Alpek & ContourGlobal create JV to develop a CO2 recovery facility

New facility would satisfy market’s need for CO₂ & reduce Alpek’s carbon footprint

Monterrey, N.L., Mexico. March 29^th, 2021 – Alpek, S.A.B. de C.V. (“Alpek”) announced today that it has formed a new joint venture company (“JV”) with ContourGlobal plc (“ContourGlobal”) to develop a CO₂ capture and liquefaction facility. The site would be integrated into ContourGlobal’s cogeneration facility in Altamira, Mexico (“CGA”). Each party holds a 50% stake in the JV.

The JV was created to meet the rising need of food-grade CO₂ for Mexico´s food and beverage industry, which is currently undersupplied by around 80,000 tons per year, and used in the carbonation of soft drinks, beer, and mineral water, among others.

This venture is well aligned with the three pillars of Alpek’s Long-Term Strategic Growth Plan:

Foster a Circular Economy:

• Sustainable Product Portfolio: Alpek intends to continue growing its share of products that promote a lower carbon footprint and are well aligned with a fully circular economy. The proposed CO₂ recovery facility would be a carbon negative asset, helping Alpek reduce its carbon footprint, as the company works towards full carbon neutrality.

Strategic & Focused Growth:

• Product Innovation: When Alpek began negotiating the sale of CGA to ContourGlobal in 2019, both companies were already contemplating the construction of a CO₂ recovery facility. In this sense, this venture represents the fruit of a proactive mindset of both teams. Our Innovation team will continue to actively look for new products that can help Alpek grow by drawing on its core strengths.

Strengthen the Core Business:

• Value Added Products: This venture diversifies Alpek’s portfolio with a new product that can be commercialized through its existing PET customer base, moving us further into new, attractive and growing markets.

“This project is very attractive from both an ESG as well as a financial perspective,” said José de Jesús Valdez, Alpek CEO. “It combines the operational excellence of both partners alongside ContourGlobal’s expertise in carbon capture and Alpek’s ability to leverage its long-standing customer relationships in an effort to better serve their diverse needs.”

The facility being considered would have a nameplate capacity of 70,000 tons per year and could be completed as early by late 2022. Detailed engineering studies and commercial due diligence will be carried out to arrive at a final investment decision (“FID”) by the end of 3Q21.