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Commitments | 12 Months Ended
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Dec. 31, 2020
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Commitments | # 34. Commitments a. Contracts a.1 Subsidiary Tequimar has agreements with CODEBA, with the Complexo Industrial Portuário Governador Eraldo Gueiros and with the company Empresa Maranhense de Administração Portuária, in connection with its port facilities in Aratu, Suape and Itaqui, respectively. Such agreements establish a minimum cargo movement of products, as shown below:
Port | Minimum movement per year | Maturity
Aratu | 900,000 ton. | 2022
Suape | 250,000 ton. | 2027
Suape | 400,000 ton. | 2029
Aratu | 397,000 ton. | 2031
Itaqui | 1,222,377 m³ | 2049
If the annual movement is less than the minimum contractual movement, the subsidiary is liable to pay the difference between the effective movement and the minimum contractual movement, based on the port tariff rates in effect on the date established for payment. As of December 3 1, 20 20, these rates were R$ 8.37 and R$ 2.67. per ton for Aratu and Suape, respectively and R$ 0.78 per m³ for Itaqui. According to contractual conditions and tolerances, there are not material pending issues regarding the minimum purchase limits of the contract. a.2 Subsidiary Oxiteno S.A. has a supply agreement with Braskem S.A. which establishes and regulates the conditions for the supply of ethylene to Oxiteno based on the international market for this product. These contracts establish a minimum commitment to according to the table below:
Plant | Minimum purchase (tons) per year | Maturity
Camaçari | 205,000 | 2021
Mauá | 44,100 | 2023
Should the minimum purchase commitment not be met, the subsidiary would be liable for a fine based on the current ethylene price for the quantity not purchased. According to contractual conditions and tolerances, there are no material issues regarding the minimum purchase commitment. b. Insurance c overage The Company is supported by insurance policies with the objective of covering several risks to which it is exposed, including loss of profits, losses and damage from fire, lightning, explosion of any kind, gale, aircraft crash, electric damage, and other risks, covering the industrial plants and distribution bases and branches of all subsidiaries. The maximum compensation values based on the risk analysis of certain locations are shown below:
Maximum compensation value (*) |
Oxiteno | US$ 1,142 | (equivalent to R$ 5,935 million as of 12/31/2020)
Ipiranga | R$ 1,530 |
Ultracargo | R$ 1,000 |
Ultragaz | R$ 272 |
Extrafarma | R$ 160 |
(*) In million s. In accordance with policy conditions. The General Liability Insurance program covers the Company and its subsidiaries with a maximum aggregate coverage of US$ 250 million (equivalent to R$ 1,299 million as of December 3 1, 20 20), against losses caused to third parties as a result of accidents related to commercial and industrial operations and/or distribution and sale of products and services. T he Company maintain s liability insurance policies for directors and executive officers to indemnify the members of the Board of Directors, F iscal C ouncil, directors and executive officers of Ultrapar and its subsidiaries (“Insured”) in the total amount of US$ 80 million (equivalent to R$ 416 million as of December 3 1, 20 20), which cover any of the Insured liabilities resulting from wrongful acts, including any act or omission committed or attempted, except if the act, omission or the claim is consequence of gross negligence or willful misconduct. In addition, group life and personal accident, health and national and international transportation, cyber risks and other insurance policies are also maintained. The coverage and limit of the insurance policies are based on a careful study of risks and losses conducted by independent insurance advisors. T he type of insurance is considered by management to be sufficient to cover potential losses based on the nature of the business conducted by the companies. c. Area port lease On March 22, 2019, Ultrapar, through its subsidiary IPP, won the port concessions of three areas with minimum storage capacity of 64 thousand m³ (unaudited) located at the port of Cabedelo, in the state of Paraíba, and one area with minimum storage capacity of 66 thousand m³ (not reviewed) at the port of Vitória, in the state of Espírito Santo, which will be designated for handling, storage and distribution of fuels. These concessions were carried out by two consortiums of which IPP holds one third of the total participation. . For the port of Cabedelo, the companies Nordeste Logística I, Nordeste Logística II and Nordeste Logística III were incorporated, in partnership with Raízen Combustível S.A. and Petrobrás Distribuidora S.A. For the port of Vitória, the company Navegantes was incorporated, in partnership with Raízen Combustível S.A. and Petrobrás Distribuidora S.A. T he total investments regarding IPP’s stake sums up to R$160 million (unaudited) for a concession term of 25 years. On April 5, 2019, Company, through its subsidiary IPP and Tequimar, also won three concessions. IPP won two concessions in the port of Miramar, in Belém, state of Pará: (i) area BEL02A, through a consortium 50% owned by IPP,that shall have minimum storage capacity of 41 thousand m³ (unaudited), and (ii) area BEL04, which is currently operated by IPP with minimum storage capacity of 23 thousand m³. Such areas will be operated for at least 15 years, according to the auction notice. For the area BEL02 A, Latitude was incorporated, together with Petróleo Sabbá S.A.. T equimar won the concession of area VDC12 in the port of Vila do Conde, in Barcarena, state of Pará. The minimum storage capacity will be 59 thousand m³ (unaudited). The area will be operated by Tequi m ar for at least 25 years, according to the auction notice. For the area VDC12, Tequimar Vila do Conde Logística Portuária S.A. (“Tequimar Vila do Conde”) was incorporated (see Note 3.b). T he estimated investments regarding the participation of IPP and Tequimar sums up to R$ 450 million, approximately, to be disbursed throughout the next five years including the auction grants and the minimum investment required for these areas.

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