Mexichem is committed to sustainable development and has identified principal impacts, risks, and opportunities in order to improve its performance and make sustainability a successful strategy. Our employees are committed to respecting ethical values, to the self-development of communities in which we have a presence, and to environmental protection.

For the third year in a row, Mexichem received certification as a socially responsible company by demonstrating its social commitment to Mexico, its people and its communities. Also for the third consecutive year, one of our subsidiaries is one of the 20 model companies for corporate social responsibility in Brazil, according to the Guía Exame de Sustentabilidade. Our plants have implemented environmental administration systems to ensure good practices and to be recognized as clean companies. In addition, our operations use energy savings programs, which have allowed us to again receive the National Energy Savings Award in Mexico.

The opportunities and challenges that we have identified are indicated in our approach to sustainability. It is relevant to create an organizational structure that facilitates the implementation of our strategies for sustainability and allows us to approve and recognize performance in the area of sustainability and social responsibility in all business units.

As a socially responsible company, we contribute to improving the quality of life and the comfort level of those using our products. In the next few years, we wish to expand the range of our products in the "base of the pyramid" market and gradually incorporate into the manufacturing a "cradle to cradle" vision for our new products, with the understanding that sustainable development is a journey rather than a destination.

Sustainability program

Our sustainability program includes specific goals for the period from 2010 to 2013, taking into consideration the areas of social, economic, and environmental responsibility. Management and the executive groups are responsible for seeing that these initiatives are disseminated and understood by all employees, as well as for ensuring that they are completed within the established time frames.

With regard to our organizational structure, our board of directors provides the policies and monitors our triple-bottom-line performance with the support of the auditing and corporate practices committees. We have an internal audit department whose director reports to the board of directors for the purpose of avoiding conflicts of interest. The highest position with operative responsibility over environmental, energy, and safety aspects is the Director of the Center for Research and Development (CID), while the position with the greatest social responsibility that groups together aspects related to labor, human rights, communities, and corporate communication is that of the Corporate Director of Human Resources. Our directors of the transformed products, chlorine-vinyl, and fluorine production chains, among their other duties, are responsible for our products. All the management positions mentioned, except for internal auditing, report to the CEO.

We have a safety, environmental, and quality policy that permeates the entire organization and establishes that:

Mexichem and its subsidiaries consider safety to be the most important factor, making care for the environment relevant in the manufacturing of products, and providing quality services to meet the needs of our clients, with our employees being our primary strength.

Identification and selection of stakeholders

It is important for Mexichem to have a measurement that reflects an integrated focus on systematically managing its impact, both negative and positive, in all the communities in which we have a presence. This gives us access to trustworthy information on which to make decisions and strengthen our brand and reputation, in addition to reinforcing our capacity to maintain current operations and initiate new projects. For this reason, we initiated an effort designed to improve and systematize communication with our principal stakeholders: investors, employees, communities, suppliers, and clients. This first sustainability report is one example of this.

Participation and communication with stakeholders

Investors

Mexichem has committed to providing its shareholders with reasonable, sustained profitability in return for their investment. We communicate with our investors through:

• Annual financial report
• Quarterly reports
• Meetings designed by financial intermediaries for institutional investors (buy-side and sell-side)
• Presentations for potential investors in North America, South America, and Europe to announce the issuer's recent projects and other news
• Through our web page, www.mexichem.com.mx
• Telephone conferences
• Scheduled formal meetings (one on one)
• Relevant notices through the Mexican Stock Exchange

Employees

Mexichem recognizes that its executives and employees are its most valuable resource. It is committed to its guarantee to respect the dignity of all employees and to foster a work environment and space that are adequate for them to grow both professionally and personally.

One of the formal ways we engage in dialogue with our employees is through a survey called "Toma de Pulso" (Taking the Pulse), which is given every two years to all of our employees - both unionized and nonunionized-to evaluate 13 points; the survey is confidential and anonymous. Other forms of dialogue are messages via the Mexinet intranet; regular mail and e-mail; bulletin boards; and face-to-face meetings with immediate supervisors and executives.

Communities

As part of our culture and our values, social responsibility applies to each and every one of the communities in which we operate. We communicate through various channels, such as homeowners associations, opinion leaders, governmental authorities, and international organizations.

We maintain dialogues with opinion leaders, academic institutions, governmental institutions, civil society organizations, communication media, and institutions in this sector.

Suppliers

Mexichem works with suppliers that share the highest levels of quality and honesty, seeking mutual benefit that adds efficiency to the vertical integration of our production chains. We have a supplier-evaluation system that allows us to identify areas of common opportunity.

Clients

For Mexichem and its employees, our clients are strategic allies that we support in their growth and development. We take yearly satisfaction surveys that help us identify needs and ways to improve.

We form alliances with the public sector and establish annual labor agreements with unions.

Result of the stakeholder analysis

The results from the analysis with the principal stakeholders are:

• Investors: Expect a greater return on their investment through constant growth.
• Employees: Want development of leaders; retention of talent, professional development, outplacement plans and career plans; compensation that demonstrates internal equity and external competitiveness; performance management.
• Communities: Value employment creation; purchase from local suppliers; knowledge of environmental and safety management programs.
• Suppliers: Expect prompt payment and better treatment.
• Clients: Want improved delivery times and reduced prices.

The public sector and academia both show interest in establishing alliances to achieve community development and the protection of public assets; encourage research and development with universities and local research centers and introduce the concept of sustainability as a synergy for local development; establish a collective agenda to aim for sustainable development based on the principles of the United Nations Global Compact and Agenda 21.

We are convinced that we will build better relationships with open communication, in both directions, that encourages a close connection with our stakeholders. We have corporate strategies that intertwine intersectoral, interdisciplinary, and intergenerational visions facing various problems of core significance. One example is the case of water, a limited resource, vital, deteriorating, and the abundance and quality of which we should preserve for succeeding generations.

We are aware that, due to the rapid growth of our company in new geographic regions, we face enormous challenges in maintaining and increasing our human capital. We focused our efforts in three principal areas:

1. Approve, adapt, and improve labor practices that facilitate the personal and professional development of our colleagues.
2. Guarantee the respect of and vigilance over human rights in the workplace.
3. Provide the best conditions for safety and health.

Mexichem desea ser una empresa reconocida por sus principios y valores.

Durante los últimos 50 años, a pesar de todos los cambios que han ocurrido mundialmente, nuestra empresa ha permanecido comprometida a los valores de calidad, servicio y trato justo con los cuales fue fundada. Estos valores continúan siendo la base, en todos los aspectos, en nuestras relaciones de negocios.

Los altos estándares éticos seguidos por el personal de Mexichem, han sido una pieza importante en el crecimiento de nuestra empresa.

Operamos una amplia diversidad de negocios en países diferentes bajo circunstancias competitivas de variada índole, sujetas a distintas leyes, reglamentos y culturas locales. En el entorno global, la base de nuestro éxito a largo plazo será una excelencia comercial como consecuencia de observar las normas éticas más elevadas y de conformidad con lo previsto por la ley.

El objetivo de este Código de Ética es definir con claridad los principios éticos que orientan las acciones de Mexichem y los compromisos de conducta de la empresa, tanto en la parte institucional como en la parte de sus empleados.

En atención a las consideraciones anteriores, el Consejo de Administración de Mexichem ha aprobado y autorizado la expedición de este Código de Ética de Negocios. Nuestros compromisos y responsabilidades atienden a clientes, accionistas, proveedores, colaboradores, comunidad y medio ambiente.

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