the costs associated with
addressing the problem, including the removal and repiacement of potentially affected installed pipe. PolyPipe may
receive additional claims for compensation in the future which may result in litigation and could give rise to potential
material liability.
Attachment I: Description of the Applicant Company Page 149 of 204
Attachment 1_Description of the Applicant Company
Wolkaite Project
Netafim Ltd. is currently involved in a government irrigation pro ect in the Tigray region of Ethiopia called (the Wolkaite
pro ect), which is in an advanced stage. The client is the Ethiopian Sugar Corporation (ESC). Due to civil unrest, a state
of emergency has been in effect in the region since November 4, 2020.
In late November 2020, Netafim noGfied ESC, the Lender, insurers and other stakeholders that a force ma eure event
had occurred as a result of the ongoing civil unrest, suspending Netafim s obligations under the agreement. draft.
Under the onginal pro ect agreement, if force ma eure conditions continue for an extended period, each party would
have the right to terminate the agreement.
On July 1, 2021, the parties signed a Memorandum of Understanding (the MOU) that suspended until December 31,
2021, the nght to cancel the pro ect agreement due to a force ma eure event. in progress.
The MOU also establishes a period for ihe parties to assess the status of the pro ect and try to reach an agreement to
resume the pro ect.
Currently, all parties are cooperating and monitoring the situation. In addition to potential costs resuiting from pro ect
delays and possible damage to the existing pro ect, it is possible that Netafim may incur additional liabilities in certain
scenarios.
Jain antitrust complaint
In 2018, Irrigation Inc., Irrigation Design Construction LLC. (IDC) and Agri Valley Irrigation LLC. (AVI) ( Jain Parties ),
filed antitrust lawsuits in United States federal and state court in Califomia alleging that Orbia s Precision Agriculture
business, along with other manufacturers and distnbutors, participated in a group boycott against Jain Parties in alleged
violation of state and federal antitrust laws. Jain dropped his federal case in June 2019, but continued his state antitrust
claims, which are currently in the discovery stage. Netafim has filed cross state and federal complaints against Jain.
The state trial is scheduled to begin on February 10, 2023. Netafim intends to vigorously enforce its rights and does not
anticipate that this matter will result in material liabilities for the Company.
Otherissues
In addition to the matters discussed above, Orbia is party to litigation that it considers routine and incidental to the
business. The Company does not expect the results of any of these litigation matters to have a material effect on the
Entity s business, results of operations, financial condition or cash flows.
Treasury PolicTes
The Orbia Treasury function maintains as a policy intended to ensure sufficient liquidity to enable the Company to make
necessary investments in its operations.
Due to the nature of its operations, Orbia and its subsidiaries maintain bank and investment accounts both in local
currency according to the countries in which it operates and in US Dollars.
The Company maintains its cash positions deposited or invested in short-term financial instruments (less than 1 month)
in financial entities that meet the characteristics of high credit quality, level of liquidity and profitability. The selection of
counterparties and investment instruments adheres to the principles of diversification, prudence, non-speculation, and
the guidelines contained in the company s Code of Ethics and those established by agreement of the Finance Committee
and the Audit Committee.
Tax debts
Neither the Company nor any of its subsidiaries have outstanding tax obligations as of December 31, 2021.
Research and development
The Company s ability to compete in the Mexican market and in foreign markets depends on its ability to integrate new
production processes and new products acquired and developed by third parties, prior to their acquisition, in order to
reduce costs and increase profitability of company acquisitions. Orbia has 19 research and development centers, as
well as 8 training centers for the development of these activities.
Re/evant Transactions not Recorded In the Balance Sheet and Income Statement
As of the date of this Annual Report, the Company has no relevant transactions not recorded in the Balance Sheet or
the Income Statement of the Company. Orbia does not consolidate acquired companies until the related transactions
have closed, sub ect to approval by competition authorities, when applicable.
Attachment I: Description of the Applicant Company Page 150 of 204
Attachment 1_Description of the Applicant Company
iii. Internal control
Orbia s bylaws provide for the existence of the Audit and Corporate Practices Committees, intermediate corporate bodies
constituted in accordance with the Applicable Legislation in order to assist the Board of Directors in the perfortnance of
its functions. Through the aforementioned committees and the Extemal Auditor, reasonable assurance is granted that
the transactions and acts carried out by the Company are executed and recorded in accordance with the terms and
parameters established by the Board of Directors and the governing bodies of Orbia, by the Applicable Legislation and
by the different general guidelines, criteria and applicable financial information standards (IFRS).
Corporate governance
Orbia is govemed by corporate govemance principles that frame its operations and support its results. As a public
company listed on the BMV, we adhere to Mexican legislation and, specifically, to the LMV. We also adhere to the
principles established in the Code of Principles and Best Practices of Corporate overnance, endorsed by the Business
Coordinating Council.
To determine the corporate strategy, define and supervise the implementation of the values and vision that identify us,
as well as approve transac6ons between related parties and those that are carried out in the ordinary course of business
in accordance with its bylaws, the Board of Directors is supported by the Audit and Corporate Practices and Corporate
Practices and Sustainability Committees. All members of the Audit Committee are independent, whereas the ma Ority of
the Sustainability Committee members are independent.
Audit Commlttee
The functions of the Audit Committee include the following: evaluating the company s intemal control and internal audit
systems to identify any significant deficiencies monitor the corrective or preventive measures that are adopted in the
event of any non-compliance with the operating and accounting guidelines and policies evaluate the performance of
extemal auditors describe and evaluate the services of extemal auditors, not related to the audit review the company s
financial statements evaluate the effects resulting from any modification to the accounting policies approved during the
fiscal year follow up on the measures adopted in relation to the observations of shareholders, directors, relevant
directors, employees or third parties on accounting, intemal control systems and intemal and eMemal auditing, as well
as any claim related to irregulari6es in the administration, inGuding methods anonymous and confidential for the
management of reports expressed by employees and to monitor compliance with the agreements of the general
meetings of shareholders and the Board of Directors.
Corporate PracBces and Sustainability Committee
In February 2020, the Corporate Practices Committee was renamed the Corporate Practices and Sustainability
Committee to reflect its mandate to oversee sustainability matters for the Company.
The Corporate Practices and Sustainability Committee is a committee of the Orbia Board of Directors, constituted in
compliance with and for the purposes set forth in Artides 25, 42 and 43 of the Securities Market Law (the Law or
LMV ) and Article Forty-four of Orbia s Bylaws
The main purpose of the Sustainabitity and Corporate Prachces Committee is to fulfill the responsibilities delegated by
the Board and assist the Board in fulfilling its responsibilities to:
1. Consider, evaluate and make recommendations to the Board of Directors on the appropriate si e, functions,
needs and pertormance of the Board of Directors and its Committees,
2. Advise and supervise the relevant sustainability strategies, policies and programs of the Company,
3. Consider and supervise corporate govemance issues,
4. Determine and monitor the Company s compensation philosophy,
5. Set the compensation of the Chief Executive Officer of the Company ( CEO ) and the other executive officers
of the Company who report directly to the Chief Executive Officer (the Executive Leadership Team or ELT ),
6. Administer the Company s capital incentive plans. and
7. Overseet of the Company s leadership succession planning and talent development efforts.
Likewise, the Committee will have the functions of proposing to the Board of Directors and the Shareholders Meeting
the candidates to be proposed for the election of inembers of the Board of Directors. In selecting candidates for election
to the Board of Directors, the Committee recogni es the importance of diversity among the members of its Board of
Directors, to reflect differences in perspectives, skills, intemational and industry experience, background, ethnicity,
gender and other attributes.
The Committee must be made up of at least three members of the Board of Directors. The Chairman of the Committee
is elected by the vote of the Company s Shareholders.
Attachment I: Description of the Applicant Company Page 151 of 204
Attachment 1_Description of the Applicant Company
Informatfon for investors
One of the Company s fundamental ob�ctives is to ensure that shareholders and investors have sufficient information
to be able to evaluate the performance and progress of the organi ation. The Company accomplishes this through its
Investor Relations function and related infortnation provided on its company website. In addition, the shareholders of the
Company have vanous mechanisms to communicate their opinions, doubts or concems to the Board of Directors
through
1) Sharehoiders Meeting
2) Investor Relations Area
3) Conferences in which the Company participates, the presentation of which can be found on the Orbia website
4) Meetings with analysts, banks, shareholders, investors, rating agencies and financial market parUcipant.
The Company has established guidelines to enable it to meet the following additional ob ectives:
• Protect and increase the assets of investors
• Issue reliable, timely and reasonable infortnation
• Delegate authority and assign responsibilities to achieve the goals and ob ectives set
. Document the organi ation s business practices i
• Provide administrative control methods that help supervise and monitor compliance with policies and procedures
There are defined controls for policies related to maiiceting as well as operationai guidelines related to human resources,
treasury, accounting, legal, tax and IT, among others.
Some of the most critical Intemal Control Policies and Procedures are briefly described below:
Human Resources
The Company relies on the knowledge, experiences, motivation, skdls, ariitudes and abilities of its people to achieve its
ob �ctives. In this sense, it has policies and procedures that regulate the recruitment, selecGon, hiring and induction of
all personnel as weil as their training, promotion, compensation and assistance. Likewise, it contemplates the aspects
related to the control of leave, benefits and payroll. These guidetines comply with the current legal provisions in the
urisdicions in which Orbia dces business with the ob ective to increase the e�ciency and productivity of the Company.
Treasury
The ob ective of the Treasury functions is to establish procedures and mechanisms to capture, protect and disburse the
financial resources necessary for the optimal operation of the Company, including credit, loans, leases, debt issuancs,
financial and market risk hedging, sales, payment and transfer colleclions, intercompany financing, and other such
activities. It also oversees the procedures and policies for the control of credit to our customers and accounts receivable
generated by forvvard sales, i.e., the origin, management and recording of collection. These policies also inGude
procedures for the administration and recording of accounts payable from suppliers of goods and services purchased
by the Company and the various means of payment and collection (checks, electronic transfers, etc.) defining the
necessary intemal authori ation schemes and supporting documentation. Finally, the Treasury function is also primarily
responsible for relations with ali credit institutions, banking institutions and financial creditors.
Orbiafs Treasury policy is to maintain sound finances with sufficient liquidity to guarantee the continuity of day-to-day
operations, as well as the necessary investments in the acquisition, improvement, or maintenance of assets that allow
it to have the most efficient and modem production technology at low costs and high quality.
Due to the nature of its operations, Orbia and its subsidiaries maintain bank and investment accounts both in local
currency in the countries it operates and in U.S. Dollars.
Supply Chafn
The acquisition of raw materials related to operating processes is carried out on the basis of authori ed budgets and
programs. These policies allow the Company s purchases to be made at a competitive price and favorable conditions
of quality, timeliness of delivery and service. Authori ation and responsibility levels are defined for each purchase
transaction.
IT Systems
Orbia has information systems in the different regions and countries in which it operates, mainly supported by Resource
Planning Systems (ERP) that support the different operating processes of each business. Orbia s IT function is
responsible for operating these information platforms, with the principles of operational continuity and information
security, which detertnines local and corporate policies and procedures in the different countries in which the
organi ation operates.
Attachment I: Description of the Applicant Company Page 152 of 204
Attachment 1_Description of the Applicant Company
Orbia has policies and procedures that promote the correct use and protection of systems, computer programs and
information relevant to the organi ation. The organi aGon has support staff and/or help desk to attend to reports on
failures or service requirements for systems.
e) Critical accountfng estimates, provisions or reserves
In the application of the accounting policies, the Issuers Management must make udgments, estimates and
assumptions about some amounts of the assets and liabilities of the consolidated financial statements. The estimates
and associated assumptions are based on experience and other factors that are considered relevant. Actual results
could differ from those estimates.
The underlying estimates and assumptions are reviewed on a regular basis. Revisions to accounting es6mates are
recogni ed in the period of the revision and future periods if the revision affects both the current period and subsequent
periods.
The critical accounting �Udgments and key sources of uncertainty when applying the estimates made at the date of the
consolidated financial statements, and which have a significant risk of giving rise to an ad ustment in the book values of
assets and liabilities during the following financial period are as follows:
a. When testing assets for impairment, the Company is required to make estimates of the value in use assigned
to its property, plant and equipment, intangible assets, goodwill and cash-generati�g units, in the case of certain
assets. Value in use calculations require Orbia to detertnine the future cash flows that should arise from the
cash-generating units and an appropriate discount rate to calculate present value. The Company uses revenue
cash flow pro ections using estimates of market conditions, pricing, and production and sales volumes.
b. The Issuer uses estimates to detertnine inventory reserves and accounts receivable. The factors that the
Company considers in the inventory reserves are the production and sales volumes and the movements in the
demand of some products. The factors that the Company considers in estimating the credit value impairment
for accounts receivable is mainly the estimate of expected losses of unsecured accounts, which consists of
observing the total exposure to the client and the amount used within its assigned line of credit.
C. The Company periodically evaluates the estimates of its mineral reserves (fluorite and salt), which represent
the estimate with respect to the remaining amount not exploited in the mines it owns and that can be produced
and sold generating profits. Such estimates are based on engineering evaluations derived from samples and
in combination with assumptions about market prices and production costs at each of the respective mines.
The Company updates the ore reserve estimate at the beginning of each year.
d. The determination of the discount rate considers the term and behavior of high credit quality corporate bonds.
It should reflect a rate at which retirement benefits can be effectively paid. An appropriate process for
establishing such a rate is to seek available information on implicit rates in annuity contracts that could be used
to settle such an obligation, as well as on rates of high�uality fixed income investments that are available and
that are expected to continue during the period of maturation of pension benefits. However, in Mexico there is
no established annuity market that we can use for these purposes. The methodology used consists of the
construction of a ero coupon govemment bond curve where each payment flow is discounted with a ero
coupon rate. For the first part of the curve, ero coupon bonds with tertns less than 1 year (CETES) are
considered. For the second part of the curve (terms greater than 328 days) are considered couponed
govemment bonds, which through the Bootstrapping methodology are converted to ero coupon bonds
( spot rates) in a period of 6 months to 30 years. Each payment flow is discounted with the applicable ero
spot coupon rate according to the time in which the payment is being made subsequently, a single eqwvalent
rate is calculated such that the present value of the flows is equal to that obtained with the ero coupon rates.
e. Orbia is sub ect to transactions or contingent events on which it uses professional udgment in the development
of estimates of probability of occurrence. The factors considered in these estimates are the current tegai
situation at the date of the estimate and the opinion of the legal advisors.
f. Control over Ingleside Ethylene LLC - Note 4c mentions that Ingleside Ethylene LLC is a subsidiary of Orbia,
which hotds a 50% interest. Based on the agreements with the other investor, Orbia makes the decisions
related to the control of its produc6on and sale that give it exposure to the variable returns of this subsidiary.
g. The Company makes financial pro ections of each legal entity where it maintains control in order to detertnine
if the tax assets may be used in the future, in particular the tax losses to be amorti ed. Based on these
profcctions, tax losses are capitali ed or reserved in each urisdiction where Orbia operates.
h. The Company evaluates the assets sub ect to lease and defines those that are less than those that are not.
Those sub cct to the registration of rights of use are analy ed to detertnine the contractual terms of validity and
Attachment I: Description of the Applicant Company Page 153 of 204
Attachment 1_Description of the Applicant Company
the possibiliGes of renewal based on economic benefits, fhe pro ections of committed payments and the
discount rates used by rype of asset to determine the amount to be registered.
Main accounting policles
For additional details regarding estimates, provisions or critical accounting reserves applied by the Company, the
investing public is recommended to carefully read and analy e Note 4 of the audited consolidated financial statements
of Orbia that are included in the Section Annexes of this Annual Report.
Attachment I: Description of the Applicant Company Page 154 of 204
Attachment 1_Description of the Applicant Company
4. ANA E ENT
a) External Auditor
The independent extemal auditors are Deloitte Touche Tohmatsu Limited ala , Yama aki, Rui Urqui a, S.C.
( Deloitte ), with o�ces in Mexico City, Mexico. Deloitte has provided audit services to Orbia for at least the last 10 fiscal
years.
Deloitte has confirmed that it is an independent firtn with respect to Orbia, within the meaning of the stock market
regulations applicable to the latter (Article 343 of the LMV and Article 6 and other applicable provisions of the eneral
Provisions Applicable to Entities and Issuers Supervised by the National Banking and Securities Commission that hve
services of External Audit of Basic Financial Statements , known as the Single Circular of Extemal Auditors CUAE ).
As of the date of this Annual Report, the independent extemal auditors have not issued qualified or negative opinions.
nor have they refrained from issuing any opinion on the Company s financial statements.
The fees paid by Orbia do not represent 10% of Deloitte s annual revenue. The amount that the extemal auditors have
charged related to the audit as of December 31, 2021 for audit services are $5 million dollars, while the other services
not related to the audit are approximately $0.6 million dollars, among the main services are those related to legal and
tax advice, which represent 10% of the total fees paid.
The additional services not related to the December 31, 2021, audit do not affect the independence of the independent
auditor, since they are similar to an audit service that requires them to maintain independence. and where the auditor
issues an opinion based on Audit and Attestation Standards. These services are permitted since the independence
restrictions refer to services other than audit and attestation services, without intervening in the design or implementation
of internal controls over the financial infortnation, which continue to be the Issuerg responsibility. The
appointmenUratification of the independent auditors is submitted annually by management to the Company s Audit
Committee, which in tum reports thereon to the Board of Directors.
b) Transactions with Related Persons and Conflicts of Interest
In the past, the Company has entered into, and intends to continue to, enter into certain transactions with related persons
or companies, including, but not limited to, the transactions described in this section. The terms of these transactions
are reported to, and verified by, the Audit Committee and/or the Corporate Practices and Sustainability Committee, as
well as the extemal auditors, who render their opinion on the transacGons reported and follow-up as needed. The
Company believes that these transactions are entered into under conditions similar to those it could obtain from unrelated
third parties, i.e., representing current market prices.
Re/a8onships and transacBons wlth related parties
The companies Kalu , Elementia, S.A.B. de C.V., rupo Financiero Ve por M s, S.A. de C.V., rupo Pochteca, S.A.B.
de C.V., Banco Ve por M s, S.A., Instituci n de Banca M Itiple, rupo Financiero Ve por M s, Casa de Bolsa Ve por
M s S.A. de C.V., rupo Financiero Ve por M s and Constructora y Perforadora Latina, S.A. de C.V., as well as
subsidiaries of the foregoing, are considered persons or parties related to the Issuer for the purposes of this Report.
All transactions with related persons or parties are carried out under conditions similar to market conditions.
Orbia has several investment securities, trust, and bank and investment contracts with Banco Ve por M s, S.A.,
Instituci n de Banca M Itipie, rupo Financiero Ve por M s y Casa de Bolsa Ve por M s, S.A. de C.V., rupo Financiero
Ve por M s(related parties of Orbia), which generate interest at rates similar to market rates.
Orbia and Kalu , the Company s main shareholder, maintain an advisory services contract, which establishes that Orbia
will pay Kalu monthly the amount equivalent to the total costs and expenses incuRedby Kalu as a result of providing
such services, to which a market margin is added.
An analysis of balances due from and to related parties as of December 31 foreach of the periods presented follows:
Attachment I: Description of the Applicant Company Page 155 of 204
Attachment 1_Description of the Applicant Company
2027 2020 2079
Receivable,
Pochteca Raw Materials, SA de CV $454 31,449 $3,645
Etemit Colombiana, S.A. 116 113 373
Mexalit Induslrial SA de CV - 30 -
Elementia Administrative Services, SA de CV - 3,369 720
Elementia, SA de CV 247 - .
Others 242 485 19
Payable:
Kalu , SA de CV
eorge Fisher Wavin
Pochteca Raw Materials, SA de CV
Others
51,059 $5,445 $4,757
351 $ - E99,655
277 377 -
230 210 538
354 85 340
$912 $671 $100,533
Figures in thousands of dollars
The Entity had the following transactions with its related paAies dunng each of the periods presented:
2021 2020 2ot9
Income Trom-
Sales 54,291 $6,897 $6,163
Administrative services 3,056
54,291 $6,897 $9,219
Expenses per-
Administrative services
Shopping
Leases
Others
Figures in thousands of dollars
c) Dfrectors and Shareholders
$517 $4,548 b13,551
2,746 2,245 1,723
1,073 - -
431 446 314
a4,767 $7,239 315,588
In accordance with the corporate bylaws, the Company s administration under the charge of a Board of Directors and a
eneral Director who pertorms the functions established in the LMV. The Board of Directors will be made up of a
maximum of 21 Proprietary Directors, as detertnined by the Ordinary eneral Assembly of Shareholders that appoints
them and, where appropriate, their respective altemates. Of said members, both owners and alternates, at least 25%
must be independent. It should be noted that nolwithstanding the foregoing, the Company s Board of Directors in fiscal
year 2021 is made up of 12 directors, eight of whom are independent and represent 66.7% of lhe Board.
The Company exceeds the minimum number of independent members of 25% required by the Mexican Securities
Market Law and our bylaws. Also, the Board of Directors has three members of the Board who are women who represent
25%.
The cnteria used to identify whether a member is independent, proprietary, or a related Director, as indicated in the
Report, is defined in the Code of Principles and Best Practices of Corporate overnance, issued by the Business
Coordinating Council.
Likewise, in terms of Article 24 of the LMV, the Altemate Directors of the Independent Directors, have the same
character, highlighting that currently the Board of Directors of the Issuer is exclusively made up of propnetary directors.
The members of the Board of Directors may be shareholder5 or persons outside the Company.
The eneral Assembly of Shareholders both appoints and verifies the independence of the Directors.
The Independent Directors and, where appropriate, their respective altemates, are selected for their expenence,
capacity and professional prestige, considering their business and/or professional career and their ability to perform their
duties free of conflicts of interest, with freedom of criterion and without being sub �ct to personal, patrimornal or economic
interests.
During fiscal year 2021, the Board of Directors met seven times:
• January 18. The meeting was attended ( quorum ) by 100%.
• February 25. In said session, there was 100% attendance ( quorum ).
• April 27. There was 100% attendance ( quorum ) in said session.
• July 27th. There was 100% attendance ( quorum j in said session.
• September 28. There was 100% attendance ( quorum } in said session.
Attachment I: Description of the Applicant Company Page 156 of 204
Attachment 1_Description of the Applicant Company
• October 26th. There was 100% attendance ( quorum } in said session.
• December 16. In said session there was attendance ( quorum ) of 91.66%
During the 2022 fiscal year, the Board of Directors has met on two occasions:
• February 23, 2022. In said session there was 100% attendance ( quorum ).
In addition, the Board of Directors adopted unanimous resolutions by its members, outside of an i�-person mee6ng, on
March 4 and June 16, 2021, and additionally, adopted unanimous resolutions �ointly with the members of the Corporate
Practices and Sustainability Committee on January 19, 2021.
In order for the members of the Board of Directors to better understand the responsibility implied by the performance of
their duties, once a year the Secretary of the Board of Directors delivers a report that contains the main obligations,
responsibilities and recommendations applicable to the Company as an issuer of securities listed on the BMV derived
from the LMV, the Sole Issuer Circular and other applicable legislation. This report also describes the main obligations,
responsibilities and powers applicable to the members of Orbia s Board of Directors as a result of those requirements.
The Board of Directors for fiscal year 2022 was designated by the Annual Ordinary eneral Shareholders Meeting heid
on April 1, 2022.
Below are the names of the Company s directors appointed at said eneral Ordinary Shareholders Meeting, their
professional experience and the year in which they were appointed directors for the first time.
Name: Antonio del Valle Rui
Position and type of director: Honorary and Life President of the Board of Directors without being a member of said
Board, Patrimonial Related
ember of the Board of Directors since: 2000
Professional experfence: Pnvate Accountant, graduated from the Banking and Commercial School, has the degree
of Business Executive Director granted by the Pan-American Institute of Senior Business Management (IPADE). He is
Honorary President for Life of Kalu , SA de CV and rupo Financiero Ve por M s, SA de CV and has been or is a
member of several boards of directors, among which are, Telef nicas de Mucico, SA de CV, Industrias Monterrey, SA
de CV, rupo M xico. SAB de CV, Escuela Bancana y Comercial and Fundaci n ProEmpleo.
Mr. Antonio del Valle Ru is the father of Messrs. Mar 8 de uadalupe, Antonio, Francisco Javier and Juan Pabto del
Valle Perochena.
Name: Juan Pablo del Valle Perochena
Position and type of director: Chairman of the Board of Directors, Patrimonial Related
ember of the Board of Directors since: 2002
Professional experience: Industnal Engineer graduated from Universidad An huac, with a Masters degree in
Administration from Harvard Business School. Chairtnan of the Board since 2011. Member of the Board of Directors of
JCI Inc in the USA, of Fortale a Materials, SAB de CV and Elementia Materials, SAB de CV Participates in the following
associations: Consuitative Committee of Harvard s David Rockefeller Center for Latin American Studies, Kalu
Foundation, Chairman s Intemational Advisory Council of the Americas Society, as well as the La6n American
Conservation Council of The Nature Conservancy.
Mr. Juan Pablo del Valle Perochena is the son of Mr. Antonio del Valle Ru and is the brother of Messrs. Mar 8 de
uadalupe. and Antonio and Francisco Javier del Valle Perochena.
Attachment I: Description of the Applicant Company Page 157 of 204
The Board of Director is structured as follows:
Attachment 1_Description of the Applicant Company
Name: Antonio del Valle Perochena
Position and type of director: Patrimonial
ember of the Board of Directors since: 2002
Professional experience: Bachelor of Business Administration. graduated from the Anahuac University where he also
completed a Masters degree in Management. In addition, he has a postgraduate degree in Senior Management from
the Pan-Amencan Institute of Senior Business Management (IPADE) and a speciali ation in literature from the
Universidad Iberoamericana.
Chairman of the Board of Directors of rupo Financiero Ve por M s, SA de CV and of Kalu , the controlling company
of Orbia.
Member of the Board of Directors of Banco Ve por M s, SA, Holding Company EK, SAPI de CV, Afian adora Sofimex,
SA and Byline Bank. In addition, he is part of the Board of Trustees of the National Institute of Medical Sciences and
Nutrition Salvador ubir n, Pro Bosque de Chapultepec Trust, Colmex Foundation Board of Trustees, Mexican
Institute for Competitiveness, AC and as of February 2019 chairs the Mexican Business Council, an organi ation group
that brings together the 60 most important companies with Mexican capital.
Mr. Antonio del Valle Perochena is the son of Mr. Antonio del Valle Rui and brother of Messrs. Francisco Javier, Juan
Pablo and Mrs. Mar a de uadalupe.-of the Perochena Valley.
Name: Maria de uadalupe del Valie Perochena
Position and type of director: Patrimonial
ember of the Board of Directors since: 2005
Professional experience: Degree in Economics, graduated from the An huac University. In addition, she has a
postgraduate degree in Senior Management from the Pan-American Institute of Senior Business Management (IPADE).
Member of the Board of Directors of Kalu , Banco Ve por M s, SA and Holding Company EK, SAPI de CV She worked
in the finance and marketing functions of Banco de Santander and Bital, and supervises the investments of the Family
Office of the family of the Perochena Vailey.
Mrs. Mar a de uadalupe del Valle Perochena is the daughter of Mr. Antonio del Valle Ru and the sister of Messrs.
Antonio. Francisco Javier and Juan Pablo del Valle Perochena.
Name: Francisco Javier del Valle Perochena
Position and type of director: Patnmonial
ember of the Board of Directors since: 2021
Professional expe�ience He has a degree in Business Administration from the An huac University, a master s degree
in economics and business from the same university and an AD-2 in Senior Management from the Pan-American
Institute of Senior Business Management (IPADE).
Member of the Board of Directors of Fortale a Matenals, SAB de CV and Elementia Materials, SAB de CV).
In 2010 he entered ihe educational sector founding SAE Institute Latin America, a university speciali ed in creative
media, he is also a member of the Board of Directors of rupo Financiero Ve por M s, Cuprum, rupo Interprotecci n,
the Advisory Council of Banamex, the Communication Council and the Pacific Alliance Business Council. Committed to
society, he supports different causes, such as sponsorship of high-performance athletes, campaigns and initiatives
focused on the care and preservation of the environment, and housing programs.
Mr. Francisco Javier del Valle Perochena is the son of Mr. Antonio del Valle Rui and the brother of Messrs. Juan Pablo.
Mar � de uadalupe and Antonio del Valle Perochena.
Name: Divo Milan Haddad
Position and type of director: Independent
ember of the Board of Directors since: 2002
Professional experfence: eneral Director of Strategic Research, Pralnvest, and Dimmag Invest (Panama Real
Estate).
Chairman of the Board of Directors of: Inmobiliaria del Norte, Pro-lnvest, (Commercial Real Estate), Dimmag Invest,
C i+culo de Cr dito (Risk Rating Agency), C i�culo Laboral (Labor Database), rupo Aradam (Food Franchise) and
Quonia (Spanish Real Estate Company).
Member of the Board of Directors of: NetCapital (Technological School), Orbia, Banco Ve por M s, SA, rupo
Financiero Ve por M s, SA de CV, Fortale a Materials, SAB de CV and Elementia Materials, SAB de C�.
Name: u�llermo Orti MaRine
Position and type of director: Independent
ember of the Board of Directors since: 2010
Professfonal experience: raduated from the National School of Economics of the National Autonomous University
of Mexico. He later obtained a Master s and Ph.D. in Economics from Stanford Universiry in the United States.
Currentiy, Dr. Orti is a partner and member of the Board of Directors of BT Pactual, and is also a member of the
roup of Thirty, the Council of the Center for Financial Stability, the Institute for lobali ation and Monetary Policy at
the Federal Reserve Bank of Dallas and the CDPQ lobal Economic and Financial Advisory Board, as well as President
of the Per Jacobsson Foundation.
He is the founder of O Asociados, an economic consulting company created in 2009. Dr. Orti was Chairman of
BT Pactuai Latin America ex-Bra il from 2016 to 2018 and Chairman of the Board of Directors of rupo Financiero
Banorte-Ixe from 2011 to 2014.
Attachment 1: Description of the Applicant Company Page 158 of 204
Attachment 1_Description of the Applicant Company
Additionally. he is a member of the Board of the Mexican companies Aeropuertos del Sureste, Orbia and ViVo.
Dr. Orti was ovemor of the Bank of Mexico between January 1998 and December 2009 and Secretary of Finance
and Public Credit between December 1994 and December 1997.
Name: Eduardo Tnao Haro
Position and type of director: Independent
ember of the Board of Directors since: 2008
Professional experience: ootechnical Agronomist Engineer, graduated from the Monterrey Institute of Technology
and Higher Studies.
President of rupo Lala and rupo Nuplen. He chairs the executive committee of Aerom xico.
Member of the Board of Directors of Orbia, Aerom xico, Televisa, rupo Financiero Banamex and Aura Solar and the
Mexican Business Council.
Member of the Board of various foundations and philanthropic organi ations such as the Federico me � Children s
Hospital of Mexico, Salvador ubir n National Institute of Medical Sciences and Nutrition, Mexicanos Primero, The Latin
America Conservation Council of the Nature Conservancy, among others.
Name: Alma Rosa Moreno Ra o
Position and type of director: Independent
ember of the Board of Directors since: 2018
Professional experience: Degree in Economics, graduated from Instituto Tecnol gico Aut nomo de M xico. In
addition, she has a masters degree in Economics from the Colegio de M xico and doctoral studies from the University
of New York.
She was President of the Tax Administration System from 1999 to 2000. She was Ambassador of Mexico to the United
Kingdom of reat Britain and Northem Ireland, from 2001 to 2004, Director of Administration at rupo Financiero
Banorte from 2004 to 2009 and from 2009 in the middle of 2018 would be an official at Pemex.
Name: Mana Teresa Altagracia Amal Machado
Position and type of director: Independent
ember of the Board of Directors since: 2019
Professional experience: Industrial Engineer from the Universidad Cat lica Andr s Bello in Vene uela, has a Masters
Degree in Business Administration (MBA) from Columbia University and is a member of the Intemational Women s
Forum.
She was in charge of oogle s operations in Mexico, and currently leads Stripe s Latin American operations, a fintech
company, where she is in charge of opening and building the business in Latin America.
She was eneral Director of Twitter in Mexico, Colombia and Argentina and directed J. Waiter Thompson Mexico,
Mirum and Clarus.She wasalso founder of IAB in Mexico (Interactive Advertising Bureau) and, President of the Council
of the World Internet Proect in its local version. She led the Microsoft and Telmex JV, ProdigyMSN. She was a
consultant at The Boston Consulting roup and Boo Allen Hamdton.
Name: Jack oldstein Ring
Positfon and type of director: Independent
ember of the Board of Directors since: 2020
Professional experience: Degree in Business Administrator from the Universidad de Los Andes in Colombia and has
a Masters Degree in Business Administration from Babson College. He has attended several continuing education
courses at Oxford University and Harvard University.
Founder, Managing Partner and Sole Owner of Alfa Intemational (Investment Manager).
He served as CEO and President of Sanford Management, a company dedicated to managing a portfolio of multi-sector
companies based mainiy in Latin America. He was also President of Filmtex, a ma or market player in the plastics
industry.
He has been an advisor to several companies and charitable foundations, inGuding Bavaria (today SAB Miller), the
Colombian-American Chamber of Commerce, the Ministry of Foreign Trade, and the Julio Mario Santo Domingo
Foundation. He also served as President of the enesis Foundation and member of the Advisory Committee of the
Banco de la Rep blica de Cotombia.
Name: Mark Ra kowski
Position and type of director: Independent
ember of the Board of Directors since: 2021
Professfonal experience: He has a degree in Accounting from Lehigh University in Bethlehem, Pennsylvania, United
States. From 2016 to 2020, he was CFO of Xylem, where he helped engineer the company s transfortnation into a
leading global provider of water technology solutions and put sustainability at the heart of the companys strategy.
Before oining Xylem, he was Strategic Advisor to West Rock Company, a global specialty chemicals and packaging
company that was formed from the merger of Mead Westvaco and Rock Tenn. He was previously Chief Financial Officer
of Mead Westvaco, where he led ali areas of Finance, Strategy, Corporate Development, IT and Shared Services, and
played a key role in executing the companys merger with Rock Tenn in 2015. Previously, he hetd various Senior
financial and operational positions at Eastman Kodak Company, including eneral Manager of WoAdwide Operations
for the Film and Digital Imaging Systems roup. He began his career at Price Waterhouse Coopers LLP, where his last
position was Managing Partner of the Upstate New York Technology group and Partner of the firm s business advisory
Attachment I: Description of the Applicant Company Page 159 of 204
Attachment 1_Description of the Applicant Company
and audit services group. He is also a member of the board of directors of ACCO Brands, one of the worid s largest
providers of branded academic, consumer and business products.
Name Mihir Arvind Desai
Position and lype of director Independent
ember of the Board of Directors since: 2021
Professional experience: Ph.D. in Political Economy from Harvard University He eamed an MBA as a Baker Scholar
from Harvard Business Schoot and a BA in History and Economics from Brown University. In 1994, he was a Fulbnght
Scholar in India.
He is the Mi Lho Financial roup Professor of Finance at Harvard Business School and Professor of Law at Harvard
Law School.
Professor Desai s areas of speciali ation include fiscal policy, international finance, and corporate finance. His scholarly
publications have appeared in leading economics, finance, and law ournals. His work has emphasi ed the proper
design of fiscal policy in a globali ed environment, the links belween corporate govemance and the application of tau
burdens, and the intemal capital markets of multinational companies. His research papers have been cited in The
Economist, BusinessWeek, The New York Times, and several other publications. He is a Research AssoGate in the
Public Economics and Corporate Finance Programs at the National Bureau of Economic Research, and served as co-
director of the NBER India program.
His professional experience includes working at CS First Boston (1989-1991), McKinsey Co. (1992), and advising
various companies and govemment organi ations. He is also on the Advisory Board of the International Tax Policy
Forum and the Oxford Universiry Center for Business Taxation.
Name: Juan Pablo del Rio Benite
Position and type of director: Secretary without being a member of the Board of Directors
ember of the Board of Directors since: 2008
Professional experience: raduated in Law from the Universidad An huac in 1992. He speciali ed in commercial law
(postgraduate) at the Escuela Libre de Derecho, period 1993-1994. He is a founding partner of the law firm DRB
Consultores Legales.
He has concentrated his professional practice in the areas of corporate, commercial, financial, foreign investment,
mergers and acquisitions, securities and corporate financing.
He is non-member Secretary of the Board of Directors and external legal advisor to several companies, including Orbia,
Elementia, Fortale a Materials, SAB de CV and Elementia Materials, SAB de CV, Compa 8 Minera Autl n, rupo
Pochteca, rupo Hotelero Santa Fe, Banco o for More, rupo Financiero o for More, Aeropuertos Mexicanos del
Pac fico, rupo Finaccess, Sabormex y C�. La Central Match irl.
He is a member of the Regulatory Committee of the Mexican Stock Exchange, the Mexican Bar Association and the
Center for International Legal Studies.
The directors are elected at the Annual Shareholders Meeting, and their functions last one year, with the Assembly
having the power to re-elect them or, if applicable, appoint new members. The appointment date of each Director is
included below.
BOARD OF DIRECTORS
["ember �endar A olMmentDate
Antonio del Valle Rui Male Ordinary eneral Assembly of Shareholde�s dated April 28, 2000
Honora President (o� Ufe
Juan Pablo del Valle Perochena Male Extraordinary and Ordinary eneral Meeang o( Sha�eholders dated
A nl 30, 2002
Anlonio del Valle Perochena Male Extraordinary and Ordinary eneral Meeting o( Shareholdero dated
A nl 30, 2002
Mary ol uadalupe of the Perochena Valley Female Ordinary eneral MeeGng o( Shareholders daled April 27, 2005
Francisco Jawer del Valle Perochena Male Ordinary Annual eneral Meeting of Shareholders dated March 30,
2021
Divo Milan Haddad• Male Extreordinary and Ordinary eneral Meeting of Shareholders dated
A n130 2002
William Orti Martine ' Male Ordinary Annual eneral Meating of Shareholders dated April 30, 2010
Eduardo Tnuo Haro• Male Ordinary Annual eneral Meeang of Shareholders dated Apnl 29, 2008
Alma Rosa Moreno Ra o' Female Ordmary Annual enerel Mee6ng of Shareholders dated April 23, 2018
Maria Teresa Altagraua Amal Maehado• Female �rdmary and Extraordinary Annual anerel Meeting of Shareholders
daled A ril 23 2019
Jack oldstein Ring Male Ordmary Annual eneral Mee6ng of Shareholders dated April 28, 2020
Mark Ra kowski Male Ordmary Annual enerel Meeting o( Shareholtlers dated April 28, 2020
Mihir Arvind Desai Male Ordinary enerel Assembly of Shareholders dated Juty 21, 2021
(') Independent direclors.
() Without being a member o( the Council.
As of 2021 and 2022, 25% of the Directors are women.
Attachment I: Description of the Applicant Company Page 160 of 204
Attachment 1_Description of the Applicant Company
Powers of the Board of Directors
The Board of Directors has the legal representation of the Company and en oys the broadest powers to carry out all the
operations inherent to the corporate purpose, except those expressly entrusted to the eneral Assembly of
Shareholders. The Board of Directors is vested with, but not limited to, the foilowing faculties or powers: (i) initiating
lawswts and collections, (ii) administering assets, (iii) exercising acts of ownership, (iv) appointing and removing the
eneral Director, executive directors, managers, o�cers and attorneys-in-fact, and detertnining their powers, working
conditions, remuneration and guarantees, and confering powers of attorney to directors, managers, officers, attorneys
and olher persons required to carry out the Company s operations.
The Board of Directors also have various mandates which require it to: (i) monitor compliance with the agreements of
the Shareholders Meetings, which may be carried out through the Audit Committee (ii) establish compensation plans
for executives and directors, as well as to make decisions regarding any other matter in which the aforementioned
persons may have an interest. The Board of Directors reports annually to the Assembly of Shareholders on its activities
and resolutions, with the Assembly of Shareholders having the power to evaluate, qualify and, if applicable, approve
said report on the operation of the Board of Directors, and may even require additional reports.
Furthertnore, the Board of Directors is in charge of the strategic management of the Company and is empowered to
resolve any matter that is not expressly reserved for the Shareholders Meeting. Among others, the Board of Directors
must deal with the obligations and responsibilities established in article 28 of the LMV.
In accordance with the LMV, the Board of Directors, for the pertormance of its functions, will have the support of an
Audit Committee, Corporate Practices and Sustainability Committee and Finance Committee.
Audlt Committee
The Audit Committee is appointed by the Board of Directors of the Company to fulfill the responsibilities delegated by
the Board of Directors and to assist it in fulfilling its responsibilities related to matters of: (a) appointment and supervision
of the performance of the auditors of the Company, (b) assisting the Board of Directors with respect to (i) ensunng the
integrity of the Company s financial statements, (ii) supervising the Company s compliance with legal and regulatory
requirements, (iii) evaluating the qualifications and independence of the independent auditor, and (iv) evaluate and
monitor the performance of the Company s intemal controls and internal audit function and (c) prepare and deliver said
reports and opinions, and carry out other activities, as required by the LMV, other applicable laws and regulations and
the Company s Bylaws.
The Audit Committee must be composed of at least three members, all of whom must be independent members of the
Board of Directors in accordance with applicabie laws and Company policy. The members vmll be appointed by the
Board of Directors acting on the recommendation of the Corporate Practices and Sustainability Committee of the same
Board of Directors, and will serve until their successors are duly elected and qualified or until their prewous resignation,
disqualification, retirement, death or dismissal. The Chairman of the Audit Committee will be elected by ma onty vote of
the Company s Shareholders, and members of the Audit Committee other than the Chairman may be removed by the
Board of Directors.
The Audit Committee assists the Board of Directors in fulfilling its oversight responsibilities through the following
activities:
Matters Related to Financial Statemenfs and Disclosure
1. Review and discuss the annual audited financial statements, including related disclosures, with management and the
Company s independent auditors, to make its recommendation to the Board of Directors regarding the approval of the
Company s audited financial statements.
2. Review and discuss with management and, if the Committee deems it appropriate or necessary, with the Company s
independent auditor, the Company s quarterly financial statements prior to the filing of its earnings report and related
disclosures.
3. Review and discuss with management the Company s eamings news releases, including the �ro forma or [�d usted
infortnation, as well as financial infortnation and earnings guidance provided to analysts and rating agencies. This
discussion can be done in a general way which consists of discussing the types of infortnation that will be disclosed and
the types of presentations that will be made. to enable the Committee to review and approve the Company s press
releases and other public statements related to quarte�ly and annual financial performance.
4. Review, with appropriate members of senior management, the Company s disctosure controls and procedures,
including management s conclusions about their effectiveness and any material breaches ihereof, and any audit steps
taken to light of such breach.
Attachment I: Description of the Applicant Company Page 161 of 204
Attachment 1_Description of the Applicant Company
5. Review and discuss with the independent auditors (i) all critical accounting policies and practices to be used (ii) all
alternative treatments (and related disGosures) of financial mformation within Intemational Financial Reporting
Standards (IFRS), as well as the ramifications of the use of such altemative disGosures and treatments, and the
treatment preferred by the independent auditors, and (iii) other material written communications between the
independent auditors and management, such as any letters from management or list of unad usted differences.
6. Discuss v�nth management and the independent auditor the effect of regulatory and accounting initiatives, as well as
off-balance sheet structures, if any, on the Company s finanaal statements.
7. Discuss with the independent auditors the matters that need to be discussed with the Audit Committee in accordance
with applicable legislation, including the Mexican Securities Market Law and the Mexican Stock Exchange.
8. Assist in the resolution of disagreements, if any, between management and independent auditors related to financial
information.
Independent Auditor Matters
1. Issue their opinion and opinion to the Board on the appointment and, where appropriate, replacement of the
independent account auditors, who will report directly to the Committee. Review the experience and qualifications of
the senior members of the independent audit team, including those of the lead partner.
2. Approve and discuss the scope and approach (including staffing) of all audit services, including assurance letters
and statutory audits, and pertnitted non-audit services including fees and terms. that will be carried out for the Company
prior to the performance of said work, and approve and recommend any changes thereto for subsequent approval by
the Board.
3. Obtain and review a report from the independent auditor at least annually regarding (a) the independent auditors
i�ternal quality control procedures, (b) any material issues raised by the internal quality control review most recent, or
peer review, of the auditors, or by any inquiry or investigation by govemment or professional authorities within the
preceding five years with respect to one or more independent audits conducted by the firm, (c) any steps taken to deal
with such matters, and (d) all relationships between the independent auditor and the Company. Assess the
qualifications, perfortnance and independence of the independent auditor, including consideration of whether the
auditors quality controls are adequate and whether the provision of permitted non-audit services is consistent with
maintaining the auditors independence, taking into account the opinions of management and internal auditors. auditors
4. Review and consider, as appropriate, the length of tenure of the lead audit partner and review audit partner in
providing audit services for the Company, and ensure that new lead audit partners and audit review partner are
appointed periodicaily in accordance with applicable laws and industry practices.
5. Ensure that the independent auditors submit, at least once a year, to the Committee a formai written statement that
describes all relationships between the independent auditors and the Company, and actively engage in a dialogue with
the independent auditors regarding any disclosed relationships or services that may affect the ob �ctivity and
independence of the independent auditors.
6. Review, approve and establish the policies for the hiring by the Company of the employees or former employees of
the independent auditors.
7. Discuss with the engagement partner of the independent auditors any significant matters related to the quality and
consistency of the audit.
Infernal Audit Matters
1. Review the intemal audit process to establish the annual internal audit plan and its approach.
2. Discuss annually, with input from the Corporate Vice President and Head of Intemal Audit, the budget, organi ational
structure. responsibilities, and qualifications of the intemal audit staff.
3. Discuss and approve the appointment, substitution or removal of the Head of Intemal Audit.
4. Review and discuss significant issues or recommendations reported by the intemal audit group and management
responses to those issues or recommendations. Oversee actions taken by management to resolve such issues.
Conceptually, Intemal Audit reports directly to the Committee
Infernal Controls
Review with management and, as deemed necessary or appropriate with the independent auditor, the Company s
internal control over financial reporting, inGuding management s annual evaluation of the adequacy and effectiveness
Attachment I: Description of the Applicant Company Page 162 of 204
Attachment 1_Description of the Applicant Company
of intemal control over financial reporting, any significant deficiency or material weakness in intemal controls (inGuding
remediation), any fraud (regardless of materiality) involving management or other employees who have a significant
role in internal control over financial reporting, and any changes in internal controls that has materially affected or may
materially affect intemal control over financial reporting. This shall inGude review of the disGosures made to the
Committee by the CEO and CFO of the Company in connection vwth their periodic certifications, review of the reports
of the independent auditor and the Head of Intemal Audit related to the adequacy of accounting controls, including any
management letter and management responses to recommendations made by the independent auditor or chief internal
auditor.
Legal and Tax Matters
1. Review material legal matters involving the Company penodically with the Company s Senior Vice President and
eneral Counsel and the Company s Chief Compliance O�cer, it being understood that each individual has express
authority to communicate personally with the Chairtnan of the Compliance Committee or Audit Committee on any such
matter as deemed appropriate.
2. Review important tax issues with the company s Chief Financial Officer.
Compliance /ssues
1. Review material compliance matters involving the Company penodically with the Senior Vice President and eneral
Counsel and the Vice President and Chief Compliance Officer of the Company, it being understood lhat each individual
has express authority to communicate personally with the Chairman of the Compliance Committee or Audit Committee
on any matter, as deemed appropriate.
2. Advise the Board regarding the Company s policies and procedures regarding compliance with applicable laws and
regulations and with the Company s lobal Ethics and Compliance Standards.
3. Establish procedures for the receipt, retention and treatment of complaints received by the Company regarding
compliance, accounting, intemal accounting controls or auditing matters, inGuding confidential anonymous submissions
made by employees.
4. Review any report of evidence of a material violation made to the Committee pursuant to O�ce of eneral Counsel
Policy by any of the Company s internal or extemal counsel, and take all necessary or appropriate action to respond.
Risk management
1. Meet periodically with management to discuss the Company s ma or risk exposures, the potentiai impact of those
risks on financial reporting, and steps taken to ensure that appropnate processes are in place to identify, manage, and
control those risks to the Company.
2. Discuss with management significant risk management failures, if any, and management responses to such failures.
3. Monitor and provide risk oversight with respect to such areas of focus as the Board of Directors may assign to the
Committee from Gme to time, including cybersecurity, tax and liquidity management, product integrity and security, risk
supplier management, operational business continuiry, and crisis management.
Corporate PractTces and Sustafnability Committee
The Board of Directors, for the performance of its functions, also utili es a Corporate Practices and Sustainability
Committee.
The Committee must be made up of a ma ority of Independent Directors per ArtiGe 25 of the LMV, and by a minimum
of three members appointed by the Board of Directors, at the proposal of the President of said corporate body. It s the
President will be appointed and removed by the eneral Assembly of Shareholders, The Chairman of the Board of
Directors cannot chair this Committee.
The Corporate Practices and Sustainability Committee assits the Board of Directors in fulfilling it responsibilities via the
following activities: is to fulfill the responsibilities delegated by the Board and assist the Board in fuifilling its
responsibilities rel
1. Consider, evaluate and make recommendations to the Board of Directors regarding the appropriate si e.
funcGons, needs and pertormance of the Board of Directors and its Committees,
2. Advise and supervise the relevant sustainability strategies, policies and programs of the Company,
3. Consider and supervise corporate govemance issues,
Attachment I: Description of the Applicant Company Page 163 of 204
Attachment 1_Description of the Applicant Company
4. Determine and monitor the Company s compensation philosophy,
5. Set the compensation of the Company s Chief Executive O�cer ( CEO ) and other executive officers of the
Company who report directly to the Chief Executive Officer (the Executive Leadership Team or ELT ),
6. Administer the Company s capital incentive plans, and
7. Oversee the Company s leadership succession planning and talent development efforts.
Additionally, the Committee proposes candidates for election to the Board of Directors. In selecting candidates for
election to the Board of Directors, the Committee recogni es the impoRance of diversity among the members of its
Board of Directors, to reflect differences in perspectives, skills, international and industry experience, backgrounds,
ethnicity, gender and other attributes.
Likewise, the Committee will have the following functions and purposes:
Corporate Practices and Government AI/airs:
1. Develop and recommend to the Board of Directors the criteria for membership of the Board of Directors,
including those set forth in the Company s Principles of Corporate overnance, as amended from time to time
2. 2Cvaluate, in accordance with applicable law and Company policies, the independence of the candidates
proposed for election to the Board of Directors
3. Consider and make recommendations on the appropriate si e and needs of the Board of Directors and
annually assess the attributes, skills, and mix of experiences and talents of the members of the Board of
Directors to optimi e the composition of the Board of Directors and support the planning of the succession of
Directors
4. Monitor and make recommendations on the functions, composition and Presidencies of the different
committees of the Board of Directors
5. Make recommendations regarding retirements and resignations of Directors
6. Oversee the annual self-assessment of the Board of Directors and its committees, including making
recommendations on the structure of ineetings of the Board of Directors and its committees
7. Prepare an annual evaluation of the Committee s perfortnance and annually assess the adequacy of its charter,
and recommend any proposed changes to the Board of Directors for approval
8. Consider corporate governance matters and review, at least annually, the Company s Corporate ovemance
Principles
9. Consider issues of potential conflicts of interest of inembers of the Board of Directors and executive officers
10. Review and approve related person transactions submitted to the Committee for its consideration, and provide
a summary of such transactions, including their tertns, structure and business purpose, and the Committee s
approval decision to the Audit Committee.
Sustainability issues:
1. Review, advise and monitor the Company s sustainability strategy, reporting and performance.
Compensation and Performance Issues:
1. Annually review and approve relevant corporate goals and ob ectives for compensation of the Chief Executive
Officer, evaluate the pertormance of the Chief Executive Officer in light of those goals and ob �ctives, and
detertnine and approve the level of compensation of the Chief Executive Officer based on this evaluation
2. In In consultation with the Company s Chief Executive Officer, annually review and approve corporate goals
and ob �ctives relevant to the Company s ELT compensation, oversee the evaluation of individual ELT
performance in light of those goals and ob ectives, and determine the individual ELT s compensation levels
based on such evaluations
Attachment I: Description of the Applicant Company Page 164 of 204
Attachment 1_Description of the Applicant Company
3. Penodically review, elative to comparable companies. and approve (i) executive compensation, inGuding
compensation levels of salaries, bonuses and incentives (ii) deferred compensation (ii) executive bonuses
(iii) executive capital compensation (including awards to encourage employment) (iv) executive
compensation (iv) benefits for changes in executive control and (v) other fortns of executive compensation
4. Approve all incentive compensation and deferred compensation plans for the Company s executives
5. Exercise all rights, authority and functions of the Board of Directors under the Company s stock incentive and
other stock-based plans, inGuding, without limitation, the authority to interpret the terms thereof, to grant
shares in virtue thereof and to amend said plan. In addition, the Committee may exercise all the rights, powers
and functions of the Board of Directors by virtue of the incentive plans, deferred and other compensation plans,
retirement plans and other benefit plans of the Company. To the extent permitted by applicable law and the
provisions of a particular stock-based plan, and in accordance with the requirements of applicable law and
such stock-based plan, the Committee may delegate to one or more executive officers of the Company, or in
a deputy director-committee of the Committee fortned for that purpose, the power to make stock awards
pursuant to such stxk-based plan to employees of the Company or any subsidiary of the Company who are
not directors or executive officers of the Company
6. Periodically review and make recommendations to the Board of Directors regarding compensation of Directors
7. Periodically review and make recommendations to the Board of Directors regarding management succession
planning, including policies and principtes for the selection and succession of the Chief Executive O�cer in
the event of an emergency or retirement of the Chief Executive O�cer
Finance Committee
The Finance Committee was created by resolution of the Board of Directors adopted at its meeting held on June 9,
2016, based on articie 38 of the bylaws.
The Finance Committee is designated by the Company s Board of Directors to support the Board of Directors in
monitoring and supervising the Company s capital structure, capital allocation strategy, financial policies and financial
risk management, cash flow, dividend policy and investment strategy(inGuding mergers, acquisitions and divestitures.
The Finance Committee is not responsible for financial reports or conirols, which are overseen by the Audit Committee
of the Board of Directors.
The Finance Committee shall be composed of no less than three members appointed by the Board of Directors. The
members of the Committee will be appointed by the Board of Directors at the proposal of the Corporate Practices and
Sustainability Committee, and may be removed by the Board of Directors. The members of the Committee will perform
their duties until their successors are duly elected and qualified or until their previous resignation, disqualification,
retirement, death or dismissal. The Chairman of the Committee �nnll be elected and may be removed by the Board of
Directors.
The Finance Committee discharges its responsibilities and assist the Board of Directors in fulfilling its oversight
responsibilities by doing the following:
1. Capital structure, planning and management. The Committee is responsible for reviewing and making
appropriate recommendations to the Board of Directors and management of the Company regarding the capital
structure of the Company. In addition, the Committee reviews the Company s capital allocation plans and
provide guidance and advice on liquidity, the sources and uses of capital, and expected returns.
2. Supenrision of financial planning. The Commiriee reviews and recommends to the Board of Directors the
Company s annual operating plan and oversee the Company s annual resource allocation plan, liquidity status,
significant operating investment plans and other financial planning.
3. Investment policies. The Committee reviews and supervises the policies for investing and safeguarding the
Company s financial resources and for related Treasury activities.
4. Mergers, acquisitions, divestitures and other strategic investments. The Committee reviews proposed material
mergers, acquisitions, bint ventures and divestitures, along with the financial implications of the proposed
transactions, and make recommendations to the Board of Directors. The Committee will also review and
evaluate integration and synergy plans related to ma or mergers and acquisitions, as well as the effectiveness
of their post-transaction implementation.
5. Issuance and repurchase of Company securities. The Committee supervises the issuance and repurchase of
securities by the Company and wili oHer the tertns of said issuances and repurchases of securities.
Attachment I: Description of the Applicant Company Page 165 of 204
Attachment 1_Description of the Applicant Company
6. Diwdends. The Committee is responsible for reviewing and making appropriate recommendations to the Board
of Directors regarding the Company s dividend policy and the declaration and issuance of dividends.
7. Financial risk management. The Committee periodically reviews the Company s general financial risk
management plans and strategies related to insurance coverage. In addition, the Committee monitors the
Company s strategies, policies and procedures wdh respect to hedging, swaps and other derivative
transactions.
Crltical Risks ExecuUve Committee
Orbia has an Executive Critical Risk Committee (CRC), chaired by its Orbia eneral Manager and made up of the
Finance Director, the presidents of the five business groups and other key officials. The CRC helps the Board of
Directors to identiy and assess corporate risks, assess the Company s risk profile, develop risk mitigation plans and
supervise their implementation. The CRC meets quarteAy and reports directly to the Audit Committee and the Board of
Directors as required.
Orbia s risk mapping process in 2021 included teams from each business group that identified and analy ed a universe
of risks relevant to each of them, using research, intemal surveys and targeted interviews with business leaders. Their
results were aggregated to form a Risk Register, which was reviewed and approved by the CRC. In addition, the CRC
reviewed Orbia s position and disclosures on climate change, prepared by the Company s vice president of
sustainability, and a cyber risk assessment prepared by Orbia s Chief Information Security Officer.
O�cers and Executives
The following table shows the names of the current main officers of the Company:
Dete o/
Olflc/al poslGonsln Engl/sh I tronalated into admisslon
Name Sex Date of birth Spanish (dNmm/yy)
Sameer e e Chiel Exec�five OKced Managing Dveaor
Bharadwa
Maarten Roe( Male 07/23/1964 Business Group Mesidenf Building 8 In/restiucfure/
P2sidenf o/ Ihe Building 8 In6asfruGure Business
Group
Peter Ha du Male 07/i 7/7976 Business Group Presidenf Duraline/Presldenf v/fhe
Duraline Business Group
abriel Miodownik Male
Nichalas Ballas
autam Nivarty
reg Smith
James P. Kely
Sheldon Hart
Deborah Bulters
Jorga Luis
u manMaia
Male
Male
Male
Male
09/07/1973 Business Group Presidenf Piedsion Agricu7fure/
P2sident ol fhe GrouP ol
Predsion Agnculfuie business
07/27/7960 Business Group Presidenf Polymer Solufrons
(VesfolifyPresidenf o/fhe Polyme� Solufions
Business Group (VestolifJ
04/26�1973 Business roup President Potymer Solufions
(Alphagary)I President of the Potymer Solutions
Business roup (Alphagary)
09/f0/f964 Business Group Piesidenf Fluorinafed SNutions
Presiden( ol Ihe Fluorinated SoluGons Busrness
Group
if/fA�1959 Chie/Finandal0/ficeNDirectorofF�nance
A
Male 07/f0/7963 General Counsel/Legal Vice President
Female 03/Of/f969 Chie/PeopleO�cer/VicePiesident
Human Resources
Male 0&/27/7970 Capaafe Vice-Piesident, InternalAudiUvice
Piesident, Intemal Audil
O1N9/1999
oaroinoia
09/22/2003
osvinozo
03127I2017
03/262018
08/23/2027
05�77/2079
o�ro��ozo
ozroinooa
Sameer S. Bharadwaj is the CEO of Orbia and until January 2021, president of the Fluorinated Solutions and Polymer
Solutions business groups, a group of leading companies improving life through basic materials, advanced materials
and formulated solutions in a set diverse end markets.
With more than 20 years of experience, Sameer is a recogni ed strategic leader with a track record of fostering business
growth through technology-driven innovation, operational excellence, and talent development in the advanced materials,
technology, energy, and energy industries. and pharmaceutical.
Since 2016, when he �oined Orbia to lead the Compounds business group, Sameer has progressively assumed the
leadership of the Alphagary, Koura and Vestolit commercial brands, managing to position the portfolio of solutions
competitively in the market and has led its global teams at high levels of performance. Prior to oining Orbia, Sameer
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Attachment 1_Description of the Applicant Company
held various executive leadership positions in his 11-year career at Cabot Corporation, where he served as Vice
President and eneral Manager. As part of his du6es, he led the market and commerciali ation strategy for new
technologies with a key fxus on the energy and materials sectors. Pnor to this, Sameer worked as a strategy consultant
for The Boston Consuiting roup, where he served Gients in the metals, telecommunications, technology, biotech and
pharmaceutical industries. He began his professional career as a senior research engineer with The Dow Chemical
Company.
Sameer eamed a master s degree from Harvard Business School, a Ph.D. in chemical engineering from the University
of Minnesota, and a bachelors degree in chemical engineering from the University of Bombay.
Maarten Roef s president of Orbia s Building Infrastructure business group. This group is redefining today s piping
industry with innovative solutions that last longer and require less time to install.
Maarten has nearly three decades of experience in the plastics and packaging industry, during which he managed
Wavin s overseas business in the Benelux and North West regions, before being appointed to Wavin s board of directors
in 2010. Maarten is also a member of the European Plastic Pipe and Fittings Association (TEPPFA).
Maarten has a masters degree in business economics from Erasmus University in Rotterdam, the Netherlands.
Peter Hajdu is the president of Orbia s Dura-Line business group, a company that produces more than 400 million
meters of cable conduit a year to create the physical pathways that fiber and other technologies use to connect cities
and homes.
Peter oined Orbia in 2018 having held multiple execuGve positions across Cisco"s EMEA and emerging markets
operations, Peter has a wealth of knowledge and insight on how to use data to make life easier. Prior to Cisco, Peter
was a consultant with McKinsey Company, serving clients in the chemical, automotive, aviation, and banking
industries.
He is a graduate of the University of California, Berkeley, where he earned his MBA and bachelors degree in technology
management.
Ga6riel Miodownik is president of Orbia s Precision Agriculture business group, a world leader in precision imgation
solutions for sustainable agriculture.
Over 17 years, aby gained a deep understanding of Netafim s global customer base and agricultural markets,
spanning multiple geographies, holding posi6ons such as CFO for Latin America, eneral Manager of Netafim Mexico,
Vice President of the Americas, Vice President of Europe, the Middle East and Africa, and most recently as Senior Vice
President and President of the Americas at Netafim.
aby has an MBA with a ma or in Accounting and Finance from Tel Aviv University. He is also a certified accountant in
Israel.
Nicholas Ballas is president of Orbia s Vestolit Polymer Solutions business group. He has extensive global expenence
in the chemical and manufacturing industries. He also has extensive experience in developing and execu6ng strategies
and optimi ing operations aimed at growth in sales and profits.
Prior to �tlining Orbia in 2020, Mr. Balias was Executive Vice President of Nexans, SA, a global leader in the cable
industry, where he led the company s business division in the Asia Pacific region for 8 years. He also served as director
of the Nexans Foundation, where he helped lead efforts to provide etectricity to disadvantaged communities around the
world. Mr. Ballas began his career at Cabot Corporation, where for 22 years he held various finance, strategy and
general management positions in the US, Japan, Malaysia and Indonesia.
Prior to dining Orbia in 2020, Nicholas was Executive Vice President of Nexans, SA for eight years, a global leader in
the cable industry, where he led the company s Asia Pacific business division. Nicholas also served as director of the
Nexans Foundation, where he helped lead efforts to provide electricity to disadvantaged communities around the world.
Nicholas s previous professional experiences include a consulting stint with Cathedral Hill Advisory, Samudera Shipping
in Indonesia, and an early start at Cabot Corporation, where he was instrumental in the development of Cabot LN .
Mr. Ballas is currently a member of the Board of Directors of Samudera Shipping Line Ltd. He holds an MBA from
Thunderbird School of lobal Management and a BA from St. Cloud State University.
autam Nivarthy is president of Orbia s Alphagary Polymer Solutions business group. As a chemical engineer by
profession and with over 20 years of management experience in the chemical industry, autam has led extensive
business transformation efforts that have created significant value.
Since oining Orbia in 2017, autam has taken Alphagary to a leading position in the industry thanks to its innovative
solutions tailored to customer needs. Prior to oining Orbia, autam hetd executive leadership positions in marketing.
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Attachment 1_Description of the Applicant Company
strategy and general management for Honeywell. DuPont and Undever. During his time at DuPont and Unilever he lived
m Southeast Asia and Europe.
autam holds a Ph.D. in chemical technology from the University of Twente, an MBA from Columbia Business School,
and a BSc in chemical engineenng from the University of Bombay.
Gregg Smith is president of Orbia s Fluorinated Solutions business group. regg has more than three decades of
experience in the global chemical and specialty materials industries, with an extensive background in general
management, business development, and developing technologies to drive growth.
Since oining Orbia in 2018, regg has led Fluorinated Solutions to a competitive position in the fluorine value chain by
expanding into existing and new verticals where fluorite is paramount. Prior to oining Orbia, regg held executive
leadership positions in operaGons, business and business development, and technology at Cabot Corporation. He has
a successful track record as a corporate entrepreneur and technological developer creating new businesses and
materials for electrophotographic and ink et printing, carbon-reinforced composites and lithium-ion battery technologies,
regg received his MBA from Northeastem University and a BS in chemical engineering from the University of New
Hampshire.
ames P. elly is Senior Vice President and CFO of Orbia and brings over 30 years of experience to leading Orbia s
finance organi ation and presiding over the accounting, treasury, financial planning and analysis, tax and investor
relations functions.
Jim is a seasoned executive with extensive experience in building global finance organi ations and a track record of
financial and operational leadership in the chemical and manufactunng industries. He has expertise in establishing best-
in-class finance systems, processes and fundamentals that enhance organi ational resilience and support growth.
Prior to oining Orbia, Jim held a variely of senior positions, most recently serving as Vice President and Corporate
Controller of Cabot Corporation, where he oversaw all reporting and internal control activities, finance process
improvements and facilitation of Cabot s Audit Committee activities. Over the course of his career, Jim lived and worked
across several continents and steered teams in corporate reporting, business financial planning and analysis, investor
relations and internal audit.
Jim holds an MBA from Harvard University and a B.S. degree in accounting from eorgetown University.
Sheldon Hirt is Vice President and eneral Counsel of Orbia. He oversees Orbia s legal, compliance and regulatory
organi 8tion, ensuring that our business continues to grow responsibly.
Prior to f�ining Orbia, Sheldon worked at Amneal Pharmaceuticals, where he was a member of the executive leadership
team. Sheldon has significant experience handling legat and compliance matters at intemational pharmaceutical
companies such as Johnson Johnson, Actavis, and Progenics Pharmaceuticais. He speciali es in mergers and
acquisitions, licensing, securities, and corporate govemance.
Sheldon holds a bachelors degree in international affairs from Columbia University s Schoot of Intemational and Public
Affairs and a JD from Cotumbia Law School.
Deborah Butters is the Chief People Officer, responsible for growing and devetoping Orbia as a people-oriented and
sustainable organi ation, and enhancing the experiences and capabilities of our team around the world. In addition, she
leads the execution and strategic vision of Orbia s brand communication and marketing.
With over 25 years of experience, she is a seasoned HR leader, team builder and cuitural manager who brings a
pragmatic and creative approach to driving business value. In addition to having worked in the technology, consuiting,
life sciences and now industrial sectors on a global scale, Deborah has experience in attracting and retaining talent,
integrating acquisiGons, executive and employee compensation modets, and business initiatives. change management
and transformational performance support. Prior to oining Orbia, she served as lobal Human Resources Director
(CHRO) at PerkinElmer for four years, leading the company s people strategy. Prior to PerkinElmer, Deborah spent 17
years with IBM, living and working in the United States and Europe in leadership roles where she enhanced the
company s global HR programs and led a company-wide talent transformation. Deborah began her career at a soflware
startup with Lotus Development in 1991, where she held progressive leadership positions until IBM acquired Lotus in
1999.
Deborah obtained a Bachelor of Science degree in Human Resources irom the University of Bath in England, and
subsequently a Postgraduate degree in Human Resources from the University of London.
Jorge Luls Guzman Mejia is the Corporate Vice president of Intemal Audit. He has more than 20 years of experience
in finance, treasury, credit, risk assessment, auditing, and intemal controls.
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Attachment 1_Description of the Applicant Company
Before tlining Orbia m 2008, he worked for companies including Avon, Becton Dickinson, DuPont and Dow Chemical.
Jorge Luis has a degree in business administration and an MBA from the Universidad Iberoamericana. He is also CIA
certified and CSA certified by the Florida Institute of Internal Auditors.
Compensation to the members of the Board of Directors and the Company's Committees
In accordance with the resolutions of the Ordinary Annual eneral Meeting of Shareholders held on April 1, 2022, it
was resolved that during the fiscal year of 2022 and until further resolution by the Shareholders Meeting:
a) The members of the Board of Directors, with the exception of the Honorary President and the President of the
Board of Directors, would receive an annual compensation in cash in Mexican pesos equivalent to USD
$60,000.00 (sixry thousand 00/100 United States dollars) and a compensation in kind. in Pesos (net resulting
from the withholding of the corresponding taxes) of USD $960,000.00 (ninety thousand 00/100 Dollars of the
United States of America) in restricted shares of the Company.
b) The Honorary President of the Board of Directors receives an annual cash payment equivalent in Pesos.
National Currency, to USD$500,000.00 (Five Hundred Thousand 00/100 Dollars of the United States of
America).
c) The Chairtnan of the Board of Directors receives an annuai cash payment equivalent in Pesos, National
Currency, to USD$750,000.00 (Seven Hundred Fifty Thousand 00/100 United States of America Dollars) and,
in addition, shali be entitled to receive an additional contingent payment. of up to a maximum equivalent in
Pesos, National Currency, of USD$750,000.00 (Seven Hundred Fifty Thousand 00/100 United States Dollars),
payable on the basis of the achievement of certain specific ob ectives established and evaluated by the
Corporate Practices Committee.
d) The Chairman of the Audit Committee will receive, in addition to the payment in cash and in kind due to him as
a member of the Board of Directors, an annual payment in cash equivalent in Pesos, National Currency, to
USD$25,000.00 (Twenty Five Thousand 00/100 Dollars of the United States of America) and the Presidents of
the Corporate Practices Committee and the Finance Committee will receive, also in addition to the payment in
cash and in kind due to them as members of the Board of Directors, an annual payment in cash equivalent in
Pesos, National Curcency, at USD$20,000.00 (Twenty Thousand 00/100 Doliars of the United States of
America).
Together, the benefits received from the Company during 2021 by the members of the Board of Directors and Relevant
Directors amounted to USD$2,800,000 in cash, plus USD$585,000 in kind (restricted shares of Orbia), for a total of
USD$3.385,000.
Intermedfate Adminisbation Bodies
The Committees that assist the Board of Directors are the Audit Committee, ihe Corporate Practices and Sustainability
Committee and the Finance Committee. Orbia does not have intermediate bodies other than those mentioned above.
Code of efhics
Orbia must always be a company recogni sd for its prinaples and values. In order to maintain and reinforce its ethical
and professional performance, its Code of Ethics has been updated and reinforced, while a more effective reporting
system has been established through which behaviors contrary to the principles and values of the company can be
reported.
The Code of Ethics establishes Orbia s commitments to society, the government and the competition, as well as to its
collaborators, suppliers, consumers, customers, partners and shareholders.
The Code of Ethics is the standard of behavior in the daily operation of Orbia.
MaJor Shareholders
As of the date of this Annual Report, the main shareholder of the Company is Kalu , which is controlled by the Valle
Perochena family, and which owns approximately 44.83% of the capital stock with voting rights and accordingly ia
shareholder that exercises significant influence, according to the LMV. The Valle Perochena brothers individually own
0.47%, other shareholders related to a greater or lesser extent to the Valle family own approximately 9.27% of the
capital stock with voting rights, so together with Kalu are considered to be a shareholder who exercise significant
influence over the Company in accordance with the LMV. No govemmental institution owns more than 5% of the voting
capital stock.
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Attachment 1_Description of the Applicant Company
As of this date, the Company s capital remains unchanged. The capital is represented by 2,010,000,000 shares.
Shareholding of employees and executives
As far as the Company is aware, none of its employees and/or Relevant Directors has an individual holding of shares
greater than 1% of the capital stock.
Shareholding of H►e Directors
The main shareholders of the Company are the members of the Perochena Valley Family (Antonio del Valle Perochena,
Mar a Blanca del Valle Perochena, Mar a de uadalupe del Valle Perochena, Francisco Javier del Valle Perochena
and Juan Pablo del Valle Perochena), through the Kalu company, of which they own 44.83% of the total shares issued
by Orbia
Messrs. Juan Pablo, Antonio, Mar a de uadalupe and Francisco Javier del Valle Perochena are also Directors of the
Company,
Based on the lists of owners provided to the Company by various stock market intertnediaries on the occasion of its
Ordinary eneral Shareholders Meeting on April 1, 2022, none of the Company s directors holds a direct and individual
shareholding greater than 1% and less than 10% of the Company s capital stock:
Signlficant Changes in fhe Last Three Years !n Shareholder Ownership
There have been no significant changes in the ownership of shareholders in the last three fiscal years.
Labor lncluslon program policy descrlption
Our corporate culture respects professional, cultural and gender diversity and encourages professional development
based on talent, character, education, knowledge, discipline and work, without distinction of gender, race, religion or
other factors. Furthermore, Orbia strictly prohibits any kind of discnminatory conduct, including gender discrimination.
To date, the Company is working on documenting policies, to be approved by our Board of Directors, that wiil actively
promote corporate and labor diversity both in our goveming bodies as well our workforce, with a view to broadening the
diversity of gender, perspective and experience.
As of 2021, 2555 of the Directors are women.
d) Corporate Bylaws and Other Agreements
The following is a bnef summary of the main provisions contained in the Company s corporate bylaws.
Right of Preference
In cash capital increases. shareholders will have preference to subscnbe the new shares issued to representthe increase.
This right must be exercised within the term established for such purpose by the Shareholders Meeting that decrees the
increase, which in no case may be less than 15 (fifteen) calendar days counted from the date of publication of the
corresponding notice in the electronic system established by the Ministryof Economy. In addition, the Company may
publish the respective notice in a newspaper with widespread circulation at the registered office. However, if all the
shares compnsing the capital stock are represented atthe Meeting that decreed the increase, said period of at least 15
(fifteen) days shall begin to run and be counted, if so resolved by said Meeting, as from the date the MeeGng is held, and
the shareholders shall bedeemed to have been notified of the resolution at that time, and therefore its publication shall
not be necessary.
In the event that, after the expiry of the aforementioned period, certain shares still remain unsubscribed, theBoard of
Directors shall have the power to determine the person or persons to whom the unsubscribed shares must be offered
for subscription and payment.
Shareholders shall not en dy a pre-emptive right in the case of: (i) the merger of the Company, (ii) the conversion of
debentures into shares, (iii) the public offering of shares under the terms of ARicle 53 of the LMV and Article Eight of the
bylaws, (iv) the increase in the capital stock through the payment in kind of theshares issued, or through the cancellation
or capitali ation of liabilities payable by the Company, (v) the placement of shares acquired by the Company in
accordance with Artide 56 of the LMV and ARide Thirteen of the bylaws (repurchase fund), (iv) the capitali ation of share
premiums, retained earnings and reserves or other items of the assets of the Company and (vii) any other case where
the Law pertnits the non- application of the pre-emptive subscription right.
Provisions for Change of Control
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Attachment 1_Description of the Applicant Company
The ninth article of the corporate Bylaws contains measures to limit shareholding Poison Pill , such that anytransfer of
shares to any person or group of persons acting in a concerted manner, which accumulates in one or more transactions
(without time limit) 10% or more of the total shares representing the outstanding capital stock, shall be sub ect to the
authori ation of the Board of Directors.
The above, including but not limited to: a) The purchase or acquisition by any title or means, of shares representing the
capital stock of this Company, including Ordinary Participation Certificates (CPO s) or anyother instrument whose
underlying value are shares issued by the Company b) The purchase or acquisitionof any class of rights corresponding
to the holders or owners of the Company s shares or shares issued in the future by the Company c) Any contract,
agreement or legal act that seeks to limit or results in the transferof any of the rights and powers that correspond to
shareholders or owners of shares in the Company, including derivative financial instruments or operations, as well as
acts that imply the loss or limitation of voting rights granted by shares representing the capital stock of this Company
and d) Purchases or acquisitions intended to be made by one or more interested parties, who act in a concerted manner
or are finked to each other, de ure or de facto, to take decisions as a group, association of persons or consortia.
The prior favorable written agreement of the Board of Directors shall be required regardless of whether thepurchase or
acquisition of the shares, securities and/or rights is intended to be made on or off the Stock Exchange, directly or
indirecUy, through a public offer, private offer, or through any other modality or legal act, in one or several transactions
of any legal nature, simultaneous or successive, in Mexico or abroad.
The favorable prior written agreement of the Board of Directors shall also be required for the execution of agreements,
contracts and any other legal acts of any nature, oral or written, by virtue of which voting mechanisms or association
agreements are formed or adopted, to be exercised at one or more Shareholders Meetings of the Company, each time
the number of grouped votes results in a number equalto or greater than any percentage of the total shares representing
the capital stock of the Company that areequal to or greater than 10% (ten percent) of the capital stock. An agreement
of this nature shall not be understood to be an agreement entered into by shareholders for the appointment of minonty
Directors. Suchagreements shall be subect to the provisions of the LMV and shall not be enforceable against the
Companyto the detriment of the other shareholders or the Company s financial or business interests.
If purchases or acquisitions of shares are made, or restricted agreements are entered into, without observingthe
requirement to obtain prior favorable written agreement of the Board of Directors of the Company and, if applicable,
compliance with the aforementioned provisions, the shares, securities and rights pertaining to such purchases,
acquisitions or agreements, shall not grant any right or faculty to vote at the Company s Shareholders Meetings, nor
shall any value be given to certificates of deposit of shares issued by any credit institution, financial intermediary or stock
exchange, depositary or institution or for the deposit of securities,to accredit the right to attend a Shareholders Meeting_
Nor shall such shares, rights or securities be entered in the Register of Shares of the Company or, as the case may be,
the Company shall cancel their entry in the Register of Shares kept by the Company.
Notwithstanding and regardless of any consequence arising from noncompliance with the foregoing, each person who
acquires shares, securities, instruments, or rights representing the Company s capital stock in violation of the provisions
will be obliged to pay the Company a conventional penalty in an amount equal tothe price of all the shares, securities or
instruments representing the Company 9 capital stock that have bee�the ob ect of the forbidden transaction. In the event
that the transactions that have given rise to the acquisition of a percentage of shares, securities, instruments, or rights
representing the Company s capital stock equal to or greater than 10% (ten percent) of the capital stock are made free
of charge, the conventional penalty will be equivalent to the market value of said shares, securities, or instruments,
provided that the authori ation of the Company s Board of Directors has not been obtained.
If the Company maintains the shares representing its capital stock registered in the National Securities Registry, the
above requirement, in the event of transactions carried out through the stock exchange, will also be sub ect to the rules
established by the Stock Market Act or those issued by the National Banking and Securities Commission in accordance
therewith.
Shares
All shares, both those representing the minimum fixed capital stock, with no right of withdrawal, and those representing
vanable capital, are ordinary, nominative, without nominal value and confer on their holdersC�qual rights and obligations.
Shareholders eetings
The eneral Shareholders Meeting is the supreme body of the Company. Meetings shall be Ordinary, Extraordinary or
Special. The Extraordinary Meetings will be those that meet to deal with any of the matters referred to in ArtiGe 182 of
the eneral Corporations Act, as well as Articles 53 and 108 of the LMV. SpecialMeetings will be those that meet to deal
with matters that may affect a single category of shareholders. All other Meetings shall be Ordinary, the latter being held
at least once a year within the four months foliowingthe end of the fiscal year, to address the matters indicated in ArtiGes
181 of the eneral Corporations Act and 56 section IV of the LMV.
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Attachment 1_Description of the Applicant Company
The Annual Ordinary eneral Shareholders Meeting will appoint the members of the Board of Directors, based on the
payroll proposed by the control group. In accorda�ce with the LMV and the Bylaws, any shareholder or group of
shareholders owning shares representing 10% of the capital stock may appoint andrevoke a member of the Board of
Directors at a general shareholders meeting. Such appointment may only be revoked by the other shareholders when
the appointment of all the other directors is revoked.
In terms of Article 47 of the LMV, the Ordinary enerel Shareholders Meeting, in addition to the provisionsof the eneral
Corporations Act, will meet to approve the operations that the Company or the legal entities it controls intends to carry
out, within the period of a fiscal year, when they represent 20% (twenty percent) or more of the consolidated assets of
the Company based on figures corresponding to the Gose of the previous quarter, regardless of the way in which they
are carried out, whether simultaneously or successively, but which due to their characteristics may be consolidated as
a single operation.
In addition, the Annual Ordinary eneral Shareholders Meeting shall be infortned of the annual repoR prepared by the
Committee or Committees that perform the Corporate Practices and Auditing functions referred to in Article 43 of the
LMV, which must be presented to said Shareholders Meeting by the Company s Board of Directors.
Shareholders Meetings must be called at least 15 calendar days in advance, through the publication of therespective
call through the electronic system of publications established for such purpose by the Ministry ofEconomy of the Mexican
govemment. In addition, the Company publishes this announcement in a newspaper with widespread national
circulation. The call forthe Shareholders Meetings contains the meeting s agenda and, cannot be changed unless 100%
of the issued shares are represented atthe Shareholders Meeting.
The Ordinary Shareholders Meeting will be considered legitimately installed by virtue of the first call if at least 50% plus
one of all the shares with voting rights in such Meetings are present. In the case of a secondor subsequent call, with the
expression of this circumstance, it will be considered legitimately installed with any number of shares represented in the
Meeting.
The Extraordinary Meeting shall be legally installed by viRue of the first cali if at least 75% of all the shares entitled to
vote in the Meeting are represented. In the case of a second or subsequent call, with the expression of this circumstance,
it shall be considered legitimately installed if at least 50% plus one of all theshares with the right to vote in said Meeting
is represented in it.
The Ordinary or Extraordinary eneral Meeting wiil be legitimately installed without the need to call a meeting if all the
shares into which the capital stock is divided are represented and may resolve any matterif at the time of voting all the
shares are still represented.
Admission to Shareholders I eetings
In order to attend the Meetings, shareholders must obtain from the Company s secretary the correspondingadmission
card for the Meeting, at least one day in advance, at the day and time set for the holding of the Meeting.
In order to obtain the admission card, sharehoiders must deposit their shares at the Secretary of the company s oKce
in advance in the case of shares deposited at the S.D. Indeval Instituci n para el Dep sito de Valores, S.A. de C.V., This
must be complemented with the list referred to in Article 290 of the LMV anddelivered to the address of the Company s
secretariat or to the address of the Company to obtain the admission card.
Shareholders may be represented at the Meetings by the person or persons they appoint by means of a power of attorney
signed before two witnesses or by representa6ves with su�cient general or special powerof attorney granted in terms of
the applicable legislation or through ihe forms referred to in Article 49 of the LMV, which must be available to
shareholders from the day of publication of the call.
Transactions with Company securities
On February 24, 2015, the Board of Directors approved the Policies and Agreements on Securities Transactions and
the Acquisition and Placement of the Company s Own Shares and the Policies and Agreements on Securities
Transactions and the Acquisition and Piacement of the Company 8 Own Shares _ The purpose of this document is to
disclose the limitations/prohibitions that certain persons related to the Company have considering that its shares are
listed on the BMV, among them the members of the Board ofDirectors, the eneral Director, the Relevant Officers and
others, to carty out operations with securities (shares or any class of securities issued by Orbia or credit securities that
represent them as well as optionalsecurities or derivative financial instruments that have such securities or securities as
underlying) issued by the Company itself.
Although it is the responsibility of the members of the Board of Directors, Relevant Executives, and other paAies obligated
under the aforementioned policy to comply with the same and with the regulations regarding transactions with securities
issued by Orbia, induding the use of insider information, the Company has triedto alert such persons about such
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Attachment 1_Description of the Applicant Company
provisions and regularly infortns them of the penods of restnction for the purchase or sale by them of Orbia shares based
on the existence of insider information that has not been communicated to the public.
Compensation and Performance Evaluation of Directors and Committee embers
The Directors shall receive as compensation for their services the one established in cash or in kind by theOrdinary
eneral Shareholders Meeting that has appointed them. This Meeting may delegate to the Boardof Directors or any
other competent administrative body the implementation of any remuneration in kind forDirectors.
The Corporate Practices and Sustainabitity Committee is responsible forevaluating the performance of andcompensation
to the Issuer 9 relevant executives as discussed earlier in this annual report.
Faculty of the Council to make decisions regarding any other matter in which they may have a personal interest
The members and, where appropriate, the Secretary of the Board of Directors, who have a conflict of interest in any
matter, must refrain from participating and be present in the deliberation and voting on said matter.
Modiflcations in the by/aws
1. In the Ordinary and Extraordinary Annual eneral Meeting of Shareholders held on April 23, 2019, certain artiGes
of the Company 5 bylaws were modified. A summary of said modifications is presented below:
Second Article: Reflect the change by which the Federal District is renamed Mexico City.
Article Three: Make precisions in the corporate purpose.
Sixth Article: Establish that prior express authori ation of the CNBV, the Company may issue limited, resVicted or
non-voting voting shares and that the preferential subscription nght referred to in ArtiGe 132 of the eneral Law of
Commercial Companies will not be applicable in the case of capital increases through public offerings.
Seventh Article: Only draRing ad ustments.
Article Nine: Regulate the acquisition of 10% or more of shares representing the capital stock and in addition to the
foregoing, that a ma oriry of the members of the Board of Directors who have been elected to said position before
verifying any circumstance that could imply a change of Control, must grant their authori ation in writing so that a
Change of Control in the Company.
It is important to note that the modification of this ARicle may only be approved in the Extraordinary eneral Assembly
of Shareholders of the Company in which 5% or more of the outstanding shares have not voted against on the date
of the respective Shareholders Assembly.
Article Ten: Speciry that the right of preference is in terms of the provisions of article 132 of the eneral Law of
Commercial Companies.
Thirteenth Articte: Establish the power of the Board of Directors to designate the person or persons responsible for
managing the resources for the acquisition and placement of own shares, when said designation has not been made
by the Shareholders Meeting.
Fifteenth Article: Only drafting ad ustments.
Article Twenty-Eighth: Requirements for appointing and revoking a member of the Board of Directors by shareholders
holding shares representing 10% of the capital stock.
Article Thirty-Second: Add to the requirements to be Directors those persons who, in the opinion of the Companys
Corporate Practices Committee, en oy recogni ed professional or business experience and prestige as well as moral
solvency and are not in situations of conBict of interest with the Company. Company or its subsidianes.
Article Thirty-Four: Procedure for the election of Directors proposed by shareholders holding shares representing
10% of the capital stock, as well as including the power of the Company s Corporate Practices Committee to present
to the Ordinary Annual eneral Meeting of Shareholders a form with the names of the candidates proposed to form
the Board of Directors, including those proposed by minority shareholders.
Article Forty-Four: InGude as a power of the Corporate Practices Committee to propose to the Shareholders Meeting
the candidates who, in its opinion, should be part of the Board of Directors, in case the members that are part of it at
the time of the election are not ratified. in their positions by the Assembly of Shareholders.
Attachment I: Description of the Applicant Company Page 173 of 204
Attachment 1_Description of the Applicant Company
2. In the Extraordinary eneral Assembly of Shareholders held on August 26, 2019, the change of corporate name to
ORBIA ADVANCE CORPORATION was approved, consequently, it was decided to reform Article One of the
corporate bylaws.
3. At the Extraordinary eneral Meeting of Shareholders held on September 13, 2021. Article Three of the Company s
bylaws was amended in order to specify ihe purpose of the Company.
Process to be followed to change the rights associated with the shares
Both the shares that represent the minimum fixed capital stock, without the right to withdrawal, and those that represent
the variable capital, are ordinary, nominative, without expression of nominal value and confer equal rights and obligahons
to their holders.
With the prior express authori ation of the CNBV, the Company may issue limited, restricted or non-voting voting shares.
The issuance of shares other than ordinary shares must not exceed Nventy-five percent of the paid-in capital stock
placed among the investing public. When expressly authori ed by the CNBV, said limit may be extended, in certain
exceptional cases.
Statutory clauses or agreements between shareholders that limit or restrict the management of the issuer or its
shareholders
There is no restriction whatsoever for the shareholders to participate in the management of the Company, in this regard,
the bylaws establish that the shareholders holding shares with voting rights, even limited or restricted, that individually
or ointly have the 10 % of the Capital Stock, shall have the right to appoint and revoke a member of the Board of
Directors and their respective altemate at the eneral Shareholders Meeting, on the understanding that it must always
be respected that 25% of the Directors must be independent. Such appointment may only be revoked by the other
shareholders when the appointment of all the other Directors is also revoked, in which case the persons replaced may
not be appointed in that capacity during the lwelve months immediately following the date of revocation.
Minonty shareholders who, in terms of what is described above, intend to appoint a Director, must notify the Company s
Corporate Practices and Sustainability Committee at least 5 business days in advance of the Ordinary Annual eneral
Meeting of Shareholders. Said communication must contain at least: (i) full name and experience of the person they
propose to appoint, and (ii) an indication of whether or not, in their opinion, they meet the conditions of independence,
recogni ed experience and professional or business prestige and of moral solvency, as well as those defined in the laws
and other applicable provisions.
Attachment I: Description of the Applicant Company Page 174 of 204
Attachment 1_Description of the Applicant Company
5. CAPITAL AR ET
a) Shareholding structure
The capital stock as of December 31, 2021, is represented by 2,010,000,000 shares, ordinary, nominatwe with voting
rights and without par value, which are fully paid. The fixed part of the capital is represented by registered shares of
Class I without right of withdrawal. The variable part of the capital is represented by registered shares of Class II. without
expression of nominal value. As of December 31, 2021, the number of shares and amount of capital stock is as follows.
December 31, 2021
Subsc�ibed capital Numbar of acUons Amount
( illions of dollars)
Class I 308,178,735 $38
Class II 1,701,821,265 219
Total 2,010,000,000 257
As of December 31, 2021, the Company does not have open positions in derivative instruments that can be settled in
kind whose underlyi�g assets are ORBIA' shares.
During 2020 and 2019, Orbia has not changed the number or amount of outstanding shares represenhng its share
capital.
As of December 31, 2021, the Company had acquired 90,000,000 own shares through the use of the resources
authori ed by the Ordinary Annual eneral Meeting of Shareholders for the Repurchase Fund and that the Issuer buys
in the stock market, charged to its capital.
b) Performance of the share in the Stock arket
The prices and amounts of the stock market operations of the ORBIA` shares are presented in Mexican pesos.
The level of marketability corresponding to the shares is High , according to the information available from the
Marketability Index carried out by the BMV in the month of March 2021. As of 2008, Orbia s shares are an integral part
of the BMV Quote Price Index.
In the last three years, the listing on the BMV of the ORBIA ' shares have not been suspended.
The following tables show the maximum, minimum and last prices of the shares listed on the BMV dunng the indicated
periods:
AnnualPerformance
Date aximum �inimum Closinp Volume Amount
2017 53.60 46.00 48.63 725,639,512 35,850,875,980
2018 67.79 42.71 49,94 832,120,117 47,265,429,553
2019 52.88 31.02 40.32 932,615,312 39,556,051,265
2020 5180 2380 46.75 788,415,268 28,206,256,417
2021 59 75 42 70 52.27 664,912,571 34,871,105,897
Quarterly Performance
Date azimum inimum Closing Volume Amount
1Q2020 51.80 23.80 26.09 258,529,654 9,764,206,655
2Q2020 37.74 24.31 33.98 243,451,901 7,391,465,477
3T2020 39.07 32.05 38,74 136,713,729 4,906,796,401
4Q2020 47.50 35.71 46.75 149,719,984 6,143,787,884
1Q2021 57.49 42.70 57.02 212,843,203 10,560,032,463
2Q2021 59.20 48,51 52.91 142,575,936 8,309,475,964
3Q2021 56.56 4928 52.27 158,013,104 7,748,898,364
4Q2021 54.81 46,47 51.38 100,668,872 8,252,899,106
1Q2022 54.81 46,47 52.51 172,611,599 8,817.313,517
Attachment I: Description of the Applicant Company Page 175 of 204
Attachment 1_Description of the Applicant Company
onthly Performance
Date aximum inimum Closing Volume amount
30-Apr-21 59.75 5124 56.50 46,765,892 2,552,400,501
31-May-21 58.50 55.03 56.41 49,960,192 2,823,589,814
34Jun-21 57.16 51.04 52.14 54,754,236 2,933,485,649
31-Ju1-21 56.36 50.71 54.25 41,089,668 2,198,702,496
31-Aug-21 57.75 53.80 57.34 45,975,236 2,561,835,791
3aSep-21 59.20 48.51 52.91 55,510,434 2,988,160,077
31-Oct-21 56.56 51.67 53.51 33,510,484 1,795,067,302
30.Nov-21 54.85 49.65 49.94 64,250,660 3,353,412,883
31-Dec-21 54.50 49.28 52.27 60,220,904 3,104,418,921
31-Jan-22 52.79 46.47 48.17 45,194,104 2,215,908,077
28-Feb-22 53.83 47.50 53.32 32,463,720 1,669,617,161
31-Mar-22 54.81 49.52 52.51 94,978,756 4,931,788,279
Souree: Financial Infosel. Price figures in pesos.
c) arket aker
As of the date of this Annual Report, the Company has not contracted a Market Maker to support the trading of ORBIA'
shares, as permitted by the LMV.
Attachment I: Description of the Applicant Company Page 176 of 204
Attachment 1_Description of the Applicant Company
6. RESPONSIBLE PERSONS
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Attachment I: Description of the Applicant Company Page 177 of 204
Attachment 1_Description of the Applicant Company
orbia Advance Co�oZation,
S.A.B. de C.V. y Subsidiarias
Manifiesto de consentimientn para la
inctusi6n en el repvrte anual en los
terminos del Articulo 33 de las
DEspastciones por el a"no que tern�ino
el 31 de diciembre de 2021.
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Attachment I: Description of the Applicant Company Page 178 of 204
Attachment 1_Description of the Applicant Company
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Attachment I: Description of the Applicant Company Page 179 of 204
Attachment 1_Description of the Applicant Company
7. ANNEXES
• Consolidated and audited financial statements of Orbia Advance Corporation, S.A.B. de C.V., for the years
2021, 2020 and 2019,
• Reports of the Corporate Practices and Audit Committee of Orbia Advance Corporation, S.A. B. de C.V., for the
years 2021, 2020 and 2019.
Attachment I: Description of the Applicant Company Page 180 of 204
Attachment 1_Description of the Applicant Company
orbia � Stock Information
Mexican Stock Exchange
�� �, Ticker:Orbia•
Orbia Announces Fourth Quarter and Full-Year 2022
Financial Results
exico City, February 22, 2023 — Orbia Advance Corporation, S.A.B. de C.V. (BMV: ORBIA*) ("the
Company" or "Orbia") today released unaudited results for the fouRh qua�ter and full year of 2022.
Orbia delivered solid results for 2022 and exceeded the upper end of its annual EBITDA guidance, which
accounted for ongoing impacts from macroeconomic challenges and lower year-over-year revenue and
profitabiliry. For both the quarter and the year, Orbia generated strong cash flow and maintained a strong
balance sheet, demonstrating resilience in its businesses and robust long-term fundamentals.
Q4 2022 Financial Highlights
(All metrics are compared to Q4 2021 unless otherwise noted)
. Net revenues of $2.1 billion decreased 10%, with lower sales in Polymer Solutions, Building and
Infrastructure and Precision Agriculture.
• EBITDA of $308 million decreased 39%, driven by higher input costs, lower volumes in certain segments
and currency headwinds, partially offset by higher profitabiliry in Connectivity Solutions. EBITDA
included one-time charges of $32 million in the quaKer.
. Net ma tlrity income of negative $36 million was driven by lower EBITDA and an impairment charge.
• Free cash flow of $308 million increased by $4 million, reflecting effective working capital management,
which offset lower EBITDA and increases in capital expenditures.
Full-Year 2022 Financial Highlights
{All mefrics are compared to FY 2021 un/ess otherwise noted)
• Net revenues of $9.6 billion increased 10%, with higher sales in Connectivity Solutions, Fluorinated
Solutions and Polymer Solutions, especially during the first half of the year, partially offset by lower sales
in Precision Agriculture.
. EBITDA of $1.91 billion decreased 7%, driven by higher input costs, lower volumes in ceRain segments
and currency headwinds, partially offset by higher profitability in Connectivity Solutions and Fluorinated
Solutions. Full-year EBITDA included one-time charges of approximately $42 million.
• Net ma arity income of $567 million decreased 14%, driven by lower EBITDA, partially offset by lower
financial costs.
. Free cash flow of $466 million decreased 19%, reflecting lower EBITDA and increases in taxes paid
and capital expenditures, partially offset by effective working capital management.
• Cash returned to shareholders was $442 million, with dividends and share buybacks of $299 million and
$142 million, respectively.
• Leverage ratio (net debt-to-EBITDA) increased to 1.65x, due to an increase in borrowings during the
year and the reduction in EBITDA.
"2022 was a challenging year for us and the world at large, marked by the war in Ukraine, inflation, rising
interest rates and waves of pandemic-related shutdowns lhat continue to impact our lives and work. I would
like to thank the Orbia team for their dedication to delivering value for our shareholders while delivering on
our purpose to advance life around the world," said Sameer Bharadwaj, CEO of Orbia.
Bharadwa continued, "Challenging times have offered us opportunities to strengthen our business
fundamentals, pursue vertical integration and synergies between our businesses and seed strategic
pa�tnerships for sustained value creation. In 2022, we maintained our focus on disciplined capital allocation
and invested in the differentiation of our portfolio, as we detailed at our Investor Day in May. For example,
3. Startmg in lhird quarter 2022. Dala Commurncations busmess wdl be referred lo as Connec6vdy SoluUons
Attachment I: Description of the Applicant Company Page 181 of 204
Attachment 1_Description of the Applicant Company
in our Fluorinated Solutions business, we took significant steps to deepen our presence in the lithium-ion
battery supply chain in North America with an agreement to establish a�oint venture with Solvay to produce
PVDF, an essential lithium-ion battery binder and separator coating. In addition, we secured a U.S.
Department of Energy grant to build the first U.S. manufacturing plant for the electrolyte salt LiPF6 and
entered into a related technology licensing agreement with Kanto Denka.
Concluded Bharadwaj, "We have continued to make strides when it comes to our aspiration to be a global
leader in sustainable solutions in 2022. We remain committed to this going forward as we take advanlage
of organic growth opportunities. We look forward to serving our customers and addressing the world's
toughest challenges in 2023 and beyond "
Q4 and Full-Year 2022 Consolidated Financial Information�
(All metrics are compared to Q4 and FY 2021 unless otherwise noted)
mm U5$
Financlal Hlghllghts
Net saies
Selling, ge�enl and adminlstntive expenses
Operating Income
EBITDA
EBITDA margin
Flnanclal cost
Earnings before taxes
Income tax
Consolldated net income (loss)
Net maJority income
Operoting cash flow
CapRal e:penditurcs
Free cash flow
Net de6c
2022
2,100
349
160
308
] a.6%
'i6
A7
I01
?11i
�56i
555
{i: i?
308
3.149
2021
2,339
332
345
504
21 5%
86
259
109
151
126
450
['.'r71
304
2,738
%Var.
10%
5%
54%
39%
689 bps
N/A
69%
-7%
N/A
N/A
23%
82%
1%
15%
2022
9,648
1,241
1 328
1,909
19 8%
160
1,034
369
G65
567
1.107
;�.e 1
466
3.149
2021
8 783
1 178
1 449
2.047
23 3`k
297
1 154
381
772
657
982
I�l:l
572
2,738
%Var.
10%
5%
8%
J%
-352 bps
46%
10%
-3%
-14%
14%
13%
77%
19%
]5%
Net revenues of $2,100 million in the fourth quarter decreased 10%. For the full-year 2022, net revenues
of $9,648 million increased 10%.
The decrease in revenues for the quarter was driven mainly by decreases in Polymer Solutions, Building
and Infrastructure, and Precision Agriculture, primarily due to a slowdown in demand from a very strong
prior year period, driven by COVID lockdowns in China, weaker end markets in the conteut of the current
� Unless noted othenvise, all figures m this release are derNed trom the Consohdaled Financial Statements ot lhe Company as nf
December 31, 2022 and are prepared in accordance with Internatronal Accounting Slandards 34'Intenm Financ�al RepoAing' of the
Internalianal Finanaal RepoAing Standards (IFRS) which have been published in lhe Bolsa Mex�cana de Valores {BMVj. ee Noles
and Detinitions at the end of lhis release for further exolanation o( lerms used herein.
�/vestolit alphagary wavtn .
OrMa is a rnmpany orb�a
tlrrven hy a 5hared purpo5e
WadvancelifearoundlhewoAtl '�NfWW' OdU�IhIQ I:OU�O �w,.�+yra.myan.�
Attachment I: Description of the Applicant Company Page 182 of 204
Attachment 1_Description of the Applicant Company
macroeconomic environment and the devaluation of ma[�r currencies. For the full year, revenues increased
across all businesses, except for Precision Agriculture. Primary drivers of the year-over-year increase
included strong PVC pricing in the Polymer Solutions businesses, particularly during the first half of the year
strong demand in Connectivity Solutions and improved pricing across the Fluorinated Solutions product
portfolio.
Cost of goods sold of $1,591 million in the fourth quarter decreased 4%. For the full year, cost of goods
sold of $7,079 million increased 15%.
The decrease in cost of goods sold for the quarter was driven primarily by lower volumes. For the full year,
the increase was primarily due to inflationary pressures leading to higher raw material, energy, freight and
labor costs.
Selling, general and administrative expenses of $349 million in the fourth quarter increased 5%. As a
percentage of sales, S A increased approximately 240 basis points to 16.6%. For the full year, selling,
general and administrative expenses of $1,241 million increased 5%. As a percentage of sales, S A
decreased approximately 55 basis points to 12.9%.
The increase in selling, general and administrative expenses was primarily due to inflation impacts and to
continued investment in executing the Company's growth strategy.
EBITDA of $308 million in the quarter decreased 39% from a very strong prior year level, while EBITDA
margin decreased approximately 690 basis points to 14.6%. For the full year, EBITDA of $1,909 million
decreased 7%, while EBITDA margin decreased approximately 350 basis points to 19.8%. Excluding one-
time items, EBITDA was $340 million in the quarter and $1,951 for the full year, representing decreases of
35% and 6%, respectively. EBITDA margin excluding one-time items was 16.2% in the quaRer and 20.2%
for the full year, a reduction of approximately 610 basis points and 310 basis points, respectively.
The decrease in EBITDA and EBITDA margin was due to softening demand across certain markets in the
second half of the year, coupled with higher input costs, particularly in Polymer Solutions, Building and
Infrastructure, and Precision Agriculture. The decrease in the quarter was partially offset by higher
profitability in Connectivity Solutions. For the full year, the decrease was partially offset by higher profitabiliry
in Connectivity Solutions, as well as in Fluorinated Solutions.
Financial costs of negative $54 million in the quarter decreased by $140 million from $86 million last year.
For the full year, financial costs of $160 million decreased by $137 million from $297 million last year.
The decrease in financial costs was largely driven by ad�ustments in the valuation of put options and one-
time charges, where 2022 included a net $111 million benefit from lower valuations and the prior year
included a charge of $23 million associated with higher valuations. The lower valuations in 2022 were driven
by higher discount rates as interest rates have risen, while the 2021 valuation increase was associated with
higher results of the underlying businesses. The decrease in financing costs related to put options and other
one-time items was partly offset by higher charges during the year related to foreign exchange, particularly
from devaluations of the Euro and British Pound.
Taxes of $101 million for the quarter decreased 7°Io. The effective tax rate for the quarter was 126.4°Io,
which is an increase of approximately 8,450 basis points compared to the same period last year. For the full
year, taxes of $369 million decreased 3°Ia, and the effective tax rate was 35.6%, which is an increase of 258
basis points compared to last year.
For the quarter, the increase in the effective tax rate was driven by one-time items, including a non-
deductible impairment of goodwill of $136 million that significantly lowered eamings before taxes. This
impairment was due to a higher discount rate used in the impairment analysis, caused by increases in
interest rates during the year. The increase in the effective tax rate was also due to the strengthening of the
Mexican Peso and additional reserves for uncertain tax positions, partially offset by the release of valuation
allowances and non-taxable option revaluation. For the full year, the increase in the effective tax rate was
primarily driven by the one-time items mentioned above.
�/ vestolit alphagary wavin orbia �
OrWa is a mmparry
drrven by a shared purpose
toadvancelifeamuntlthewodtl '�fQiAI1M' OdUfC�IIII? f:OU�O �a.�s�c.�yz�.ioq.m«
Attachment I: Description of the Applicant Company Page 183 of 204
Attachment 1_Description of the Applicant Company
Net income to ma ority shareholders of negative $36 million in the quarter decreased by $162 million,
largely due to the decrease in EBITDA and the one-time items noted above. For the full year, net income to
mat�rity shareholders of $567 million decreased 14%, also driven by the aforementioned decrease in
EBITDA and one-time items. Excluding one-time items, net income to maf�rity shareholders was $139
million for the quarter and for the full year was $742 million.
Operating cash flow of $555 miliion in the quarter increased 23% while free cash flow of $308 million
increased by $4 million. For the full year, operating cash flow of $1,107 million increased 13°Ia while free
cash flow of $466 million decreased 19%.
During the quarter, cash generated from effective management of working capital was parlially offset by
lower EBITDA and higher capital expenditures. For the full year, the increase in operating cash flow was
offset by higher capital expenditures.
Net debt of $3,149 million was comprised of total debt of $4,696 million, less cash and cash equivalents of
$1,546 million. The Company's net debt-to-EBITDA ratio increased from 1.34x to 1.65x year-over-year,
driven by an increase in debt during the year, as well as the decrease in EBITDA year-over-year.
Q4 and Full-Year 2022 Revenues by Region
(All metrics are compared to Q4 and FY 2021 unless otherwise notedJ
mm US$
Region 2022 2021 % Var. Prev Year % Revenue
North America 840 815 3�0 4030
Europe 644 777 -17% 319�
South America 368 512 28qo 18�
Asia 196 154 27% 99�
Afnca and others 53 81 -35% 33'0
Total 2,100 2,339 -10% 100%
mm US$ � - "
Region 2022 2021 % Var. Prev Year % Revenue
North Amer�ca 3,606 2,905 24% 3796
Europe 3,050 3,036 0% 32Yo
South Amenca 1,922 1,942 -13'0 209'0
As�a 812 651 25� 8'S'o
Africa and others 258 250 3% 3Yo
Total 9,648 8,783 10% 300%
Orb�a is a comparry
tlrrven hy a sharetl purpo5e
to ativance tife around lhe woAd
�/ vestolit alphagary wavtn
,�lOWIM" OdU�GIUI¢ I�OUfO
orbia �
�a+.z.q ua �oo.mx
Attachment I: Description of the Applicant Company Page 184 of 204
Attachment 1_Description of the Applicant Company
Q4 and Full-Year 2022 Financial Performance by Business Group
(All metrics are compared to Q4 and FY 2021 unless otherwise noted)
Polymer Solutions (Vestolit and Alphagary), 38 of Revenues
Orbia's Polymer Solutibns business group and businesses Vestolit and A/phagary focus on Genera/ Purpose
and Specia/ty PVC resins (polyvinyl chloride) and PVC and zero-halogen specia/ty compounds with a wide
variety of applications in everyday products for everyday life, irom pipes and cab/es to household appliances
to medical devices. The business group supplies Orbia's downstream businesses and a g/oba/ customer
base.
mm U55
PolymerSolutions 2022 2021 %Var. 2022 2021 %Var.
Total sales• 735 999 -26% 3,696 3,438 7%
Operoting income 37 252 -85% 549 876 -37%
EBITDA 301 320 �69% 804 1,134 -29%
'In[ercompany sales were 533 million and 594 mi lion m 4Q22 and 4Q21, respe[Uvely
Full ycar mtercompany sales were 5232 mdlion and 5322 mi 6on n 2022 and 2021 respecbvely
Q4 revenues of $735 million decreased 26% and full-year revenues of $3,696 million increased 7%. Q4
EBITDA of $101 million decreased 69% and EBITDA margin decreased approximately 1,835 basis points
to 13.7%, while full-year EBITDA of $804 million decreased 29% and EBITDA margin decreased 1,125 basis
points to 21.8%.
The decrease in revenues for the quarter was driven primarily by lower volumes reflecting softening demand
and lower prices in eneral Purpose PVC due to increased product availabiliry as a result of high industry
operating rates to capture profitability in the Chlor-Alkali segment, partially offset by higher prices in
Specialty PVC, Chlorine and Caustic Soda. For the full year, the increase in revenues was driven primarily
by strong prices during the first half of the year, as well as the high performance of the Specialty PVC and
Chlor-Alkali businesses over the course of the year.
Q4 and full-year EBITDA decreased year-over-year in eneral Purpose PVC resins, due to lower prices
and volumes and higher feedstock and energy costs, particularly in Europe. This was partly offset by strong
pricing in Specialry PVC and Chlor-Alkali businesses.
Building and Infrastructure ( avin), 30 of Revenues
Orbia's Building and Infrastructure business group and business Wavin is redefining today's pipes and
fittings industry by creating solutions that last longer and perform better, all with /ess installation labor
required. The business group benefits from supply chain integration with the Polymer Solutions business
group, a customer base spanning three continents, and investments in sustainab/e, resilienf technologies
for water and indoor climate management.
mm US$ I �
Bulldl�g & Infrastructure 2022 2021
Total salez 661 702
Operoting income
EBITOA
12
47
44
82
I �.
%Var. i022 2021
o.e 2.926 2 922
-73% 193 283
�43% 321 424
%Var.
0"6
32%
24%
Q4 revenues of $661 million decreased 6% and full year revenues of $2,926 were relatively flat. Q4 EBITDA
of $47 million decreased 43% and EBITDA margin decreased approximately 460 basis points to 7.1 %, while
full-year EBITDA of $321 decreased 24% and EBITDA margin decreased approximately 355 basis points
to 11.0%. Excluding one-time items due to restructuring costs and hyperinflationary effects from Turkey,
OrWaisammparry V�estolit alphagary wavzn
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Attachment I: Description of the Applicant Company Page 185 of 204
Attachment 1_Description of the Applicant Company
EBITDA for the quarter was $55 million and EBITDA margin for the quarter was 8.4%, reflecting a decrease
of approximately 330 basis points. For the full year, EBITDA excluding one-time items was $330 million and
EBITDA margin was 11.3% reflecting a decrease of approximately 320 basis points.
The decrease in revenues for the quarter was mainly driven by lower volumes, particularly in Europe from
an inflationary cost environment and demand volatility, and Bra il, from political volatiliry as well as the
impact of currency devaluation.
Q4 and full-year EBITDA declined year-over-year reflecting the decrease in volumes and continued input
cost increases, particula�ly in Europe.
Precision Agriculture (Netafim), 11 of Revenues
Orbia's Precision Agriculture business group and business Netafim's /eading-edge irrigation sysfems,
services and digital farming fechno/ogies enable stakeholders to achieve significant/y higher and better-
quality yields while using /ess water, (erfilizer and other inputs. By helping farmers worldwide grow more
with /ess, the business group is contri6uting to feeding the planet e�cient/y and sustainably.
mm US$
Preclslon Agrlculture
Total sales
OperaUng income
Opereting intome extluding one-offs
Reported EBITDA
EBITDA excluding one-offs
2022 2021 %Var. ]022 2021 %Var.
... Y�+l+ -14% 1,085 1126 -4
(l9) ;i8� 65% 19 46 -58%
(A) . N/A 45 72 -38%
(!) ]17 N/A 119 146 �18%
:7 7!1 -58% 144 172 46%
Q4 revenues of $229 million decreased 14% and fuli year revenues of $1,085 million decreased 4%. Q4
EBITDA of $(4) million decreased by $14 million, while full-year EBITDA of $119 million decreased 18%,
with EBITDA margin decreasing approximately 195 basis points to 11.0%. Excluding one-time items due to
a hyperinflation ad ustment, a one-time legal settlement and corporate fee allocalions that were not charged
in the past but that will be included going forward, EBITDA for the quarter was $12 million and EBITDA
margin for the quarter was 5.2'/0, reflecting a decrease of approximately 560 basis points. For the full year,
EBITDA excluding one-time items was $144 million and EBITDA margin was 13.310 reflecting a decrease
of approximately 195 basis points.
The decrease in revenues was driven by a slowdown in demand in most markets and currency devaluation,
partially offset by strength in Latin America and Turkey. The slowdown in Europe was directly related to
economic weakness relating to the war in Ukraine and high energy costs affecting key market segments,
especially the greenhouses business. The slowdown in demand in Q4 was also a result of continued
destocking in the customer value chain after an inventory build-up in the first half of the year.
Q4 EBITDA decreased year-over-year, reflecting lower demand, unfavorable product mix, currency
devaluation and the one-time expenses mentioned above. For the full year, EBITDA decreased due to lower
demand, unfavorable product mix, currency devaluation, and one-time expenses.
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Attachment I: Description of the Applicant Company Page 186 of 204
Attachment 1_Description of the Applicant Company
Connectivity Solutions �Dura-Line), 74 of Revenues
Orbia's Connectivity Solutions business group, Dura-Line, produces more than 500 million meters of
essential and innovative inirastructure per year to bnng a world's worfh of information everywhere. The
business group produces telecommunications conduit, cable-in-conduit and other HDPE products and
solutions that create physical pathways for fiber and other network technologies connecting cities, homes
and people.
mm U55 -
Connectivity Solutlons 2022
Total sales 317
Operating income 76
EBITDA 84
2021
297
33
41
%Var.
7%
13d%
]O8%
2022
1,370
321
357
2021
99E
102
134
%Var.
38%
21a%
167%
Q4 revenues of $317 million increased 7% and full year revenues of $1,370 million increased 38°Ia. Q4
EBITDA of $84 million increased 108% and EBfTDA margin increased approximately 1,305 basis points to
26.7%, while full-year EBITDA of $357 million increased 167°Io and EBITDA margin increased approximately
1,260 basis points to 26.1%. Excluding one-time items due to restructuring costs, EBITDA for the quarter
was $95 million and EBITDA margin for the quaRer was 30.1 °Io reflecting an increase of approximately 1,650
basis points. For the full year, EBITDA was $368 million and EBITDA margin was 26.9%, reflecting an
increase of approximately 1,340 basis points.
Q4 and full-year revenues increased year-over-year supported by investments in production capacity along
with growing demand for fiber infrastructure.
Q4 and full-year EBITDA also increased year-over-year, driven by higher revenues combined with a
stabili ation of material costs.
Fluorinated Solutions ( oura), 9 of Revenues
Orbia's Fluorinated Solufions business group and business Koura provides fluorine and downstream
products that support modem, e�cient living. The business group owns and operates the world's larges[
fluorspar mine and produces intermediates, refrigerants and propellants used in automotive, infrastructure,
semiconductor, hea/th, medicine, climate control, food cold chain, energy storage, computing and
felecommunications applications.
mm US$ � �
Fluorinated Solutions 2022 2021 %Var. 2022 2021 %Var.
Total Sales 201 198 2% 852 744 15%
Operatingincomx 51 S2 -2% 248 183 36%
EBI#DA 65 67 -3% 305 24a 25%
Q4 revenues of $201 million increased 2% and full-year revenues of $852 million increased 15°Io. Q4
EBITDA of $65 million decreased 3°Io and EBITDA margin decreased approximately 155 basis points to
32.1 %, while full-year EBITDA of $305 million increased 259'o and EBITDA margin increased approximatety
295 basis points to 35.8%.
Revenues for the quarter reflected strong pricing across the product portfollo particularly in refrigerants,
partially offset by lower volumes. For the full year, revenues increased due to strong pricing despite lower
volumes, especially during the first half of the year.
�/ vestolit alphagary wavin orbia �
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Attachment I: Description of the Applicant Company Page 187 of 204
Attachment 1_Description of the Applicant Company
Q4 EBITDA and EBITDA margin decreased slightly due to higher input costs and accelerating strategic
investments, partly offset by strong pricing across the product portfolio. The increase in EBITDA for the full
year was driven by revenue growth and strong pricing, which helped offset lower volumes and higher input
and logistics costs.
Balance Sheet, Liquidity and Capital Allocation
Orbia continued to maintain a strong balance sheet. The net debt-to-EBITDA ratio increased from 1.34x to
1.65x year-over-year due to an increase in borrowings during the year and the reduction in EBITDA.
During the quarter, Orbia added approximately $500 million of borrowings, which is reflected as new debt
in the Company's cash flow statement. The proceeds from these borrowings are intended to be used for the
retirement of short-term debt due in early 2023, funding of growth initiatives and general business purposes.
Working capital decreased by $289 million during the quarter, primarily reflecting lower selling prices and
proactive management, but increased by $33 million during the year. Capital expenditures of $221 million
during the quarter increased 82% year-over-year and increased 77% for the full year to $549 million,
including ongoing maintenance spending and investments to support the Company's growth initiatives.
During the quarter Orbia paid $75 million as the fourth installment of the ordinary and extraordinary dividend
approved at the Annual Shareholders Meeting held on April 1, 2022. For the full year, the Company returned
$442 million to shareholders, consisting of $299 million of dividends and $142 million of share buybacks.
2023 Outlook
Broad market uncertainty, including impacts of monetary tightening, exchange rate volatility, inflationary
challenges and the war in Ukraine continue to impact the global environment, all of which make near-term
forecasting challenging. That said and assuming no significant or unexpected disruptions, Orbia is a resilient
company.
We have had a good start to the year across all businesses. While iYs early in the year to give definitive
ranges, based on where we are, we anticipate a flat to mid-single digit percentage revenue decline and
EBITDA of $1.65 billion or higher for 2023. We will refine our guidance as the year progresses. Orbia is also
expecting capital expenditures in the range of $600 million to $700 million for 2023, including $300 million
to $350 million of maintenance spending and $300 million to $350 million of growth-related investments,
depending on the underlying economic environment. The effective tax rate for the year is expected to be
between 29°lo and 32%.
For each of Orbia's businesses The Company is assuming the following:
. Polvmer Solutions We expect the PVC market to improve over the course of 2023 as China
reopens and construction markets worldwide stabili e. We have seen general purpose PVC prices
rebound from the bottom in the start of 2023, and ultimately, we expect general purpose PVC pnces
to settle above pre-pandemic levels. We continue to believe that the industry supply/demand
balance will remain tight for the long-term.
• Buildina and Infrastructure: We expect inflationary cost pressures through the first half of the
year, with conditions improving in the second half. Energy costs in key European countries have
come down below pre-war levels but uncertainty remains. We will continue to manage margins and
to focus on driving a higher-value sales mix in the business.
• Precision Aqriculture: We expect demand for precision irrigation products to strengthen over the
course of the year, supported by continued investment in technologies that address water shortages
worldwide.
• Connectivitv Solutions: We expect continued growth throughout the year, supported by favorable
market conditions and continued investments in incremental capacity.
Orb�a is a company
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Attachment I: Description of the Applicant Company Page 188 of 204
Attachment 1_Description of the Applicant Company
Fluorinated Solutions: We expect improvements in revenue and profitability across the product
portfolio, aligned with market strengthening and new regulations, partly offset by incremental costs
to invest in long-term growth initiatives.
Looking forward, the Company's management is confident that the continued execution of Orbia's strategy—
supported by vertical integration, investments in organic growth and selective bolt-on acquisitions—will
generate sustainable and profitable growth in line with the targets communicated during Orbia's Investor
Day in May 2022.
The CompanyCs Board of Directors has approved and intends to recommend to its shareholders for their
approval at Orbia s next Annual eneral Meeting of Shareholders, (i) an aggregate ordinary dividend
payment of $240 million payable in four quarterly installments in 2023, (ii) authori ation to cancel up to 105
million shares held in treasury, and (iii) authori 8tion to establish a fund for the repurchase of shares for an
amount equal to the total balance of the Company s net profits as of December 31, 2022 and including those
withheld from previous years, in the understanding that the acquisition and placement of the applicable
shares of the Company will be made by the Company through the Mexican Stock Exchange (Bolsa
Mexicana de Valores, S.A.B. de C.V.).
Conference Call Details
Orbia will host a conference call to discuss Q4 and Full Year 2022 results on February 23, 2023, at 9:00 am
Central Time (CT Mexico City)/10:00 am Eastern Time (ET New York). To access the call, please dial 001-
855-817-7630 (Mexico), 1-888-339-0721 (United States) or 1-412-317-5247 (International).
Participants may pre-register for the conference call here.
The live webcast can be accessed here.
A recording of the webcast will be posted several hours after the call is completed on Orbia's website.
For all company news, please visit www.orbia.com/this-is-orbia newsroom.
Orbia is a comparry
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Attachment I: Description of the Applicant Company Page 189 of 204
Attachment 1_Description of the Applicant Company
Consolidated Income Statement
.
mm US$
Income Statement 2022 2021 % 2022 2021
Netsala 2,100 2.339 -30% 9,648 8,783
Costofsales 1,591 1.661 -4% 7,079 6,156
Grou proflt 509 678 -25% 2569 2,627
Selling,generalandadministraUveexpensez 349 332 5% 1,241 1,178
Openting income (lou) 160 345 -54% 1,328 IA49
Financialcort �S<] 86 N/A 160 297
Equiryinincomeofassociatedmciry 1 {l1� N/A 3 1
Impairmenlexpense 136 - N/A 136 -
Income (loss) from continuing operatlons before 80 259 �69% 1,030 1,154
inmme tax
IncomeWx 301 309 -7% 369 381
Inaome�bss�homcontinuingoperations �IS] 151 N/A 666 773
Dlscontlnuedoperatlans - �01 -10076 �]j ;nj
Conwlidated net fncome (bss) �t1} 151 N/A 665 772
Minorirystxkholders IS 25 30% 99 1l5
MaJorityNetinoome�loss) f36] 126 N/A 567 657
EBRDA 306 504 -39?i 1.909 2,047
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'�NRAfIM OdUIWhI¢ I:OU�O
%
30%
15%
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N/A
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-7%
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Attachment I: Description of the Applicant Company Page 190 of 204
Attachment 1_Description of the Applicant Company
Consolidated Balance Sheet
Balance sheet Dec 2022 Dec 2021
Total assets 11,624 10,587
Current assets 4,584 3,724
Cash and temporary investments 1,546 782
Receiva bl es 1,229 1,370
Inventaries 1,320 1,292
Otherscurrentassets 489 282
Non current assets 7,040 6,862
Properry, plant and equipment, net 3,170 3,051
Right of use fixed assets, net 358 346
Intangibleassetsandgoodwill 3,305 3,130
Long•term assets 408 335
Total liabilkies 8,301 7,182
Current liabilities 3,045 2,643
Current portion of long-term debt 760 240
Suppl i ers 1,279 1,505
Short-termleasings 84 86
Othercurrentliabilities 923 812
Non current liabilities 5,256 4,539
Long-term debt 3,936 3,280
Long-termemployeebenefits 137 221
Long-term deferred tax liabilities 373 318
Long-termleasings 285 281
Other long-term liabilities 525 440
Conwlfdated shareholders'equky 3,324 3,404
Minorityshareholders'equiry 655 668
Majority shareholders' equity 2,668 2,737
Total liabilkies & shareholders' equky 11,624 10,587
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Attachment I: Description of the Applicant Company Page 191 of 204
Attachment 1_Description of the Applicant Company
Cash Flow Statement
mm U55
EBITDA
Taxes pald, net
Net Interest / bank commisslons
Change in trade working capital
Others (other assets - provisions, Neq
CTA and F%
Opereting cash flow
Capital ezpenditures
Leasing payments
free eash flow
FCF mnversion (%)
2022
i�5
��Ol
(98)
289
16
61
555
l: 71 �
i2E.
308
]00.0%
2021
ii1E
lssi
�3?1
91
1
I?01
-0SD
ll7:j
I:dj
304
603%
Dlvldends to shareholders i 's.
Buy-batk shares program �ni
New debt (pald) n65
MlnOfity Int0f05t paymBntS (36)
Mergers & acquisitlons (d)
Flnancial instruments and others (.:)
Net change In cash 649
Initial cash balance 897
Cash balanca 1,545
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0
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xvar.
39%
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51%
215°6
1446%
N/A
23%
82%
10%
1%
0%
53%
100%
;103%
5%
3346
N/A
a1z%
37%
98%
2022
1.1i:9
�son�
12051
(33)
1381
(21)
s.ia�
(549)
1921
466
24 4%
(299)
(142)
k,1 35
(141)
12251
�281
765
782
1,546
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� ne�
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98!
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1981
572
18.0%
(199)
(166)
(122)
(138)
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a
{ga)
875
782
% Var,
7%
81%
19%
93%
N/A
69%
13%
77%
a%
19%
SO%
14%
N/A
2%
366%
N/A
N/A
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98%
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Attachment I: Description of the Applicant Company Page 192 of 204
Attachment 1_Description of the Applicant Company
Notes and Definitions
The results contained in this release have been prepared in accordance with International Financial
Reporting Standards ("NIIF" or "IFRS") with U.S. Dollars as the repoAing currency. Figures are presented
in millions, unless specified otherwise.
Figures and percentages have been rounded and may not add up.
About Orbia
Orbia is a company driven by a shared purpose: to advance life around the world. Orbia operates in the
Polymer Solutions (Vestolit and Alphagary), Building and Infrastructure (Wavin), Precision Agriculture
(Netafim), Connectivity Solutions (Dura-Line) and Fluorinated Solutions (Koura) sectors. The five Orbia
business groups have a collective focus on expanding access to health and wellness, reinventing the future
of cities and homes, ensuring food and water security, connecting communities to information and
accelerating a circular economy with basic and advanced materials, specialty products and innovative
solutions. Orbia has a global team of over 23,000 employees, commercial activities in more than 110
countries and operations in over 50, with global headquarters in Boston, Mexico City, Amsterdam and Tel
Aviv. The company generated $8.8 billion in revenue in 2021. To learn more, visit: orb�a.com
Prospective Information
In addition to historical information, this press release contains forvvard-looking statements that reflect
managements expectations for the future. The words "anticipate," "believe," "expect," "hope," "have the
intention of," "might," "plan," "should" and similar expressions generally indicate comments on expectations.
The forward-looking statements included in this press release are subf�ct to a number of material risks and
uncertainties, and our results may be materially different from current expectations due to factors, which
include, but are not limited to, global and local changes in politics, economic factors, business, competition,
market and regulatory factors, cyclical trends in relevant sectors as well as other factors affecting our
operations, markets, products, services and prices that are highlighted under the title "Risk Factors" in the
annual report submitted by Orbia to the Mexican National Banking and Securities Commission (CNBV) and
available on our website at ti•,�.:��, nd-
filin s�. The forward-looking statements included herein represent Orbia's views as of the date of this press
release. Orbia undertakes no obligation to revise or update publicly any forward-looking statement for any
reason unless required by law."
Orbia has implemented a Code of Ethics that helps define our obligations to and relationships with our
employees, clients, suppliers, and others. Orbia's Code of Ethics is available for consultation at the following
link: http://wwwArbia com/Cod�qo de et�ca html. Additionally, according to the terms contained in the
Mexican Securities Exchange Act No 42, the Orbia Audit Committee has established a"hotline" system
permitting any person who is aware of a failure to adhere to applicable operational and accounting records
guidelines, internal controls or the Code of Ethics, whether by the Company itself or any of its controlled
subsidiaries, to file a complaint (including anonymously). This system is operated by an independent third-
party service provider. The system may be accessed via telephone in Mexico, via internet at
w.vs. ia.com or via email at rbia com. Orbia's Audit Committee has oversight
responsibility for ensuring that all such complaints are appropriately investigated and resolved.
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Attachment I: Description of the Applicant Company Page 193 of 204
Attachment 1_Description of the Applicant Company
orbia � Stacklnformation
Mexican Stock Exchange
�� 9 Ticker:Orbia•
Orbia Announces First Quarter 2023 Financial Results
exico City, April 26, 2023 — Orbia Advance Corporation, S.A.B. de C.V. (BMV: ORBIA') ("the Company"
or "Orbia") today released unaudited results for the first quarter of 2023.
Orbia delivered solid results for the first quarter of 2023 with moderate improvement in several of its end
markets over the course of the quarter. Revenue and profitability both declined from the record performance
achieved in the prior year quarter due to macroeconomic challenges that arose in the second half of 2022
and continued into 2023. In the quaRer, Orbia generated strong operating cash flow and maintained a solid
balance sheet, demonstrating the resilience of its businesses and robust long-term fundamentals.
Qi 2023 Financial Highlights
(All metrics are compared to Q1 2022 unless otherwise noted)
� Net revenues of $2.3 billion decreased 12%, with lower sales in Polymer Solutions, Building and
Infrastructure and Precision Agriculture.
e EBITDA of $469 million decreased 23%, driven by lower volumes in certain segments and currency
headwinds, partially offset by higher profitabiliry in Connectivity Solutions and Fluorinated Solutions.
• Net ma arity income of $55 million decreased 78%, driven by lower EBITDA and higher financial costs.
• Free cash flow of $1 million decreased by $67 million, reflecting lower EBITDA and increases in capital
expenditures, which more than offset effective working capital management.
"We had an encouraging start to the year, showing sequential improvement in all our businesses despite
continued market volatility. I would like to thank the Orbia team for their ongoing commitment and dedication
to our many stakeholders," said Sameer Bharadwaj, CEO of Orbia.
Bharadwa continued, "We remain cautiously optimistic about the remainder of the year and remain
confident in our long-term opportunities as we execute on our organic growth plans. As we continue to focus
on solving the world's most significant challenges with our unique product portfolio and innovation
capabilities, we are well-positioned to capture profitable growth opportunities across the Company in both
the short and long-term."
Attachment I: Description of the Applicant Company Page 194 of 204
Attachment 1_Description of the Applicant Company
Qi 2023 Consolidated Financial Information�
(All metrics are compared to Q1 2022 unless otherwise noted)
mm US$
Financial Highlights
2023 2022 %Var.
Net sales 2,280
Selling, general and administrative exper 336
Operating income 323
EBITDA 469
EBITDA margin 20.6%
Financial cost 101
Earnings before taxes 223
Income tax 143
2,596 -12'S'o
297 13`Y
467 -31'Yo
611 -23'Yo
23 5% -295 bps
42 138%
A26 -485'0
143 05'0
Consolidated net income (loss) 80 283 -72%
Net majority income 55 250 -783'0
Operating cash flow 167 194 -145'0
Capital expenditures i1471 {10t1 41%
Free cash flow 1 68 -999'0
Net debt 3,246 2,851 14%
Net revenues of $2,280 million decreased 12%.
The decrease in revenues for the quarter was driven by Polymer Solutions, Building and Infrastructure and
Precision Agriculture, primarily due to a slowdown in demand from a very strong prior year period. Lower
eneral Purpose PVC prices and weaker end markets in the context of the current macroeconomic
environment were partially offset by strong demand in Connectivity Solutions and improved pricing across
the Fluorinated Solutions product portfolio.
�Unless noted olhervvise, all figures in this release are derned from the Consohdated F�nancial Statements of the Company as o(
March 31, 2023 and are prepared in accardance with Intemational Accounting Standards 34 'Inlerim F�nancial Reporting' of the
Internalional Financial Reporting Standards (IFRS), which have been published in the Bolsa Mexicana de Valores �BMV] See Noles
and Detinilions at the end of this release for further exolanation of terms used herein.
�/ vestolit alphagary wavtn •
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Attachment I: Description of the Applicant Company Page 195 of 204
Attachment 1_Description of the Applicant Company
Cost of goods sold of $1,620 million decreased 12°Io.
The decrease in cost of goods sold for the quarter was driven primarily by lower volumes as well as lower
raw material and input costs.
Selling, general and administrative expenses of $336 million increased 13°/a. As a percentage of sales,
S A increased approximately 333 basis points to 14.8%.
The increase in selling, general and administrative expenses was primarily due to inflation, restructuring
costs to streamline our operations and continued investment in executing the Company's growth strategy.
EBITDA of $469 million in the quarter decreased 23% from a very strong prior year level, while EBITDA
margin decreased approximately 295 basis points to 20.6%.
The decrease in EBITDA and EBITDA margin was due to softer demand across certain markets, particularly
in Polymer Solutions, Building and Infrastructure, and Precision Agriculture. The decrease was partially
offset by higher profitability in Connectivity Solutions and Fluorinated Solutions.
Financial costs of $101 million increased 138%.
The increase in financial costs was largely driven by a foreign exchange loss due to the appreciation of the
Mexican Peso and higher interest expense due to an increase in debt. These factors were partially offset by
higher interest income from an increase in short-term rates.
Taxes of $143 million were flat. The effective tax rate for the quarter was 64.0%, which is an increase from
33.6% in the same period last year.
The increase in the effective tax rate was primarily due to the strengthening of the Mexican Peso against
the US Dollar and inflation.
Net income to ma[arity shareholde►s of $55 million decreased 78%, largely due to the decrease in
EBITDA and higher financial costs.
Operating cash flow of $167 million decreased 14% while free cash flow of $1 million decreased by $67
million.
The decrease in operating cash flow was due to lower EBITDA, which was partially offset by a lower
consumption of cash from changes in working capital. In addition, the decrease in free cash flow was driven
by higher capital expenditures.
Net debt of $3,245 million was comprised of total debt of $4,629 million, less cash and cash equivalents of
$1,384 million. The Company's net debt-to-EBITDA ratio increased from 1.29x to 1.84x year-over-year,
driven by an increase in debt during the year, as well as the decrease in EBITDA year-over-year.
Qi 2023 Revenues by Region
(All metrics are compared to Q1 2022 un/ess ofherwise noted)
mm USS
Region
North America
Europe
South America
Asia
Africa and others
Total
Orb�a is a mmparry
tlrrven by a sharetl purpose�
to advance life amund lhe woAd
2023 2022 % Var.Prev Year % Revenue
869
749
381
897
865
542
-3� 389'0
-139�0 33Y'o
-309'0 17�
223 228 -23'0 103'0
58 63 -9% 3%
2,280 2,596 -12% 100%
�/ vestoGt alphagary Wa�=n I orbia �
'�fOL1►tIM- OdUlGlin¢ ICOU�O �e.,�yu.wq�n.,
Attachment I: Description of the Applicant Company Page 196 of 204
Attachment 1_Description of the Applicant Company
Qi 2023 Financial Performance by Business Group
(All metrics are compared fo Q1 2022 unless otherwise noted)
Polymer Solutions (Vestolit and Alphagary), 32 of Revenues
Orbia's Polymer So/utions business group and businesses Vestolit and Alphagary focus on Genera/ Purpose
and Specialty PVC resins (polyvinyl ch/oride) and PVC and zero-halogen specia/ty compounds with a wide
variety of applications in everyday producfs for everyday life, irom pipes and cables to household appliances
to medica/ devices. The business group supplies Orbia's downstream businesses and a global customer
base.
mm US$
Polymer Solutions
Total sales•
2023 2022
694 778
2023 2022
770 1,065
Opereting income 83 242 -66%
EBITDA 147 308 -52'Yo
'Intercompany sales were $38 million and $78 m�llion in 1Q23 and 1Q22, respect�vely
Revenues of $770 million decreased 28% year-over-year. EBITDA of $147 million decreased 529�o and
EBITDA margin decreased approximately 980 basis points to 19.1 %
The decrease in revenues was driven primarily by lower prices in eneral Purpose PVC due to increased
product availability due to high industry operating rates to capture profitability in the Chlor-Alkali segment,
and lower volumes, reflecting softer demand.
EBITDA decreased year-over-year primarily in eneral Purpose PVC resins, due to lower prices and
volumes, partly offset by lower raw material costs and improved results year-over-year in Specialty Resins
and the derivatives business.
Building and Infrastructure ( avin), 30 of Revenues
Orbia's Building and Infiastructure business group and business Wavin �s redefinmg today's pipes and
fittings industry 6y creating solutions that last longer and perform better, all wifh /ess installation labor
required. The business group benefits from supply chain integration with the Po/ymer Solutions business
group, a customer base spanning three continents, and investments in sustainable, resilient terhnolog+es
for water and indoor climate management.
mm US$
Building & Infrestructure
Total sales
Operating income
EBITDA
%Var.
-28%
%Va r.
-11'S'o
39 75 -48%
70 105 -339'0
Revenues of $694 million decreased 11°I� year-over-year. EBITDA of $70 million decreased 33% and
EBITDA margin decreased approximately 341 basis points to 10.1%.
�/ vestolit alphagary wavin
OrMa �s a mmpaM orbia
drrven by a 5hared purpo5e
WadvancelifearoundthevroAd '�NIWIM' OdUlGdlfl? i:0Uf0 �e...�„yu.wo.�n«
Attachment I: Description of the Applicant Company Page 197 of 204
Attachment 1_Description of the Applicant Company
The decrease in revenues was mainly driven by lower volumes, particularly in Europe and Asia, due to the
continued volatile environment, as well as lower prices in certain Latin American and Asian markets.
EBITDA declined year-over-year primarily reflecting a contraction in Europe as well as the decrease in
volumes and prices mentioned above.
Precision Agriculture (Netafim), 12 of Revenues
Orbia's Precision Agricu/ture business group and business Nefa�m's leading-edge irrigation sysfems,
services and digital farming technologies enab/e stakeho/ders to achieve signi�cantly higher and better-
quality yields while using less water, fertilizer and other inputs. By he/ping (armers worldwide grow more
with less, the business group is contributing to feeding the planet ef(icient/y and sustainably.
mm US$
Precision Agriculture
Total sales
Operating income
2023 2022
275 313
3 28
%Var.
-12%
-90Yo
EBITDA 28 53 -46'Y
Revenues of $275 million decreased 12�o year-over-year. EBITDA of $28 million decreased 461a and
EBITDA margin decreased approximately 644 basis points to 10.3%.
The decrease in revenues was driven by a slowdown in demand, particularly in US, Europe and Africa,
driven by macroeconomic and climate conditions, partially offset by strength in Latin America and Chlna.
Revenues in Turkey also increased year-over-year, although the recent earthquakes have caused a delay
in some shipments to subsequent quarters.
EBITDA decreased year-over-year, reflecting lower demand as explained above.
Connectivity Solutions (Dura-Line), 15 of Revenues
Orbia's Connectivity Solutions business group, Dura-Line, produces more than 500 million meters of
essentia/ and innovative infrastructure per year to bring a worid's worth of information everywhere. The
business group produces telecommunications conduit, ca61e-in-conduit and other HDPE products and
solutions that create physical pathways for fi6er and other network techno/ogies connecting cities, homvs
and people.
mm USS
Connectivity Solutions
2023 2022 %Var.
Totalsales 345 325 6%
Operating income 104 62 67q,
EBITDA 114 70 62Yo
�/vestoGt alphagary Waw�n orbia �
O�bia is a mmparry
tlrrven by a shared purpose
toativanceldearoundlhewoAd •�OQW1M- OdUfG�lI12 I:OUfC ,w�,.�c.yra.w�.�n.,
Attachment I: Description of the Applicant Company Page 198 of 204
Attachment 1_Description of the Applicant Company
Revenues of $345 million increased 6% year-over-year. EBITDA of $114 million increased 62°la and EBITDA
margin increased approximately 1,135 basis points to 33.0%.
Revenues increased year-over-year supported by investments in production capacity along with higher
demand for fiber infrastructure.
EBITDA also increased year-over-year driven by higher revenues combined with a stabili ation of material
costs.
Fluorinated Solutions ( oura), 11 of Revenues
Orbia's Fluorinated Solutions business group and business Koura provides fluorine and downstream
products that support modern, efficient living. The business group operates the world's largest fluorspar
mine and produces intermediates, refrigerants and propellants used in automotive, inirastructure,
semiconductor, hea/th, medicine, climate control, food cold chain, energy storage, computing and
telecommunications applications.
mm US$
Fluorinaied Solutions
Totalsales
Operating income 87 �a
2023 2022 %Var.
242 204 19%
EBITDA
102 15
404'0
33'Yo
Revenues of $242 million increased 19% year-over-year. EBITDA of $102 million increased 33°Ia and
EBITDA margin increased approximately 451 basis points to 41.9%.
Revenues increased year-over-year reflecting strong pricing across the product portfolio, particularly in
refrigerants, combined with higher volumes, following supply disruptions during the first half of 2022.
EBITDA also increased year-over-year due to strong pncing across the product portfolio, which more than
offset higher input costs and investments in strategic growth initiatives.
Balance Sheet, Liquidity and Capital Allocation
Orbia continued to maintain a strong balance sheet. The net debt-to-EBITDA ratio increased from 1.29x to
1.84x year-over-year due to an increase in borrowings during the year and the reduction in EBITDA.
During the quarter, Orbia paid down approximately $150 million of short-term debt, reflecting a net change
in debt of $128 million on the cash flow statement.
Working capital increased by $181 million, as compared to an increase of $309 million in the previous year.
The increase in the current quarter was primarily due to an increase in accounts receivable partly offset by
improvements in inventory and accounts payable. Capital expenditures of $142 million increased 41°/o year-
over-year. including ongoing maintenance spending and investments to support the Company's growth
initiatives.
During the quarter Orbia did not pay any dividends, as the first and second of four equal dividend payments
will both be made durfng the second quarter of the year.
OrDia is a mmparry V �estolit alphagary wav�n
tlrrven by a shared purpose orbia
toadvancelifearoundlheworld ��MTAFlM" OdUfWh1¢ i:0Uf0 ,�e..�.qwioy.u�.
Attachment I: Description of the Applicant Company Page 199 of 204
Attachment 1_Description of the Applicant Company
2023 Outlook
During the first quarter of 2023, Orbia had a good start to the year across all businesses, with several of the
Company's end markets improving compared to the end of 2022. However, the Company remains cautious
under the current macroeconomic conditions and market uncertainry, including uncertain ongoing impacts
of monetary tightening, exchange rate volatility, inflationary challenges and the war in Ukraine. Therefore,
Orbia reaffirms its EBITDA guidance of $1.65 billion or higher for 2023 and will continue to refine its guidance
as the year progresses. The Company also reaffirms its capital expenditure guidance in the range of $600
million to $700 million for 2023, which includes maintenance spending and growth-related investments.
Strategy Update Webcast Details
Orbia will host a Strategy Update webcast on Tuesday, June 6th, 2023, via a live stream webcast. Sameer
Bharadwa , Chief Executive Officer and Jim Kelly, Chief Financial Officer will provide an update on the
Company's execution of its sustainability-aligned business platform, long-term growth and value creation
strategy and multi-year financial targets.
Further details to access the webcast will be announced soon.
Conference Call Details
Orbia will host a conference call to discuss Q 1 2023 results on April 27, 2023, at 9:00 am Central Time (CT
Mexico City)/10:00 am Eastern Time (ET New York). To access the call, please dial 001-855-817-7630
(Mexico). 1-888-339-0721 (United States) or 1�12-317-5247 (International).
Participants may pre-register for the conference call here.
The live webcast can be accessed here.
A recording of the webcast will be posted several hours after the call is completed on Orbia's website.
For all company news, please visit w�vw.orbia.com/this-is-orbia/newsroom.
Orbia is a comparry
tlrrven by a shareU purpose�
[o advance IHe around the woAd.
�/ vestolit alphagary waysn
•�MfAM1- OdUfO�lfi¢ I:OUfO
orbia �
•e.snc:q w� �oqnn..
Attachment I: Description of the Applicant Company Page 200 of 204
Attachment 1_Description of the Applicant Company
Consolidated Income Statement
mm US$
Income Statement
Netsales
Cos t of s a I es
Gross profit
Selling, general and administrative expenses
Opereting income (loss)
Financial cost
Equiry in income of associated entity
Impairment expense
Income (loss) from wntinuing operations before
income tax
I ncome tax
Income (loss) from continuing operetions
Discontinued operations
Consolidated net income (loss)
Minority stockholders
Majority Net income (loss)
EBfTDA
Orb�a is a mmpany
tlnven by a shared purpose
to advance lite around lhe wodd
2023 2022 %
2,280 2,596 -12%
1,620 1,832 -12%
660 763 -14%
336 297 13%
323 467 31'Yo
101 42 138%
1 2 -75%
- - N/A
223 426 -48%
143 143 04'0
80 283 -72%
- {p} -100%
80 283 -72%
25 33 -22%
55 250 -78%
469 611
�/ vestolit alphagary wavtn
,�NRAMI 0(klfqdhl¢ I:OUfO
-23%
orbia �
�a.em�q w ioqnnar
Attachment I: Description of the Applicant Company Page 201 of 204
Attachment 1_Description of the Applicant Company
Consolidated Balance Sheet
Balance sheet Mar 2023 Dec 2022 Mar 2022
Total assets 11,777 11,624 11,358
Current assets 4,649 4,584 4,333
Cash and temporery investments 1,384 1,546 970
Recei va bl es 1,528 1,229 1,746
I nventori es 1,279 1,320 1,382
Others current assets 458 489 234
Non current assets 7,128 7,040 7,025
Properry, plant and equipment, net 3,199 3,170 3,076
Right of use fixed asseu, net 361 358 347
Intangibleassetsandgoodwill 3,134 3,105 3,200
Long-term assets 434 408 402
Totalliabilkies 8,603 8,301 7,884
Current liabilities 3,330 3,045 2,950
Current portion of long-term debt 691 760 392
Suppl i ers 1,311 1,279 1,588
Short-termleasings 90 84 82
Othercurrentliabilities 1,238 923 888
Non current liabilities 5,273 5,256 4,934
Long-term debt 3,938 3,936 3,429
Long-termemployeebenefits 137 137 213
Long-term deferred tax liabilities 388 373 348
Long-term leasings 281 285 284
Otherlong-termliabilities 530 525 660
Consolidated shareholders'equity 3,174 3,324 3,474
Minorityshareholders'equity 657 655 695
Majority shareholders' equity 2,517 2,668 2,779
Total liabilities & shareholders' equity 11,777 11,624 11,358
OrWa is a comparry
tlrrven by a sharetl purpose
to aWance life arountl the woAtl
�/ vestolit alphagary wavzn
��►QGlW' OdU00diI1¢ ICOU�a
orbia �
na•M+�y w ioyan«
Attachment I: Description of the Applicant Company Page 202 of 204
Attachment 1_Description of the Applicant Company
Cash Flow Statement
mm US$ 2023 2022 %Var.
EBITDA 469 611 23%
Taxes paid, net (64) (69) -89'0
Net interest / bank commissions (7a) (55) 3a%
Change in trade working capital (181) (309) 41%
Others (other assets - provisions, Net) (19) (10) 929'0
CTA and FX 36 27 34%
Operating cash flow
Capital expenditures
Leasing payments
Free cash flow
FCFconversion (%J
Dividends to shareholders
Buy-back shares program
Debt
Minority interest payments
Mergers & acquisitions
Financial instruments and others
Net change in cash
Initial cash balance
Cash balance
Orb�a is a mmparry
tlrrven by a 5haretl purpose
W advance life around lhe woAd
167 194 -14Y'o
(142) (101) 41'Yo
(24) (24) -1'Yo
1 68 -99%
0.2% 11.2%
0 100%
7 {7Sf N/A
(128) 78& N/A
(31) [31} 0`Yo
( l (}81 -100%
{Ij 2 N/A
(163) 189 N/A
1,546 782 98'Yo
1,384 970 43%
�/ vescoUc alphagary wavzn
���uunr- Odura�llna �(oura
orbia �
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Attachment I: Description of the Applicant Company Page 203 of 204
Attachment 1_Description of the Applicant Company
Notes and Definitions
The results contained in this release have been prepared in accordance with International Financial
Reporting Standards ("NIIF" or "IFRS") with U.S. Dollars as the reporting currency. Figures are presented
in millions, unless specified otherwise.
Figures and percentages have been rounded and may not add up.
About Orbia
Orbia is a company driven by a shared purpose: to advance life around the world. Orbia operates in the
Polymer Solutions (Vestolit and Alphagary), Building and Infrastructure (Wavin), Precision Agriculture
(Netafim), Connectiviry Solutions (Dura-Line) and Fluorinated Solutions (Koura) sectors. The five Orbia
business groups have a collective focus on expanding access to health and wellness, reinventing the future
of cities and homes, ensuring food and water securily, connecting communities to information and
accelerating a circular economy with basic and advanced materials, specialty products and innovative
solutions. Orbia has a global team of over 23,000 employees, commercial activities in more than 110
countries and operations in over 50, with global headquarters in Boston, Mexico City, Amsterdam and Tel
Aviv. The company generated $8.8 billion in revenue in 2021. To learn more, visit: orbia com
Prospective Information
In addition to historical information, this press release contains forvuard-looking statements that reflect
management's expectations for the future. The words "anticipate," "believe," "expect," "hope," "have the
intention of," "might," "plan," "should" and similar expressions generally indicate comments on expectations.
The forvvard-looking statements included in this press release are sub ect to a number of material risks and
uncertainties, and our resulis may be materially different from current expectations due to factors, which
include, but are not limited to, global and local changes in politics, economic factors, business, competition,
market and regulatory factors, cyclical lrends in relevant sectors as well as other factors affecting our
operations, markets, products, services and prices that are highlighted under the title "Risk Factors" in the
annual report submitted by Orbia to the Mexican National Banking and Securities Commission (CNBV) and
available on our website at h�s iiwtivrr.orbia com/investor-relations/financial-reports/annual-reports-and-
filinqsi. The forward-looking statements included herein represent Orbia's views as of the date of this press
release. Orbia undertakes no obligation to revise or update publicly any forward-looking statement for any
reason unless required by law "
Orbia has implemented a Code of Ethics that helps define our obligations to and relationships with our
employees, clients, suppliers, and others. Orbia's Code of Ethics is available for consultation at the following
link: � etica.html. Additionally, according to the terms contained in the
Mexican Securities Exchange Act No 42, the Orbia Audit Committee has established a"hotline" system
permitting any person who is aware of a failure to adhere to applicable operational and accounting records
guidelines, internal controls or the Code of Ethics, whether by the Company itself or any of its controlled
subsidiaries. to file a complaint (including anonymously). This system is operated by an independent third-
party service provider. The system may be accessed via telephone in Mexico, via internet at
w_.v•r. >m or via email at xbia com. Orbia's Audit Committee has oversight
responsibility for ensuring that all such complaints are appropriately investigated and resolved.
OrMa is a mmparry
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Attachment I: Description of the Applicant Company Page 204 of 204
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Attachment 2_Dura-Line Outline Spec - Lubbock TX - 20230210R1
Dura-Line Extrusion Facility
Outline S eci ications
p
904 Lubbock Business Park Boulevard, Lubbock, TX 79403
February 10, 2023
Attachment 2_Dura-Line Outline Spec - Lubbock TX - 20230210R1 Page 1 of 14
Attachment 2_Dura-Line Outline Spec - Lubbock TX - 20230210R1
A: Project Introduction:
Proiect Scope of Work:
The shell building shall require two building additions attached to the North Ivory Avenue side of the
facility for a Grinding Room and a Vacuum Pump/Process Pit Room. The additions shall match the
material type and finishes of the existing buitding. The clear heights of the additions shall be 27'.
The finished floor elevation of the Grinding Room addition shall be approximately 48" below the existing
finish floor elevation and the exterior wall of the Grinding Room shall include a 12' x 14' insulated
overhead door with 3-button controller.
The Process Pit Room shall include below ground water pits with a minimum depth of 12 ft. and a
capacity of approximately 15,000 GAL (7,500 GAL per side). Provide approximately 400 LF of 16" PVC
pipe with a 0.5% slope under the slab for process water draining to the water pit referenced above for a
close-loop water system with 13 riser stubs above concrete. Also provide 400 LF of Zurn floor drain with
sump, pump & filter draining to the process pit. The Process Pit Room and Vacuum Pump room shall
each include a 12' x 14' insulated overhead door with 3-button controller.
The tenant improvement non-process MEP shall be designed to avoid modifications to the existing
building roof structure. Provide modifications to the existing building roof structure as required for the
process water, compressed air and pellet conveying systems.
Three (3) 14' x 16' insulated drive-in doors with 3-button controls and concrete ramps to the exterior
pavement shall be provided at the plan south building elevation.
Sawcut existing floor and provide six (6) dock positions at southeast elevation with equipment as
specified.
Provide interior improvements as specified.
Provide exterior concrete patio with privacy fencing, silo pads and chiller pads as specified.
Extend the existing concrete pavement at the south end of the site by approximately (2) acres to provide
a total of (5) acres of concrete pavement for finished goods storage. Provide site lighting as specified
with additional light poles as required. Remove the existing curbed is�and within the south pavement area
and pave to match existing.
Provide 10' high chain link security fencing at the perimeter of the entire site with five (5) powered sliding
gates at entry with locks at driveway entrances to the site.
The utility usage estimates for the facility are: 1) Power: t 8,000 amps of 480/277v
2) Gas = 400 MMBtu in peak months
3) Water = 60,000 gallons per month
4) Discharge = standard warehouse facility
5) Fiber = OM4, multimode fiber unless it exceeds max
recommended distanced, SC connectors.
Attachment 2_Dura-Line Outline Spec - Lubbock TX - 20230210R1 Page 2 of 14
Attachment 2_Dura-Line Outline Spec - Lubbock TX - 20230210R1
The following division of responsibilities shall be followed for the process utilities:
Dura-Line:
Electrical:
1. Design/install secondary conduits, secondary wiring, main switchgear.
2. Design/install equipment distribution from main switch(conduits, wiring, panels, disconnects, final
connections).
3. Design/install nefinrork cabling between PLCs & process equipment.
Process Water:
1. Design/install chillers, piping, pumps, filters, valves, control scheme and connections to equipment.
Dura-Line to purchase chillers direct.
2. Provide isometric drawings, piping loads, elevation layout drawings and support drawings.
3. Provide design geometry (size and location) of the pits, underground 12"-16" PVC piping and Zurn
drain system.
Compressed Air:
1. Design & install the compressed air loop and drops. Dura-Line to purchase air compressors direct.
2. Provide isometric drawings, piping loads, equipment specs.
Equipment Installation:
1. Install extruder and downstream equipment.
2. Install Dura-Line provided grinding equipment.
3. Design & install blender mezzanines.
4. Design & install rail unloading system.
Design/Builder:
Electrical:
1. Install trenching and backfill for raceway from street to transformer pad for main electrical service.
2. Coordinate installation of feeders from street to transformer with Electric Company. Set Electric
Company transformer pad. Coordinate installation of transformer with Electric Company.
3. Design/install electrical distribution to the building elements from the main switchgear for: all exterior
improvements, exterior lighting, gate power and controls, signage, building shell, fire suppression system,
warehouse lighting, exit lighting, emergency lighting, warehouse AC, warehouse convenience
receptacles, dock equipment, overhead doors, tenant office buildout, truckers lounge, breakroom,
restrooms, truckers lounge and shipping office.
4. Design/install fire alarm system.
5. Relocate existing raceway for phone and data service entrance in the building within the Electric Room.
Process Water:
1. Provide structural permit design/installation of the pits based on provided geometry.
2. Provide permit design/installation of underground 16" PVC piping and Zurn drain system based on
provided geometry.
Attachment 2_Dura-Line Outline Spec - Lubbock TX - 20230210R1 Page 3 of 14
Attachment 2_Dura-Line Outline Spec - Lubbock TX - 20230210R1
6: Outline Specifications
A. Introduction:
a) Design/Builder shall make sure the components outlined in this outline specification will be
reflected in the design.
b) The outline specification is a brief description of the main components to be used in the
construction of the Dura-Line facility. It serves to describe the scope of work to the
Design/Builder.
B. Outlined Specification for main buildinct components:
Scope:
Design/Builder will provide complete design-build services from the site and building design through
permitting, construction, and final turnover as outlined in this specification.
Architectural, structural, civil, fire protection, plumbing, mechanical, and electrical design drawings and
specifications will be provided by the Design/Builder through licensed design professionals.
Compliance:
The project will be designed and constructed in conformance with all applicable local, county, state, and
national codes, laws, and ordinances. All building construction and site improvements shall comply with
all governing jurisdictions, including but not limited to all applicable building codes, ADA guidelines, FM
Global standards, environmental standards, local zoning ordinances, and site industrial park covenants.
All subcontractors, material suppliers, and others employed by the Design/Builder will be appropriately
licensed, insured, trained, and qualified to perform their respective scopes of work.
Preliminary Space Planning:
. The purpose of this phase will be to review the proposed building, together with Owner's operation
requirements to ensure compatibility. These services will include, but not be limited to, the following:
— Prepare preliminary plans (1/8" = 1'0" Scale) for the project with all personnel, production, and
support areas included.
— Provide a"Space AudiY' for each building component, that includes an area take-off that breaks
out each category of personnel and use.
— Attend all required meetings with Owner; incorporate Owner comments into plan, and ultimately
create a plan that is approved by Owner.
Schematic Design-Core/Shell, and Interior:
. The preliminary space plan will be reviewed, and any changes desired by Owner will be incorporated
into the final approved space program.
. According to the final approved space program, prepare drawing revisions as may be necessary in
order to create a schematic layout, incorporating all personnel and uses. The Schematic Plan will
include adjacencies representing the organization of the various departments and uses.
. Prepare a recommendation as to the design concept and appearance of the new space that accounts
for Owner requirements, overall building design and the Owner's standards, desires and preferences.
Refine the Owner's o�ce and workstation standards, if necessary.
Attachment 2_Dura-Line Outline Spec - Lubbock TX - 20230210R1 Page 4 of 14
Attachment 2_Dura-Line Outline Spec - Lubbock TX - 20230210R1
. Prepare schematic layouts for the special use areas such as reception, training and conference
rooms, computer rooms, copy, coffee, storage, filing, lunchrooms, supply, and mail areas. The
architect will be responsible for specifying furniture, casework, and "built-ins" for these areas.
. Ensure schematic designs comply with all applicable codes.
. Coordinate building plan with Civil, MEP, and landscape trades as required.
. Prepare a final presentation of all of the items above, in addition to interim presentations as required.
. Prepare document revisions based on Owner/team review of drawings, leading to a formal approval
of the Schematic Design Package.
Design Development:
. Based on the approved Schematic Design package, prepare drawings and specifications that fix and
define the scope, materials, and character of the project, and describe architectural systems,
furniture, fixtures and equipment and other special treatments.
. Develop and define the appearance of the space, including proposed color schemes and finishes for
walls, floors and ceilings. Provide millwork detailing and material selections, window treatments, and
other special treatments as required for a complete design.
. Engage subconsultant partners such as Civil & MEP engineers, structural engineers, landscape
architects, etc. as required for a full and complete design.
. Coordinate with the other design consultants to incorporate their work into the Design Development
package.
. Coordinate electrical, data, and telecommunications requirements with the Owner's personnel.
Construction Documents:
. Based on an approved Design Development package, prepare complete architectural and
engineering working drawings that describe the requirements of construction work for the project.
• Prepare project specifications detailing all materials and required quality levels.
• The Design / Builder will be responsible for the distribution and tracking of all shop
drawings/submittals. The Design / Builder will be required to overnight or courier packages to the
Architect, Engineers and Development Manager, and remaining distribution will be sent via regular
mail. Packages to the subcontractors/suppliers cannot be released without prior approval of the
Architect and Engineers. Following the award of the contract, the Design / Builder will have one week
to prepare and submit a schedule to The Owner and other persons designated by The Owner
delineating the timeframe for submission of shop drawings, cut sheets and samples. The Design /
Builder will be expected to track the individual submittal schedules to ensure submissions are made
according to the schedules. Prior to distributing each submittal, the Design / Builder shall review
each submittal for accuracy.
� Update and refine the construction budget, primarily based on quantities and unit prices.
• Provide detailed CADD disks to furniture vendor, including furniture layout and critical "hold"
dimensions. In coordination with the design concept, recommend furniture and fixtures for reception
areas, conference areas and other specialty areas.
• File for and obtain all required governmental approvals.
Attachment 2_Dura-Line Outline Spec - Lubbock TX - 20230210R1 Page 5 of 14
Attachment 2_Dura-Line Outline Spec - Lubbock TX - 20230210R1
Division 01 General Conditions
Permits and Fees:
The Design/Builder will be responsible for coordinating, submitting, and achieving approval of all permits
required to complete the project. Include all the necessary State and Local building permit fees, including
tap-on and connection fees, and inspections.
Utilities:
The Design/Builder will initiate, set up, coordinate, install and pay for all temporary utilities required for the
entire construction duration. Following Beneficial Occupancy, the Design/Builder shall remove all
temporary utilities and coordinate with the Tenant to facilitate the transfer from temporary service to
permanent service.
The Design/Builder will coordinate and provide for the installation of all permanent utilities.
Design/Builder to connect to existing utilities. If the existing utility infrastructure is not adequate for the
new expansions the Design/Builder shall provide additional capacity to the existing system.
Testing and Inspections:
Design/Builder will provide quality assurance inspections and materials testing by a licensed professional
for specific assemblies and materials, including soil, concrete, masonry, structural steel, roof, and
pavements. Copies of the results of all inspections and tests will be provided to Dura-Line, architect, and
government jurisdictions as required.
Insurance:
The Design/Builder shall provide Builder's Risk, General Liability / Umbrella coverage, and Worker's
Compensation and list additional insured as according to Dura-Line's requirements.
Warranties:
1. The Design/Builder will provide a standard (2) year warranty for all material, labor, and workmanship.
2. The existing roof warranty should be maintained.
General Conditions:
The Design/Builder will provide all general conditions necessary for the successful execution of the
project. General conditions are:
- Mobilization
- Project Management
- Administrative Support
- Site Supervision & Security (provide live video feed to monitor construction activity progress)
- Design Management
- Constructability Review and Value Engineering
- Project Planning and Scheduling
- Project Cost Budgeting and Cost Control
- Permit Coordination and Expediting
- Procurement of Materials and Labor
- Contract Administration
- Shop Drawing Review
- Temporary Utilities
- Temporary Construction Trailer / Field Office
- Project Identification Sign(s)
- Fire and Safety Equipment
- Rubbish Dumpsters and Removal
- Miscellaneous Labor
- Soil and Material Testing and Analysis During Construction
Attachment 2_Dura-Line Outline Spec - Lubbock TX - 20230210R1 Page 6 of 14
Attachment 2_Dura-Line Outline Spec - Lubbock TX - 20230210R1
- Construction Layout
- Messenger/UPS/Federal Express/Mail/Fax
- Office Materials and Equipment
- Phone Charges
- Progress Photos
- General Clean up
Project Close-Out:
Dura-Line will receive the following data and services as pa�t of the project closeout:
1. A complete list of subcontractors including contacts, addresses, and phone numbers for all
subcontractors and material suppliers.
2. Copies of all Waiver of Liens for all subcontractors and general contractors.
3. Three (3) sets of as-built drawings; also provide electronic copies.
4. One (1) set of maintenance and operation manuals with electronic copies.
5. Hold training classes in the operation of all equipment. Training to include the following
information:
- Written description of sequences, processes, and equipment
- Video recording of all training sessions
- Provide professional training staff to instruct designated facility management
representatives in equipment maintenance and operation
6. Documentation of all equipment and systems commissioning, but not limited to the
following:
- Air handling equipment
- Energy management equipment
- Door equipment
7. Copies of all test and balance reports.
8. Copies of all certificates of inspection and approval.
9. All required keys with a corresponding keying schedule.
10. Attic stock (2% for ceiling tile and flooring).
11. Written warranties and guarantees.
12. Maintenance proposals for equipment: two (2) year included with five (5) year optional extension.
Division 02 Demolition
Demolition:
- All necessary site & building demolition work is to be completed in a neat and orderly fashion with
minimal impact on the surrounding areas.
Division 03 Concrete
Foundations:
- Provide all concrete for perimeter footings including all rebar reinforcing as required.
- Provide insulation to slabs as required by code.
Floor Slabs:
- Warehouse slab-on-grade shall be a minimum 6" concrete, 4000 psi with 6x6x6 WWF over 4"
aggregate base course + Proper subgrade material preparation per geotechnical
recommendation. Overall floor flatness shall be Ff=45 and overall floor levelness shall be FI=30.
Attachment 2_Dura-Line Outline Spec - Lubbock TX - 20230210R1 Page 7 of 14
Attachment 2_Dura-Line Outline Spec - Lubbock TX - 20230210R1
- All concrete floor slabs shall have saw cut control joints on centers no greater than 15'. Isolation
at columns is provided. All construction joints shall have diamond dowels.
- O�ce slab on grade shall be 5" concrete, 4,000 psi with 6x6x6 W1NF over a minimum 4"
aggregate base course. Proper subgrade material preparation per geotechnical recommendation
- Provide reinforcement for the concrete surface for areas that subject to surFace abuse of
moveable equipment.
Concrete Wall Panels:
- Exterior walls shall be constructed of load-bearing concrete designed to meet structural load and
bracing for the building height. Concrete is to 4000psi. Panels shall have the code required
thickness of applied rigid insulation. Concrete panel materials and exterior finish to match
existing building.
Concrete Coatings and Sealants:
- Apply two coats of Ashford formula (or approved equal) floor sealer to new floors per
manufacturer's instructions after scrubbing the floor of all dirt, grease, and foreign materials.
- All saw-cut and construction joints shall be filled with polyurea or an equal product including the
interior perimeter of the building where the slab on grade meets the exterior wall.
- Provide Option for high wear concrete hardener at Reeler areas to reduce surface abuse.
- All of the joints should be caulked. (Polyurethane)
Concrete Water Pit:
- Provide below ground water pits on one side of the building with a capacity of approximately
15,000 GAL (7,500 GAL per side). Specific dimensions are to be determined by site specific
layout. Minimum depth of 12 ft.
- Provide approximately 400 LF of 16" PVC pipe with a 0.5% slope under the slab for process
water draining to the water pit referenced above for a close-loop water system with 13 riser stubs
above concrete.
Division 04 Masonry — Not Required
Division 05 Metals
Steel Structure:
- The structure is to be a combination of steel tube columns, beams, or open web joist girders and
joists, joist bracing with all materials having factory-finished gray anticorrosive coating.
- Steel shall be designed to meet FM Global requirements.
- Steel structure is to be designed in coordination with the specified roofing system.
- Roof deck shall be 22-gauge, factory-primed grey top/white bottom finish.
- Cross bracing (K or inverted K) is not allowed for the bracing of the structure.
- 36' is to be the minimum clear height of all structural steel and MEP/FP systems.
- Include all structural steel framing and reinforcement of rooftop equipment.
- Confirm all additional imposed roof loads such as suspended conveyor, piping and roof mounted
HVAC.
Miscellaneous Metals:
- Anchor bolts
- Bollards —(4) bollards at each drive-in door, (3) bollards at each fire hydrant.
- Miscellaneous roof support angles.
Attachment 2_Dura-Line Outline Spec - Lubbock TX - 20230210R1 Page 8 of 14
Attachment 2_Dura-Line Outline Spec - Lubbock TX - 20230210R1
- Handrails and railings as required by code.
- Dock pit frames.
- Roof drain guards.
- Guard rails at electrical panels and fire protection risers.
Division 06 Wood & Plastics
Wood Blocking:
- Roof blocking as required.
- Provide fire treated wood blocking in offices at toilet accessories, millwork, AV locations, and
other locations per the Office Specification.
Finish Carpentry:
- Provide all millwork for the new office areas, restrooms, breakroom, and locker room areas per
the Office Specification.
Division 07 Thermal & Moisture Protection
Roof System:
- Match existing roof system with 2 layers of insulation with joints staggered to meet code required
R-value, maintain existing roof warranty.
- Provide copings, flashings, and fascia for a complete weatherproof installation using 24-gauge
galvanized sheet steel with a finish to match existing.
- Provide structural design and wind load requirements for the building structure per local
requirements.
Building Insulation:
- Walls should meet code required R-value. All applied wall insulation shall be rigid.
Roof Hatch — N/A
Division 08 Doors & Windows
Holtow Metal Doors and Frames:
- Added exterior man doors will be 3' x 7' insulated, prime painted, steel foam filled frames with
weather stripping, lever type mortise hardware, closers, and exterior keying to meet Dura-Line
requirements.
- Provide panic hardware where required by local code.
- Electric strikes will be required at security checkpoints inside and outside the facility. Final
locations to be coordinated with Dura-Line.
- All exterior man doors should have badge access.
- Provide interior doors per the Office Specification.
Overhead Doors:
- Provide three (3) 14' x 16' drive-in doors with 3 button control station motor operators, vertical lift
type with 24-gauge factory pre-finished steel skin, 3" heavy-duty galvanized door track, 3"
polystyrene insulation, weather stripping, and compressible bottom seal.
- Provide three (3) high-speed doors in the same opening as the drive-in door.
Attachment 2_bura-Line Outline Spec - Lubbock TX - 20230210R1 Page 9 of 14
Attachment 2_Dura-Line Outline Spec - Lubbock TX - 20230210R1
- Provide three (3) 12'x14' insulated doors with 3 button control station motor operators, vertical lift
type with 24-gauge factory pre-finished steel skin, 3" heavy-duty galvanized door track, 3"
polystyrene insulation, weather stripping, and compressible bottom seal at Grinding Room,
Vacuum Room and Process Pit Room.
Glass and Glazing:
- Aluminum finish to match existing building.
- Provide glass to match existing.
- Exterior glazing to be 1" thick double pane. Provide tempered glazing where required by code.
- Sealants are to be provided on the exterior and interior perimeter of framing systems.
- Sealants are to be two-part polyurethane or silicone products.
- Provide interior glass and glazing per the O�ce Specification.
Division 09 Finishes
Drywall and Acoustic Ceilings:
- Provide all new walls and ceilings per the Office Specification.
Paint:
- Paint all hollow metal doors and frames. Paint misc. metals including dock angles, bollards,
railings, guardrails, and stairs safety yellow. Oil-based paint shall be used on all metal surfaces.
- All walls in the warehouse & manufacturing area are to be painted white. Any wall area receiving
rigid insulation shall remain unpainted.
- All drywalls shall receive one (1) coat of primer and two (2) coats of premium latex paint.
- Paint the interior walls in the warehouse area grey to 48" AFF and a blue stripe from 48" to 60"
AFF. Tenant to provide exact colors. The remaining warehouse walls above the blue stripe shall
be painted white.
- Paint the exterior of the building to match the provided elevations.
- Paint materials shall be Benjamin Moore, Sherwin Williams or equal.
Flooring:
- Provide flooring and base per the Office Specification.
Division 10 Specialties
Specialties:
- Provide lockers and benches per the Office Specification.
Toilet Partitions � Accessories:
- Provide toilet room partitions and accessories per the Office Specification.
Window Treatments:
- Provide window treatments for all exterior windows.
Fire Department Requirements:
- Fire extinguishers are to be provided and located to meet code. Provide a Knox Box(s) as
required by the local Fire Department.
- Fire alarm requirements and quantities are to be customized to be compatible with the Dura-
Line's racking and other equipment.
Attachment 2_Dura-Line Outline Spec - Lubbock TX - 20230210R1 Page 10 of 14
Attachment 2_Dura-Line Outline Spec - Lubbock TX - 20230210R1
Division 11 Equipment
Provide the following Rite Hite dock equipment at six (6) dock positions.
0 7'x8' RHH-4000 Hydraulic Dock Levelers and associated control panels including exterior
red/green communication lights
o Classic dock seal with traditional head cu�tain
o Dok-Guardian HD Safety Barriers
o SHR Series Dok-Lok Vehicle Restraints
o Z-guards at overhead door tracks
o Laminated dock bumpers
Division 12 Furnishings
No furnishings are included in the construction pricing.
Division 13 Special Construction
No special construction is included in the construction pricing.
Division 14 Conveying Systems
No conveying system items are included in the construction pricing
Division 21 Fire Protection Systems
Fire Protection:
- Modify existing automatic ESFR fire sprinkler system designed to NFPA standards. Provide hose
valves as required by local authorities.
- Fire protection system shall be designed to meet FM Global requirements.
- Provide fire protection system in the o�ce area to meet local code.
Division 22 Plumbing Systems
Water Service:
- Provide modifications to the existing domestic water as required, adequately sized for building
usage. Provide backflow preventers and meters as required by the local jurisdiction.
Storm Drainage:
- Roof storm drainage shall be through gutters and downspouts.
Sanitary Sewer:
- Modify existing sanitary service as required and stub up into the proposed office areas. Includes
all necessary waste and vent piping.
Plumbing:
- Plumbing for the office areas shall be provided to match the Office Specification.
Plumbing Fixtures:
- Fixtures to be according to the Office Specification.
Attachment 2_Dura-Line Outline Spec - Lubbock TX - 20230210R1 Page 11 of 14
Attachment 2_Dura-Line Outline Spec - Lubbock TX - 20230210R1
Division 23 HVAC Systems
Heating / Ventilation:
- Provide office heating and cooling according to the Office Specification.
- Provide warehouse heating to achieve 60F @ OF outside air temperature.
- Provide code required warehouse ventilation thru rooftop mounted or sidewall mounted fans
utilizing the existing louver locations.
- Smoke evacuation systems shall be provided per local code.
- Start-up of all equipment, testing and balancing of systems two (2) year parts, and labor warranty
included.
- Provide (4) 16' HVLS fans in the manufacturing area.
- Provide alternate to air condition the manufacturing area. Alternate shall include providing rigid
insulation from 10' AFF to roof at all exterior wal�s.
Division 26 Electrical Systems
Power and Receptacles:
- Power capacity: 8,000 amps at 480 volts. Main electrical service and distribution and connections
to all production equipment to be provided by Dura-Line.
- Provide all necessary receptacles, including GFI where required by code.
- Provide convenience receptacles on every column in the warehouse area.
- Provide receptacles for appliances, general power, and rough conduit for low voltage systems per
the Office Specifications.
Low Voltage — Rough In:
Provide rough-in (pathways, conduits, and boxes) for LV systems to accessible areas above
ceilings. In Warehouse areas rough-ins are to be extended to bar joists elevation.
The electrical sub will need to install conduits and LV wiring for the AV/IT/Security. All headend
equipment will be by Dura-Line.
Site Lighting:
- Provide LED wall packs on the building expansions no less than every 100' apart, a light at each
man door to meet local code or 1 foot-candle, whichever is greater, as required.
- Site lighting to be controlled by photocell.
- Design/Builder should provide adequate working light in the yard. Design 5.00 AVG maintained
foot candles with a uniformity ratio of 20 to 1.
- Light poles to be installed as required. Grid pattern, not checkerboard.
Utility Services:
Electric service that is adequately sized to accommodate the building shall be provided by others.
Interior Lighting:
- Provide LED fixtures with motion sensors to achieve the following minimum foot candles:
30FC in shop and warehouse areas.
50FC in o�ce, restrooms, locker rooms, employee, and misc. areas
Strip lights are to be provided in utility rooms.
- All light fixtures will be LED.
- Lighting fixtures to be according to the Office Specification.
Attachment 2_bura-Line Outline Spec - Lubbock TX - 20230210R1 Page 12 of 14
Attachment 2_Dura-Line Outline Spec - Lubbock TX - 20230210R1
Emergency and Exit Lighting:
Provide combination exiUemergency fixtures and emergency battery back-up as required to satisfy code,
including customization compatible with the TenanYs racking and other improvements. Requirements
and quantities could change once the racking plan is provided by Tenant. Provide an emergency
generator if required by the local building officials.
Mechanical:
Provide power wiring and connections to all HVAC equipment.
Division 28 Electronic Safety & Security
Fire-Alarm System:
- Provide addressable fire alarm control panels with area annunciation in accordance with all
codes.
- Provide manual pull stations in accordance with all codes, but at a minimum at each exit door.
- Provide ADA approved audio/visual devices.
- Provide smoke and heat detection devices, including smoke detectors, duct smoke detectors,
heat detectors, throughout for early fire detection.
- Provide sprinkler flow and tamper modules / switches.
- Fire alarm requirements and quantities are to be customized to be compatible with Dura-Line's
racking and other improvements.
- Provide conduit / pull boxes for six (6) exterior cameras in yard, mounted on exterior light poles.
Division 31 Earthwork
�xcavation:
- Include all site clearing, grubbing, and site preparatory work as required for exterior
improvements.
- The building elevation will be established to allow for drainage, which may be handled by means
of catch basins, storm sewers, swales, and surface runoff as specific site conditions dictate.
- Sedimentation and erosion control measures will be provided per code.
- The building pad will be compacted to 95% modified proctor density and the parking area to 90%.
Building and pavement areas will be proof-rolled to verify subgrade integrity.
- Include removal of all known unsuitable subgrade material and provide structural fill materials.
- If undocumented unsuitable soils are encountered, follow the testing agency's recommendations
to either replace with structural fill, suitable for bearing, or use other stabilization methods, and
include the necessary compaction. Provide unit pricing for cost adjustments.
- Include the necessary loading and re-spreading of topsoil at the disturbed landscaped areas.
- All detail work including fine grading of the building pad, fine grading of pavement areas, coring of
curbs, backfill of curbs, cutting for sidewalks and retaining walls, and other requirements are to be
included.
- Provide proper sub-base material below the pavement.
- Include temporary accessways and roads including maintenance for use by this and all others on
the site. Place and compact fill material for all new building expansion areas to revised subgrade
elevations.
- The site will be a balanced site. If the site does not balance any import or exporting of material
from the site is included.
- Provide retaining walls as needed to accommodate the site design
- Any moisture conditioning that may be required to meet the requirements of the soils report shall
be included.
- All landscaped areas shall be respread with a minimum of 6" of topsoil for applicable locations.
Attachment 2_Dura-Line Outline Spec - Lubbock 7X - 20230210R1 Page 13 of 14
Attachment 2_Dura-Line Outline Spec - Lubbock TX - 20230210R1
Division 32 Exterior Improvements
Site Concrete:
- All heavy-duty pavements will be concrete
- Concrete pavements are to be designed to accommodate 75 ESALs per day.
- Sidewalks and stoops at man-doors are to be provided as 5" concrete over 4" compacted stone
base as shown on the site plan.
- Provide MAG STD DTL 220-1 Type "a" curb Aggregate Base Course at the entrance roads and
around the parking areas.
- Outside finished goods storage to be concrete. Design/Builder must verify and comply with the
Geotechnical Engineers recommendations. Specific base, rebar, psi, etc. to be determined by
engineers. The initial area will be 5 acres.
- Yard to be sloped in one direction (1 % gradient), can't do low level area within yard to avoid
finished products rolling around.
- 25'x25' exterior patio adjacent to the office area, gives direct access to cafe/breakroom.
Concrete Pads:
- Provide concrete pads for Owner supplied silos. Pads to be approximately 2,450 SF and capable
of holding (10) 7,000 cubic ft. silos with 200,000 Ibs. fill capacity each. Silos are to be 60' tall; The
concrete pad should allow for another two smaller silos.
- Provide concrete pads for chillers approximately 1,750 SF. Pads to be 7" reinforced concrete.
Fencing:
- Provide chain link fencing at the perimeter of the site
- Provide five (5) powered sliding gates at auto entry points.
Landscaping and Irrigation:
- Repair existing landscaping and irrigation as required.
Division 33 Utilities
Site Utilities:
- Provide all necessary underground storm, sanitary and water piping modifications as required.
Attachment 2_Dura-Line Outline Spec - Lubbock TX - 20230210R1 Page 14 of 14
Attachment 2-Dura-Line Process 8 Equipment Scope of Work - Lubbock TX - 20230328 DNH
Dura-Line Extrusion Facility
P�ocess & E ui ment Sco e o
q p p
Wo�k
904 Lubbock Business Park Boulevard, Lubbock, TX 79403
March 31, 2023
Attachment 2-bura-Line Process 8� �quipment Scope of Work - Lubbock 7X Page 1 of 9
Attachment 2-Dura-Line Process 8� Equipment Scope of Work - Lubbock TX - 20230328 DNH
Project Introduction:
Delivered plant will have operational capacity to produce 40.5 M LBS of finished product annually.
Standard duct will represent 16 M LBS of total capacity and require two SD designed extruder lines. SD
lines will produce up to 2.5-in conduit for direct shipment or for use in Jumbo FuturePath. MicroDuct will
represent 16.5 M LBS of total capacity and require four MD designed extruder lines, two of which will
have one-pass capability. FuturePath will represent 8 M LBS of total capacity and require five FP
designed extruder lines. CIC and PinPoint capability are not included in project scope. Plant will
incorporate floor spacing for two additional lines in the future.
2024
Sales (k$)
Volume (k Ib.)
Volume breakdown (k Ib.)
MD
FP
SD
17,852
6,075
321
3,954
1,800
2025
92,404
33,589
1,619
19,970
12,000
2026
112,819
40,785
2,159
26,626
12,000
Based on existing procurement policy, site will require two weeks supply of virgin HDPE resin on hand or
silo capacity to store approx. 1.62M LBS. No rail is available at site, virgin HDPE will be delivered by
truck. Eight virgin HDPE silos will be installed on west side of shell building, each will have 200k LBS
usable capacity. Silos will be divided into two banks with two ladder access points to catwalks above
silos. Silos will be 14-ft diameter with a stack up height not to exceed 54-ft. Silos will be mounted on load
cells to support improved inventory management. High and low level rotary paddle indicators will be
incorporated.
Silos will be installed by a mechanical contractor. Wiring to silo components and grounding of silos will
be completed by electrical contractor.
Resin distribution from silos to extruder lines will be managed as follows:
All virgin HDPE silos will be connected to all extruder lines via 2.5-in convey lines.
Standard Duct lines will have three-layer capability with stripes and require a four-component blender
with color add on main extruder, a four-component blender on silicore extruder, and a single
component feeder with color add on skin extruder. Blenders will need to support rates at 1800-pph on
main extruder, 216-pph on silicore extruder, and 360-pph for skin extruder. Stripers will have an
individual loader with pickup wand line side.
MicroDuct tandem (single pass) lines require four-component blenders with 2 color adds on main
extruder, four-component blender on silicore extruder, and a single component feeder with color add
on oversheath extruder. Blenders will need to support rates at 1100-pph on main extruder, 132-pph
on silicore extruder, and 400-pph on oversheath extruder. Stripers will have an individual loader with
pickup wand line side.
MicroDuct standard lines require a four-component blender with 2 color adds on main extruder and a
four-component blender on silicore extruder. Blenders will need to support rates at 1100-pph on main
Attachment 2-bura-Line Process 8 Equipment Scope of Work - Lubbock TX Page 2 of 9
Attachment 2-Dura-Line Process 8 Equipment Scope of Work - Lubbock TX - 20230328 DNH
extruder and 132-pph on silicore extruder. Stripers will have an individual loader with pickup wand line
side.
FuturePath lines require a three-component blender with color add. Three FP lines will incorporate a
striper. Stripers will have an individual loader with pickup wand line side.
All design, equipment supply, mechanical install of convey lines to be completed by Sysmetric. All
wiring over 24 Vdc to be supplied, run and landed by electrical contractor. Sysmetric to supply wiring
diagrams for all equipment to show power requirements and termination points. Alt controls cables
(24Vdc) will be supplied by Sysmetric. Electrical contractor to run cables per Sysmetric wiring
schematic as Dura-Line sees fit. Sysmetric will land connections on Sysmetric equipment. All
mechanical setting of equipment (blenders, vacuum pumps) will be completed by mechanical
contractor. Sysmetric to provide loads for structural review of existing roof.
All CD blenders will be mounted on mezzanines above extruders. Box tilt stations will provide source
location for miscellaneous additive and color adds.
Mezzanines will be fabricated by third party and installed by mechanical contractor. Mezzanines will
require underside lighting and sprinklers. Height of top deck will be 120-inches, underside clearance
to be minimum 106-inches.
Site will incorporate a grinding and pelletizing operation to consume internally generated scrap. Some
regrind/reprocessed pellets may be transferred to other Dura-Line sites for use. The grinding system will
accept stick material and continuous feed from reels. A continuous payoff and tire puller will feed each
grinder. Grinders will be located in an enclosed area to reduce noise and dust. Grinders will incorporate
an evacuation system with filter head to minimize dust in grinding room. Grinder 1 will feed directly to
regrind silo with continuous throughput captured via a Scaleman. Grinder 2 will also incorporate a
Scaleman and feed directly to regrind silo or to a supersac loading station and controlled via a diverter
valve. Budget considerations have been made to incorporate color sorter/classifier system (Stage 1 only)
based on Clinton prototype.
Regrind silo will be designed similar to virgin HDPE silos with exception of hopper cone angle. Regrind
silo will be located with virgin HDPE silos on west side of shell building. Regrind silo will supply feed to
pelletizer e�ruder and have ability to supply a second supersac loading station. Direct connection of
Regrind silo to extruder lines is not in scope. Silo will be mounted on load cells to support improved
inventory management. High and low level rotary paddle indicators will be incorporated.
Pelletizer will convert regrind to reprocessed pellet. Reprocessed pellets will be blown to reprocessed
silo with continuous throughput captured via a Scaleman. Reprocessed will be designed same as virgin
HDPE silos. Reprocess silo will be located with virgin HDPE silos on west side of shell building.
Reprocessed silo will supply Standard Duct Line 1 and Standard Duct Line 2. Reprocess silo will also
have ability to supply supersac loading station (same as regrind supersac station). Silo will be mounted
on load cells to support improved inventory management. High and low level rotary paddle indicators will
be incorporated.
Silos will be installed by a mechanical contractor. Wiring to silo components and grounding of silos will
be completed by electrical contractor.
Site will incorporate a closed loop process cooling system. Chillers will provide required 50F water temp.
The site will require three 150-ton high efficiency chillers. A divided process pit (details provided in
Outline Specs) will include a(cold) process supply side and a(hot) process return side. VFD recirc
pumps will move water from (hot) return side through filter banks to chillers to (cold) supply side of pit. 6-
in schedule 80 PVC will be used for chiller side. VFD process pumps will deliver water from (cold) supply
side through an 8-in Schedule 80 PVC overhead distribution header to individual extrusion lines (approx.
500 LF). Chilled water distribution will include 2-in drops to a 2-in supply manifold running along utility rail
line side. Individual connections will be made from 2-in supply manifold. A 4 in gravity return manifold
Attachment 2-Dura-Line Process 8 Equipment Scope of Work - Lubbock TX Page 3 of 9
Attachment 2-Dura-Line Process � Equipment Scope of Work - Lubbock TX - 20230328 DNH
will run along utility rail line side to 6-in stub up to under slab 16-in PVC pipe (details provided in Outline
Specs). Return manifold will include vent pipes every 20-ft. All new piping will have 1-in thick fiberglass
insulation installed, including aluminum jacketing with heat tape on all exterior piping. A make-up supply
line will be installed from city water supply to pit.
Process cooling water system to be designed by third party. Chilled water equipment will be procured
and installed by mechanical contractor. Chilled water equipment will be wired by electrical contractor.
Chilled water piping will be installed by mechanical contractor. Water treatment is not included in this
scope - planned as an operating expense per Dura-Line policy.
Site will require (2) 75-HP air compressors for blenders, vac pumps, plasma units, pullers, product testing,
box tilt stations, product drying, etc. Air compressors will be stationed in pit room with a 660-gat receiver.
System will include an integrated refrigerant dryer, coalescing filters, and oil/ water separator. The
compressed air distribution system will include a 2.5-in header loop (1300 LF) around main production
area with four 2-in sub headers inside the loop for (22) 1-in drops at extrusion lines. Drops will include
ball valves. An additional (8) 1-in piping runs from main loop to specified areas will include drops with ball
valves. 1-in drops with valves will also be included at every other column around main production area.
All drops w/ valves to be positioned approximately shoulder height off floor.
Installation of compressor system equipment, fabrication & installation of exhaust duct work, materials &
labor to install header loop will be completed by mechanical contractor. Wiring to compressors will be
completed by electrical contractor. Distribution to point of use to be completed by Dura-Line maintenance
personnel.
Existing power at site will not support 6,000-amp operational requirements. A second transformer will be
installed on west side of shell building. Transformer installation will require a trench to be cut across
concrete lot from utility company tap box to new transformer location. Two 3,000-amp GFI Main breaker,
480-V switchboards with onboard metering and breakers will be installed in new switchgear room.
Onboard monitoring to include line voltage and load voltage presence, current, power, reactive/apparent
power, frequency, power factor, demand, etc. The existing service entrance will be extended from tap
box to new 3,000-amp main switchboard. Eight sets of 500 MCM copper conductors in PVC conduits
from new transformer will need to be installed to second 3,000-amp main switchboard. A 400 amp, 480V
bus duct with switches to provide power to distribution of downstream equipment on the two (2) Standard
Duct extrusion lines will be required. Included in electrical scope will be (3) 75-KVA 480-120/208V, 3-
phase transformers and (3) 200-amp, 120/208V breaker panels. Phase loss protection on two switchgear
units are out of scope.
Local motor disconnects and wiring for eleven extrusion lines, grinding system equipment, pelletizing
equipment, vacuum pumps, blowers, blending equipment, air compressors, silos, silo load cells, supersac
loading stations, and chillers in electrical contractor's scope.
LP&L will install their primary conduit, conductor and transformer. Electrical contractor (DesignPlast) will
provide ditch and backfill and new transformer pad.
Standard Duct line setup will include 5s cart to stage tooling. Accessory items to be procured: pins &
bushings, red depth indicating thermocouples, die safety guards, sizing sleeves, vac tank roller set, quick
change hardware and gaskets for three tank positions, rope payoffs and static eliminators.
MicroDuct line setup will include tooling delivered with equipment. 5s cart will be included to stage
tooling. Accessory items to be procured: string payoffs, fiber payoffs (for 2 lines), BB testers, red depth
indicating thermocouples, die safety guards, wire flyer & stands, wire straightener & stand, quick change
gaskets, sizing sleeves.
FuturePath line setup will include 5s cart to stage tooling. Accessory items to be procured: MD guides,
red depth indicating thermocouples, string payoff, wire payoff, wire straightener & stand, 15 payoff sleds
Attachment 2-Dura-Line Process 8 Equipment Scope of Work - Lubbock TX Page 4 of 9
Attachment 2-Dura-Line Process 8 Equipment Scope of Work - Lubbock TX - 20230328 DNH
per line, inline oversheath slitter, quick change hardware & gaskets for three tank positions, sponge
cutting tools.
Three reel building stations will be fabricated and setup in production area, one on north end for MD reels
and two on south end for SD and FP reels.
Product handling scope will include an upender, three floor jacks, racking for raw materials, and one
scrap cart per two lines.
In addition to standard QC lab instrumentation, the production area will be supplied with two octopus
testers and two fiber testers.
To support OT network and equipment digitization, the following network drops will be required:
• Blending/Gravimetrics (2) —1 interface per CD blender, 1 interface per Graviman
• Extruder Area (4) —1 for Extruder PLC, 1 for HMI, 1 for Dimensional monitoring, 1 extra
• Puller/Inkjet Area (4) — 2 for printers, 1 for PFDC terminal, 1 extra
• Reeling Area (2) — 1 for Operator HMI/PC, 1 for Scanner
• Pelletizing/Grinding/Scales/Silo Area (1 each) —1 each, a small switch/router can be deployed if
necessary
• Displays/TVs (2) — 2 each
• Chillers —1 per chiller
Production floor will be PFDC network ready for nine workstations. SAP will be deployed with Go Live
included in project scope. Entire site will have Wi-Fi coverage, including yard.
This site will follow current EHSS guidelines and will install and operate access control and monitoring
infrastructure consisting of, perimeter fencing, access control for all entries, including trucking and camera
monitoring of all perimeters. Perimeter fencing will extend from north corners of building out around east
& west lots and entire south lot. Employee auto parking lot on north end will be outside perimeter fence.
Four truck access control locations will be included with one manual gate for maintenance to access north
end of building. All exterior doors not within perimeter fencing will include access control.
Site will follow current EHSS guidelines for production area considerations. Site already has an existing
fire suppression system installed. Extension of fire suppression system will be required for protection
under mezzanines.
Site will incorporate a fenced area within main building for Maintenance department. Budget
considerations have been made for maintenance tools & basic support equipment. Site critical spare
parts will be established per Critical Spare Parts policy.
No landscape irrigation system is included in scope. Landscaping will be native and drought resistant.
Attachment 2-Dura-Line Process 8 Equipment Scope of Work - Lubbock TX Page 5 of 9
Attachment 2-Dura-Line Process 8 Equipment Scope of Work - Lubbock TX - 20230328 DNH
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Attachment 2-Dura-Line Process 8 Equipment Scope of Work - Lubbock TX Page 7 of 9
Attachment 2-Dura-Line Process 8 Equipment Scope of Work - Lubbock TX - 20230328 DNH
CHILLED WATER SYSTEM
COMPRESS�D AIR SYSTEM
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Attachment 2-Dura-Line Process 8 Equipment Scope of Work - Lubbock TX Page 8 of 9
WIm M1Q �OOIYOA OmlS fla� M
Attachment 2-Dura-Line Process S Equipment Scope of Work - Lubbock TX - 20230328 DNH
REGRINb AND SILO PFD
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Attachment 2-Dura-Line Process 8 Equipment Scope of Work - Lubbock TX Page 9 of 9
Attachment 3_List of New Real Property Improvements and Equipment
Real Property Improvements
• 9,350 sqft of office and employee experience (including office space, lobby, break room, locker
room, lobby, collaborative workspace, office kitchen, drivers lounge, etc)
• Upgraded electrical service (additional 3,000 amps)
• sqft of additions to the existing footprint (2000 sqft grinding room, 288 sqft switchgear room,
735 sqft for vacuum pump room, 1470 sqft pit room)
• Perimeter fencing of property
• Exterior yard lighting upgrades
• Interior lighfing upgrades
• Interior painting
• Dock door upgrades
• Exterior patio for the employees
• Air movement upgrades
• Building security (Cameras, access control doors and gates)
• Additional openings in building with ramps and large, high speed access doors
• 10 silos (200,000 Ib capacity each)
• Compressed air distribufion and piping network inside plant
• Process water system and piping inside plant
• Xeriscape landscaping using local, low water plants
• Wiring and equipment for IT infrastructure including wifi, network drops for equipment data
collection, security needs and office needs.
Tangible Personal Property
• 11 Extrusion lines, including resin distribution system, blending and line controls, extruders, and
reelers.
� 2 grinders system with pelletizing capability
• Additional 3,000 amp electrical service
Attachment 3_List of New Real Property Improvements and Equipment Page 1 of 1
Attachment 4_50% or more goods are distributed outside Lubbock County
�
� �
June 30, 2023
Mayor of Tray Payne and Lubbock City Council Members
City of Lubbock
P.O. Box 2000
Lubbock, Texas 79457
Dura-Line LLC
11400 Parkside Dr., Suite 300 TN 37934 USA
PHONE 865/218-3460 • FAX 865/223-5085
www.duraline.com
Dear Mayor Tray Payne and Lubbock City Council Members,
The list following in Attachment 4 represents the customer base and citylstate pairings where
Dura-Line LLC intends to focus manufacturing and distribution for the upcoming site
planned in Lubbock, TX.
Please reach out for further details if needed.
Thank you,
Kendall Roach
Transportation Manager
Dura-Line Corporation
Attachment 4 50% or more goods are distributed outside Lubbock County Page 1 of 9
Attachment 4_50% or more goods are distributed outside Lubbock County
�
� �
Customer Name
TDS METROCOM
POWER & TELEPHONE SUPPLY - EDI
REXEL USA INC
ACCU-TECH CORP
WHOLESALE ELECTRIC SUPPLY - HO
CABLE ONE *
AT&T SUPPLY
GRAYBAR - ODESSA
PRYSMIAN GROUP SPECIALTY
REYNOLDS COMPANY THE
AT&T SUPPLY
BORDER STATES
TDS METROCOM
AT&T SUPPLY
AT&T SUPPLY
WESCO - AMARILLO 7891
GRAYBAR-ZCNC CHARLOTTE
MILLENNIUM
TECHUNE INC.
GRAYBAR - ST CLOUD
POKA LAMBRO TELE. COOP,. INC.
POWER & TELEPHONE SUPPLY - EDI
WINDSTREAM SUPPLY, LLC
TECHLINE INC.
GENUINE CABLE GROUP
AT&T SUPPLY
ANIXTER INC
GRAYBAR - ZSTX STAFFORD
GOOGLE FIBER
LONESTAR ELECTRIC SUPPLY
AT&T SUPPLY
VERIZON ONE FIBER
CHARTER COMMUNICATIONS
CRAWFORD ELECTRIC SUPPLY
GRAYBAR - AUSTIN
HILL COUNTRY ELECTRIC/AUSTIN
KBS ELECTRICAL DISTR.,INC.
QUEST UTILITY CONSTRUCTION INC
TEXAS ELECTRIC COOPERATIVES
CRAWFORD ELECTRIC SUPPLY
ACCU-TECH CORP
Appendix A
City
HOBBS
STANTON
PECOS
ODESSA
ODESSA
ODESSA
ODESSA
ODESSA
ODESSA
ODESSA
GARDENDALE
GARDEN CITY
FORT STOCKTON
MIDLAND
ABILENE
ABILENE
WINGATE
MERKEL
MERKEL
JAYTON
WILSON
SPUR
BROWNFIELD
VANDERPOOL
ROCKSPRINGS
UVALDE
AUSTIN
AUSTIN
AUSTIN
AUSTIN
AUSTIN
AUSTIN
AUSTIN
AUSTIN
AUSTIN
AUSTI N
AUSTI N
AUSTIN
AUSTIN
ROUNDROCK
PFLUGERVILLE
Dura-Line LLC
11400 Parkside Dr., Suite 300 TN 37934 USA
PHONE 865/218-3460 • FAX 865/223-5085
www.duraline.com
State
NM
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
Zip
88240
79782
79772
79766
79765
79762
79761
79761
79761
79761
79758
79739
79735
79706
79602
79601
79566
79536
79536
79528
79381
79370
79316
78885
78880
78801
78758
78758
78753
78753
78748
78748
78745
78744
78744
78744
78744
78725
78701
78664
78660
Country
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
Attachment 4_50% or more goods are distributed outside Lubbock County Page 2 of 9
Attachment 4 50% or more goods are distributed outside Lubbock County
_ �
� �
Customer Name
CED - AUSTIN 0234
GRAYBAR - AUSTIN
LONESTAR ELECTRIC SUPPLY
LONESTAR ELECTRIC SUPPLY
DURA-LINE LLC - SAMPLES ONLY
GOOGLE FIBER
FRONTIER COMM OF THE SOUTH INC
GOOGLE FIBER
GRAYBAR - AUSTIN
TECHLINE INC.
D. F. COUNTRYMAN CO
ONESOURCE COMMUNICATIONS *
TEXAS ELECTRIC COOPERATIVES
TVC COMMUNICATIONS LLC
USTC CORP.
KBS ELECTRICAL DISTR.,INC.
GOOGLE FIBER
KT COMMUNICATIONS SUPPLIES
STUART C IRBY - BASTROP 603
FRONTIER COMM OF THE SOUTH INC
TEXAS ELECTRIC COOPERATIVES
CABLE ONE *
ADB COMPANIES, INC *
NX UTILITIES *
AT&T SUPPLY
CHARTER COMMUNICATIONS
ACCU-TECH CORP
DURA-LINE LLC - SAMPLES ONLY
GOOGLE FIBER
ANIXTER INC - POWER SOLUTIONS
GRAYBAR - SAN ANTONIO
KGP LOGISTICS
VERIZON ONE FIBER
DURA-LINE LLC - SAMPLES ONLY
GOOGLE FIBER
POWER & TELEPHONE SUPPLY - EDI
DURA-LINE LlC - SAMPLES ONLY
ACCU-TECH CORP
ADVANCED MEDIA TECHNOLOGIES IN
AT&T SUPPLY
QUEST UTILITY CONSTRUCTION INC
Appendix A Cont.
City
PFLUGERVILLE
PFIUGERVILLE
PFLUGERVILLE
LIBERTY HILL
Leander
Leander
HUTTO
HUTTO
HUTTO
HUTTO
GEORGETOWN
GEORGETOWN
GEORGETOWN
GEORGETOWN
GEORGETOWN
FREDERICKSBURG
BUDA
BUDA
BASTRO P
RO BSTO W N
ROBSTOWN
GREGORY
San Antonio
SAN ANTONIO
SAN ANTONIO
SAN ANTONIO
SAN ANTONIO
SAN ANTONIO
SAN ANTONIO
SAN ANTONIO
SAN ANTONIO
SEGUIN
SELMA
NEW BRAUNFELS
NEW BRAUNFELS
NEW BRAUNFELS
ELMENDORF
CONVERSE
CONVERSE
CONVERSE
CONVERSE
Dura-Line LLC
11400 Parkside Dr., Suite 300 TN 37934 USA
PHONE 865/218-3460 • FAX 865/223-5085
www.duraline.com
State
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
Zip
78660
78660
78660
78642
78641
78641
78634
78634
78634
78634
78626
78626
78626
78626
78626
78624
78610
78610
78602
78380
78380
78359
78266
78266
78249
78247
78223
78219
78219
78218
78217
78155
78154
78132
78132
78132
78112
78109
78109
78109
78109
Country
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
Attachment 4 50% or more goods are distributed outside Lubbock County Page 3 of 9
Attachment 4_50% or more goods are distributed outside Lubbock County
�
�
�
Customer Name
ZAYO GROUP, LLC *
ELLIOTT ELECTRIC SUPPLY INC
MILLENNIUM
EIS INC
AT&T SUPPLY
HILL COUNTRY ELECTRIC
CSSA - COMM. SUP. SERV. ASSOC
GRAYBAR - DTSC DALLAS
DURA-LINE LLC - SAMPLES ONLY
ADB COMPANIES, INC *
INSPIRED SOLUTIONS, INC *
VERIZON ONE FIBER
STUART C IRBY - BASTROP 603
GRAYBAR - ZSTX STAFFORD
AT&T SUPPLY
CABLE ONE *
WHOLESALE ELECTRIC SUPPLY - HO
CITY ELECTRIC SUPPLY - CHARLOT
FRONTIER COMM OF THE SOUTH INC
CITY BUILD UTILIN SUPPLY
POWER & TELEPHONE SUPPLY CO
CDT UNDERGROUND LLC
COMCAST COMMUNICATIONS **
KGP LOGISTICS - COMCAST
GRAYBAR - ZSTX STAFFORD
TERRY-DURIN COMPANY
CABLE ONE *
KGP LOGISTICS - COMCAST
REM COMMUNICATIONS, INC
KGP LOGISTICS - CENTURYLINK
DURA-LINE LLC - SAMPLES ONLY
MILLENNIUM
STUART C IRBY
TERRY-DURIN COMPANY
ANIXTER INC
COMCASTCOMMUNICATIONS **
ELLIOTT ELECTRIC SUPPLY INC
KGP LOGISTICS - COMCAST
KGP LOGISTICS
Appendix A Cont.
City
CONVERSE
PLEASANTON
PLEASANTON
LAREDO
LAREDO
KERRVILLE
INGRAM
INGRAM
Boerne
CASTROVILLE
CASTROVILLE
CASTROVILLE
VICTORIA
VICTORIA
VICTORIA
VICTORIA
VICTORIA
COLLEGE STATION
BRYAN
MANVEL
KATY
KATY
KATY
KATY
STAFFORD
CYPRESS
BAY CIN
RICHMOND
HUMBLE
SPRING
CONROE
CONROE
CONROE
CONROE
TOM BALL
TOMBALL
TOMBALL
TOMBALL
PO RTE R
Attachment 4_50% or more goods are distributed outside Lubbock County
Dura-Line LLC
11400 Parkside Dr., Suite 300 TN 37934 USA
PHONE 865/218-3460 • FAX 865/223-5085
www.duraline.com
State
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
Zip
78109
78064
78064
78045
78041
78028
78025
78025
78015
78009
78009
78009
77905
77904
77901
77901
77901
77840
77803
77578
77494
77493
77493
77493
77477
77429
77414
77406
77396
77389
77385
77385
77385
77385
77375
77375
77375
77375
77365
Country
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
Page 4 of 9
Attachment 4 50% or more goods are distributed outside Lubbock County
�
� �
Customer Name
TERRY-DURIN COMPANY
AT&T SUPPLY
VERIZON ONE FIBER
POWER & TELEPHONE SUPPLY - EDI
POWER & TELEPHONE SUPPLY CO
AT&T SUPPLY
TECHLINE INC.
POWER & TELEPHONE SUPPLY CO
ADVANCED MEDIA TECHNOLOGIES IN
KGP LOGISTICS - COMCAST
KGP LOGISTICS - CENTURYLINK
KGP LOGISTICS
CED - HOUSTON 3276 & 3274
CDT UNDERGROUND LLC
COMCASTCOMMUNICATIONS **
GEORGIA UNDERGROUND
CABLETEX COMMUNICATION, LLC *
AT&T SUPPLY
AT&T SUPPLY
VERIZON ONE FIBER
WHOLESALE ELECTRIC SUPPLY - HO
CITY BUILD UTILITY SUPPLY
DURA-LINE LLC - SAMPLES ONLY
STUART C IRBY
TEXAS ELECTRIC COOPERATIVES
GRAYBAR - ZAGA AUSTELL
TRANSTELCO, INC
TECHLINE INC.
CHARTER COMMUNICATIONS
AT&T SUPPLY
ACCU-TECH CORP
GRAYBAR - ZSTX STAFFORD
ONESOURCE COMMUNICATIONS *
STUART C IRBY
MILLENNIUM
ONESOURCE COMMUNICATIONS *
POWER & TELEPHONE SUPPLY - EDI
CENTURYLINK *
GEORGIA UNDERGROUND
Appendix A Cont
City
PORTER
NEW CANEY
NEW CANEY
LIVINGSTON
LIVINGSTON
CLEVELAND
MONTGOMERY
CONROE
HOUSTON
HOUSTON
HOUSTON
HOUSTON
HOUSTON
HOUSTON
HOUSTON
HOUSTON
HOUSTON
JERSEY VILLAGE
HOUSTON
HOUSTON
HOUSTON
HOUSTON
HOUSTON
HOUSTON
SAN ANGELO
SAN ANGELO
SAN ANGELO
EARLY
WACO
WACO
MCGREGOR
TAYLO R
TAYLO R
TAYLOR
HARKER HEIGHTS
HARKER HEIGHTS
HARKER HEIGHTS
KILLEEN
KILLEEN
Dura-Line LLC
11400 Parkside Dr., Suite 300 TN 37934 USA
PHONE 865/218-3460 • FAX 865/223-5085
www.duraline.com
State
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
Zip
77365
77357
77357
77351
77351
77327
77316
77304
77093
77093
77075
77073
77067
77049
77049
77049
77048
77041
77034
77032
77004
77003
77003
77003
76905
76901
76901
76802
76710
76704
76657
76574
76574
76574
76548
76548
76548
76543
76541
Country
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
Attachment 4_50% or more goods are distributed outside Lubbock County Page 5 of 9
Attachment 4_50% or more goods are distributed outside Lubbock County
_ �
� �
Customer Name
ADB COMPANIES, INC *
GEORGIA UNDERGROUND
ONESOURCE COMMUNICATIONS *
KGP LOGISTICS - CENTURYLINK
AT&T SUPPLY
POWER & TELEPHONE SUPPLY - EDI
BORDER STATES
GRAYBAR - ST CLOUD
KGP LOGISTICS - CENTURYLINK
PRYSMIAN GROUP SPECIALN
KGP LOGISTICS
GALLOWAY GROUP INC, THE
LONESTAR ELECTRIC SUPPLY
ONESOURCE COMMUNICATIONS *
USTC CORP.
GRAYBAR - CUIL CHAMPAIGN IL
STUART C IRBY
DURA-LINE LLC - SAMPLES ONLY
ANIXTER INC - POWER SOLUTIONS
GRAYBAR-FORT WORTH
CHARTER COMMUNICATIONS
TECHLINE INC.
TERRY-DURIN COMPANY
AT&T SUPPLY
STUART C IRBY - FT WORTH TX
CHARTER COMMUNICATIONS
WHOLESALE ELECTRIC SUPPLY - TE
K6P LOGISTICS
NC COMMUNICATIONS LLC
WESCO - AMARILLO 7891
GRAYBAR - DTSC DALLAS
AT&T SUPPLY
AT&T SUPPLY
NEXTLINK INTERNET *
GRAYBAR - DTSC DALLAS
MILLENNIUM
R J CARROLL COMPANY
Appendix A Cont.
City
JARRELL
JARRELL
JARRELL
BELTON
TEMPLE
DE LEON
CISCO
CISCO
BRIDGEPORT
STEPHENVILLE
OLNEY
ROANOKE
KRUM
FORT WORTH
AUBREY
CORINTH
CORINTH
Fort Worth
FORT WORTH
FORT WORTH
Forest Hill
FORT WORTH
FORT WORTH
RICHLAND HILLS
FORT WORTH
Haltom City
HALTOM CITY
FORT WORTH
WHITE
SETTLEMENT
WHITE
SETTIEMENT
FORT WORTH
FORT WORTH
WEATHERFORD
SPRINGTOWN
NEWARK
NEWARK
MANSFIELD
Dura-Line LLC
11400 Parkside Dr., Suite 300 TN 37934 USA
PHONE 865/218-3460 • FAX 865/223-5085
www.duraline.com
State
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
Zip
76537
76537
76537
76513
76504
76444
76437
76437
76426
76401
76374
76262
76249
76244
76227
76208
76208
76177
76155
76155
76119
76119
76119
76118
76118
76117
76117
76115
Country
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
TX
TX
TX
TX
TX
TX
TX
TX
TX
76108
76108
76107
76106
76088
76082
76071
76071
76063
US
US
US
US
US
US
US
US
US
Attachment 4_50% or more goods are distributed outside Lubbock County Page 6 of 9
Attachment 4_50% or more goods are distributed outside Lubbock County
_ �
� �
Customer Name
VERIZON ONE FIBER
NX UTILITIES *
CHARTER COMMUNICATIONS
MILLENNIUM
AT&T SUPPLY
STUART C IRBY - BASTROP 603
TERRY-DURIN COMPANY
STUART C IRBY - BASTROP 603
STUART C IRBY - OKLAHOMA CITY
AT&T SUPPLY
DURA-LINE LLC - SAMPLES ONLY
KT COMMUNICATIONS SUPPLIES
TEXAS ELECTRIC COOPERATiVES
CHARTER COMMUNICATIONS
AT&T SUPPLY
POWER & TELEPHONE SUPPLY - EDI
POWER & TELEPHONE SUPPLY - EDI
DURA-LINE LLC - SAMPLES ONLY
KGP LOGISTICS
KGP LOGISTICS - CENTURYLINK
AT&T SUPPLY
ELLIOTT ELECTRIC SUPPLY INC
POWER & TELEPHONE SUPPLY - EDI
GRAYBAR - DTSC DALLAS
STUART IRBY - CODALE ELECTRIC
VERIZON ONE FIBER
AT&T SUPPLY
GEORGIA UNDER6ROUND
USTC CORP.
MILLENNIUM
ACCU-TECH CORP
ADVANCED MEDIA TECHNOLOGIES IN
CENTURYLINK *
CHARTER COMMUNICATIONS
KGP LOGISTICS - CENTURYLINK
TERRY-DURIN COMPANY
VERIZON ONE FIBER
CRAWFORD ELECTRIC SUPPLY
TERRY-DURIN COMPANY
Appendix A Cont.
City
MANSFIELD
ITASCA
HURST
HASLET
EULESS
CLEBURNE
CLEBURNE
BURLESON
BURLESON
ARLINGTON
Aledo
ALEDO
ALEDO
Arlington
NACOGDOCHES
LUFKIN
LEONA
PALESTINE
JACKSONVILLE
ATHENS
TYLER
TYLER
HENDERSON
DALLAS
DALLAS
DALLAS
DALLAS
DALLAS
DALLAS
SUNNYVALE
BALCH SPRINGS
BALCH SPRINGS
BALCH SPRINGS
Balch Springs
MESQUITE
BALCH SPRINGS
BALCH SPRINGS
WILMER
WILMER
Dura-Line LLC
11400 Parkside Dr., Suite 300 TN 37934 USA
PHONE 865/218-3460 • FAX 865/223-5085
www.duraline.com
State
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
Zip
76063
76055
76053
76052
76039
76033
76031
76028
76028
76015
76008
76008
76008
76001
75961
75904
75850
75801
75766
75751
75701
75701
75654
75261
75247
75247
75244
75211
75211
75182
75180
75180
75180
75180
75180
75180
75180
75172
75172
Country
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
Attachment 4_50% or more goods are distributed outside Lubbock County Page 7 of 9
Attachment 4 50% or more goods are distributed outside Lubbock County
�
�
�
Customer Name
GRAYBAR - ZJIL JOLIET
AT&T SUPPLY
CHARTER COMMUNICATIONS
AT&T SUPPLY
AT&T SUPPLY
CHARTER COMMUNICATIONS
DURA-LINE LLC - SAMPLES ONLY
FRONTIER COMM OF THE SOUTH INC
CHARTER COMMUNICATIONS
AT&T SUPPLY
CHARTER COMMUNICATIONS
KGP LOGISTICS
KGP LOGISTICS - FRONTIER
KGP L061STICS - VERIZON
PARRISH HARE ELECTRICAL SUPPLY
TRINITY CABLING CO
ANIXTER INC
KMM TELECOMMUNICATIONS
TECHLINE INC.
ADVANTAGE ELECTRONICS WIRE & C
GEORGIA UNDERGROUND
CENTURYLINK *
CHARTER COMMUNICATIONS
CRAWFORD ELECTRIC SUPPLY
DATA OPTICS CABLE, INTL INC
AT&T SUPPLY
DURA-LINE LLC - SAMPLES ONLY
MILLENNIUM
REXEL USA INC
ANIXTER INC
DURA-LINE LLC - SAMPLES ONLY
FRONTIER COMM OF THE SOUTH INC
GENESEE SUPPLY COMPANY
GEORGIA UNDERGROUND
GOOGLE FIBER
GALLOWAY GROUP INC, THE
PRECISION CONTRACTING SERVICES
Appendix A Cont.
City
LAVON
TERRELL
ME54UITE
DUNCANVILLE
LANCASTER
Canton
CANTON
LEWISVILLE
Mckinney
MCKINNEY
LEWISVILLE
IRVING
IRVING
IRVING
IRVING
IRVING
LEWISVILLE
LEWISVILLE
GRAND PRAIRIE
GRAND PRAIRIE
GARLAND
GARLAND
Garland
IRVING
FRISCO
PLANO
PLANO
CELINA
CARROLLTON
CARROLLTON
CARROLLTON
CARROLLTON
CARROLLTON
CARROLLTON
CARROLLTON
ADDISON
ADDISON
Attachment 4_50% or more goods are distributed outside Lubbock County
Dura-Line LLC
11400 Parkside Dr., Suite 300 TN 37934 USA
PHONE 865/218-3460 • FAX 865/223-5085
www.duraline.com
State
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
Zip
75166
75160
75149
75137
75134
75103
75103
75077
75071
75069
75067
75063
75063
75063
75061
75061
75057
75057
75053
75050
75043
75041
75040
75038
75034
75025
75023
75009
75007
75006
75006
75006
75006
75006
75006
75001
75001
Country
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
US
Page 8 of 9
Attachment 4 50% or more goods are distributed outside Lubbock County
_ �
� �
Appendix A Cont.
Page Left Blank Intentionally (9 of 9)
Dura-Line LLC
11400 Parkside Dr., Suite 300 TN 37934 USA
PHONE 865/218-3460 • FAX 865/223-5085
www.duraline.com
Attachment 4_50% or more goods are distributed outside Lubbock County Page 9 of 9
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Lubbock Central Appraisal District
2109 Avenue Q
PO BOX 10542
Lubbock, Texas 79408-3542
806.762.5000 EXT 5
www.lubbockcad.org
Quick Ref#: R338788
BVLBP2 LP
5820 W NORTHWEST HWY
STE 200
DALLAS TX 75225-3201
Attachment 5_Current Real Estate Value for existing location
NOTICE OF APPRAISED VALUE
This is NOT a Tax Bill
Date: 04/03/2023
�
iCkRef#: (Refer to this # when inquiring about your property)
38788
�perty ID: R533675-00000-00150-000
�eet Address:
� LUBBOCK BUSINESS PARK BLVD LUBBOCK TX 79403
�perty Description:
BBOCK BUSINESS PARK L 15
2018 Appraised Value: N/A %Chg (2018 to 2023): 0 N/A
This percentage information is required by Tax Code Section 25.19(b-1).
Dear Property Owner:
We have appraised the property listed above for the 2023 tax year. Based on the appraisal date of January 1 of this year,
the appraisal is as follows:
Appraised Information
Agricultural Market Value
Agricultural Productivity Value
Improvement (Buildings) Market Value
Personal Property Market Value
Mineral Interest Market Value
Total Market Value of this Property
Total Appraised Value (with Homestead Limit) "*
Exemptions
Last Year
608,417
0
0
9,039,583
0
0
9,648,000
9,648,000
Proposed This Year
608,417
0
0
15,800,360
0
0
16,408,777
16,408,777
2022 2022 2023 Exemption
2pyy 2023 Proposed ypy3 2023 Proposed Amount
Exemptlons �emption Taxable Taxing Unk Appraised Value Exemptlons Exemptlon Taxable Vatue canceled
Amount • Value Amount or Reduced
from Last Year
0 9,648,000 Lubbock County 16,408,777 0 16,408,777 0
0 9,648,000 Lubbock ISD 16,408,777 0 16,408,777 0
0 9,648,000 City Of Lubbock 16,408,777 0 16,408,777 0
0 9,648,000 Lubb Cnty Hospital 16,408,777 0 16,408,777 0
0 9,648,000 Hi Plains Water 16,408,777 0 16,408,777 0
Beginning August 7th, visit Texas.gov/PropertyTaxes to find a link to your local property tax database on which you can easily access information regarding your
property taxes, including information regarding the amount of taxes that each entity that taxes your property will impose if the entiry adopts its proposed tax rate.
Your local property tax database will be updated regularly during August and September as local elected officials propose and adopt the property tax rates that will
determine how much you pay in property taxes.
Property owners who file a notice of protest with the Appraisal Review Board (ARB) may request an informal conference with the Appraisal District to attempt to
resolve their dispute prior to a formal ARB hearing. The informal conference must be held before the hearing on the protest.
The governinq body of each taxing unit listed on this notice decides whether property taxes increase. The appraisal district only determines the value
of your property. "The Texas Legislature does not set the amount of your local taxes. Your property tax burden is decided by your loca/ly e/ected
o�cials, and all inquiries concerning your taxes should be directed to those o�cials."
'If you are 65 or older and received the $10,000 school tax exemption on your home last year from the school listed above, your school taxes for this year will not
be higher than when you first received the exemption on this home. If you are disabled and received the $10,000 school tax exemption on your home last year from
the school listed above, your school taxes for this year will not be higher than the 2003 taxes or the first year you received the exemption, whichever is later. If your
county or city has approved a limitation on your taxes, your county or city taxes will not be higher than the first year your county or city approved the limitation or the
first year you qualified for the limitation. If you improved your property (by adding rooms or buildings) your school, county, or city tax ceiling may increase for these
improvements. If you are a surviving spouse age 55 or older, you may retain the tax ceiling.
'*Your residence homestead is protected from future appraisal value increases in excess of 10% of the appraised value of the property for the preceding tax year
plus the value of any new improvements.
SEE 2023 PROPERTY TAX PROTEST PROCESS INSERT
PLEASE FILE YOUR PROTEST ONLINE Protest Deadline: 05/15/2023
Online Inquiry/Protest ID: xxxxxxxxxx ARB Hearings Begin: 05/01/2023
Location of ARB Hearings: 2109 Avenue Q
_ ing location