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TABLE OF CONTENTS
TABLE OF CONTENTS
01
MESSAGE
FROM OUR
MANAGEMENT
02
ABOUT ALPEK
Market Presence
Long-Term Growth Strategy
03
2021
PERFORMANCE
9
10
Financial Highlights
Polyester
Plastics & Chemicals
12
13
15
04
ESG
ESG Model
ESG Targets & Highlights
Material Issues & Progress
05
GOVERNANCE
18
20
23
Corporate Governance
Board of Directors
Management Team
Code of Conduct
36
38
40
41
TABLE OF CONTENTS
TABLE OF CONTENTS
TABLE OF CONTENTS
TABLE OF CONTENTS
42
50
53
54
55
56
06
MANAGEMENT’S
DISCUSSION
AND ANALYSIS
07
APPENDIX
Glossary
Our Footprint
Our Value Chains
Our Approach to Reporting
08
CONSOLIDATED
FINANCIAL
STATEMENTS
09
CONTACT
Message from
our Management
Dear Shareholders,
Alpek experienced an outstanding year during 2021. A marked
increase in petrochemical demand, combined with tighter
global supply for petrochemical-based products, supported
strong performance. Alpek faced a potentially adverse
production environment, yet the team captured untapped
opportunities where these threats laid. It discovered new levels
of productivity and EBITDA, reaffirming its leading position
across its respective industries, and continuing to move steadily
forward on its long-term business and ESG strategies.
This 2021 message will focus on four key takeaways that
encapsulate the year’s results and learnings.
ARMANDO GARZA SADA
CHAIRMAN OF THE BOARD
MESSAGE
MESSAGE
MESSAGE
MESSAGE
MESSAGE
3 improved
improved
improved
improved
performance
Comparable EBITDA of
US $962 million; 60%
higher vs 2020
1.POSITIVE CHANGES IN THE
PETROCHEMICAL INDUSTRY
SIGNIFICANTLY IMPROVED COMPANY
PERFORMANCE
Twice during the year Alpek revised
its EBITDA guidance upwards, as
industry margins for key products in its
portfolio expanded and remained at high
levels. The first increase came after an
unprecedented polar vortex in the U.S.
Gulf Coast in 1Q21 affected a large portion
of the industry, while Alpek’s operations
continued uninterrupted. A similar impact
occurred later in the year, as power supply
interruptions in China reduced output into
the global polyester industry.
The largest benefit to industry margins
came from strength in the global
economy during 2021, which resulted
in increased demand for petrochemical
products in applications such as food and
beverage packaging, construction, and
e-commerce. Moreover, products like PET
and polypropylene received an additional
boost, growing their share of the market in
categories like food packaging, as brand
managers sought to increase the use of
economic, sustainable, and low-carbon
packaging materials. This trend is expected
to extend into the coming years.
Higher freight costs and lower marine vessel
availability also contributed to better-than-
expected results, as import parity pricing
for North America directly benefited from
the increased logistical cost for Asian-based
producers. Though marine freight costs
are expected to decline somewhat towards
the end of 2022, they are not expected to
return to historical averages.
As a combined result of these effects,
Alpek’s 2021 Comparable EBITDA was US
$962 million, 60% higher than last year.
Strong annual volume of 4.8 million tons
also matched last year’s results.
4 STABILITY
STABILITY
STABILITY
STABILITY
STABILITY
JOSÉ DE JESÚS VALDEZ SIMANCAS
CHIEF EXECUTIVE OFFICER
2. RECENT RESULTS HAVE
STRENGTHENED OUR BALANCE SHEET
Alpek began the year focused on further improving its financial
standing with the successful issuance of a 10-year US $600 million
bond at a low 3.25% annual coupon. The funds were used in a
concurrent tender offer for its 2022 bonds, which increased the
average debt profile from 4.4 to 6.7 years.
Furthermore, the strong operational results Alpek obtained throughout
the year generated Free Cash Flow of US $280 million. This allowed
Alpek to pay out total dividends of US $183 million to Shareholders
while still reducing Net Leverage to 1.1 times.
Free Cash Flow of
US $280 million
As a result of Alpek’s improved
financial position, but more
importantly after a thorough review of
the Company’s Business Risk Profile,
S&P reverted Alpek’s credit rating to
a BBB- on a standalone basis, which
is equivalent to investment grade.
Both Moody’s and Fitch maintained
their corresponding stable investment
grade ratings for the Company.
5 3. ALPEK HAS SHIFTED TO
AN ENHANCED GROWTH
TRAJECTORY
Alpek’s long-term
perspectives have been
significantly enhanced by
2021 performance
Throughout the year, Alpek
implemented activities aligned with
its long-term growth strategy. These
included:
• Acquisition of the largest and
newest bottle-to-bottle PET
recycling facility in the United States
from CarbonLITE, which reaffirms
our position as a leading PET
recycler in the Americas, and moves
us closer to our goal of supplying
300,000 tons of rPET per year by
2025
• Successful turnaround of our
recently acquired EPS assets in the
United States, which was achieved a
full year ahead of schedule
• Shutdown of Caprolactam
production in Mexico and the Staple
Fibers facility in Cooper River after
two years of high raw material costs
and underperforming operations
Looking forward, our stable
results, healthy debt profile, low
leverage levels, and cash on hand
of US $513 million, will allow us to
pursue additional EBITDA-accretive
projects in 2022, M&A opportunities
associated with vertical integration
or value-added products or an
extraordinary dividend payout. None
of these measures would compromise
our strong financial standing, and
indeed, regardless of the end use
of the funds, Alpek’s long-term
perspectives have been significantly
enhanced by 2021 performance.
4. ALPEK HAS A CLEAR ESG
AMBITION AND WILL REMAIN AT
THE SUSTAINABILITY FOREFRONT
Over the past two years, Alpek has
made a concerted effort to improve
the way it identifies its material ESG
risks, addresses these issues head
on, discloses its relative progress,
and works tirelessly on being a
responsible steward of the planet,
thus proactively addressing the
concerns of the Company’s broader
stakeholder base.
Ambitious
targets defined
for each of our
12 material ESG
issues
6 ESG performance ratings
have reached top
quartile of the industry
This year the Company reached the
next milestone in its ESG journey
through Project Evergreen, a
comprehensive and analytical review
of the global ESG landscape and its
progress to date. This project focused
on aligning the Company behind
concrete ambition levels, targets, and
key action items for each of Alpek’s 12
material issues.
Some of Alpek’s most relevant ESG
targets resulting from this project are:
• Circularity (PET): Increase PET
bottle recycling capacity to
300,000 tons by 2025
• Carbon Emissions & Eco-Efficiency:
OUTLOOK
Sincerely,
Reduce CO2 emissions by 27.5%
(2019 base) before 2030 and reach
carbon neutrality by 2050
• Occupational Safety: Attain a Total
Recordable Incident Rate (TRIR) in
the top decile of the industry, with
the goal of achieving zero accidents
every day
• Sustainable Corporate Governance:
Improve the composition and
effectiveness of the Board through
more frequent ESG reviews and
enhanced member diversity
This work has already yielded
excellent results for Alpek, as its ESG
ratings with both S&P Global and
Sustainalytics have reached the top
quartile of its industry. Furthermore,
the Company was added to S&P /
BMV Total Mexico ESG Index. It is
noteworthy that both achievements
occurred before the conclusion of
Project Evergreen, and as such, the
Company expects additional growth in
its 2022 ESG ratings as this progress
is reflected throughout the year.
This review of Alpek’s key
takeaways for 2021 is intended to
provide insight into the elements
that supported the Company’s
performance throughout the year,
and the strategic elements that
will continue to drive results in the
years to come. Looking ahead to
2022, Alpek maintains its positive
outlook, as both demand and
reference margins are expected to
continue at higher-than-historical
levels. Available funds will likely be
deployed to strategic projects that
will drive further EBITDA growth.
Alpek would like to close by thanking
its employees, customers, suppliers,
creditors, and Board members
for their dedication and talent, as
without them, none of this year’s
outstanding results would have been
possible.
Armando Garza Sada
Chairman of the Board
José de Jesús Valdez Simancas
Chief Executive Officer
7 We create the building blocks our
customers need to improve everyday
lives and make the world a better place.
+8.2 million tons of total capacity
We are a leading manufacturer of PTA,
PET, rPET, PP, EPS and Arcel®, among
other products.
8 Market Presence
32
plants
07
countries
Mexico
3,395 Kta
USA
2,829 Kta
Canada
114 Kta
Argentina
246 Kta
Brazil
1,226 Kta
Chile
28 Kta
Canada
United
Kingdom
144 Kta
PTA
PET
rPET
Flake
rPET
Pellet
rPET
SPT
Fibers
PP
EPS
Arcel
CPL
Other
United Kingdom
United States
Mexico
Polyester
P&C
Chile
+6,300
employees worldwide
Brazil
Argentina
9 Long-Term Growth Strategy
STRENGTHEN CORE BUSINESS
STRATEGIC & FOCUSED GROWTH
S
T
S
Y
L
A
T
A
C
H
T
W
O
R
G
Global Cost Improvement
Zero-Based Budgeting & process innovation
(Mainly Operations, Logistics & SG&A)
Value-added Products
Shift to products with higher margins &
barriers to entry (PET, Copolymers and others)
FCF Generation
Reductions to CAPEX & NWC / Recover M&G
Mexico debt
Footprint Optimization
Ensure global production grows across
optimal sites & logistic networks
01
02
Foster Product Circularity
Increase mechanical (PET) & chemical
recycling (PP, EPS) capacity through
organic growth, M&A and Open
Innovation to reach ESG goals
Offer biodegradable alternatives for
EPS & PP
Value-Creation in CO2 Emissions
Reduction
Pursue opportunities & participate
in new markets associated with
reaching carbon neutrality before 2050
(Renewable energy, Green hydrogen,
CO2 capture, Carbon offsetting)
S
T
S
Y
L
A
T
A
C
H
T
W
O
R
G
CAPTURE ESG-RELATED OPPORTUNITIES
S
T
S
Y
L
A
T
A
C
H
T
W
O
R
G
Value Chain Integration
Grow capacity selectively & integrate into
value chain (Px, EPS)
Product Innovation
New products & business lines (Natural Gas
Commercialization, Biovento, PLA & others)
Maximize Value from
Corpus Christi Polymers (CCP)
Optimize project timing & minimize CAPEX
03
10
Our two
business units
achieved
exceptional
operating results
11 Financial Highlights
A YEAR
Volume
4,798
(ktons)
Tied highest
figure in history
Reported EBITDA
1,145
(US$, millions)
Highest year
in history
Comparable EBITDA
962
(US$, millions)
Highest year
in history
OF RECORDS
Revenues
7,697
(US$, millions)
Highest year
in history
Leverage
1.1x
Lowest
since 2013
ktons
VOLUME
2
1
0
4
,
6
0
9
5
0
1
.
3
2
0
4
4
,
2
1
9
0
9
4
3
,
4
8
3
4
,
5
9
8
0
9
4
3
,
2
0
8
4
,
3
8
8
8
1
9
3
,
8
9
7
4
,
2
0
0
,
1
6
9
7
3
,
2017
2018
2019
2020
2021
US$, millions
COMPARABLE EBITDA
1,063
850
9
8
7
1
3
2
3
5
3
565
1
0
6
8
1
2
2
7
3
0
0
8
5
7
2
6
2
5
384
2
6
4
9
2
2
4
3
2
1,145
2
6
9
0
8
4
8
5
4
2017
2018
2019
2020
2021
Polyester Plastics & Chemicals
Others Reported EBITDA
REVENUES
US$, millions
1
9
9
6
,
1
3
2
5
,
6
1
2
6
,
6
2
3
5
,
7
9
6
7
,
2017
2018
2019
2020
2021
OPERATING INCOME
6
8
0
,
1
1
4
6
5
5
3
4
6
8
2018
2019
2020
2021
6
2
8
0
7
2
2
6
1
7
2
2
2017
8
8
1
-
CAPEX
6
3
2
2017
2018
2019
2020
2021
DEBT & LEVERAGE
Debt (US$, millions) & Leverage (times)
3.3
2
6
2
,
1
1.7
1.6
2
3
8
,
1
0
3
3
,
1
2.1
5
8
1
,
1
1.1
5
2
2
,
1
2017
2018
2019
2020
2021
12 6,496
thousand tons
in capacity
4,547
employees
18 plants
Leading
PTA, PET
and PSF
producer
across the
Americas
2nd
largest PET
producer
worldwide
A leading
PET
recycler in
the Americas
USA
Mexico
Brazil
Argentina
Canada
UK
13 Acquired the largest PET
recycler in the United
States from CarbonLITE
& reaffirmed our position
as a leading PET recycler
in the Americas
r
e
t
s
e
y
o
P
l
Alpek’s Polyester segment serves the
resilient and growing demand for PET
and rPET from the food and beverage
industry. During 2021, the category
grew sharply as the global economy
enjoyed a strong tailwind. Moreover,
customers have been shifting their
packaging material mix into PET as
they seek lower prices and higher
sustainability.
Despite the strong market demand,
volume was 3% lower than 2020 as
the company faced adverse weather-
related effects such as an unexpected
drought in Altamira, Mexico in the
third quarter, and hurricanes in the
U.S. Gulf Coast during the latter
half of the year which resulted in
preventive shutdowns. Had it not
been for these events, we believe our
volume would have set new records.
Segment results were also benefitted
by a tight global supply from PET,
first from the unprecedented U.S.
polar vortex experienced in the first
quarter of the year, secondly by
the low availability and high cost
of marine freight from Asia into the
Americas, and finally from power
supply interruptions in China in
the fourth quarter, which affected
Chinese PET producers’ volume.
As a result of the improved supply
and demand balance, integrated Asian
polyester margins averaged US $359
dollars per ton, far above Guidance
figures of US $245 dollars per ton at
the beginning of the year. This led to
Alpek posting a Polyester Comparable
EBITDA of US $458 million, one of its
highest annual figures.
In terms of its long-term strategy, the
company completed the acquisition
of the largest and newest bottle-to-
bottle PET recycling facility in the
United States from CarbonLITE, which
reaffirmed our position as a leading
PET recycler in the Americas.
Looking ahead, our expectations
for the Polyester segment remain
positive, as we anticipate demand
will continue to be strong and Asian
integrated margins will remain at
higher-than-historical levels.
We achieved a
record-breaking
Comparable
EBITDA of US
$458 million
14 1,722
thousand tons
in capacity
1,799
employees
13 plants
We
produce
polypropylene (PP),
expandable Styrenics
(EPS & ARCEL®) and
specialty chemicals
Leading EPS
producer
in the Americas
and 3rd largest
worldwide
Only PP
producer
in Mexico
USA
Mexico
Brazil
Argentina
Chile
15 Record volume of
1,002 ktons; +13%
vs 2020
Alpek’s Plastics & Chemicals (“P&C”)
segment serves the diverse needs
of several industries including food
and beverage, household goods,
consumer goods, automotive,
construction and e-commerce. Just
as the Polyester segment did, these
industries enjoyed growth from a
strong global economy in 2021.
Volume was 13% higher on a year-
on-year basis mainly due to the
addition of capacity from the recently
acquired EPS sites in the United
States, which operated at high rates
to meet strong demand. Volume
would have been higher had it not
been for planned maintenance for
these sites in the fourth quarter.
Segment results were benefitted in
the first quarter of the year by the
s
l
a
c
i
m
e
h
C
&
s
c
i
t
s
a
P
l
effects of the unprecedented U.S.
polar vortex, which dramatically
reduced North American output of
Polypropylene, as Alpek’s operations
remained unaffected. Power supply
interruptions in China in the fourth
quarter also benefited global EPS
margins late in the year, in a similar
manner as with PET.
The tightness in supply for
Polypropylene, which started early in
the year, led integrated Polypropylene
margins to reach highs of 52cpp,
and average a record 45cpp for the
year. Combined with the strength in
EPS results, Alpek was able to post a
Record P&C
Comparable
EBITDA of US
$480 million
Successful ramp-up of
our recently acquired EPS
assets in the U.S., a year
ahead of schedule
record P&C Comparable EBITDA of US
$480 million.
In terms of its long-term strategy, the
company was able to turn around
operations at its aforementioned EPS
sites in the United States much faster
than expected. These combined sites
were expected to be EBITDA-neutral
for 2021, but instead contributed to
the segment’s record EBITDA.
Looking ahead, our expectations for
the P&C segment remain positive as
we believe demand for Polypropylene
and EPS will continue to grow at the
strong rates experienced in 2021, and
PP margins will decline from record-
highs but normalize at higher-than-
historical levels.
16
ENVIRONMENTAL,
SOCIAL AND GOVERNANCE
Stronger
performance
& clearer path
to further
improvement
For information on our most recent ESG KPIs (‘19-’21) as well as our alignment
to TCFD recommendations, please review our ESG Booklet 2021 on our website
17 We strive to minimize any
adverse effects from our
products and processes.”
Circularity
Carbon Emissions &
Energy Eco-efficiency
Water Management
I C I E N C Y
F
F
E E
C
R
U
E RES O
XIMIZ
A
M
GR
O
W
R
E
S
P
O
N
S
I
B
L
Y
We increasingly rely on sustainable
business practices across our entire
value chain to create value for our
shareholders.”
Cybersecurity
Pollution
Relationship with Customers & Suppliers
Occupational Safety
Diversity, Equity & Inclusion (DEI)
Community Engagement
L
E
A
D
W
I
T
H
E
M
P
A
T
HY
We empower our people to
create value for our company
and communities.”
ESG
MODEL
E
G
N
C E C HA
A
R
B
E M
Innovation
Active ESG Risk Management
Sustainable Corporate Governance
We actively monitor our changing
environment and develop
new ways to tackle emerging
challenges through our enablers.”
18
Our Contribution to the UN’s SDGs
Alpek contributes to
these SDGs through
decarbonization
initiatives, energy
efficiency, reducing the
footprint of its products
and the development
of innovative solutions
to avoid downstream
emissions.
Circularity
Carbon Emissions
and Energy
Eco-efficiency
Water
Management
MAXIMIZE RESOURCE EFFICIENCY
LEAD WITH EMPATHY
Alpek contributes to these
SDGs by making sure
that health and safety
services are of high quality
through ongoing training,
establishing objectives,
scope, definition of
responsibilities, protection
measures and clear and
precise behavior guidelines.
Occupational
Safety
Diversity, Equity
and Inclusion (DEI)
Community
Engagement
Cybersecurity
Pollution
Relationship
with Customers
and Suppliers
Alpek contributes to
these SDGs by earning
revenue from residues
such as rPET and by-
products, supporting
circular economy
business models,
and developing new
business opportunities.
GROW RESPONSIBLY
EMBRACE CHANGE
Alpek contributes
to these SDGs
by focusing on
improving our
current products
and processes while
discovering more
environmentally-
friendly alternatives
for both.
Innovation
Active ESG Risk
Management
Sustainable
Corporate
Governance
19 ESG Targets & Highlights
In 2021 we defined targets & made progress on our commitments
for our 12 material issues.
CIRCULARITY
Acquired CarbonLITE, increasing 115
KTA our recycling capacity & reached
2
0
2
189% of our rPET
capacity target
PET: Alpek plans to increase its
PET bottle recycling capacity to
300 THOUSAND ANNUAL METRIC TONS BY
2025 TO MEET ITS CUSTOMERS’ RECYCLED
CONTENT NEEDS.
CIRCULARITY
EPS: Alpek will focus on
long-term usage applications for EPS,
DEVELOP BIODEGRADABLE ALTERNATIVES
FOR THE F&B MARKET, AND WORK ON MAKING
CHEMICAL RECYCLING VIABLE.
Closure of CPL
& Cooper River
Fibers will reduce
CO2 emissions by
~17% in 2022
(2019 base)
CIRCULARITY
PP: Alpek will leverage
its partnerships to develop
CHEMICAL RECYCLING SOLUTIONS FOR
POLYPROPYLENE AND INCREASE ITS
SHARE OF COPOLYMERS, EMPLOYED IN
LONG-TERM USAGE APPLICATIONS.
CARBON EMISSIONS & ENERGY ECO-EFFICIENCY
Alpek is committed to the Paris Agreement.
We are targeting an SBTi-certified
Scope 1 and 2 emissions reduction of
(2019 BASE), REACHING CARBON NEUTRALITY BY 2050,
AND WILL BEGIN MEASURING OUR SCOPE 3 EMISSIONS.
27.5%b
0
3
0
2
y
20
WATER MANAGEMENT
Alpek is closely monitoring its
WATER CONSUMPTION INTENSITIES,
PARTICULARLY IN WATER-STRESSED AREAS, AND
IDENTIFYING OPPORTUNITIES TO REDUCE THEM.
OCCUPATIONAL SAFETY
DIVERSITY, EQUITY AND INCLUSION (DEI)
Alpek plans to reach a
Total Recordable Incident Rate (TRIR)
FOR ITS EMPLOYEES AND CONTRACTORS IN THE TOP
DECILE OF ITS INDUSTRY, THOUGH ITS GOAL REMAINS
TO ACHIEVE ZERO ACCIDENTS EVERY SINGLE DAY.
Improved TRIR to
0.61; 16%
better than 2020
Alpek is committed to
further diversifying its
WORKFORCE THROUGH MORE
EQUITABLE HIRING, RETENTION
AND DEVELOPMENT STRATEGIES.
COMMUNITY ENGAGEMENT
CYBERSECURITY
Alpek cares about all
its local communities and is committed to
INVESTING ITS TIME AND PROFITS ON ACTIVITIES THAT
CONTRIBUTE TO OUR NEIGHBORS’ SAFETY, EDUCATION,
ACCESS TO SERVICES, AND QUALITY OF LIFE.
Alpek is committed to
securing its information and
GUARANTEEING THE CONTINUITY OF ITS BUSINESS
BY MAINTAINING STATE-OF-THE-ART CYBERSECURITY
SYSTEMS, EMPLOYEE TRAINING, AND INCIDENT
RESPONSE CAPABILITIES.
21 POLLUTION
RELATIONSHIP WITH CUSTOMERS & SUPPLIERS
Alpek is committed to enforcing
and exceeding all regulatory requirements
ON POLLUTION. WE ARE CONSTANTLY LOOKING FOR NEW
WAYS TO REDUCE POST-INDUSTRIAL WASTE, WASTEWATER
DISCHARGE, AND AIR POLLUTANTS FROM OUR PRODUCTS
AND PROCESSES.
Alpek will work with
its customers and suppliers
IN AN EFFORT TO ACTIVELY IDENTIFY ESG-
RELATED RISKS AND THE CORRECTIVE ACTIONS
NEEDED TO MAKE OUR ENTIRE VALUE CHAIN
MORE SUSTAINABLE.
INNOVATION
Alpek’s innovation efforts will be
focused on improving its current
PRODUCTS AND PROCESSES, WHILE
DISCOVERING MORE ENVIRONMENTALLY
FRIENDLY ALTERNATIVES FOR BOTH.
As a result of our
continued efforts to
prioritize ESG issues,
we became part of the
S&P/BMV Total Mexico
ESG Index
ACTIVE ESG RISK MANAGEMENT
Alpek will continue to
reinforce its Governance practices
AND ORGANIZATION SO IT MAY REACH THE
VARIOUS TARGETS SET FOR EACH OF ITS ESG
MATERIAL ISSUES.
SUSTAINABLE CORPORATE GOVERNANCE
Alpek is committed to further
improving the composition and effectiveness
OF ITS BOARD BY INCREASING THE FREQUENCY ESG TOPICS
& METRICS ARE REVIEWED, AS WELL AS ENHANCING THE
DIVERSITY AND EXPERIENCE OF ITS MEMBERS.
22 SASB: RT-CH-130 a.1
CSA S&P: 2.4.1 to 6
WHY IT MATTERS
Our planet’s resources are finite. It is our responsibility to make
sure our products are fully integrated into the circular economy.
OUR TARGET
CIRCULARITY
rPET Bottle-to-Flake Capacity*
115
268
153
.
s
e
s
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e
c
o
r
p
d
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F
F
E
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U
O
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E
R
I
E
Z
M
X
A
M
I
2020
CarbonLITE
2021
KTA
This is also an opportunity to capture a growing market and ensure
business continuity.
WHAT IS ALPEK DOING
We have defined Circular Economy as one of
our most important ESG priorities. In 2021,
we started to identify the processes in which
a circular approach can be established for
all our BUs and products, setting the basis
for implementing Life-Cycle Assessments,
understanding and identifying the viability of
greener raw materials and setting targets for
each of the business units (BUs).
Additionally, during 2021, we carried out
several initiatives regarding circular economy,
such as block waste recycling into the
process to reduce PTA consumption, the use
of sugar cane to produce Bio-PET, and the
acquisition of CarbonLITE, the largest PET
recycling plant in the U.S. This plant will have
the capacity to recycle more than 100 K Tons
per year, equivalent to an additional 5 billion
bottles of PET.*
*Input capacity = 30 KTA
*Based on the polyester content of a carbonated drink PET bottle.
PET:
Alpek plans to increase its PET
bottle recycling capacity to
300 thousand annual metric
tons by 2025 to meet its
customers’ recycled content
needs.
PP:
Alpek will leverage its
partnerships to develop
chemical recycling solutions
for Polypropylene and increase
its share of Copolymers,
employed in long-term usage
applications.
EPS:
Alpek will focus on long-
term usage applications for
EPS, develop biodegradable
alternatives for the F&B market,
and work on making chemical
recycling viable.”
23
WHY IT MATTERS
WHAT IS ALPEK DOING
GRI Standards: 302-1 to 4, 305-1 to 4
TCFD: All elements
SASB: RT-CH-110a-1
Material issues: Carbon Emissions
and Energy Eco-Efficiency; Water
Management
CARBON EMISSIONS & ENERGY
ECO-EFFICIENCY
CO2 Emissions & Energy Consumption
Contributing to de-accelerate climate
change is a crucial part of our overall
ESG Strategy. In order to have a more
sustainable future, Alpek commits to
reduce its CO2 emissions through a
transition to more renewable energy
sources and the execution of initiatives
that optimize its processes and energy
consumption.
Overall CO2 Emissions (S1/S2)
Million Tons
Overall Energy Consumption
x 106 GJ
0.4
5
2
.
.
4
0
.
7
0
.
6
0
.
8
0
0.3
2
2
.
.
2
0
.
6
0
.
7
0
.
7
0
0.4
5.9
4
2
.
.
3
0
.
6
0
.
6
0
.
8
0
5.2
3
3
1
5
7
6
,
7
1
2
1
3
1
4
3
1
5
7
6
7
,
1
1
1
5
1
5.5
5
3
4
1
8
1
1
5
1
2019
2020
2021
2019
2020
2021
Other Fuels Electricity Steam Natural Gas CO2 Emissions Intensity: (Ton CO2/Ton Produced) | Energy Consumption Intensity (GJ/Ton Produced)
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In 2021 we carried out an extensive
analysis to identify the projects in
which our BUs can improve their
energy consumptions, move to
cleaner energies and optimize their
processes to reduce their emissions.
As an example, we have put a plan in
motion for 2022 to transition some of
our BUs to an energy source that is
more clean, efficient and sustainable.
Also, at the end of 2021 our
caprolactam site and one of our fibers
facilities were closed. This action will
help in the reduction of more than
400,000 tons relative to our 2019
base, equivalent to a 17% reduction
in 2022. These actions, and other
upcoming initiatives will get us closer
to our target.
Throughout 2022, we will be working
closely with the ESG departments
of every BU, to execute activities
which will help us meet our 2030 and
2050 targets. Moreover, we expect to
complete the SBTi certification of our
targets.
Note: The addition of 2 new plants at the end of 2020 (M&A
NOVA EPS business) and the higher production of CPL
resulted in an increase in our total CO2 emissions and energy
consumption for 2021 vs. 2020. With the closure of CPL &
Cooper River we expect a reduction in our CO2 emissions by
17% comparing to 2019.
OUR TARGET
We are committed
to the Paris
agreement. We are
targeting an SBTi-
certified scope
1 & 2 emissions
reduction of 27.5%
by 2030 (2019
base), reaching
carbon neutrality by
2050, and will begin
measuring our
Scope 3 emissions.”
24
OUR TARGET
Closely monitor
our water
consumption
intensity,
particularly
in water-
stressed areas,
and identify
opportunities to
reduce it.”
GRI Standards: 303-1 to 5
SASB: RT-CH-140a.1, 3
WATER MANAGEMENT
WHY IT MATTERS
We understand that water is a
precious resource that we must use in
the most optimal way. This is why we
carry out water-stress assessments,
continuously monitor our withdrawals
and discharges, and work on being
more efficient in all the processes
that involve water usage.
WHAT IS ALPEK DOING
In 2021 we significantly improved the
process of data compilation on water
in our facilities, which has led us to a
better understanding of what must
be done to improve water usage in
operations. Some of our BUs have
already set targets. As an example,
our polyester segment reused 750
thousand m3 and aims to reach 1 million
m3 by 2022. In addition, our polystyrene
business reduced its demineralized
water consumption by 10%.
One of the main actions we want to
implement are water risks assessments
throughout the entire operation and
fine-tune our current course of action.
Water Intake by End-Use
Million m3
19.5
18.0
24.0
8.4
3
5
1
3
5
3.6
4.3
6
1
1
7
2
3
1
1
1
2
2
9
9
8
0
0
1
2019
2020
2021
Consumed
Water Intake Intensity (m3/Ton Produced)
Discharged
Water Consumption Intensity (m3/Ton Produced)
Note: The addition of 2 new plants at the
end of 2020 (M&A NOVA EPS business) resulted in an
increase in our total water withdrawals, consumption and
discharges for 2021 vs. 2020. Alpek is actively working on
improving the performance in its current and acquired assets.
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GRI Standards: 403-1 to 403-10
SASB: RT-CH-320 a.1
FTSE4Good: SHS01, 04, 12, 38, 40
WHY IT MATTERS
OCCUPATIONAL SAFETY
Overall Recordable Incidents | TRIR & LTIR
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1.40
0.35
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0.43
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1
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2019
9
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2020
0.61
0.40
4
6
2
2
2
4
2021
Non-Lost Time Incidents Lost Time Incidents TRIR LTIR
Note: Due to M&A at the end of 2020 and some changes in
the current methodology, this information has been revised
and adjusted.
Ensuring the safety and well-being of our people will always be
Alpek’s first priority. It is thanks to them that we are a leading
company in the industry.
OUR TARGET
WHAT IS ALPEK DOING
Even when the COVID-19 contingency
continued to be the main priority
in our operations, in 2021 we also
carried out several other initiatives
to continue strengthening our safety
practices:
• Training on emergencies
• Vaccination campaigns
• Working with external consultants to
develop a stronger safety culture
• Standardizing practices on reporting
of incidents and near-misses for
employees and contractors
• Monitoring and reporting incidents to
senior management periodically
The application of these measures
resulted in a sharp improvement in our
TRIR down to 0.61, 16% better versus
2020.
In 2022, we will continue our efforts
to reinforce existing initiatives and
create new ones to improve our safety
performance.
Alpek plans to
reach a Total
Recordable
Incident Rate
(TRIR) for its
employees and
contractors in
the top decile
of its industry,
though its goal
remains to
achieve zero
accidents every
single day.”
26
GRI Standards: 405-1, 405-2
DIVERSITY, EQUITY
& INCLUSION (DEI)
Workforce
2019
2020
2021
4,967
907
5,315
968
Men Women
5,874
6,283
6,396
5,359
1,037
WHY IT MATTERS
A diverse workforce strengthens
our overall growth strategy.
Being inclusive and providing all
our employees with the same
opportunities will help us enhance
decision-making processes and be
a more responsible company.
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WHAT IS ALPEK DOING
In 2021 we identified these issues as
material to our operations. Consequently,
we implemented the first stage of analysis
of attraction and retention processes, main
causes of low diversity, and possible gaps in
the benefits offered.
Specifically, in 2021 our Polyester business
started implementing several initiatives
such as a women’s network to support
their development, boost connections, and
empower them in the workplace. Also, an
internal assessment for identifying any gender-
based salary gaps was conducted.
In 2022, all our Business Units will continue
these efforts, expanding the level of detail of
analysis to include:
• Identification of causes for lack/loss of
employee diversity
• Development of retention strategies
• Fostering of a diverse culture through more
employee resource groups
OUR TARGET
Alpek is
committed
to further
diversifying
its workforce
through more
equitable hiring,
retention and
development
strategies.”
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OUR TARGET
Alpek cares
about all its local
communities and
is committed
to investing its
time and profits
on activities that
contribute to its
neighbors’ safety,
education, access
to services, and
quality of life.”
GRI Standards: : 413-1, 413-2
FTSE4Good: SHR03, 15, 16, 17
COMMUNITY ENGAGEMENT
As part of the UN Global
Compact Community,
Alpek has the goal
of strengthening the
efforts to work towards
the betterment and
well being of our
society and planet.
Since 2021 Alpek has been committed to the UN
Global Compact’s corporate responsibility initiative
and its principles in the areas of human rights, labor,
the environment and anti-corruption.
Investment in Community Programs
(US$K)
2019
2020
2021
2,741
1,947
1,984
WHY IT MATTERS
Our surrounding communities are one of
our most important stakeholders. Ensuring
their safety, boosting their development and
offering assistance on education and social
matters, generates a positive impact in our
society.
WHAT IS ALPEK DOING
As the pandemic continued, our work
with communities was more focused on
providing them with various services and
ensuring full coordination with community
leaders. As such, we carried out several
activities like:
• Investment in community development and
social assistance up to US $2.0 million
• More than 413 of our employees volunteered
to work with communities
• Sponsored several events to gather funds
for community development
In 2022 we will further strengthen our
participation and communication with our
communities. Also, as the pandemic passes
we look forward to returning to more face-to-
face engagement.
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CYBERSECURITY
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WHY IT MATTERS
In recent years we’ve seen an increase in
cybercrime generating financial losses, data
theft, economic & political incidents, or public
health risks.
We need to reduce the potential risk of financial
and data losses.
WHAT IS ALPEK DOING
All our Business Units have assigned a party
responsible for overseeing cybersecurity
strategy. An incident management system
records all events that are reported or identified
as security breaches or threats for follow-up.
Policies and procedures consider elements such
as mobile device management, logical access
control, business continuity, infrastructure
control, among others.
In 2021, Alpek implemented several programs to
be completed by 2022, such as:
• 100% of personnel with training in email risk
management
• Virtual patching for all servers
• Algorithm security information and event
management
• Updating of our threat and response plan
OUR COMMITMENT
We commit to
securing our
information and
guaranteeing
the continuity
of our business
by maintaining
state-of-the-art
cybersecurity
systems, employee
training, and
incident response
capabilities.”
29
OUR COMMITMENT
GRI Standards: 306-1 to 6
SASB: RT-CH-150 a.1
FTSE4Good: EPR01, 02, 24, 25, 26, EPR13
We are committed
POLLUTION
to enforcing
and exceeding
all regulatory
requirements on
pollution. We are
constantly looking for
new ways to reduce
post-industrial
waste, wastewater
discharge, and air
pollutants from
our products and
processes.”
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WHY IT MATTERS
Ensuring pollutants do not reach the air or water is important to preserve
human health and the environment. We are responsible for ensuring our
business processes and products always comply with this basic tenet.
WHAT IS ALPEK DOING
In 2021, we carried out several
initiatives to reduce our waste
disposal. Some of these
initiatives are:
• Increase the life cycle of
our packaging materials by
recovering, reconditioning and
reusing them
• Finding a use to some off-spec
products, avoiding their disposal
• Using part of our waste as
energy recovery
In 2022, we will continue to map
initiatives that help us further
reduce pollution.
Waste Generation
Ktons
12.4
1
7
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3
0
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5
3
12.3
5
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13.5
3
3
2019
5
4
8
4
2020
2021
Disposed Recycled/Reused
Intensity (kg/Ton Produced) 3
Note: The addition of 2 new plants at the
end of 2020 (M&A NOVA EPS business) resulted in an
increase in our total waste generation for 2021 vs. 2020.
Alpek is actively working on improving the performance in its
current and acquired assets.
30
GRI Standards: 102-9, 204-1,
308-1, 2, 412-2
RELATIONSHIP WITH CUSTOMERS AND SUPPLIERS
OUR COMMITMENT
We will work with
our customers
and suppliers to
actively identify
ESG-related risks
and the corrective
actions needed to
make our entire
value chain more
sustainable.”
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WHY IT MATTERS
Collaborating in strategic
partnerships with our suppliers and
customers will help us find better
solutions to reach a circular economy
and face the oncoming challenges.
WHAT IS ALPEK DOING
In 2021, we identified different topics
related to our supply chain that could
pose a risk to our operations. For
example, a shortage of raw material
supply could have an adverse effect
on the company. As such, we are
working hand-in-hand with our
suppliers to develop and refine
comprehensive engagement plans.
Moreover, during 2021, customers’
demand for ESG information
disclosure increased sharply. Alpek
plans to continue improving on this
topic in 2022.
31
SAM S&P: 2.5.8, 1.9.2, 3, 4
SASB: RT-CH-410a.1
CSA S&P: 2.4.1 to 6
INNOVATION
WHY IT MATTERS
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Constant innovation is crucial to remaining competitive.
This allows us to lower operational costs, find new
business opportunities, adapt to market changes, enhance
our long-term business viability and enable
the achievement of our targets.
WHAT IS ALPEK DOING
During 2021 we carried out our first
official Open Innovation Program
through which diverse issues were
addressed across the different business
units, most of them with a high impact
in our ESG Agenda. 70% of the subjects
were exclusively focused on:
• Chemical Recycling
• Biodegradability
• Energy eco-efficiency
In 2022, incorporating ESG criteria
into our innovation process will be the
key driver of the overall innovation
strategy. We will also continue fostering
partnerships for traditional R&D, as well
as to boost the improvement of products
and processes.
OUR TARGET
We focus on
improving
our current
products and
processes while
discovering more
environmentally-
friendly
alternatives for
both.”
32
We actively monitor our chang-
ing environment and develop
new ways to tackle emerging
challenges through our enablers
GRI Standards: 102-15, 102-30
CSA S&P: 1.3.1, 2, 3, 4
TCFD: Risk management
ACTIVE ESG RISK MANAGEMENT
WHY IT MATTERS
Having an active ESG risk management enables
the company to successfully develop strategies
that mitigate the identified risks and turn them
into opportunities.
WHAT IS ALPEK DOING
As part of our ESG risks identification, in 2020 we
carried out a first ESG analysis; during 2021, we dove
deeper into our processes to identify which material
issues are more pressing. To complement this effort,
we implemented a gap analysis regarding our ESG
performance in order to further establish feasible
ambitions in accordance to our resources and the
targets we want to reach.
These efforts led us to an improvement of our ESG
activities roadmap, and a more active participation
from our Top Management in the detection of risks
and opportunities.
One of the main initiatives to address ESG risks at a
high level, was to further emphasize this topic in our
Board meetings agenda.
OUR TARGET
Alpek will continue
to reinforce its
Governance
practices and
organization so it
may reach the
various targets
set for each of
its ESG material
issues.”
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BOARD OVERSIGHT
The Board and its Chairman oversee ESG-related
progress, followed by our CEO, who leads the ESG
strategy. Our CFO, who is also the ESG Officer,
is responsible for the effective management and
execution of the strategy across all the BUs.
To support the aforementioned positions, in 2021
we consolidated our ESG Taskforce, formed by the
ESG Director and top executives from the BUs. The
objective of this group is to determine and oversee
ESG initiatives and metrics, identify and mitigate
ESG risks, and turn them into opportunities for the
company’s growth.
33
GRI Standards: 102-19, 102-20, 102-21,
102-27, 102-31, 102-32
TCFD: Governance
SUSTAINABLE
CORPORATE GOVERNANCE
WHAT IS ALPEK DOING
In 2021, and as part of our ESG Strategy,
we made efforts on several governance
fronts. One of the main actions was
that we appointed an ESG Director
and strengthened our ESG-related
committees. We also developed the ESG
Policy. We will be working hand in hand
with the Top Executive Body to enhance
the initiatives needed regarding our
Board diversity and experience on ESG.
OUR COMMITMENT
We are committed
to further improving
the composition and
effectiveness of our
Board by increasing
the frequency of ESG
topics & metrics being
reviewed, as well as
enhancing the diversity
and experience of its
members.”
WHY IT MATTERS
A firm commitment on ESG, and
an engaging leadership from the top
executive body of the company is
needed in order to ensure the success
of our ESG Strategy. We are convinced
that a shared vision on sustainability
that is enhanced by our Board and
CEO, will inevitably result on better and
more responsible business decisions.
.
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BOARD
• All ESG Material Issues, plus:
• Sustainable Corporate Governance
• Active ESG Risk Management
EXECUTIVE
• All ESG Material Issues
ESG
COMMITTEES
OPERATIONS
COMMERCIAL
• Carbon Emissions & Energy Eco-efficiency
• Water Management
• Pollution
• Occupational Safety
• Circularity
• Relationships with
Customers and Suppliers
• Innovation
HUMAN
CAPITAL
• Diversity, Equity &
Inclusion (DEI)
• Community Engagement
IT
• Cybersecurity
34
35 36
CORPORATE GOVERNANCE
The Board of Directors and Audit and
Corporate Practices Committee implement
and maintain the best practices and highest
standards of Corporate Governance in the
Company. As a public company, we have the
obligation to keep our investors informed
of all our financial activities under required
standards, thus ensuring full transparency.
Our Board of Directors is our highest
governing body. Its members are chosen
based on the alignment of their skills and
previous experience with Alpek’s strategic
and ESG needs, as well as their integrity and
standing in the global community.
BOARD OF DIRECTORS:
11
07
proprietary directors with no alternates
independent board members
64% of our
Board and all
members of our
committees are
independent
best
corporate
corporate
corporate
practices
AUDIT AND CORPORATE
PRACTICES COMMITTEE supports
the Board, and is composed of
independent members. They
oversee, among others, the following
topics:
• Selection and determination of
fees for the external auditor
• Coordination with the Company’s
internal audit committee
• Assessment of accounting policies,
employment terms and severance
payments, as well as compensation
for senior executives
• Recommendations for succession
plans and replacement options
• ESG issues review
4 BOARD MEETINGS called by the
Secretary in 2021. Annual meetings
may be called by the Board’s
chairman, the Audit and Corporate
Practices Committee’s chairman,
the secretary or at least 25% of its
members. At least one meeting is
dedicated to defining the Company’s
medium and longterm strategies.
Any conflict of interest must be
disclosed by INVOLVED PARTIES
and they must abstain from
participating.
• The company has internal control
systems with general guidelines
that are submitted to the Audit and
Corporate Practices Committee for
its opin ion. In addition, the external
auditor validates the effectiveness of
the internal control system and issues
the corresponding reports.
• The Board of Directors is advised by
the planning and finance department
when evaluating matters related
to the feasibility of investments,
strategic positioning of the company,
alignment of invest ing and financing
policies, and reviewing invest
ment projects. This is carried out in
coordination with the finance and
planning department of the holding
company, Alfa, S.A.B. de C.V.
• Alpek has a department that
is specifically re sponsible for
maintaining open communication
with its shareholders and investors.
This ensures that they have the
financial and general informa tion
97.7% meeting
attendance
during 2021
required to assess the Company’s
progress in developing its activities.
This function makes use of press
releases, notifications of relevant
events, conference calls for quarterly
reports, investor meetings, its
website, and other communication
channels.
• Alpek promotes good corporate
citizenship and adheres to the
recommendations issued by its
holding company, Alfa, S.A.B. de C.V.
It has a mis sion, vision, values and
a code of ethics that are promoted
within the organization.
37 38
BOARD OF
DIRECTORS
ARMANDO GARZA SADA
FRANCISCO JOSÉ CALDERÓN ROJAS
Chairman of the Board of Alpek
AGE: 64 | BOARD TENURE: 10 YEARS (2011)
PUBLIC BOARDS:
7 Total | ALFA (Chairman) | Nemak (Co-Chairman) |
Axtel | Grupo Lamosa | Liverpool | CEMEX |
BBVA México
EDUCATION:
BA from MIT | MBA from Stanford
Chief Financial Officer of Grupo Franca Industrias,
S.A. de C.V. | Independent | Audit and Corporate
Practices Committee
AGE: 55 | BOARD TENURE: 9 YEARS (2012)
PUBLIC BOARDS:
3 Total | BBVA México (Regional Advisor) |
Citibanamex (Regional Advisor) |
FEMSA (Alternate Member)
EDUCATION:
BA from ITESM | MBA from UCLA
ÁLVARO FERNÁNDEZ GARZA
RODRIGO FERNÁNDEZ MARTÍNEZ
FRANCISCO GARZA EGLOFF
President of ALFA, S.A.B. de C.V.
AGE: 53 | BOARD TENURE: 10 YEARS (2011)
President of Sigma Alimentos, S.A. de C.V.
AGE: 45 | BOARD TENURE: 9 YEARS (2012)
President of Proval Consultores | Independent
AGE: 67 | BOARD TENURE: 2 YEARS (2019)
PUBLIC BOARDS:
6 Total | Axtel (Co-Chairman) | Nemak (Co-
Chairman) | Cydsa | Grupo Citibanamex | Vitro |
Grupo Aeroportuario del Pacifico
EDUCATION:
BA from Notre Dame University | MBA from ITESM
& Georgetown University
PUBLIC BOARDS:
0 Total
EDUCATION:
BA from UVA | MBA from Wharton
PUBLIC BOARDS:
4 Total | Arca Continental | Axtel | Grupo Financiero
Banregio | Grupo Industrial Saltillo
EDUCATION:
BA from ITESM | MBA from IPADE
RELEVANT EXPERTISE
Petrochemicals
Comsumer Goods
Automotive
Construction
ESG
Audit & Risk Management
Operations
Finance
Public Policy
Strategic Planning
39
ANDRÉS E. GARZA HERRERA
MERICI GARZA SADA
PIERRE FRANCIS HAAS GARCÍA
Chief Executive Officer of Qualtia Alimentos |
Independent | Audit and Corporate Practices Committee
AGE: 53 | BOARD TENURE: 9 YEARS (2012)
PUBLIC BOARDS:
0 Total
EDUCATION:
BA from ITESM | MBA from San Diego University |
Global Leadership Program IMD Switzerland
Investor
Managing Director of Energy at NAX Group | Independent
AGE: 63 | BOARD TENURE: 9 YEARS (2012)
AGE: 69 | BOARD TENURE: 9 YEARS (2012)
PUBLIC BOARDS:
0 Total
EDUCATION:
BA from ITESM | MA from Stanford
PUBLIC BOARDS:
0 Total
EDUCATION:
BA from Vanderbilt University | MBA from
Cambridge
JOSÉ ANTONIO RIVERO LARREA
JAIME ZABLUDOVSKY KUPER
ENRIQUE ZAMBRANO BENÍTEZ
Chairman of the Board of Compañía Minera Autlán |
Independent
AGE: 68 | BOARD TENURE: 3 YEARS (2018)
PUBLIC BOARDS:
1 Total | Compañía Minera Autlán (Chairman)
EDUCATION:
BA from ITESM | MBA from ITESM
Executive President of Consejo Mexicano de
la Industria de Productos de Consumo, A.C.
(CONMÉXICO) | Independent
AGE: 65 | BOARD TENURE: 2 YEARS (2019)
PUBLIC BOARDS:
1 Total | Fibrahotel
EDUCATION:
BA from ITAM | Ph.D. from Yale
Chairman of Grupo Proeza, S.A. de C.V. | Independent |
Audit and Corporate Practices Committee
AGE: 65 | BOARD TENURE: 9 YEARS (2012)
PUBLIC BOARDS:
1 Total | BBVA México
EDUCATION:
BA from ITESM & MIT | MBA from Stanford
CARLOS JIMÉNEZ BARRERA
Secretary of the Board
RELEVANT EXPERTISE
Petrochemicals
Comsumer Goods
Automotive
Construction
ESG
Audit & Risk Management
Operations
Finance
Public Policy
Strategic Planning
President of the EPS and Specialty
Chemicals Business Unit
JOSÉ LUIS ZEPEDA PEÑA*
President of the Polypropylene Business Unit
ALEJANDRO LLOVERA ZAMBRANO
CoPresident, Alpek Polyester
JORGE P. YOUNG CERECEDO
Chief Executive Officer
JOSÉ DE JESÚS VALDEZ SIMANCAS
MANAGEMENT TEAM
Our Management Team establishes the guidelines
and general strategy for CONDUCTING THE BUSINESS
WITH THE HIGHEST ETHICAL STANDARDS.
CoPresident, Alpek Polyester
FELIPE GARZA MEDINA*
Chief Financial Officer
JOSÉ CARLOS PONS DE LA GARZA
President of the Fertilizer and
Polyester Filament Business Unit
GUSTAVO TALANCÓN GÓMEZ
Senior Vice President, Human Capital
ARMANDO RAMOS CANTÚ
*As of December 31, 2021; these directors retired at year’s end.
40 All relations
with Alpek
are carried
out under a
framework
of legality,
respect for
human rights
and ethical
conducts.”
CODE OF CONDUCT
We have a code of conduct for all employees, suppliers and
any third party involved in our business. This document
establishes the core values, standards and culture that
regulate our daily behaviors.
The most relevant topics the Code addresses are
anticorruption practices (including bribes and gift policies),
conflict of interests, proprietary information, intellectual
property, Human Rights, environmental protection,
community relations, and occupational health and safety.
For more information on our Code of Conduct, please visit our website.
41 42 Management’s Analysis
Unless otherwise specified, figures are expressed in millions of nominal
pesos, while certain figures are expressed as millions of dollars (US$)
due to the high dollarization of Alpek’s revenues. Percentage variations
are stated in nominal terms. All information is presented in accordance
with International Financial Reporting Standards (IFRS).
The Mexican economy continues to
recover from its deepest slump in
decades, spurred by growth in the U.S.
and progress in COVID19 vaccination. The
country’s authorities managed to maintain
external, financial, and fiscal stability
during 2021, so it is necessary that this
slack be used next year to support the
expenses of social assistance, education,
and public investment. Manufacturing and
export index are at prepandemic levels,
services have gradually reactivated, and
employment has recovered, however, the
differential in real income per capita vs.
the US continues to widen, generating
a significant gap in purchasing power
quality. Mexico’s key problems remain low
productivity growth and poverty; in the
future, the country will face challenges
related to technology and consequences of
climate change. The MXN/USD exchange
rate resented a strong volatility throughout
the year, to end with a depreciation of 3%
compared to the previous year, however, it
is one of the currencies that presented the
greatest recovery during the year along
with that of countries such as Norway and
China.
The behavior of the GDP and other
variables in Mexico and the United States,
which is essential to understanding the
context of Alpek’s results, is described
below:
In the United States, Gross Domestic
Product (GDP) increased 6.9%(a) in 2021,
higher than the 3.5%(a) reported in 2020.
Consumer inflation was 7.0%(a) in 2021,
higher than the 1.4%(a) recorded in 2020.
Sources:
(a) Bureau of Economic Analysis (BEA)
analysis
analysis
analysis
analysis
2021
43
Mexico’s Gross Domestic Product
(GDP) increased 5.0%(b) in 2021,
compared to 8.5(b) in 2020. Consumer
inflation was 7.4%(c) in 2021, higher
than the 3.2%(c) recorded in 2020.
The Mexican peso experienced
an annual depreciation of 2.8%(d)
in 2021, compared with 5.5%(d) in
2020. Additionally, in real terms the
annual average for the Mexican peso
experienced an overvaluation against
the dollar of 3.7%(e) in 2020 and a value
of 2.5%(e) at the close of 2021.
In Mexico, the average Interbank
Equilibrium Interest Rate (TIIE) was
4.6%(e) in nominal terms, as compared
to 5.7%(e) in 2020. In real terms,
there was an increase in the annual
aggregate of 0.9%(e) in 2021 to 2.4%(e)
in 2020. Regarding interest rates, the
annual average nominal 3month US
dollar LIBOR rate, was 0.2%(c) in 2021,
compared to 0.7%(e) in 2020. If the
peso’s nominal appreciation against
the dollar is included, the LIBOR rate
in constant pesos went from 8.7%(e) in
2020 to 10.6%(e) in 2021.
Volume
[thousand of tons]
2021
2020
2019
‘21 vs ‘20
[%]
‘20 vs ‘19
[%]
Polyester
3,796
3,918
3,490
Plastics & Chemicals
1,002
883
895
Total Volume
4,798
4,802
4,384
(3)
13
(0)
12
(1)
10
Sources:
(a) Bureau of Economic Analysis (BEA)
(b) National Institute of Statistics and Geography (INEGI)
(c) Bank of Mexico (Banxico)
(d) Banxico: Exchange rate for settling liabilities denominated in foreign currency payable in Mexico
(e) Internal calculation based on INEGI, Bureau of Economic Analysis (BEA), and Bureau of Labor Statistics (BLS)
Revenues
2021
2020
2019
‘21 vs ‘20
[%]
‘20 vs ‘19
[%]
Polyester
Millions of Pesos
98,000
85,280
90,857
Millions of Dollars
4,828
3,976
4,718
Plastics & Chemicals
Millions of Pesos
47,470
25,349
27,097
Millions of Dollars
2,342
1,192
1,407
Total Revenues
Millions of Pesos
156,224
113,989
119,685
Millions of Dollars
7,697
5,326
6,216
15
21
87
97
37
45
(6)
(16)
(6)
(15)
(5)
(14)
Price Index
2021
2020
2019
‘21 vs ‘20
[%]
‘20 vs ‘19
[%]
Polyester
Millions of Pesos
Millions of Dollars
Plastics & Chemicals
Millions of Pesos
Millions of Dollars
Total
Millions of Pesos
Millions of Dollars
99
94
157
149
119
113
84
75
95
86
87
78
100
100
100
100
100
100
19
25
65
73
37
45
(16)
(25)
(5)
(14)
(13)
(22)
44 REVENUES
Alpek’s revenue in 2021 was $156,224
million (US $7,697 million), 37%
higher than the $113,989 million (US
$5,326 million) in 2020. This increase
was caused by a rise in average
prices of 37% and 45% in pesos and
dollars, respectively, driven by higher
feedstock prices and a strong volume.
REVENUES BY BUSINESS
SEGMENT
Polyester’s net revenues in 2021
were $98,000 million (US $4,828
million), 15% more than the $85,280
million (US $3,976 million) in 2020.
This segment posted an increase of
19% and 25% in average sale prices
in pesos and dollars, respectively.
Volume decreased 3% when
compared to 2020. This decrease
was due to nature-related impacts
throughout the year.
Plastics and Chemicals posted
revenues of $47,470 million (US
$2,342 million) in 2021, in comparison
to the $25,349 million (US $1,192
million) in 2020. The 87% increase in
revenues was mainly due to the 65%
and 73% rise in the average sale price
in pesos and in dollars, respectively,
reflecting higher feedstock prices.
The segment’s volume posted a rise
of 13% compared to 2020, mainly
due to the successful ramp-up of the
recently acquired EPS facilities.
OPERATING PROFIT AND EBITDA
In 2021, the operating income was
$17,494 million (US $864 million),
133% higher than the $7,493 million
(US $355 million) in 2020. In
2020, operating profit includes an
extraordinary gain of $657 million
(US $35 million) from the business
combination on the acquisition of the
Wilton PET site.
As of December 31, 2021, consolidated
EBITDA was $23,234 million (US
$1,145 million), an increase of 94%
compared to the $11,993 million
(US $565 million) of 2020. The
consolidated EBITDA includes a net
positive effect from extraordinary
items of $3,674 million (US $183
million), resulting in a Comparable
EBITDA of $19,560 million (US $962
million), 50% higher than in 2020,
setting a new record.
In 2021, the EBITDA for the Polyester
segment increased by 84% to $12,560
million (US $618 million), including a
net positive effect from extraordinary
items of $3,239 million (US $160
million). Adjusting for these items, the
Comparable EBITDA for the Polyester
segment was $9,322 million (US $458
million), an increase of 15% year-over-
year, resulting from higher margins
compared to the previous year.
The EBITDA for the Plastics and
Chemicals segment increased 107%
to $10,173 million (US $503 million),
compared to $4,920 million (US
$229 million) in 2020, including a net
positive effect from extraordinary
items of $436 million (US $23
million). Adjusting for these items, the
Comparable EBITDA for the Plastics
& Chemicals segment was $9,737
million, an increase of 108% year-over-
year, due to better than expected PP
margins and EPS volume.
EBITDA
[Millions of Pesos]
2021
2020
2019
‘21 vs ‘20
[%]
‘20 vs ‘19
[%]
Polyester
12,560
6,842
8,236
Plastics & Chemicals
10,173
4,920
Others
501
231
4,198
3,961
Total EBITDA
23,234
11,993
16,395
84
107
117
94
(17)
17
(94)
(27)
EBITDA
[Millions of Dollars]
Polyester
Plastics & Chemicals
Others
Total EBITDA
2021
2020
2019
‘21 vs ‘20
[%]
‘20 vs ‘19
[%]
618
503
25
1,145
324
229
12
565
428
218
205
850
90
119
121
103
(24)
5
(95)
(34)
45 NET FINANCIAL RESULT
In 2021, the net financial cost was
-$3,144 million (US -$154 million),
51% higher than in 2020. The net
financing expenses that comprise
this item increased from -$1,972
million (US -$92 million) in 2020,
to -$2,492 million (US -$122
million) in 2021, mainly reflecting
the additional expenses related
to the bond issuance and the
subsequent tender for Alpek’s
2022 bond. In addition, variations
in exchange rates resulted in the
recognition of a non-cash foreign
exchange loss of -$652 million (US
-$32 million) in 2021, versus -$113
million (US -$7 million) in 2020.
Financial result, net
[Millions of Pesos]
2021
2020
2019
‘21 vs ‘20
[%]
‘20 vs ‘19
[%]
Financial expense
(3,082)
(2,497)
(2,822)
Financial income
590
525
774
Financial expenses, net
(2,492)
(1,972)
(2,048)
(23)
12
(26)
Loss due to exchenage
fluctuation, net
(652)
(113)
(587)
(480)
Financial result, net
(3,144)
(2,085)
(2,635)
(51)
11
(32)
4
81
21
46 TAXES
In 2021, an income tax was posted for -$4,115 million
(US -$202 million) as a result of the decreased pre-
tax income, while 2020 posted an income tax of
-$1,202 million (US -$57 million).
Taxes
[Millions of Pesos]
2021
2020
2019
‘21 vs ‘20
[%]
‘20 vs ‘19
[%]
Income (loss) before taxes
14,311
5,323
9,413
169
(43)
Income tax rate
30%
30%
30%
Statuory income tax rate
(expenses) benefit
Taxes for permanent differences
between accountingtaxable profit
(4,293)
(1,597)
(2,824)
(169)
43
178
395
935
(55)
Total income tax
(4,115)
(1,202)
(1,889)
(242)
Effective tax rate
29%
23%
20%
Comprised as follows:
Current income tax
(4,304)
(1,933)
(2,463)
Deferred income tax
189
731
574
(123)
(74)
Total income tax
(4,115)
(1,202)
(1,889)
(242)
(58)
36
22
27
36
NET INCOME ATTRIBUTABLE TO THE CONTROLLING INTEREST
In 2021, consolidated net income
attributable to the controlling interest
was $7,756 million (US $385 million)
resulting from strong volume and
better-than-expected margins in
Polyester and Plastic & Chemicals
business segments. In 2020, the
consolidated net income attributable
to the controlling interest was $3,123
million (US $150 million), including a
net benefit of $657 million (US $35
million) from the gain in the business
combination (Wilton PET site).
Statement of income
[Millions of Pesos]
2021
2020
2019
‘21 vs ‘20
[%]
‘20 vs ‘19
[%]
Operating income
17,494
7,493
12,361
Financial result, net
(3,144)
(2,085)
(2,635)
Equity in income of associates
and joint ventures
(39)
(85)
(313)
133
(51)
54
Income tax
(4,115)
(1,202)
(1,889)
(242)
Consolidated net income
10,196
4,121
7,524
Income attributable to
Controlling interest
7,756
3,123
6,605
147
148
(39)
21
73
36
(45)
(53)
INVESTMENTS IN FIXED AND INTANGIBLE ASSETS
In 2021, investments in fixed and
intangible assets totaled $4,580 million
(US $227 million), 32% higher than the
$3,477 million (US $162 million) posted
in 2020. The resources were used
for the acquisition of CarbonLITE,
strategic projects and maintenance
and minor asset replacements.
47
NET DEBT1
Net debt was $25,219 million (US $1,225 million) as
of December 31, 2021, 7% above the $23,645 million
(US $1,185 million) as of December 31, 2020. The cash
balance and cash equivalents totaled $10,554 million
(US $513 million) at year-end 2021.
Short and long term debt2
[Millions of Dollars]
2021
2020
‘21 vs ‘20
[%]
Integrated ‘21
[%]
Integrated ‘20
[%]
Shortterm debt
Current portion of LT debt
2 years
3 years
4 years
5 years
8+ years
Total
Avg. Maturity longterm debt (years)
Avg. Maturity total debt (years)
Financial Indicators
[Times]
Net Debt / EBITDA
Interest Coverage
Total liabilities / Stockholders’ equity
52
100
(54)
(90)
(100)
118
1
2
6
19
2
71
100
2
42
19
4
33
100
35
94
300
30
1,103
1,562
6.8
6.7
23
649
300
65
506
1,543
4.5
4.5
2021
2020
2019
1.1
8.7
1.5
2.1
6.0
1.3
1.6
7.2
1.3
(1) Net Debt = Current debt plus non-current debt (excluding debt issuance costs), plus accrued interest payable, less
cash and cash equivalents, less restricted cash and cash equivalents.
(2) Excludes leases and lease interests
48 49 a
GLOSSARY
production. It means that these products
are designed, and developed with their
endoflife taken into consideration.
e
ARCEL®
A Polystyrene (PS) & Polyethylene (PE)
copolymer used in protective packaging
for highend products like electronics.
Due to its resistance to tearing,
puncturing, cracking, and flaking, it
absorbs shocks without decreasing its
protection.
c
CAPROLACTAM (CPL)
CPL is made by reacting cyclohexane,
ammonia and sulfur and is the raw
material used to produce Nylon 6
polymer. Nylon 6 is a synthetic resin
that, because of its strength, flexibility,
and softness, has a range of end uses,
including sportswear, underclothes and
engineering plastics.
CIRCULARITY
All products that have a circularity focus
are manufactured in a way so they can
be disassembled or come to their end
oflife and their materials will either be
broken down by nature or returned to
CLEAN INDUSTRY CERTIFICATION
Certification granted by the Mexican
Environmental Protection Agency
(PROFEPA) to companies that comply
with environmental legislation.
CO2 EMISSIONS
Unit to measure the carbon dioxide
produced by the burning of solid, liquid
and gaseous fuels, including natural gas.
COMPREHENSIVE RESPONSIBILITY
ADMINISTRATIVE SYSTEM (NATIONAL
ASSOCIATION OF THE CHEMICAL
INDUSTRY, ANIQ)
Certification given to companies that
comply with the six comprehensive
responsibility requirements established
by the ANIQ, covering Process safety,
Health and safety in the workplace,
Product safety, Transportation and
distribution, Prevention and control of
environmental pollution and Community
protection.
CYCLOHEXANE
Compound produced by the
hydrogenation of benzene and used in
caprolactam production.
ESG
Environmental, Social and Governance.
ETHANE
Hydrocarbon part of the natural gas
liquids, which at room temperature is
colorless and odorless. It is used as a raw
material to produce ethylene.
ETHYLENE
Compound produced from ethane. It is
the raw material used to produce vinyl
acetate, ethyl chloride, styrene, ethylene
oxide and polyethylenes.
ETHYLENE OXIDE
Compound produced from ethylene
and used as an intermediate in the
production of MEG and other chemicals.
EXPANDABLE POLYSTYRENE (EPS)
Light, rigid, cellular plastic, product of
the polymerization of styrene monomer.
EPS is a versatile material because of
its properties as an impact reducer
and thermal insulator, with customized
molding capacity. These properties,
combined with the ease with which it
can be processed, make EPS a popular
packaging for impact-sensitive items
and for protecting perishables. It is also
widely used in construction systems, to
lighten floor and roof structures, and as
an insulator.
g
GREENHOUSE GASES (GHG)
Components of the atmosphere that
absorb and emit radiation within the
infrared range, causing the Earth’s
surface temperature to increase.
50 l
LTIR
Lost Time Incident Rate is a standard
OSHA metric that calculates the number
of incidents that result in time away from
work.
m
MEGAWATT (MW)
Unit of power, equal to 1 million watts.
MONOETHYLENE GLYCOL (MEG)
Raw material with diverse industrial
uses, especially for producing polyester
(PET and fiber), antifreeze, refrigerants
and solvents.
p
PARAXYLENE (PX)
Hydrocarbon in the xylene family used
to produce PTA. It is also a component
of gasoline.
POLYETHYLENE TEREPHTHALATE
(PET/vPET)
Material widely used to manufacture
bottles and other containers for liquids,
food and personal hygiene, household
and healthcare products. PET flakes and
films are used to produce caps, trays and
recipients. Because of its transparency,
strength, durability and high protection
barriers, PET presents no known health
risks, is light and recyclable, and has a
wide range of applications in reusable,
temperaturesensitive packaging. PET
has replaced glass and aluminum, as
well as other plastics such as PVC and
polyethylene, for making containers.
PROPYLENE
Unsaturated, 3carbon hydrocarbon,
coproduct of the cracking process at
petrochemical complexes and a by
product at oil refineries. It is used in the
petrochemical industry to produce PP,
propylene oxide, cumene, isopropanol,
acrylic acid and acrylonitrile. It is also
converted into a gasoline component by
alkylation with butanes or pentanes
RECYCLED POLYETHYLENE
TEREPHTHALATE (rPET)
PET bottles are cleaned and crushed to
produce new PET products. Other rPET
uses include carpets, fabrics for the
clothing industry, and fibers.
POLYPROPYLENE (PP)
Thermoplastic polymer, produced
from the polymerization of propylene
monomer. Its properties include a low
specific gravity, great rigidity, resistance
to relatively high temperatures and good
resistance to chemicals and fatigue. PP
has diverse applications, including for
packaging, textiles, recyclable plastic
parts and different kinds of containers,
autoparts and polymer (plastic)
banknotes.
PROPYLENE OXIDE
Compound produced from propylene
and used to manufacture commercial
and industrial products, including
polyols, glycols and glycolethers.
PURIFIED TEREPHTHALIC ACID (PTA)
Aromatic dicarboxylic acid, the main raw
material in polyester production. PTA is
produced by the oxidation of paraxylene.
It is used to manufacture PET, which is
then used to make bottles for water, soft
drinks and other beverages, containers
and other packaging, and polyester fiber
for rugs, clothing, furniture and industrial
applications, as well as other consumer
products.
51 s
SBTi
Science Based Targets initiative (SBTi)
is a collaboration between the Climate
Disclosure Project (CDP), the United
Nations Global Compact, World
Resources Institute (WRI) and the World
Wide Fund for Nature (WWF) to help
companies define a target of emissions
reduction.
SCOPE 1, 2 AND 3
Scope 1 are emissions directly related to
the operations, Scope 2 are emissions
related to utilities (indirectly) and scope
3 are emissions that are generated
up and down the chain of a product
creation and use (suppliers and
customers).
SDGs
Sustainable Development Goals
SINGLE-PELLET TECHNOLOGYTM
Single Pellet Technology™(SPT) creates
a pellet where mechanically Recycled
PET (rPET) flake is used as a raw
material feedstock in the virgin PET
production process. Once injected
into the PET manufacturing process,
the rPET flake melts and the polymer
is chemically integrated allowing the
rebuilding of polymer chains to create a
new PET resin pellet with an integrated
recycle content of up to 25% with
performance equal to that of virgin PET.
STYRENE MONOMER
Unsaturated hydrocarbon used to make
a variety of plastics, synthetic rubber,
protective coatings and resins. It is the
main raw material in EPS production
and used as a solvent and chemical
intermediate.
t
TRIR
“Total Recordable Incident Rate.” It is
a calculation that takes into account
how many OSHA recordable incidents
your company has per number of hours
worked.
w
WATT
Unit of power in the International System
of Units (SI).
52 Our
Footprint
Note: rPET flake capacity modified in 2Q21 to reflect inputs
/ totals may reflect rounding.
Kta: Thousand tons per year
Source: Alpek estimates
Country
Site
PTA
PET
Flake
Pellet
SPT
Fibers
PP
EPS
Arcel
CPL
Other
Monterrey
Altamira
Salamanca
Mexico
(3,395 Kta)
1,000
640
240
160
Cosoleacaque
610
185
15
Lerma
Fayetteville, NC
Charleston, SC
Columbia, SC
Bay St. Louis, MS
Richmond, IN
Darlington, SC
Monaca, PA
Painesville, OH
Reading, PA
Montreal
Zárate
General Pacheco
General Lagos
Guaratingueta
Ipojuca
Santiago
Puerto Montt
Punta Arenas
Concon
Wilton
USA
(2,829 Kta)
Canada
(144 Kta)
Argentina
(246 Kta)
Brazil
(1,226 Kta)
Chile
(28 Kta)
United Kingdom
(350 Kta)
15
150
640
170
170
725
430
144
190
64
66
31
115
49
22
15
640
450
90
350
36
123
45
19
46
20
85
360
100
5
2
1
TOTAL CAPACITY: 8,218 Kta
2,890
2,814
267
95
30
400
640
493
36
85
468
53 OIL
NAPHTHA
REFINERY
REFORMER
PARAXYLENE
PTA
ETHANE
CRACKER
ETHYLENE
BENZENE
METHANE
AMMONIA
CAPROLACTAM
PET
FIBERS
rPET
FLAKE
rPET
PELLET
CRACKER
PENTANE
Polyester
Plastics & Chemicals
CYCLOHEXANE
AMMONIUM SULFATE
OIL
NAPHTHA
REFINERY
STYRENE
POLYETHYLENE
EPS
ARCEL
CRACKER
ETHYLENE OXIDE
MONOETHYLENE GLYCOL
PROPANE
PROPYLENE
PDH
POLYPROPYLENE
OUR VALUE CHAINS
Alpek’s products are used by
millions of people daily, in a wide
variety of applications.
54 GRI Standards
Our Approach to Reporting
SASB
TCFD
SDG
compliant
Through our 2021 Annual Report we share with our stakeholders
the economic, corporate governance, labor, social, environmental
and financial results, for the period from January 1st to December
31, 2021. We compiled the information reported based on the
data analyzed from all our operations in the countries and regions
where we have operations.
This report was prepared in accordance
with the Global Reporting Initiative
(GRI) Standards: Core option. The
contents used were defined based on
our ESG assessment, Project Evergreen,
which ensued 12 priority issues for our
company. The information provided has
not been restated in any manner.
Likewise, we maintain our commitment
to contribute to the Sustainable
Development Goals (SDG) of the United
Nations, 2030 Agenda.
Striving to improve how we manage
ESG issues, in addition to the GRI
contents and our contributions to
the Sustainable Development Goals,
we include information to meet the
Sustainability Accounting Standards
Board (SASB) applicable to Chemicals
and our performance within the
framework developed by the Task
Force for Climaterelated Financial
Disclosures (TCFD).
For additional information, we prepared an ESG Booklet
available on: https://www.alpek.com/esg/governance/
55 Alpek, S. A. B. de C. V. and Subsidiaries
(Subsidiary of Alfa, S. A. B. de C. V.)
Consolidated Financial Statements
FINANCIAL
STATEMENTS
As of and for the Years Ended December 31, 2021, 2020 and 2019,
and Independent Auditors’ Report Dated January 31, 2022
Table of Contents
Independent Auditors’ Report
Consolidated Statements of Financial Position
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income
Consolidated Statements of Changes in Stockholders’ Equity
Consolidated Statements of Cash Flows
Notes to the Consolidated Financial Statements
Page
5 7
60
6 1
62
63
64
65
56 57 58 59 Consolidated Statements of Financial Position
60 Consolidated Statements of Income
61 Consolidated Statements of Comprehensive Income
62 63 Consolidated Statements of Cash Flows
64 Notes to the Consolidated Financial Statements
65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 17. Lease liability
105
106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 Alpek, S.A.B. de C.V.
Av. Gómez Morín 1111 Sur
Col. Carrizalejo, San Pedro Garza García
Nuevo León, CP. 66254, Mexico
www.alpek.com
Investor Relations
Alejandro Elizondo
Alejandra Bustamante
IR@alpek.com