Risk factors

An investment in securities involves a high degree of risk. All investors should carefully consider the following factors in addition to the other information in this investor relations website before investing in Plascar?s securities. In general, investing in the securities of issuers in emerging market countries, such as Brazil, involves a higher degree of risk than investing in the securities of U.S. issuers or issuers in other countries with highly developed capital markets. Plascar?s business, financial condition, results of operations and prospects may be materially adversely affected by any of these risks.

The risks briefly described below are those that the Company currently believes most likely may materially affect its performance.

1. Risks Related to Plascar

  • Plascar may be unable to successfully implement its growth strategy.
  • Plascar is subject to operating risks associated with the use of its products in critical applications.
  • The discontinuation or loss of services by key employees may negatively affect the Company?s results.
  • Losses and other liabilities that are not covered by Plascar?s insurance policies may result in additional costs in its operations.
  • The Company has been facing increased competition in certain areas of its business.

2. Risks Related to the Industries in which the Company Operates

  • The segments in which Plascar operates, especially the automotive industry, may face slowdowns.
  • The automotive industry depends on the national and global economies and primarily on the demand for automotive vehicles.
  • The Company?s business assumes a long-term relationship with clients and ongoing participation in the development of new products.
  • The segments in which Plascar operates are subject to rapid technological innovations.

3. Risks Related to Brazil

  • The Brazilian government has significantly influenced the Brazilian economy. The Brazilian political and economic environments have a direct impact on Plascar?s businesses, financial condition, operating results and market perspectives on the trading price of its shares.
  • The instability of the exchange rate and the appreciation of the real against the dollar and euro may adversely affect the Company.
  • Inflation and certain measures taken by the Brazilian government to curb inflation have historically had adverse effects on the Brazilian economy and the Brazilian capital markets. High inflation levels in the future may adversely affect Plascar.
  • Interest rate variation may adversely affect the Company, as well as the trading price of its shares.
  • Events and the perception of risk in other countries, especially in emerging countries, may adversely affect the Brazilian securities market and the price of Plascar shares.

4. Risks Related to Plascar Shares

  • The Company?s current controlling shareholder may have interests conflicting with its other investors? interests.
  • The relative volatility and lack of liquidity in the Brazilian securities market may substantially limit investors? capacities to sell Plascar shares at the price and time that they wish to do so.
  • The sale of significant amounts of the Company shares may decrease the price of its shares.
  • Holders of Plascar shares may not receive any dividends or interest on shareholders? equity.