Ultragaz’ operations are divided into bottled gas sales (mainly in 13 kg cylinders) and bulk sales. The company operates in the two segments with different distribution strategies, in such a way as to make the most of the opportunities in each market and maximize customer loyalty.

Distribution in the bottled LPG segment includes direct home delivery and retail stores, both carried out by the company or its dealership network. In this segment, which principally serves the residential consumer, there has been a constant improvement in the products and services offered, as well as an increase in the level of interaction with consumers, either through sales carried out through the Internet (ClickUltragaz), by telephone (DiskUltragaz), through its own distribution outlets or via independent dealers. The company operates in this market with two brand names: Brasilgás (very strong in the Northeast of Brazil) and Ultragaz (in Brazil’s other regions). The Company maintains 16 gas cylinder filling plants, which provides support for the three forms of distribution: the home delivery of gas cylinders; direct sales through its own sales outlets or through its chain of exclusive independent dealers.

For the bulk segment, distribution is largely carried out through storage tanks installed on its clients. Since 1994, Ultragaz has been investing in small/medium size bulk delivery facilities and in bob-tail trucks, known as UltraSystem, which deliver LPG in bulk to commercial clients. Ultragaz’s clients in the commercial sector include shopping centers, hotels, residential buildings, restaurants, laundries and hospitals. Ultragaz’s trucks supply client’s stationary tanks using a system that is quick, safe and cost effective.

Oxiteno is a second generation company and the only producer of ethylene oxide and its principal derivatives in Mercosur – and the largest in Latin America, as well as being a large producer of specialty chemicals, developed to meet the specific needs of its clients. Oxiteno’s principal raw material is ethylene and its main suppliers are Braskem and Petroquímica União. Supply of ethylene constitutes an entry barrier to new ethylene oxide producers in the country since the current production capacity of ethylene by Brazilian crackers is committed to existing second generation companies, and significant investments are needed for the construction of a new cracker. In addition, the characteristics of ethylene oxide (highly inflammable at room temperature and atmospheric pressure), make importing of this product generally uneconomical. Oxiteno competes largely with imported products.

Ultracargo is the Brazilian market leader in integrated logistics – transport and storage services – to chemical products and fuels. The company offers transportation solutions using its own and third-party fleets as well as storage services through warehousing facilities at port terminals and rail junctions for the transportation of chemical products. Transportation services include integrated multi-modal transportation as well as receiving and dispatching customers’ goods. The company also offers ship loading and unloading services, pipeline operations, logistics programming and installation engineering.

Ultragaz competitive advantages include (i) strong brand name recognition, associated with quality, safety and efficiency; (ii) market concentration in the principal Brazilian population centers thus boosting economies of scale in distribution logistics and resulting in cost efficiencies; (iii) detailed knowledge of the Brazilian market, in part based on Ultragaz’s involvement at all levels of LPG distribution to its clients; and (iv) a highly efficient distribution network.

Besides being the largest producer of ethylene oxide and its principal derivatives in Mercosur, Oxiteno’s principal competitive advantages include (i) its large production capacity in excess of Brazilian demand; (ii) its operational flexibility which enables it to optimize its sales mix in line with market conditions; (iii) its plants which employ technologically advanced production processes; (iv) its advanced research and development centers for improving production processes and product uses; and (v) its competitive production scale, as Oxiteno owns the largest ethylene oxide unit in the Southern Cone.

Ultracargo’s principal competitive advantages include (i) its unique position as the only company in the market equipped to offer integrated transportation services and storage for the chemical products and fuels segment; (ii) the location of its assets, and; (iii) the commitment to operational safety.

For 2006 Ultrapar belives that the successive base rate reductions begun at the end of 2005 have signalled prospects for a pickup in the domestic economy, which could benefit the operational performance of the group’s companies in the domestic market. Ultragaz began the year with an ambitious program of cost and expense reductions and a project to review the structure of its distribution logistics, focusing on improving its profitability and maximizing free cash generation. For the chemical business, we began 2006 with a major investment plan, focusing on organic growth. We will make significant progress in the construction of the new fatty alcohols plant – the first in Latin America, comparable to the largest ones in the world and using renewable raw materials – adding 100,000 tons to production capacity and increasing our competitiveness in the markets for cosmetics and detergents. We are also increasing our production capacity for specialty chemicals and ethylene oxide, which will enter into operation at the beginning of 2007 and 2008, respectively. At Ultracargo, the start-up of operations at the Santos Terminal and the expansion project for the existing terminals should strengthen the company’s outstanding position in the provision of integrated logistics services for special products, principally at the major export ports. We believe that these initiatives will be instrumental in allowing us to continue firmly on our growth path.

Ultrapar Participações became a Publicly Listed Company in October, 1999. Ultrapar’s shares started trading at New York Stock Exchange– NYSE on October 7, 1999 and at São Paulo Stock Exchange– BOVESPA on October 13, 1999. Ultrapar Participações was the first Brazilian Company to do an IPO simultaneously in BOVESPA and NYSE.

Ultrapar has 81.3 million shares, 49.4 million as common shares and 31.9 million as preferred shares. Ultrapar’s free float is 38% of its capital. Ultrapar’s tickers are UGPA4 – at São Paulo Stock Exchange (BOVESPA) and UGP – at New York Stock Exchange (NYSE).

In the IPO, 80% of the shares were allocated internationally and 20% of the shares were allocated locally. At 12/31/05, the distribution was 31% in ADRs at NYSE and 69% in shares at BOVESPA.

The Board of Directors consists of 7 members, of which 4 are independent non-executive directors and 2 are executive directors, with a mandate of one year and the possibility of reelection.

Ultrapar has a permanent Fiscal Council that in addition to the activities provided in the Brazilian legislation, it will act as an Audit Committee as defined in Sarbanes-Oxley Act. The Fiscal Council is composed of five members: 1 member representing the minority shareholders, 1 member representing the preferred shareholders and 3 members representing the c ontrolling shareholders .

At the beginning of 2000, Ultrapar granted Tag Along, rights to its shareholders, guaranteeing equal treatment to minority shareholders in the event of a change in shareholder control of the Company. With this step forward, Ultrapar set itself apart from most other companies. At the end of 2001, the Publicly Listed Company Law (Lei das S.A.) was approved, making the Tag Along right obligatory; however, it is limited, granting 80% of an offer price only to holders of common shares. Ultrapar's Tag Along guarantees that holders of all share types will receive 100% of an offer price.