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Good morning, and welcome to ALPEC's second quarter 2012 earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session with instructions given at that time. As a reminder, today's conference call is being recorded. Now, I would like to turn the conference over to Mr. Raul Millares, CFO of ALPEC. Mr. Millares, you may begin.

Thank you. Welcome to the first conference call of Alpec as a public company. For this conference, we will review our results for the second quarter of the year. Please notice that during the call, we will share forward-looking information based on variables and assumptions that are inherently uncertain. Therefore, actual results are likely to vary from those mentioned in this conference. Today, this first conference call of our company, Mr. Jose de Jesus Valdez, Pepe, our CEO, has joined us to comment on the results of the company. I will now turn the call over to Mr. Valdez. Pepe, please. Thank you, Raul.

Good morning. The very first thing I want to do today is to extend the warmest welcome to all of you to this, our first conference call ever. As you know, ALPEC became public just a couple, two and a half months ago. I thank all of the investors that participated in the IPO as well as all of those that have subsequently supported our shares with their investment. It's a clear manifestation of their confidence. We remain committed to executing our realistic but demanding business plan aimed at strengthening our competitiveness and achieving growth and superior returns we believe we can get in these new environments. Let me start with the results for second quarter 12 by saying we have another strong quarter in line with our guidance. I will expand a little bit on what was behind our performance and then make a few comments on the conditions of our industry. Sales in the polyester segment continue to be strong. They were actually 7% ahead of the same quarter last year. Demand for our products allow us to keep our facilities busy. I think very important, the integration of the Pearl River PET plant is progressing very well, as well as the Columbia operation. In particular, in Columbia, we have been able to position our PET products as trade leaders in the market segments, which is, I believe, a big accomplishment. The plant is working at full capacity, both PTA and PET in Columbia. And as we explained during the IPO roadshow, the polyester segment has shown a lot of resilience to slower economic growth and has been able to command stable margins in dollars per ton. The strong performance of this business segment is even more remarkable this quarter when we consider that in the same quarter last year, a force majeure of another PTA producer in the region pushed up sales and prices of our PET products. The total impact of that force majeure, we estimate to have been close to $20 million between second and third quarter of 2011. So again, it was a very important, a very strong tailwind last year. And also we have to remember at the beginning of this year, There was an industry-wide adjustment in the PTA margin, in the PTA pricing mechanism, to support the competitiveness of our customers. So, again, in spite of those two differences, our results in this second quarter were very similar in the polyester, practically identical to last year. We were able to compensate for those factors with additional volume and with higher efficiencies in the operations. In the plastics and chemical segment, we have seen fits of prices following the downward trend of oil that have in turn triggered a decline in prices in the industry and, of course, the stocking activities of our customers. I will elaborate on this later. However, let me say that in our key and most profitable products and markets within this segment, polypropylene, polystyrene, and chemical specialties, Demand has been growing and margins have been steady, or even growing a little bit. It is only in the case of Caprolactam where we have significant sales to China. And in our trading business, we do some trading with Monoethylene Glycol, where we have seen a reduction in volumes and in margins. important to point out, though, that in the case of the caprolactam business, fortunately, we continue to have very strong performance of the byproduct of the fertilizer that is the byproduct of the caprolactam. And this has helped us offset, to a certain extent, the decline in the margins and volumes of the main product. Let me talk now a little bit about the, well, the industry in general. You are all aware about the world economy. It has been going through a very uncertain and volatile period for a number of reasons that you probably understand better than we do. However, the most important of those changes for us is the decline in oil prices that have occurred, particularly during the second quarter. And that's an important factor in our industry because normally it triggers a decline in the prices of products and feedstocks. And in the case of ALPEC, this decline fortunately has not implied lower margins since, as we have explained to most of you, we have a cost-plus pricing mechanism that protects us from this declining in oil prices. And another important consideration is that De Cv Ord De Cv Ord De Cv Ord De Cv Ord De Cv Ord De Cv Ord De Cv Ord De Cv Ord De Cv Ord De Cv Ord De Cv Ord Again, I have to say, as in previous periods of oil and feedstock volatility, we devote a lot of effort to manage our inventories and to quickly respond to these global market trends. However, as strange as it might seem, for us, normally, when prices of crude oil or feedstock go down, puts pressure in our profitability because, as I mentioned, we have a cost-plus Cost plus contracts over prices change the physical prices immediately But sometimes we have to deal with the inventory so when prices are going down or where prices are just immediately But we have inventory at higher cost that we have to do You know that normally hits over profits and and and again when prices are going up the the the opposite happens you know that we normally have a You know a temporary benefit so again I have to say that during the second quarter, we have more or less managed very well this transition. And particularly, I suppose, when you look at what is happening in the Asian market, this year the Asian petrochemical industry has seen difficult times. Again, as partly as a result of this crude oil prices coming down. There have been temporary shutdowns of polyester plants. And unfortunately for us, our activities are mostly focused in North America and we are more or less isolated from the situation in Asia, in most of our products. We have some exposure in our sales to Europe or South America, but for the most part, we are isolated from the trends in Asia. Our products have remained competitive in our marketplace. Again, partly due to the PTA adjustment that we did at the beginning of the year, and again, Conditions in Europe and Asia have been more difficult. Our great exports, however, to North America has reduced the overall negative impact on us, and we remain confident in our businesses. We, on the other hand, are already seeing an important recovery of petrochemical feedstock in Asia, as I mentioned for the last two weeks, and we believe that hopefully for the remaining of the year, we're going to have a little bit more stable situation in terms of of prices and margins in Asia. Now, before opening this conference to the Q&A session, let me make also a couple of comments on the implementation of our business strategy that we explained to some detail with you during the IPO roadshow. First, to tell you we're making progress on the first co-op implant in our PTA PET facility at Consoliacake. This investment, $130 million investment, should be ready by the end of next year, and it represents a very important step in making this site one of the most competitive in the world. And second, we have also authorized and started several de-bottlenecking projects, two at our Columbia PTA and PET plants, and another one over Pearl River PET plant. With a very marginal investment, these projects will be on stream in the following 12 months, and will increase capacity at such sites by approximately 10%. And of course, with the additional benefit of improving our cost position in all of these sites. And lastly, I believe some of you should be aware that our subsidiary, Petro Temex, has offered to repurchase its outstanding senior notes due 2014. This decision goes in line with our goal of reducing our financing costs and extending the terms of our debt in as much as possible. We expect the transactions should be implemented in the next few weeks. And let me conclude my comments by reaffirming our belief on ALPEC's sound business strategy and healthy financial condition. We believe we are in a unique position to pursue our aggressive organic growth opportunities while at the same time We are capable of capturing other global opportunities that might present themselves. Thank you very much.