SAO PAULO and RIO DE JANEIRO, Brazil, October 25 /PRNewswire/ -- Suzano Petroquimica S.A. (the "Company") (Bovespa: SZPQ4) (Latibex: XSUPT), one of the largest strategic investors in the Brazilian petrochemical sector and a joint controlling shareholder of Rio Polimeros S.A., Polibrasil Resinas S.A., Petroflex Industria e Comercio S.A. and Politeno Industria e Comercio S.A., conveys to the market that, in furtherance of its repositioning process within capital markets, its Board of Directors approved on October 21, 2004, submission to the Company's shareholders, in an Extraordinary General Meeting, of a proposal contemplating compliance by the Company with Level 2 of Corporate Governance Practices of the Sao Paulo Stock Exchange -- BOVESPA -- as well as granting to shareholders of additional rights, which are described below:

I. The granting of tag along rights in the event of sale of control of the Company, and the increase in the minimum mandatory dividend:

-- Tag along: holders of preferred shares shall be entitled to take part in any tender offer for the sale of control of the Company, for a price equivalent to 80% of the amount paid for each of the Company's common shares that comprise its control block;

-- Minimum Mandatory Dividend: the minimum mandatory dividend to be paid to all of the Company's shareholders shall be increased from 25% to 30% of the Company's adjusted net profits. Preferred shares will lose their current right to a dividend 10% higher than the dividend attributed to common shares. This proposal is also to be submitted for approval in a Special Meeting of Preferred Shareholders.

II. Controlling Shareholders to waive their right to appoint three candidates for the position of representative of the Preferred Shareholders on the Board of Directors.

III. The Company's Fiscal Committee to become permanent.

IV. Compliance with Level 2 of Corporate Governance Practices of the Sao Paulo Stock Exchange -- BOVESPA -- with the main consequences being:

-- Preferred Shareholders shall have the right to vote on certain issues submitted for approval by the Company's General Meeting, such as (i) reorganizations of the Company's structure, including transformation of the Company into a different type of corporate entity, its merger into another company (whether or not the Company is the surviving entity) and a spin-off; (ii) approvals of agreements between the Company and its Controlling Shareholders; and (iii) a change in the Company's corporate purpose, among others.

-- The election of arbitration as the method for resolving corporate disputes involving the Company, its shareholders, managers and members of its Fiscal Council, with adhesion by the Company to the Regulation for Market Arbitrations of the Sao Paulo Stock Exchange -- BOVESPA.

The Company's Board of Directors approved the call for an Extraordinary General Meeting of Shareholders to be held on November 18 in order to approve changes to its bylaws, which are necessary for implementation of the proposal approved by the Board of Directors, as well as the call for a Special Meeting of Preferred Shareholders to be held on the same day.

The Company believes that these initiatives, together with those recently made public, are a clear and unmistakable demonstration of the commitment of its Controlling Shareholders to adoption of better corporate governance practices and strong corporate performance. They also reinforce the Company's strategic inclination to being one of the leaders in the thermoplastic resins production segment.

We are convinced that, with accomplishment of this additional step, Suzano Petroquimica will be establishing itself as a true investment alternative in the Sao Paulo Stock Exchange -- BOVESPA.