As filed with the Securities and Exchange Commission on May 29, 2002
===============================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   ---------

                                   Form 20-F

                                   ---------

       [ ]  REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                                       OR

           [X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                      THE SECURITIES EXCHANGE ACT OF 1934
                  For the fiscal year ended December 31, 2001

                                       OR

         [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                      THE SECURITIES EXCHANGE ACT OF 1934

                        Commission File Number 001-14950

                                   ---------

                          ULTRAPAR PARTICIPACOES S.A.
             (Exact name of Registrant as specified in its charter)

      ULTRAPAR HOLDINGS INC.                   THE FEDERATIVE REPUBLIC OF BRAZIL
(Translation of Registrant's name               (Jurisdiction of incorporation
         into English)                                   or organization)

                                   ---------

                 Av. Brigadeiro Luiz Antonio, 1343, 9(0) Andar
                        Sao Paulo, SP, Brazil 01317-910
                          (Telephone: 55-11-3177-6513)
         (Address and telephone number of principal executive offices)

 Securities registered or to be registered pursuant to Section 12(b) of the Act.

         Title of each class          Name of each exchange on which registered
         -------------------          -----------------------------------------
Preferred Shares, without par value*          New York Stock Exchange

---------
*    Traded only in the form of American Depositary Shares (as evidenced by
     American Depositary Receipts) each representing 1,000 Preferred Shares
     which are registered under the Securities Act of 1933.

Securities registered or to be registered pursuant to Section 12(g) of the Act:

                                      NONE

Securities for which there is a reporting obligation pursuant to Section 15(d)
                                  of the Act:

                                     NONE

      The number of outstanding shares of each class of stock of Ultrapar
                  Participacoes S.A. as of December 31, 2001.

                  Common Shares               37,984,012,500
                  Preferred Shares            15,015,987,500

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                         Yes [X]             No [ ]

Indicate by check mark which financial statement item the registrant has
elected to follow:

                        Item 17 [ ]          Item 18 [X]


===============================================================================
<PAGE>


                               TABLE OF CONTENTS


                                                                           Page

INTRODUCTION ............................................................    1

FORWARD-LOOKING STATEMENTS...............................................    2

                                     PART I

ITEM 1.   IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS...........   3

ITEM 2.   OFFER STATISTICS AND EXPECTED TIME TABLE........................   3

ITEM 3.   KEY INFORMATION.................................................   3

A.        Selected Financial Data.........................................   3
B.        Capitalization and Indebtedness.................................   7
C.        Reasons for the Offer and Use of Proceeds.......................   7
D.        Risk Factors....................................................   8

ITEM 4.   INFORMATION ON THE COMPANY......................................  14

A.        History and Development of the Company..........................  14
B.        Business Overview...............................................  15
C.        Organizational Structure........................................  44
D.        Property, Plants and Equipment..................................  44

ITEM 5.   OPERATING AND FINANCIAL REVIEW AND PROSPECTS....................  49

A.        Operating Results...............................................  49
B.        Liquidity and Capital Resources.................................  55
C.        Research and Development, Patents and Licenses, etc.............  58
D.        Trend Information...............................................  58

ITEM 6.   DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES....................... 59

A.        Directors and Senior Management.................................. 59
B.        Compensation..................................................... 61
C.        Board Practices.................................................. 61
D.        Employees........................................................ 62
E.        Share Ownership.................................................. 62

ITEM 7.   MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS................ 64

A.        Major Shareholders............................................... 64
B.        Interests of Expert and Counsel.................................. 65

ITEM 8.   FINANCIAL INFORMATION............................................ 65

A.        Consolidated Statements and Other Financial Information.......... 65
B.        Significant Changes.............................................. 68

ITEM 9.   THE OFFER AND LISTING............................................ 68

A.        Offer and Listing Details........................................ 68
B.        Plan of Distribution............................................. 68
C.        Markets.......................................................... 68
D.        Selling Shareholders............................................. 68
E.        Dilution......................................................... 69
F.        Expenses of the Issue............................................ 69

ITEM 10.  ADDITIONAL INFORMATION........................................... 69

A.        Share Capital.................................................... 69
B.        Memorandum and Articles of Association........................... 69
C.        Material Contracts............................................... 69
D.        Exchange Controls................................................ 69


<PAGE>


E.        Taxation......................................................... 71
F.        Dividends and Paying Agents...................................... 77
G.        Statement by Experts............................................. 77
H.        Documents on Display............................................. 77
I.        Subsidiary Information........................................... 77

ITEM 11.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK....... 77

ITEM 12.  DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES........... 78

                                 PART II

ITEM 13.  DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES.................. 78

ITEM 14.  MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND
          USE OF PROCEEDS.................................................. 79

ITEM 15.  [Reserved]....................................................... 79

ITEM 16.  [Reserved]....................................................... 79

                                 PART III

ITEM 17.  FINANCIAL STATEMENTS............................................. 79

ITEM 18.  FINANCIAL STATEMENTS............................................. 79

ITEM 19.  EXHIBITS......................................................... 79

GLOSSARY ..................................................................G-1


                                      ii
<PAGE>


                                  INTRODUCTION

     In this annual report on Form 20-F, "Ultrapar", "we", "us" and "our" refer
to Ultrapar Participacoes S.A. "Ultragaz" refers to Ultragaz Participacoes S.A.
together with its subsidiaries. "Oxiteno" refers to Oxiteno S.A. Industria e
Comercio, together with its subsidiaries. "Ultra S.A." refers to Ultra S.A.
Participacoes. "Ultracargo" refers to Ultracargo Participacoes Ltda. "Tequimar"
refers to Terminal Quimico de Aratu S.A. "Transultra" refers to Transultra S.A.
Armazenamento e Transporte Especializado.

     All references herein to the "real", "reais", or "R$" are to the Brazilian
real, the official currency of Brazil. All references to "U.S. dollars",
"dollars" or "U.S.$" are to United States dollars.

     We have changed the basis of presentation of our consolidated financial
statements. The consolidated financial statements included herein are prepared
in accordance with accounting principles determined by the Brazilian corporate
law. According to the Brazilian corporate law method:

     o    price-level adjustment was discontinued as of January 1, 1996 and is
          no longer permitted; and

     o    discounting of fixed rate monetary assets and liabilities is
          prohibited.

     In prior years, the financial statements included in our annual reports on
Form 20-F were prepared in accordance with generally accepted accounting
principles in Brazil, or Brazilian GAAP. According to the Brazilian GAAP
accounting method:

     o    certain effects of inflation are recognized and data from prior
          periods is restated in constant Brazilian reais; and

     o    present value discounting of fixed rate monetary assets and
          liabilities is required when the effect is material.

     During periods when Brazil had high inflation rates, the Brazilian
corporate law method to adjust for the effects of inflation was not a
comprehensive method that resulted in all amounts being presented in a currency
of equivalent purchasing power. Therefore, the use of the Brazilian corporate
law method in the financial statements presented in our prior annual reports
would have been inconsistent with the requirements of the U.S. securities laws.
Brazilian companies have received informal permission from the United States
Securities Commission, the SEC, to file their financial statements in
accordance with the Brazilian corporate law, rather than in accordance with
Brazilian GAAP. Since as of December 31, 1997 the Brazilian corporate law
method represents a comprehensive basis of accounting that provides a more
meaningful presentation than that provided by Brazilian GAAP, and is required
to be used in distributions to shareholders in Brazil, our consolidated
financial statements are presented in this annual report in accordance with the
accounting principles determined by the Brazilian corporate law. For a
consistent presentation and to enable period-to-period comparison, financial
information presented in this annual report has been restated for all periods
presented in accordance with the Brazilian corporate law method.

     Before December 31, 1995, the Brazilian corporate law required a specific
method of accounting to recognize the effects of inflation, utilizing a
government-sanctioned index known as Unidade Fiscal de Referencia, or UFIR.
Pursuant to this method, we charged the price-level adjustment to the net
carrying value of certain assets (including permanent assets, inter-company
current accounts and certain other assets) and credited such price-level
adjustment to the income statement. Likewise, we adjusted opening shareholders'
equity and charged the amount of such adjustment to the income statement. Our
income statement would therefore reflect a net monetary correction gain (if
permanent assets and inter-company current accounts are funded by third party
financing) or loss (if shareholders' equity exceeds the carrying value of
permanent assets). We also took into account the net monetary correction gain
or loss in the determination of taxable income. However, this method did not
provide for restatement of inventories, when applicable, restatement of
advances received from customers, restatement of individual line items in the
income statement and recognition of the effects of inflation expectation
included in receivables and payments subject to settlement at future dates, nor
presentation of the past and current financial statements in constant currency.
Beginning on January 1, 1996, the Brazilian corporate law, but not Brazilian
GAAP, prohibited the recognition in financial statements of the effects of
inflation and required balances and transactions to be expressed in nominal
reais.


<PAGE>


     The change in the basis of accounts also affected the presentation of
balances under generally accepted accounting principles in the United States,
or U.S. GAAP.

     See Note 2 and 19 I (b) of the consolidated financial statements for a
discussion of the impact of the change in the basis of presentation described
above in the reconciliation of net equity and net income to U.S. GAAP.

     This annual report contains translations of certain real amounts into U.S.
dollars at specified rates solely for the convenience of the reader. The
commercial selling rate is used in this annual report rather than the noon
buying rate in New York City as reported by the Federal Reserve Bank of New
York because the noon buying rate was not consistently reported for reais
during the periods shown in this annual report. These translations should not
be construed as representations that the real amounts actually represent these
U.S. dollar amounts or could be or could have been converted into U.S. dollars
at the rate indicated or at any other rate. Unless otherwise indicated, the
exchange rate of real amounts into U.S. dollars was R$2.3204 to U.S.$1.00 at
December 31, 2001, based on the commercial selling rate as reported by Banco
Central do Brasil, known as the Central Bank of Brazil, or the Central Bank.

     Some of the figures included in this annual report may not sum due to
rounding.

     We will provide without charge to each person to whom this report is
delivered, upon written or oral request, a copy of any or all of the documents
incorporated by reference into this annual report (other than exhibits, unless
such exhibits are specifically incorporated by reference in such documents).
Written requests for such copies should be directed to Ultrapar Participacoes
S.A., Av. Brigadeiro Luiz Antonio, 1343, 9(0) Andar, Sao Paulo, SP, Brazil
01317-910, Attention: Director, Investor Relations. Telephone requests may be
directed to 55-11-3177-6513.

                           FORWARD-LOOKING STATEMENTS

     The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements. Certain information included in this
annual report contains information that is forward-looking, including but not
limited to:

     o    trends affecting our financial condition or results of operations;

     o    the effects of operating in a competitive environment;

     o    acquisitions or investments which we may make in the future;

     o    our capital expenditures plan; and

     o    the outcome of certain legal proceedings.

     Forward-looking statements may also be identified by words such as
"believes", "expects", "anticipates", "projects", "intends", "should", "seeks",
"estimates", "future" or similar expressions. Such forward-looking information
involves risks and uncertainties that could significantly affect expected
results. The risks and uncertainties include, but are not limited to:

     o    uncertainties relating to political and economic conditions in
          Brazil;

     o    inflation and exchange rate risks; and

     o    the impact of regulatory reform and increased competition.


                                       2
<PAGE>


PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

     Not applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIME TABLE

     Not applicable.

ITEM 3. KEY INFORMATION

A.   Selected Financial Data

     The following tables present selected consolidated financial information
for Ultrapar. You should read these tables in conjunction with our annual
financial statements, and the notes thereto, included elsewhere in this annual
report. We have derived the selected consolidated financial information of
Ultrapar for each of the years 1997 through 2001 from our annual financial
statements, including the consolidated balance sheets at December 31, 2000 and
2001 and the related consolidated statements of operations, changes in
shareholders' equity and changes in financial position for the three years
ended December 31, 2001 and notes thereto included elsewhere in this annual
report.

     Our consolidated financial statements are prepared in accordance with the
Brazilian corporate law, which differs in certain material respects from
generally accepted accounting principles in the United States, or U.S. GAAP.
See note 19 to our consolidated financial statements for a summary of the
differences between the Brazilian corporate law and U.S. GAAP of shareholders'
equity as of December 31, 2000 and 2001 and net income for the years ended
December 31, 1999, 2000 and 2001.

     In prior years, the financial statements included in our annual reports on
Form 20-F were prepared in accordance with generally accepted accounting
principles in Brazil, or Brazilian GAAP, which requires the recognition of
certain effects of inflation and the restatement of data from prior periods in
constant Brazilian reais. In addition, Brazilian GAAP requires present value
discounting of fixed rate monetary assets and liabilities when its effect is
material. In order to enable period-to-period comparison and for a consistent
presentation, financial information presented in this annual report has been
restated for all periods presented in accordance with the Brazilian corporate
law. See Note 2 of our consolidated financial statements for a discussion of
the impact of the change in the basis of presentation to the Brazilian
corporate law method. The selected financial information should be read in
conjunction with "Item 5. Operating and Financial Review and Prospects."

     Certain of the information in reais herein has been translated into U.S.
dollars using the commercial selling rate as of December 31, 2001, of R$2.3204
per U.S.$1.00. These translations are presented solely for the convenience of
the reader and should not be construed as implying that local currency amounts
represent, or could have been, or could be, converted into U.S. dollars at such
rates or any rate.


                                       3
<PAGE>


<TABLE>
                                       Ultrapar Participacoes S.A. and Subsidiaries

                                                                              Year Ended December 31,
                                                 ---------------------------------------------------------------------------------
                                                    1997          1998           1999          2000          2001         2001(1)
                                                 ----------    ----------     ----------    ----------    ----------    ----------
                                                     (in millions of reais, or millions of U.S. dollars, where indicated,
                                                                               except per share data)
<S>                                              <C>            <C>           <C>            <C>           <C>             <C>
Consolidated Income Statement Data:
Brazilian corporate law:                             R$            R$             R$            R$            R$            US$
Gross sales and services revenue............... R$1,127.5      R$1,331.3     R$1,927.0      R$2,301.2     R$2,862.5    U.S.$1,233.8
Sales and service tax..........................    (223.4)        (287.6)       (332.4)        (423.2)       (577.8)         (249.0)
                                                ---------      ---------     ---------      ---------     ---------    ------------
Net Sales......................................     904.1        1,043.7       1,594.6        1,878.0       2,284.7           984.6
Cost of goods and services sold................    (662.0)        (746.3)     (1,106.7)      (1,399.6)     (1,698.3)         (732.0)
                                                ---------      ---------     ---------      ---------     ---------    ------------
Gross profit...................................     242.1          297.4         487.9          478.4         586.4           252.6
Operating (expenses) revenues
Selling, general and administrative............    (170.2)        (195.1)       (233.6)        (266.2)       (317.7)         (136.9)
Other..........................................       3.8            4.1           3.8            1.3          10.2             4.4
                                                ---------      ---------     ---------      ---------     ---------    ------------
Total operating expenses.......................    (166.4)        (191.0)       (229.8)        (264.9)       (307.5)         (132.5)
                                                ---------      ---------     ---------      ---------     ---------    ------------
Operating profit...............................      75.7          106.4         258.1          213.5         278.9           120.1
Net financial income (expenses)................       0.1           (0.9)        (34.4)          43.4         (31.1)          (13.4)
Other non-operating income (expenses)..........       0.1           (6.5)        (18.3)         (16.5)        (17.0)           (7.3)
                                                ---------      ---------     ---------      ---------     ---------    ------------
Income before income tax and social
     contribution..............................      75.9           99.0         205.4          240.4         230.8            99.4
Income tax and social contribution.............     (13.2)         (14.5)        (40.6)         (47.3)        (27.5)          (11.6)
                                                ---------      ---------     ---------      ---------     ---------    ------------
Income before equity earnings and
     minority interest.........................      62.7           84.5         164.8          193.1         203.3            87.8
                                                ---------      ---------     ---------      ---------     ---------    ------------
Equity in earnings (losses) of affiliates .....       0.2           (5.7)         (3.2)           9.6           1.9             0.8
Minority interest..............................     (27.8)         (34.3)        (73.7)         (74.2)        (73.0)          (31.5)
                                                ---------      ---------     ---------      ---------     ---------    ------------
Net income ....................................    R$35.1         R$44.5        R$87.9        R$128.5       R$132.2       U.S.$57.1
                                               =====================================================================================
Net Income per thousand shares(2).............        0.9            1.2           1.7            2.4           2.5             1.1
                                                ---------      ---------     ---------      ---------     ---------    ------------
Dividends per thousand common shares (3)......       3.70           3.70          0.48           0.57          4.20            1.80
                                                ---------      ---------     ---------      ---------     ---------    ------------
Dividends per thousand preferred shares (3)(4)         --             --          0.53           0.63          4.63            2.00

U.S. GAAP:
Net income....................................       30.7           59.9          98.7          123.8         123.0            53.0
Net income per thousand common shares(2)......        0.8            1.6           2.2            2.2           2.2             0.9
Net income per thousand preferred
     shares(2)(4).............................         --             --           2.5            2.6           2.5             1.1

Other financial data (Brazilian corporate
  law)(5)
Cash flow from operating activities(6)........      103.4          213.4         373.9          302.7         339.7           146.4
Cash flow from investing activities(6)........      (95.3)        (115.9)        (96.4)        (170.5)       (206.7)          (89.1)
Cash flow from financing activities(6)........      113.2          (18.4)        233.3         (126.6)       (339.2)         (146.2)

Depreciation and amortization(7)..............       59.0           66.4          78.9           90.8         102.4            44.1
EBITDA(8).....................................      134.1          172.7         337.0          304.3         372.5           160.6
Number of common shares (in millions) (9).....        2.7            2.7      37,984.0       37,984.0      37,984.0              --
Number of preferred shares (in millions) (9)..         --             --      15,016.0       15,016.0      15,016.0              --
</TABLE>


                                       4
<PAGE>


---------
(1)  The real amounts for 2001 have been converted using the exchange rate of
     U.S.$1.00 = R$2.3204, the commercial selling rate as reported by the
     Central Bank on December 31, 2001. You should not construe currency
     conversions contained in this annual report as representations that the
     real amounts actually represent such dollar amounts. Additionally, you
     should not construe these conversions as representations that these real
     amounts have been, could have been or could be converted into dollars at
     these or any other rates of exchange. See "-- Exchange Rates."

(2)  Although not consistent with the Brazilian corporate law, for the
     convenience of the reader, the amounts disclosed in the row labeled Net
     Income (loss) per thousand shares give retroactive effect to the 15,000:1
     stock split which occurred in July 1999. One ADS represents 1,000
     preferred shares. Common shares and preferred shares each represent the
     same economic interest in Ultrapar.

(3)  See "Item 8. Financial Information - Consolidated Statements and other
     Financial Information - Dividend and Distribution Policy" for information
     regarding declaration and payment of dividends.

(4)  Prior to 1999, Ultrapar had no preferred shares outstanding.

(5)  Cash flow and EBITDA information has been derived from our Brazilian
     corporate law financial statements.

(6)  See Note 17 (V)(h) of our consolidated financial statements.

(7)  Depreciation represents depreciation expenses included in cost of goods
     and services sold and in selling, general and administrative expenses.

(8)  EBITDA is a measure widely used to approximate operating cash flows. The
     inclusion of information on EBITDA is intended to present a measure of our
     ability to generate cash from our operations. EBITDA is equal to operating
     profit plus depreciation and amortization expenses. EBITDA is not a
     measure of financial performance under U.S. GAAP or the Brazilian
     corporate law and has been provided for the convenience of the reader.
     EBITDA should not be considered an alternative to net income as a measure
     of operating performance or to cash flows from operations as a measure of
     liquidity.

(9)  Figures from 1999 to 2001 take into account the 15,000:1 stock split which
     occurred in July 1999 as well as the capital increase of 12.5 billion
     shares.


                                       5
<PAGE>


<TABLE>
                                         Ultrapar Participacoes S.A. and Subsidiaries

                                                                          As of December 31,
                                                      -----------------------------------------------------------------
                                                       1997       1998       1999       2000        2001       2001(1)
                                                      -------    -------    -------    -------    -------    ----------
                                                      (in millions of reais, or millions of U.S. dollars, where
                                                                              indicated)
<S>                                                    <C>        <C>        <C>        <C>        <C>           <C>
Consolidated Balance Sheet data:
Brazilian corporate law                                  R$         R$         R$         R$        R$           US$
Current assets:
Cash and marketable securities...................     R$274.9    R$345.7    R$856.6    R$862.2    R$656.0    U.S.$282.7
Trade accounts receivable........................        72.7       78.6      119.0      139.2      149.2          64.3
Inventories......................................        69.5       63.6       79.1       86.5       94.5          40.7
Other............................................        36.3       44.5       58.2      102.9      145.5          62.7
                                                      -------    -------    -------    -------    -------    ----------
     Total current assets........................       453.4      532.4    1,112.9    1,190.8    1,045.2         450.4

Long-term assets:
Related parties..................................         6.8        4.9        1.5        1.5        1.7           0.7
Other credits....................................        13.4       22.2       32.5       34.3       40.3          17.4
                                                      -------    -------    -------    -------    -------    ----------
     Total long-term assets......................        20.2       27.1       34.0       35.8       42.0          18.1
Permanent assets:
Investments                                             103.4       85.1       78.2       87.8       88.8          38.3
Property, plant and equipment                           709.7      722.8      665.7      655.9      707.9         305.1
Deferred charges                                         19.1       27.5       31.8       44.2       68.1          29.3
                                                      -------    -------    -------    -------    -------    ----------
     Total permanent assets......................       832.2      835.4      775.7      787.9      864.8         372.7
                                                      -------    -------    -------    -------    -------    ----------
     Total Assets................................     1,305.8    1,394.9    1,922.6    2,014.5    1,952.0         841.2

Current liabilities:
Suppliers........................................        39.9       39.7       73.0       86.8       88.4          38.1
Financings.......................................       103.8      155.1      190.1      134.1      124.5          53.6
Salaries and payroll taxes.......................        28.1       31.4       38.2       44.7       50.2          21.6
Other............................................        49.9       47.6       55.0       56.0       60.8          26.2
                                                      -------    -------    -------    -------    -------    ----------
     Total current liabilities...................       221.7      273.8      356.3      321.6      323.9         139.5
Long-term liabilities:
Financings.......................................       256.8      244.2      279.1      291.8      290.2         125.1
Related parties..................................         9.9       13.4       12.8       11.6       11.0           4.7
Other............................................        29.7       37.5       60.4       80.6       87.2          37.6
                                                      -------    -------    -------    -------    -------    ----------
     Total long-term liabilities.................       296.4      295.1      352.3      384.0      388.4         167.4
Minority interest................................       342.3      351.9      394.4      411.2      439.8         189.5

Shareholders' equity:
Restated, realized capital.......................        90.3      101.0      433.9      433.9      433.9         187.0
Revaluation reserve..............................       105.7       91.2       53.5       29.1       25.9          11.2
Reserves and retained earnings...................       249.4      281.9      332.2      434.7      340.1         146.6
                                                      -------    -------    -------    -------    -------    ----------
     Total shareholders' equity..................       445.4      474.1      819.6      897.7      799.9         344.8
                                                      -------    -------    -------    -------    -------    ----------

Total liabilities and shareholders' equity.......     1,305.8    1,394.9    1,922.6    2,014.5    1,952.0         841.2

U.S. GAAP:
Total Assets.....................................     1,251.9    1,274.3    1,838.0    1,967.6    1,892.0         815.5
Shareholders' equity.............................       347.4      388.2      760.1      854.6      748.5         322.6
</TABLE>

---------
(1)  The real amounts for 2001 have been converted using the exchange rate of
     U.S.$1.00 = R$2.3204, the commercial selling rate as reported by the
     Central Bank on December 31, 2001. You should not construe currency
     conversions contained in this annual report as representations that the
     real amounts actually represent such dollar amounts. Additionally, you
     should not construe these conversions as representations that these real
     amounts have been, could have been or could be converted into dollars at
     these or any other rates of exchange.

   Exchange Rates

     There are two principal foreign exchange markets in Brazil:

     o    the commercial rate exchange market, and

     o    the floating rate exchange market


                                       6
<PAGE>


     Most trade and financial foreign exchange transactions are carried out on
the commercial rate exchange market. These transactions include the purchase or
sale of shares or the payment of dividends or interest with respect to shares.
Foreign currencies may only be purchased through a Brazilian bank authorized to
operate in these markets. In both markets, rates are freely negotiated but may
be strongly influenced by Central Bank intervention. On January 25, 1999, the
Brazilian government announced the unification of the exchange positions of the
Brazilian banks in the floating rate exchange market and commercial rate
exchange market, which led to a convergence in the pricing and liquidity of
both markets. Since February 1, 1999 the floating market rate has been the same
as the commercial market rate. However, there is no guarantee that the rates
will continue to be the same in the future.

     From its introduction on July 1, 1994 through March 1995, the real
appreciated against the U.S. dollar. In 1995, the Central Bank announced that
it would intervene in the market and buy or sell U.S. dollars, establishing a
band in which the exchange rate between the real and the U.S. dollar could
fluctuate. This policy resulted in a gradual devaluation of the real relative
to the U.S. dollar. On January 13, 1999, the band was set between R$1.20 and
R$1.32 per U.S.$1.00. Two days later, on January 15, 1999, due to market
pressures, the Central Bank abolished the band system and allowed the real/U.S.
dollar exchange rate to float freely. As a result, the exchange rate dropped to
R$2.1647 per U.S.$1.00 on March 3, 1999. Since then, the exchange rate has been
established by the interbank market, and has fluctuated considerably. In the
past, the Central Bank has intervened occasionally to control unstable
movements in the foreign exchange rate. It is not possible to predict whether
the Central Bank will continue to let the real float freely or whether the real
will remain at its present level. Accordingly, it is not possible to predict
what impact the Brazilian government's exchange rate policies may have on us.
The Brazilian government could impose a band system in the future or the real
could devalue or appreciate substantially. See - "Risk Factors -- Risks
Relating to Brazil."

     The following table sets forth information on prevailing commercial
selling rates for the periods indicated.

<TABLE>
                                                       Exchange rates of nominal reais per U.S.$1.00
                                                   --------------------------------------------------------
Year ended                                         High             Low           Average        Period-End
---------------------------------------------      -----           -----          -------        ----------
<S>                                                <C>             <C>            <C>              <C>
December 31, 1997...........................       1.116           1.033          1.088(1)         1.116
December 31, 1998...........................       1.209           1.111          1.168(1)         1.209
December 31, 1999...........................       2.165           1.208          1.851(1)         1.789
December 31, 2000...........................       1.985           1.723          1.835(1)         1.955
December 31, 2001 ..........................       2.801           1.936          2.353(1)         2.320
Month ended
---------------------------------------------
November 30, 2001 ..........................       2.682           2.460          2.571(2)         2.529
December 31, 2001 ..........................       2.467           2.293          2.380(2)         2.320
January 31, 2002............................       2.438           2.293          2.366(2)         2.418
February 28, 2002...........................       2.469           2.348          2.409(2)         2.438
March 31, 2002..............................       2.366           2.324          2.345(2)         2.324
April 30, 2002..............................       2.369           2.271          2.320(2)         2.363
</TABLE>

(1)  Average of the rates on the last day of each month in the period.
(2)  Average of the high and low exchange rates for each month.
Source: Central Bank

B.   Capitalization and Indebtedness

     Not applicable.

C.   Reasons for the Offer and Use of Proceeds

     Not applicable.


                                       7
<PAGE>


D.   Risk Factors

     Risks Relating to Ultrapar and the Liquefied Petroleum Gas Distribution
Industry

  Ultragaz, our Liquefied Petroleum Gas distribution subsidiary, currently
depends entirely upon Petrobras for its supply of Liquefied Petroleum Gas, or
LPG.

     Historically, Petrobras has enjoyed a constitutional monopoly in the
production and importation of petroleum products in Brazil. Although the
Brazilian government removed Petrobras' monopoly from the Federal Constitution
in November 1995, Petrobras effectively still remains the sole provider of LPG
in Brazil. See "Item 4. Information on the Company -- Business Overview --
Distribution of Liquefied Petroleum Gas -- Industry and Regulatory Overview."
This may change in the future as LPG prices charged by Petrobras in the
domestic market are currently at about the same levels as prices charged in the
international market, thus making imports more competitive. At present,
however, any interruption in the supply of LPG from Petrobras immediately
affects Ultragaz's ability to provide LPG to its customers.

  Government deregulation of LPG prices will cause the refinery prices to
fluctuate according to the international markets and may affect our revenues
and operating margin.

     The Brazilian government has historically regulated both the refinery
price of LPG, which is the price we pay Petrobras and is thus a component of
our cost of goods sold, and the retail price of LPG, which is the price we
charge customers and is thus a component of our gross sales revenue. In the
1990's, the Brazilian government began to deregulate both prices and, by May
2001, the retail store prices in Brazil were no longer regulated. Since January
2002, the LPG refinery price has been set by Petrobras, and is adjusted to the
average international price (following the Mont Belvieu reference), plus
approximately U.S.$ 50 per ton to pass through handling expenses.

     In this new deregulated environment, the refinery price fluctuates
according to the international markets, while the retail store price depends on
a number of factors, including the level of competition, brand recognition and
the relative prices of the energy sources that compete with LPG. If we are not
able to pass on increases in the refinery price to our customers by increasing
the retail store prices, our operating margins may be adversely affected.

  LPG competes with alternative sources of energy.

     LPG competes with natural gas, wood, diesel, fuel oil and electric energy.
Natural gas is currently less expensive than LPG for industrial consumers who
purchase large volumes, but it is substantially more expensive in the
residential segment, since its supply requires significant investments in
pipelines. In 2001, the overall Brazilian LPG market decreased by 0.5% in part
due to an increase in use of natural gas derived from the Brazil-Bolivia
pipeline. If an alternative source of energy replaces LPG in the future, our
business will suffer. See "Item 4. Information On the Company -- Business
Overview -- Distribution of Liquefied Petroleum Gas -- Competition."

Risks Relating to Ultrapar and the Petrochemical and Chemical Industries

  Ethylene, the principal raw material used in our petrochemical operations,
comes from limited supply sources.

     Oxiteno purchases its principal raw material, ethylene, from two of
Brazil's three naphtha crackers, which are the sole sources of ethylene in
Brazil. Copene-Petroquimica do Nordeste S.A., known as Copene, supplies all of
our ethylene requirements at our plant located at Camacari, and Petroquimica
Uniao S.A., known as PQU, supplies all of our ethylene requirements at our
plant located at Maua. Because of ethylene's characteristics, it is difficult
and expensive to store and transport, and cannot be easily imported into
Brazil. Thus, like other second generation petrochemical companies, we are
entirely dependent on ethylene produced at Copene and PQU for our supply of
ethylene at our plants located near those crackers and our ability to operate
those plants.

     Oxiteno does not maintain any significant storage of ethylene, and
unexpected interruptions in supply from Copene and PQU have an immediate impact
on our production and results of operations. We have a long-term contract with
Copene, which expires in 2012, setting forth the volume of ethylene that Copene
will supply and the amount that we will purchase. Unlike Copene, PQU usually
does not enter into long-term supply contracts with its


                                       8
<PAGE>


customers. If we further expand our production capacity, there is no assurance
that we will be able to obtain additional ethylene requirements from Copene and
PQU.

     In addition, due to Petrobras' historical monopoly over the production and
importation of oil and oil related products, Copene and PQU purchase most of
their naphtha from Petrobras and, as a result, their ability to supply ethylene
to second generation petrochemical companies, including Oxiteno, is largely
dependent on Petrobras. Although Copene has begun to import naphtha from
alternative sources, currently, Petrobras is still the principal supplier of
naphtha to crackers, and any interruption in the supply of naphtha from
Petrobras to Copene and PQU could adversely impact Copene's and PQU's ability
to supply ethylene to Oxiteno.

  The Brazilian petrochemical industry may become more cyclical.

     Decreasing Brazilian tariff rates on petrochemical products, increased
demand for such products in Brazil, and the ongoing integration of regional and
world markets for commodities, among other factors, have contributed to the
increasing integration of the Brazilian petrochemical industry into the
international petrochemical marketplace. The international petrochemical market
is cyclical in nature, with alternating periods of tight supply, increased
prices and high margins, and of over-capacity, declining prices and low
margins. Accordingly, prices of certain of our products in Brazil are becoming
more closely related to price trends in the global market. As a consequence,
events affecting the economics of the world petrochemical industry could have a
material adverse effect on our business, financial condition and results of
operations.

     One of the key determinants of the prices for certain of our products is
the price that importers must pay when importing these products. Prices paid by
importers are based, in part, on transportation costs and tariff rates.
Consequently, tariff rates imposed by the Brazilian government affect the
prices we can charge for our products. Because the Brazilian government has
historically used import and export tariffs to effect economic policies,
tariffs, particularly those imposed on petrochemical products, have varied
appreciably. The import tariffs on the main categories of products that we
produce are between 13% and 16%. Decreases in Brazilian import tariff rates for
petrochemical products would reduce our competitive price advantage over
imported petrochemical products.

     Approximately 11%, 12% and 10% of Oxiteno's revenues from petrochemical
products were attributable to sales in Argentina in 2001, 2000 and 1999,
respectively. The continuation of the Argentine recession could adversely
affect our business, financial condition and results of operations to the
extent our customers in Argentina purchase fewer of our petrochemical products.
In the first quarter of 2002, 4% of Oxiteno's revenues from petrochemical
products were attributable to sales in Argentina.

   The price of ethylene is subject to fluctuations in international oil
prices.

     The price of ethylene, which is the principal component of our cost of
goods sold in the petrochemicals business, is directly linked to the price of
naphtha which, in turn, is primarily linked to the price of crude oil.
Consequently, ethylene prices are subject to fluctuations in international oil
prices. A significant increase in the price of crude oil and, consequently,
naphtha and ethylene, could have a material adverse effect on our results of
operations.

  Our insurance coverage may be insufficient to cover losses that we might
incur.

     The operation of any chemical manufacturing plant and the distribution of
petrochemicals involve substantial risks of property contamination and personal
injury and may result in material costs and liabilities. We maintain insurance
policies that cover material damages caused by leakages of toxic substances and
other events that we are able to eliminate within 72 hours. The occurrence of
losses or other liabilities that are not covered by insurance or that exceed
our insurance limits could result in significant unexpected additional costs.

  We may be adversely affected by the imposition and enforcement of more
stringent environmental laws and regulations.

     We are subject to stringent environmental laws and regulations in Brazil.
Changes in these laws and regulations, or changes in the enforcement policy of
existing laws and regulations, could adversely affect us. In addition, it is
possible that new laws or additional regulations will come into force, or that
the relevant enforcement agencies will


                                       9
<PAGE>


seek a more stringent interpretation of existing laws and regulations that
would require us to spend additional funds on environmental matters in order to
continue to keep our plants and operations in compliance.

  The production of petrochemicals and chemicals is inherently hazardous.

     The complex manufacturing operations we perform at our plants involve a
variety of safety and other operating risks, including the handling, production
and transportation of highly flammable, explosive and toxic materials.
Equipment breakdowns, natural disasters, and delays in obtaining imports or
required replacement parts or equipment can also affect our manufacturing
operations. We cannot completely eliminate the risks inherent in the
petrochemical and chemical manufacturing process.

Risks Relating to Ultrapar Generally

  If Tequimar is unable to renew its expired lease of the land underlying its
Aratu plant, there could be a significant decline in Tequimar's revenues and a
resulting impact on us.

     Tequimar's Aratu plant is situated on land which it leases from the port
authority of the state of Bahia, Cia. Docas do Estado da Bahia, known as
CODEBA. The lease expired in 1998 and has yet to be renewed as of the date of
this annual report due to CODEBA's position that the lease should be subject to
a public auction. Tequimar is currently disputing the CODEBA decision to seek
public bids for the lease. If CODEBA proceeds with the public auction, Tequimar
could lose its lease. In the event Tequimar is required by CODEBA to vacate the
Aratu site, it will be forced to abandon its facilities located there but will
be indemnified by CODEBA with respect to such facilities' value. Tequimar's
operations at the Aratu facility contributed R$29 million in net sales and R$14
million in EBITDA to Ultrapar in 2001.

  We are currently controlled by our senior management, which substantially
limits the ability of non-management shareholders to control the direction of
our business.

     Our senior management indirectly controls approximately 69% of our voting
share capital through their control of Ultra S.A. This level of control enables
the management to elect the majority of our directors and to determine the
outcome of all actions requiring shareholder approval. See "Item 7. Major
Shareholders and Related Party Transactions -- Major Shareholders --
Shareholders' Agreement of Ultra S.A.."

  Our status as a holding company may limit our ability to pay dividends on
the preferred shares.

     As a holding company, we have no significant operating assets other than
our ownership of shares of our subsidiaries. Substantially all of our operating
income comes from our subsidiaries, which are also holding companies.
Consequently, our ability to pay you dividends depends solely upon our receipt
of dividends and other cash flows from our subsidiaries.

Risks Relating to the Preferred Shares and the American depositary shares, or
ADSs

  The ADSs generally do not give you voting rights.

     The ADSs represent our preferred shares. Under Brazilian law and our
by-laws, holders of preferred shares generally do not have the right to vote at
shareholder meetings. This means, among other things, that you are not entitled
to vote on important corporate transactions including mergers or consolidations
with other companies.

  The preferred shares and ADSs do not entitle you to a fixed or minimum
dividend.

     Under Brazilian corporate law and our by-laws, unless our board of
directors decides otherwise, we must pay our shareholders a mandatory
distribution equal to at least 50% of our net income as adjusted for this
purpose. Therefore, whether or not you receive a dividend depends on the amount
of the mandatory distribution, if any, and whether the board of directors
exercises its discretion to suspend these payments. See "Item 8. Financial
Information -- Consolidated Statements and Other Financial Information --
Distribution Policy and Dividends" for a more detailed discussion on mandatory
distributions.


                                      10
<PAGE>


  You might be unable to exercise preemptive rights with respect to the
preferred shares.

     In the event of a capital increase which would maintain or increase the
proportion of capital represented by preferred shares, preferred shareholders
would have preemptive rights to subscribe to newly issued preferred shares. In
the event of a capital increase which would maintain or reduce the proportion
of capital represented by preferred shares, preferred shareholders would have
preemptive rights to subscribe for preferred shares in proportion to their
shareholdings and for common shares only to the extent necessary to prevent
dilution of their interest in the company.

     ADS holders may not be able to exercise preemptive rights relating to the
preferred shares underlying the ADSs unless a registration statement under the
United States Securities Act of 1933, or the Securities Act, as amended, is
effective with respect to those rights or an exemption from the registration
requirements of the Securities Act is available. We are not obligated to file a
registration statement with respect to the shares relating to these preemptive
rights, and therefore, we cannot assure you that any such registration
statement will be filed. Unless we file a registration statement or an
exemption from registration applies, you may receive only the net proceeds from
the sale of your preemptive rights by the depositary or, if the preemptive
rights cannot be sold, they will be allowed to lapse.

  If you exchange the ADSs for preferred shares, you risk losing certain
foreign currency remittance and Brazilian tax advantages.

     The ADSs benefit from the depositary's certificate of foreign capital
registration, which permits the depositary to convert dividends and other
distributions with respect to the preferred shares into foreign currency and
remit the proceeds abroad. If you exchange your ADSs for preferred shares, you
will be entitled to rely on the depositary's certificate of foreign capital
registration for five business days from the date of exchange. Thereafter, you
will not be able to remit abroad non-Brazilian currency unless you obtain your
own certificate of foreign capital registration or you qualify under Resolution
2,689 of the Central Bank dated January 26, 2000, known as Resolution 2,689,
which entitles certain investors to buy and sell shares on Brazilian stock
exchanges without obtaining separate certificates of registration. If you do
not qualify under Resolution 2,689, you will generally be subject to less
favorable tax treatment on distributions with respect to the preferred shares.
We cannot assure you that the depositary's certificate of registration or any
certificate of foreign capital registration obtained by you may not be affected
by future legislative or regulatory changes, or that additional Brazilian law
restrictions applicable to your investment in the ADSs may not be imposed in
the future. For a more complete description of Brazilian tax regulations, see
"Item 10. Additional Information -- Taxation -- Brazil."

  The relative volatility and illiquidity of the Brazilian securities markets
may adversely affect you.

     Investing in securities, such as the preferred shares or ADSs, of issuers
from emerging market countries, including Brazil, involves a higher degree of
risk than investing in securities of issuers from more developed countries. For
the reasons above, investments involving risks relating to Brazil, such as
investments in ADSs, are generally considered speculative in nature and are
subject to certain economic and political risks, including but not limited to:

     o    changes to the regulatory, tax, economic and political environment
          that may affect the ability of investors to receive payment, in whole
          or in part, in respect of their investments; and

     o    restrictions on foreign investment and on repatriation of capital
          invested.

     The Brazilian securities market is substantially smaller, less liquid,
more concentrated and more volatile than major securities markets in the United
States. This may substantially limit your ability to sell the preferred shares
underlying your ADSs at a price and time at which you wish to do so. The Sao
Paulo Stock Exchange, known as Bovespa, the only Brazilian stock exchange, had
a market capitalization of approximately U.S.$185 billion as of December 31,
2001 and an average monthly trading volume of approximately U.S.$5.4 billion
for 2001. In comparison, the NYSE had a market capitalization of U.S.$16
trillion as of December 31, 2001 and an average monthly trading volume of
approximately U.S.$874 billion for 2001.


                                      11
<PAGE>


     There is also significantly greater concentration in the Brazilian
securities market. The ten largest companies in terms of market capitalization
represented approximately 48.6% of the aggregate market capitalization of the
Bovespa as of December 31, 2001. The top ten stocks in terms of trading volume
accounted for approximately 53.8% of all shares traded on the Bovespa in 2001.

   Our Share Price May Be Affected By Shares Eligible for Future Sale.

     We currently have 15,015,987,500 preferred shares and 37,984,012,500
common shares outstanding. Substantially all of the preferred shares and ADSs
representing preferred shares are held by the public. Substantially all of the
common shares are held by two stockholders. Mrs. Daisy Igel, the daughter of
Ultrapar's founder, holds 9,801,825,000 common shares, and Ultra S/A, a company
controlled by Ultrapar's management, holds 26,390,251,250 common shares. There
are no agreements among stockholders that would prevent any holder of common
shares from selling those shares. Any sale of a large block of common shares
could negatively affect the market value of the preferred shares and ADSs, even
though the common shares are not convertible into preferred shares without the
consent of a majority of our common stockholders.

  If we were treated as a Passive Foreign Investment Company, U.S. Holders
of ADSs would be subject to disadvantageous rules under the U.S. tax laws.

     Please see "Item 10. Additional Information -- Taxation -- United States"
for a description of the passive foreign investment company, or PFIC, rules. If
we are characterized as a PFIC in any year, U.S. holders of ADSs could be
subject to unfavorable U.S. federal income tax treatment. Although we do not
believe that we were a PFIC in 2001, there can be no assurance that our
business and activities will not lead to PFIC status for us in the future. PFIC
classification is a factual determination made annually and thus may be subject
to change.

Risks Relating to Brazil

  The Brazilian government has exercised, and continues to exercise,
significant influence over the Brazilian economy. Brazilian political and
economic conditions have a direct impact on our business and the market price
of the preferred shares.

     The Brazilian government frequently intervenes in the Brazilian economy
and occasionally makes drastic changes in policy. The government's actions to
control inflation and effect other policies have often involved wage and price
controls, currency devaluations, capital controls, and limits on imports, among
other things. Our business, financial condition and results of operations may
be adversely affected by changes in policy involving tariffs, exchange controls
and other matters, as well as factors such as:

     o    currency fluctuations;

     o    inflation;

     o    price instability;

     o    interest rates;

     o    tax policy; and

     o    other political, social and economic developments in or affecting
          Brazil.

     Our business could be significantly affected by political instability in
Brazil. The next presidential elections are to occur in October 2002 and
Brazilian law does not allow President Fernando Henrique Cardoso, now serving a
second term, to serve a third term. Changes in the composition of the
government coalition, in the identity of ruling local parties, in the cabinet
or in the presidency may potentially undermine investor confidence or produce
policy changes that may adversely affect our operations and/or the price of our
preferred shares and ADSs.


                                      12
<PAGE>


  Inflation, and certain governmental measures to combat inflation, may
contribute significantly to economic uncertainty in Brazil and to heightened
volatility in the Brazilian securities markets.

     Brazil has historically experienced extremely high rates of inflation.
Since the introduction of the real in July 1994 under the Real Plan, Brazil's
inflation rate has been substantially lower than in previous periods.
Inflation, as measured by the Indice Geral de Precos -- Mercado, the general
market price index in Brazil, or IGP-M, fell to 1.8% in 1998 before increasing
to 20.1% in 1999 as a result of the devaluation of the real beginning in
January 1999, and decreasing again to 10.4% in 2001. There can be no assurance
that the recent lower levels of inflation will continue. Future governmental
actions, including actions to adjust the value of the real, may trigger
increases in inflation. Our cash operating expenses are substantially all in
reais and tend to increase with Brazilian inflation because our suppliers and
providers generally increase prices to reflect the depreciation of the value of
the currency. As expressed in U.S. dollars, however, these increases are
typically offset at least in part by the effect of the appreciation of the U.S.
dollar against the real. If the rate of Brazilian inflation increases more
rapidly than the rate of appreciation of the U.S. dollar, then, as expressed in
U.S. dollars, our operating expenses may increase and (assuming constant U.S.
dollar sales prices) our profit margins decrease.

  Fluctuations in the value of the Brazilian currency against the value of the
U.S. dollar may result in uncertainty in the Brazilian economy and the
Brazilian securities market, which may adversely affect our financial condition
and results of operations and, consequently, the market value of the preferred
shares and ADSs.

     The Brazilian currency has historically suffered frequent devaluations. In
the past, the Brazilian government has implemented various economic plans and
utilized a number of exchange rate policies, including sudden devaluations,
periodic mini-devaluations during which the frequency of adjustments has ranged
from daily to monthly, floating exchange rate systems, exchange controls and
dual exchange rate markets. Although over long periods devaluations of the
Brazilian currency generally have correlated with the rate of inflation in
Brazil, devaluations over shorter periods have resulted in significant
fluctuations in the exchange rate between the Brazilian currency and the U.S.
dollar and other currencies.

     In 1999, the real depreciated 48% against the U.S. dollar, and in 2000 it
depreciated 9%. During 2001, the real experienced a period of significant
depreciation, in part due to the economic uncertainties in Argentina, the
global economic slowdown and the energy crisis in Brazil. The real depreciated
18.7% against the U.S. dollar during 2001. There are no guarantees that the
exchange rate between the real and the U.S. dollar will stabilize at a current
levels or that the real will appreciate against the U.S. dollar.

     Devaluation of the real and continued currency instability could affect
our ability to meet our foreign currency obligations in the future and result
in a monetary loss relating to this indebtedness. See "Item 5. Operating and
Financial Review and Prospects -- Trend Information" for information about our
hedging policy. In addition, fluctuations in the value of the real relative to
the U.S. dollar can affect the market value of the ADSs. Devaluation may reduce
the U.S. dollar value of distributions and dividends on the ADSs and may also
reduce the market value of the preferred shares and the ADSs.

  Restrictions on the movement of capital out of Brazil may hinder your
ability to receive dividends and distributions on, and the proceeds of any sale
of, the preferred shares.

     From time to time the Brazilian government may impose restrictions on
capital outflow that would hinder or prevent the custodian who acts on behalf
of the depositary for the ADSs from converting proceeds from the preferred
shares underlying the ADSs into U.S. dollars and remitting those proceeds
abroad. Brazilian law permits the government to impose these restrictions
whenever there is a serious imbalance in Brazil's balance of payments or
reasons to foresee a serious imbalance.

     The Brazilian government imposed remittance restrictions for approximately
six months in 1989 and early 1990. If enacted, similar restrictions would
hinder or prevent the conversion of dividends, distributions or the proceeds
from any sale of preferred shares from reais into U.S. dollars and the
remittance of the U.S. dollars abroad. In such a case, the custodian, acting on
behalf of the depositary, will hold the reais it cannot convert for the account


                                      13
<PAGE>


of the holders of ADSs who have not been paid. The depositary will not invest
the reais and will not be liable for interest on those amounts. Furthermore,
any reais so held will be subject to devaluation risk.

  Developments in other emerging markets, including Argentina, may adversely
affect the market price of the preferred shares and ADSs.

     Economic and market conditions in other emerging market countries,
especially those in Latin America, influence the market for securities issued
by Brazilian companies and investors' perception of economic conditions in
Brazil. After prolonged periods of recession, followed by political
instability, Argentina in 2001 announced it would not service its public debt.
In order to address the worsening economic and social crisis, the Argentine
government abandoned its decade-old fixed dollar-peso exchange rate, allowing
the currency to float. The Argentine peso experienced a 114.3% devaluation
against the U.S. dollar from January 11 to March 31, 2002.

     The Argentine crisis may also affect the perception of risk in Brazil by
foreign investors. Although the expectation of many that a similar problem
would follow in Brazil has not materialized, the volatility in market prices
for Brazilian securities increased in early 2001. Nonetheless, if events in
Argentina continue to deteriorate, they may adversely affect our ability to
borrow funds at an acceptable interest rate or to raise equity capital when and
if there should be a need. Accordingly, adverse developments in Argentina or in
other emerging market countries could lead to a reduction in the demand for,
and market price of, the preferred shares and the ADSs. In addition, the
continuation of the Argentine recession and the recent devaluation of the
Argentine peso could adversely affect the Brazilian economy, as Argentina is
one of Brazil's principal trading partners, accounting for 8.6% of Brazil's
exports in 2001.

ITEM 4. INFORMATION ON THE COMPANY

A.   History and Development of the Company

     Ultrapar Participacoes S.A. was incorporated on December 20, 1953. We
trace our origins to 1937, when Ernesto Igel established Companhia Ultragaz
S.A., known as Companhia Ultragaz, and introduced LPG for home cooking in
Brazil. We also pioneered the development of the petrochemical industry in
Brazil, which led to the founding of Oxiteno in 1970 at the newly established
Maua petrochemical complex in Sao Paulo. Ultrapar is controlled by its current
senior management through Ultra S.A.

     On October 6, 1999, we concluded the public offering of 12,500,000,000
preferred shares in the primary portion of our initial public offering, or IPO.
On the same date, some of our shareholders concluded the public offering of an
additional 2,441,301,000 preferred shares in the secondary portion of our IPO.
Of the total number of shares offered, approximately 20% were placed in Brazil
and 80% were placed internationally, with the internationally offered shares
being traded in the form of ADSs on the New York Stock Exchange. The total
proceeds to us from the IPO amounted to approximately R$330.6 million.

     Our principal executive office is located at Avenida Brigadeiro Luiz
Antonio, 1343, 9(0) andar, 01317-910, Sao Paulo, SP, Brazil. Our telephone
number is 55-11-3177-6513. Our internet website address is
http://www.ultra.com.br.

     Our agent for service of process in the United States is C.T. Corporation
System, located at 1633 Broadway, New York, New York 10019.

  Recent Developments

     On October 22, 2001, our board of directors approved a repurchase program
for a maximum amount of 1,494,130,100 of our preferred shares, without
reduction of capital stock, for cancellation or to be held in treasury for
future sale. This share repurchase program was extended for ninety days on
January 18, 2002. On April 18, 2002, the program was extended again for an
additional ninety days. As of the date of this annual report we have not yet
repurchased shares under this program.

     In March 2002, Oxiteno made a tender offer for the acquisition of the
shares of its subsidiary Oxiteno Nordeste S.A. Industria e Comercio, known as
Oxiteno Nordeste. The tender offer was completed on April 16, 2002, through


                                      14
<PAGE>


the acquisition of 93,871 shares of Oxiteno Nordeste by Oxiteno, representing
approximately 73.3% of the shares held by minority shareholders. Oxiteno
increased its share ownership from 97% to 98.9% for approximately R$4.4
million.

  Capital Expenditures

     The following table shows our capital expenditures for the periods
indicated.

                                              Year Ended December 31,
                                        ---------------------------------
Company                                    2001         2000       1999
--------------------------------------- ---------   ---------   ---------
                                             (in millions of reais)
Ultragaz............................... R$  148.2   R$  120.4   R$   62.3
Oxiteno................................      42.9        49.9        21.0
Ultracargo.............................      11.9        11.6        10.4
Others.................................       0.1         0.5         0.8
                                        ---------   ---------   ---------
Total.................................. R$  203.1   R$  182.4   R$   94.5
                                        =========   =========   =========

     Oxiteno's capital expenditures in 2001 were mainly due to an expansion of
the production capacity for purified ethylene oxide and ethanolamines and to
modernize its industrial plants.

     Ultragaz's capital expenditures in 2001 were related to expansion in the
non-residential segment, and also to the construction of new filling plants and
the acquisition of new cylinders.

B.   Business Overview

     As a major Brazilian industrial group, we play an important role in the
LPG distribution sector and in the production of petrochemicals and chemicals.
We are also engaged in the storage and transportation of LPG and chemical and
petrochemical products.

Distribution of Liquefied Petroleum Gas

     We conduct LPG distribution through Ultragaz. Founded in 1937, Ultragaz
was the first LPG distributor in Brazil and has continuously been one of the
leading companies in the Brazilian LPG market.

     Ultragaz operates in the residential and non-residential markets in
several of the most populous states of Brazil, including Sao Paulo, Rio de
Janeiro and Bahia. Ultragaz sells LPG to residential customers through its own
retail stores as well as independent retail stores, and also through its own
fleet of trucks, with door-to-door sales. To the non-residential market, it
sells LPG through its own fleet of trucks and through independent dealers.

     In 2001, Ultragaz sold 1.35 million tons of LPG, representing a 19.3%
share of the Brazilian LPG market, and a share of approximately 36% of the LPG
market in the state of Sao Paulo. Sao Paulo has the largest state economy in
Brazil, representing approximately 35% of Brazil's GDP, and a population of
approximately 37 million. Ultragaz estimates that its LPG is sold to
approximately 6.7 million households and 15 thousand commercial and industrial
clients in Brazil.

  Industry and Regulatory Overview

     LPG is a fuel derived as a by-product from the oil and natural gas
refining process and is used in Brazil in the residential sector and the
non-residential sector, which includes the commercial sector and industrial
sectors. LPG has the following primary uses in Brazil:

     o    residential sector: primarily cooking and, increasingly, water
          heating;

     o    commercial sector: cooking and water heating in shopping malls,
          hotels, condominiums, restaurants, laundries and hospitals; and


                                      15
<PAGE>


     o    industrial sector: heating applications, such as heating kilns in the
          ceramics industry and welding in the metallurgical industry.

  LPG Distribution System

     The diagram below outlines the LPG distribution process.

                               [GRAPHIC OMITTED]






                                      16
<PAGE>


     In 2000, which is the most recent year for which official statistics are
available, LPG represented approximately 3.2% of all energy used in Brazil. In
2001, 71% of the LPG consumed in Brazil was used for domestic purposes,
primarily for cooking, with the remaining 29% used for commercial and
industrial purposes. The use of LPG for domestic heating in Brazil is
insubstantial compared with such use in other industrialized and emerging
countries, primarily because of Brazil's generally warm climate. Because LPG is
not used to a significant extent for domestic heating in Brazil, overall
consumption of LPG per capita is lower in Brazil compared to countries where
domestic heating is a major element of LPG demand. There is also substantially
less seasonality in Brazilian demand.

     Prior to 1990, extensive governmental regulation of the LPG industry
essentially limited the use of LPG to domestic cooking. Since 1990, regulations
allow the use of LPG for certain commercial and industrial uses. As a result,
the industrial use of LPG has been increasing significantly. In the industrial
sector, LPG competes with wood, natural gas, fuel oil and electrical energy.

     The primary international suppliers of LPG are major oil companies and
independent producers of both natural gas liquids and oil. However, due to
Petrobras' monopoly over the production and importation of petroleum and
petroleum products until the end of 2001, Petrobras is currently the sole
supplier of LPG in Brazil. We anticipate that this scenario might change in the
future, due to the economic feasibility of importation of LPG.

     The LPG distribution industry in Brazil currently consists of
approximately eighteen LPG distribution companies or groups of companies; and
is regulated by the National Agency for Oil, or ANP, which reports to the
Ministry of Mines and Energy. The LPG distribution industry comprises the
purchase of LPG from Petrobras, filling LPG cylinders and bulk delivery trucks
at filling stations, selling LPG to end users, controlling product quality and
providing technical assistance to LPG consumers. See "-- Distribution and
Transportation."

     LPG produced by Petrobras, which represents approximately 65% of total
demand in Brazil, is transported in pipelines and by trucks from Petrobras'
production and storage facilities to filling stations maintained by LPG
distributors. The balance is imported by Petrobras into Brazil and stored in
large storage facilities maintained by Petrobras. The imported LPG is then
transported from the storage facilities by pipeline and truck to the LPG
distributors' filling stations.

     LPG can be delivered to end users either in cylinders or in bulk. The
cylinders are filled in the LPG distributors' filling stations and transported
to end users by truck either by the LPG distributors themselves or independent
dealers. Distribution to the residential sector is carried out through two
principal channels:

     o    home delivery of LPG cylinders; and

     o    the sale of LPG cylinders in retail stores and at filling stations.

     In both cases, the cylinders are either delivered by the LPG distributors
themselves or by independent dealers. Bulk delivery is the principal delivery
method in the industrial and commercial markets and is increasingly used in the
commercial market in place of delivery in cylinders. In the case of bulk
delivery, LPG is pumped directly into tanker trucks at filling stations,
transported to the customer's premises in the truck and pumped into a bulk
storage tank located at the customer's premises.

     As of December 2001, the four largest LPG distributors in Brazil were
AgipLiquigas S.A., known as AgipLiquigas, a subsidiary of AgipPetroli SpA, an
Italian conglomerate; Ultragaz; Nacional Gas Butano Ltda., known as Butano,
which is controlled by a Brazilian family; and Supergasbras S.A., known as
Supergasbras, which is jointly controlled by SHV Energy and the founding
Brazilian family.

     The Role of the Brazilian Government. In common with other portions of the
oil and gas industry in Brazil, the sale and distribution of LPG in Brazil was
historically regulated by the Brazilian government. The period from 1960 until
1990 was characterized by heavy governmental regulation of the LPG industry,
including price controls, regulation of the areas in which each LPG distributor
could operate, regulation of the services offered by LPG distributors and
governmental quotas for the LPG sold by LPG distributors, which effectively
restricted the growth of the larger LPG distributors. In 1990, the government
embarked upon a deregulation process with a view to establishing a largely
unregulated LPG market. This process included easing the requirements for the
entry into the


                                      17
<PAGE>


market of new LPG distribution companies, reducing certain administrative
burdens and removing restrictions regarding the areas in which LPG distributors
could conduct their business and their sales quota. There are no restrictions
on foreign ownership of LPG companies.

     Up to the end of 2001, the refinery price charged by Petrobras to the LPG
distributors was determined by the Brazilian government and was the same for
all LPG distributors in all regions of Brazil. Historically, refinery prices
have been subsidized by the Brazilian government and therefore have been lower
than the annual average international LPG price. In January 2002, the
government completed the LPG sector deregulation process, and abolished
subsidies to refinery prices. The CIDE, a new tax, replaced the PPE, and is
equally applied to both domestic and imported products. As a consequence, as of
January 2002, the Brazilian government no longer controls LPG prices. On March
31, 2002 the refinery price charged by Petrobras was approximately U.S.$212 per
ton and the international LPG price was approximately U.S.$192. Increased
competition from imports may result in a decrease of LPG domestic prices as was
the case with other oil related products that compete with international
products in a deregulated market.

     The Role of Petrobras. Petrobras, Brazil's national oil company, had a
legal monopoly in the exploration, production, refining, importing and
transporting of crude oil and oil products in Brazil and Brazil's continental
waters since its establishment in 1953. This monopoly was confirmed in Brazil's
Federal Constitution enacted in 1988. As a result of this monopoly, Petrobras
has historically been the sole supplier in Brazil of oil and oil-related
products, including naphtha and LPG.

     In November 1995, Petrobras' monopoly was removed from the Federal
Constitution by a constitutional amendment approved by the Brazilian National
Congress. According to this amendment, other state and private companies would
be able to compete with Petrobras in virtually all fields in which Petrobras
operated. This amendment was implemented through Law No. 9,478, dated August 6,
1997, which effectively allowed the continuance of Petrobras' monopoly for a
maximum period of three years. Law No. 9,478 prescribed that the termination of
Petrobras' monopoly would be accompanied by the deregulation of prices for oil,
gas and oil products, and created a new regulatory agency, the ANP, to oversee
oil-related activities. In January 2002, the creation and implementation of the
CIDE, a new tax applicable to both domestic and imported products, marked the
end of the government's subsidy of refinery prices. Consequently, the refinery
LPG prices increased by approximately 23%, equivalent to international
reference prices (following the Mont Belvieu reference) plus an average of
U.S.$50 per ton to pass through handling expenses.

     The Role of the ANP. The ANP is responsible for the control, supervision
and implementation of the government's oil and gas policies. The ANP regulates
all aspects of the production, distribution and sale of oil and oil products in
Brazil, product quality standards, and minimum storage capacities required to
be maintained by distributors.

     In order to operate in Brazil, an LPG distributor must be licensed with
the ANP and must comply with certain minimum operating requirements, including:

     o    maintaining sufficient storage capacity for LPG;

     o    maintaining an adequate number of LPG cylinders;

     o    using cylinders which are stamped with the distributor's own brand;

     o    having its own filling plants;

     o    conducting appropriate maintenance on its own LPG filling plants;

     o    having a minimum paid in capital of at least R$10 million;

     o    demonstrating financial wherewithal, either by owner's equity,
          insurance, or a bank guarantee; and


                                      18
<PAGE>


     o    complying with Sistema Unico de Cadastramento Unificado de
          Fornecedores, or SICAF, the Brazilian unified system of suppliers'
          records.

     LPG distributors are required to provide the ANP with monthly reports
showing their previous month's sales and the volume of LPG ordered from
Petrobras for the next four months. The ANP limits the volume of LPG which may
be ordered by each distributor based on the number of cylinders that the
distributor has, and also its infra-structure for the LPG distribution. Based
on the information provided by the LPG distributors, Petrobras supplies the
volume of LPG ordered, provided its production and imports of LPG are
sufficient to meet the demand.

     LPG distribution to the end consumer may be carried out directly by the
LPG distribution companies or by independent dealers contracted by them. Each
LPG distributor must provide the ANP with information regarding its independent
dealers on a monthly basis. The construction of LPG filling plants and storage
facilities is subject to the prior approval of the ANP, and filling plants and
storage facilities may only begin operations after ANP inspection.

     In addition to the ANP regulations, LPG distribution companies are subject
to all federal, state and local government regulation and supervision generally
applicable to companies engaged in business in Brazil, including labor laws,
social security laws, public health, consumer protection and environmental
laws, securities laws and antitrust laws.

     The Self-Regulatory Code. In August 1996, most of the Brazilian LPG
distributors, representing more than 90% of the market, cylinder manufacturers,
LPG transportation companies and certain LPG retail stores, under the
supervision of the Brazilian government, entered into a statement of intent
regarding the establishment of a program for "requalifying" LPG cylinders (a
process under which they undergo safety and quality checks) and other safety
procedures, known as the "Self-Regulatory Code" or Codigo de
Auto-Regulamentacao. See "--Swapping Centers and Requalification." Before the
Self-Regulatory Code came into effect, certain LPG distributors, not including
Ultragaz, would fill cylinders stamped with another distributor's brand. This
practice resulted in a low level of investment in new cylinders, giving rise to
concerns regarding the safety of older cylinders. The Self-Regulatory Code
provides, among other things, that:

     o    each LPG distributor may only fill and sell cylinders that are
          stamped with its own trademark;

     o    each LPG distributor is responsible for the quality and safety
          control of its cylinders; and

     o    each LPG distributor must maintain a sufficient number of cylinders
          to service its sales volume.

     Under the Ministry of Mines and Energy Normative Ruling No. 334 of
November 1, 1996, or Ruling 334, any party that defaults on its obligations
under the Self-Regulatory Code will be subject to the penalties provided by
law, ranging from payment of a fine and suspension of supply of LPG to such
party to suspension of such party's LPG distribution operations.

     Ruling 334 sets forth the following timetable for the implementation of
the measures adopted under the Self-Regulatory Code:

     o    the construction of at least 15 swapping centers, starting in
          November 1996 (See "--Swapping Centers and Requalification);

     o    the filling of third-party cylinders to have ceased by October 1997;

     o    68.8 million cylinders, manufactured before 1991, to have been
          requalified by November 1, 2006; and

     o    12.8 million cylinders, manufactured between 1992 and 1996, to have
          been requalified by November 1, 2011.

     Ultragaz itself is required to requalify 13.8 million cylinders by
November 2006 and an additional 1.3 million cylinders by November 2011. As of
December 31, 2001, Ultragaz had requalified 5.6 million cylinders.


                                      19
<PAGE>


     Environmental, Health and Safety Standards. LPG distributors are subject
to Brazilian federal, state and local laws and regulations relating to the
protection of the environment, public health and safety. Ultragaz is regulated
at the federal level primarily by the National Council of the Environment, or
Conselho Nacional do Meio Ambiente - CONAMA.

     Federal and state environmental laws and regulations require LPG
distributors to obtain operating permits from the state environmental agencies
and from the fire department. In addition, Ultragaz must satisfy regulatory
authorities that the operation, maintenance and reclaiming of facilities is in
compliance with regulations and not prejudicial to the environment. Civil,
administrative and criminal sanctions, including fines and the revocation of
licenses, may apply to violations of environmental regulations. Under
applicable law, Ultragaz is strictly liable for environmental damages. In
addition, regulations establish standard procedures for transporting,
delivering and storing LPG and for testing and requalification of LPG
cylinders.

     Ultragaz also is subject to federal, state and local laws and regulations
that prescribe occupational health and safety standards. In accordance with
such laws and regulations, Ultragaz is required to report on its occupational
health and safety records on a yearly basis to the local office of the Ministry
of Labor in each of the states in which it operates. In addition, Ultragaz is
subject to all federal, state and local governmental regulation and supervision
generally applicable to companies doing business in Brazil, including labor
laws, social security laws, public health and consumer protection laws. See
"--Environmental Matters."

   Ultragaz

     Our subsidiary, Ultragaz, is one of the largest LPG distributors in Brazil
with a 19.3% market share in December 2001, and is one of the leading companies
in LPG distribution to the residential, industrial and commercial sectors in
Brazil. Founded in 1937, Ultragaz was the first LPG distributor in Brazil.

     History. Since 1937, when Ultragaz' founder, Ernesto Igel, introduced LPG
for domestic cooking to the Brazilian population, gas stoves have replaced
traditional wood and, to a lesser extent, alcohol, kerosene and coal gas
stoves. When Ultragaz began operations, it had a fleet of three trucks and 166
customers. Today, Ultragaz sells its LPG to an estimated 6.7 million households
through its own fleet of trucks and approximately 2,700 independent dealers.

     Companhia Ultragaz is now one of Ultragaz Participacoes S.A.'s three
operating subsidiaries. In October 1967, Ultragaz, together with other LPG
distributors, founded Utingas Armazenadora S.A., an LPG storage company with
bases in the states of Sao Paulo and Parana. Ultragaz has a 56% controlling
interest in Utingas. See "-- Storage of LPG." In 1980, Ultragaz acquired a 90%
share in Bahiana Distribuidora de Gas Ltda., known as Bahiana, which
distributes LPG primarily to residential customers in the northeast region of
Brazil. In August 1999, Ultragaz acquired the remaining 10% of Bahiana.
Currently, we own 77% of the voting capital and total capital of Ultragaz.

     Distribution. As of December 2001, Ultragaz operated 16 filling plants
located in its principal operating areas, and currently expects to open a new
filling plant in 2002, in the state of Minas Gerais. Ultragaz's distribution in
the residential market includes sales through its own home delivery service,
its own retail stores and independent dealers that make home deliveries and
carry out other retail distribution. In this market, Ultragaz uses 13 kg
cylinders, under the ANP standards and painted blue, which is an important
element of the "Ultragaz" brand recognition.

     Ultragaz distributes LPG to the commercial markets both in large cylinders
and in bulk. Since 1994, Ultragaz has invested in its small bulk facilities,
including bob-tail trucks, which deliver LPG in bulk to commercial and
industrial customers that could not easily receive LPG from the more
traditional large bulk equipment. Ultragaz installs stationary tanks at its
customers' facilities, under long-term supply contracts which are generally for
a term of approximately two to five years. Ultragaz has a leadership position
in the non-residential distribution market.

     The residential LPG market in Brazil is a mature market and Ultragaz
expects that growth in demand in this market will be slow, in line with
increases in the number of LPG consuming households and in population. Ultragaz
believes that the non-residential market offers significant growth
opportunities, mainly due to the replacement of other energy sources by LPG for
a variety of applications. When compared to other energy sources, LPG is a
clean,


                                      20
<PAGE>


portable and economic energy source. Ultragaz's sales in this market increased
by an average annual rate of approximately 20% from 1996 to 2001.

     The following table shows the annual volume and the compounded average
growth rate (CAGR) of LPG sales in the Brazilian market and of Ultragaz's sales
for the periods indicated.

Local LPG Market            1997    1998    1999    2000    2001
(in million ton)          ----------------------------------------
Non-Residential              21%     24%     26%     28%     29%
Residential                  79%     76%     74%     72%     71%
Total                       6.33   6.56     6.82    6.96    6.88

CAGR 2.1%

Ultragaz                    1997    1998    1999    2000    2001
(in million ton)          ----------------------------------------
Non-Residential              24%     30%     34%     38%     39%
Residential                  76%     70%     66%     62%     61%
Total                       1.11    1.17    1.24    1.29    1.35

CAGR 4.9%

     Ultragaz believes that it has certain competitive advantages in the
current business environment. These advantages include: the concentration of
several of its markets in major population centers in Brazil which facilitate
economies of scale in the distribution logistics; strong brand name
recognition; strong management with detailed knowledge of the Brazilian
markets, based in part on Ultragaz's involvement at all levels in the
distribution of LPG to its customers; and a reputation for quality,
reliability, safety and efficiency.

  Markets and Marketing

     Markets. In 1937, when Ultragaz began its operations, it served only the
southeast region. Currently, Ultragaz is present in almost all of Brazil's
significant population centers.

     Ultragaz's operating margins in the residential sector vary from region to
region depending upon Ultragaz's market share in the region, the volume of LPG
sold through home distribution rather than through stores and the prices
negotiated with independent dealers. In 1995, Ultragaz began a program to
increase its non-residential sales through investment in its bulk delivery
capabilities. Ultragaz's customers in the commercial sector include shopping
malls, hotels, condominiums, restaurants, laundries and hospitals. Ultragaz's
industrial customers principally comprise companies in the glass, metallurgic,
automobile and food sectors.

     The non-residential market represented approximately 39% of Ultragaz's net
sales and a greater percentage of its operating profit. LPG delivery costs per
ton are lower in the case of bulk delivery as compared to delivery in
cylinders.


                                      21
<PAGE>


     The following table sets forth Ultragaz's LPG sales volumes by region and
certain financial information relating to Ultragaz's sales for the periods
indicated:

                                               Year Ended December 31,
                                    -------------------------------------------
LPG Sold                                 2001           2000            1999
----------------------------------- ------------   ------------    ------------
                                       (in thousands of tons, except where
                                              otherwise indicated)
Greater Sao Paulo..................        349.9          338.5           327.0
Southeast..........................        512.8          468.7           441.5
Northeast..........................        313.9          292.2           281.2
South..............................        168.4          188.9           192.6
                                    ------------   ------------    ------------
    Total..........................      1,344.9        1,288.3         1,242.3
                                    ============   ============    ============
Net Sales(1)....................... R$   1,381.1   R$   1,125.9    R$     937.4
Operating profit(1)................        101.2           98.6           100.7

---------
(1)  In millions of reais.

     Marketing. Ultragaz's marketing strategy in the residential market is to
increase its market share by expanding its geographic reach into new regions
and by protecting and enhancing its market share in its existing operating
regions by increasing service quality.

     The marketing strategy for the non-residential segment is to continue
focusing on product and service innovation and brand building. In addition,
Ultragaz supplies its most important commercial customers by bulk delivery
under long-term contracts, which are generally for a term of approximately two
to five years. The long-term contract with the customer may help to enhance the
stability of Ultragaz's sales, and places Ultragaz in a better position to
retain the customer's future business, since a customer must incur costs to
switch LPG distributors, as the tanks' installation at the customers'
facilities is part of Ultragaz' investment. See "-- Distribution and
Transportation."

     In addition, Ultragaz has a team of employees responsible for, among other
things, researching the needs of each non-residential customer and developing
feasible applications for LPG.

  Supply of LPG

     The arrangements for ordering and purchasing LPG from Petrobras are set
forth in a one year contract entered into in February 2000. Although this
contract has expired, its renewal is being negotiated, and Petrobras has been
supplying LPG to Ultragaz under the same conditions. According to this
contract, the supply of LPG ordered is guaranteed unless a force majeure event
occurs. The contract provides that Ultragaz must submit rolling estimates of
its orders and limits the ability to change orders thereafter. By the 20th day
of each month, Ultragaz must submit its order for the next four months.
Ultragaz is entitled to change the order by 3% for the first month, 5% for the
second month and 7% for the third month. There are no limits with respect to
order changes for the fourth month. In addition, the contract provides that, in
the case of a shortage in the supply of LPG, Petrobras must treat Ultragaz and
other LPG distributors equally.

     The termination of Petrobras monopoly allows LPG distributors, including
Ultragaz, to diversify their sources of supply.

  Storage of LPG

     Current Storage Capacity. In common with other LPG distributors, Ultragaz
has limited storage capacity, representing approximately two and a half days'
supply of LPG, based on its average LPG sales in 2001. Petrobras also maintains
approximately three and a half days' supply of LPG at its refineries and other
facilities. Accordingly, any interruption in the production of LPG can result
in shortages, such as the one that occurred during the Petrobras strike in
1995. The limited storage capacity of the LPG distributors and Petrobras is
mitigated to a limited extent by the fact that LPG inventory is also maintained
by end users, particularly in the residential sector, where customers maintain
on average two LPG cylinders at home to ensure a continuous supply of LPG
between deliveries. Ultragaz


                                      22
<PAGE>


estimates that, on average, one such cylinder will be full at any time,
representing approximately one month's supply of LPG for the average household.

     Ultragaz's total storage capacity of 15.1 thousand tons consists of its
storage capacity at its filling plants of 10.8 thousand tons and its
proportional share of the storage capacity of Utingas of 4.2 thousand tons.

     Ultragaz's storage capacity consists of large LPG tanks at each of its
filling plants located throughout the regions in which it operates. Primary
filling plants receive LPG directly from Petrobras by pipeline; secondary
filling plants are supplied by truck; and satellite plants primarily hold LPG
which is used to fill bob-tail trucks for small bulk distribution to customers
that are not located near a primary or secondary filling plant in order to
optimize the LPG distribution process. See " -- Property, Plants and Equipment
-- Ultragaz."

     Utingas. Utingas is an LPG storage company, established in 1967, and is
56% owned by Ultragaz and 44% owned by other LPG distributors. Utingas has
total storage capacity of 7 thousand tons of LPG. Its storage facilities are
located in the city of Santo Andre, in the state of Sao Paulo, representing 6
thousand tons of storage capacity, and in the city of Araucaria, in the state
of Parana in the south of Brazil, representing 1 thousand tons of storage
capacity. Under Utingas' by-laws, each of its shareholders is entitled to use a
proportion of Utingas' total storage capacity equal to such shareholder's
proportionate ownership of Utingas at an agreed basic price. At present,
Ultragaz uses only 2.5 thousand tons of the 4.2 thousand tons available to it
at the Utingas facilities. Any storage capacity which is not used by Utingas'
shareholders pursuant to their basic entitlements, is leased by Utingas at
market rates. In 2001, Utingas' net sales, after eliminating sales to Ultragaz,
were R$16.4 million, representing approximately 1% of Ultragaz's net sales on a
consolidated basis.

     Future Storage Requirements. Historically, because of Petrobras' monopoly
in the production and importation of LPG, LPG distributors have not invested in
substantial storage capacity. Ultragaz expects that in a deregulated
environment it will be able to diversify its sources of LPG supply. Although
Ultragaz has not yet determined its sourcing strategy, Ultragaz believes that
any LPG distributor that decides to diversify its supply of LPG through
importation needs to substantially increase its storage capacity primarily
because the importation of LPG would generally only be economical if carried
out on a large scale. Ultragaz's management believes that Ultragaz, along with
the other LPG distributors, has several alternatives to address the need for
increased storage capacity including agreements with Petrobras for the use of
Petrobras' storage facilities, joint ventures, joint investments with other LPG
distributors and its own additional investments.

  Distribution and Transportation

     Ultragaz distributes LPG to customers in each of the residential and
non-residential markets in Brazil.

     In the residential market, Ultragaz's distribution of LPG is carried out
through three principal channels: home delivery by Ultragaz, sales through
Ultragaz's own retail stores, and distribution by independent dealers, both
through home delivery and retail stores.

     In the non-residential market, distribution is carried out through bulk
delivery and in cylinders. Bulk delivery, substantially all of which is carried
out by Ultragaz's own delivery personnel, is comprised of large bulk deliveries
by tanker trucks and small bulk deliveries by bob-tail trucks. LPG is delivered
in 20kg, 45kg and 90kg cylinders to commercial and industrial users by
Ultragaz's own delivery personnel.


                                      23
<PAGE>


     The following table sets forth the volume of sales in tons of LPG by
Ultragaz to its residential and non-residential customers for the periods
indicated:

                                             Year Ended December 31,
                                          -----------------------------
Customer Category                           2001      2000        1999
----------------------------------------- -------    -------    -------
                                             (in thousands of tons)
   Residential Customers:
     Home delivery by Ultragaz...........    86.5       92.3      106.2
     Ultragaz retail stores..............     5.6        8.4       12.9
     Independent dealers(1)..............   733.8      693.2      695.5
                                          -------    -------    -------
Total residential sales..................   825.8      793.9      814.6
                                          -------    -------    -------
Total non-residential sales..............   519.1      494.4      427.7
                                          -------    -------    -------
         Total........................... 1,344.9    1,288.3    1,242.3
                                          =======    =======    =======

---------
(1)  Includes home delivery and distribution through dealers' stores.

     Distribution Channels for Residential Market. Ultragaz estimates that its
LPG is delivered to approximately 6.7 million homes in Brazil. Ultragaz
delivers LPG directly through its own structure, including 56 retail stores, to
approximately 2 million homes, and approximately 2,700 independent dealers
deliver Ultragaz's LPG to the remaining 4.7 million homes.

     The volume of residential sales that Ultragaz can make is related to the
number of cylinders that it owns together with cylinders owned by Ultragaz's
independent dealers. Ultragaz estimates that as of December 31, 2001, there
were approximately 16.4 million 13 kg Ultragaz cylinders in the market.

     Home Delivery by Ultragaz. Ultragaz makes regular home deliveries in
several major cities in the areas where it operates. The principal factor in
determining the areas in which Ultragaz carries out its own home delivery is
whether the area offers the necessary economies of scale, which is a function
of the size and concentration of the relevant market and Ultragaz's market
share. Accordingly, Ultragaz carries out its own home deliveries in the
principal urban centers in the areas in which it operates. In the remaining
portions of the regions in which Ultragaz operates, home deliveries of Ultragaz
LPG are made by independent dealers.

     Ultragaz's strategy includes retaining its own distribution capability, as
Ultragaz believes that being close to its customers is a significant advantage
in developing its distribution and marketing strategies. The service associated
with Ultragaz's home delivery of LPG cylinders is an important aspect in
Ultragaz's strategy to position itself in the residential market. Ultragaz
delivery is carried out by delivery personnel wearing Ultragaz uniforms and
operating from vehicles displaying the Ultragaz logo and insignia. Ultragaz
seeks to develop the service associated with the brand by having delivery
personnel give safety advice to residential customers at the time of delivery
and by scheduling deliveries on the same day in each week for each area served
by Ultragaz.

     For home and stores delivery Ultragaz has a fleet of 692 trucks. As of
December 31, 2001, 1,940 of Ultragaz's 4,022 employees were employed in the
transportation and distribution of LPG.

     Ultragaz Stores. Ultragaz operates 56 stores: 9 in greater Sao Paulo, 22
in the southeast region, 14 in the northeast region and 11 in the south region.
Ultragaz has one store at each of its filling plants.

     Independent Dealers. Ultragaz' independent dealers network ranges from
distribution companies which operate up to 16 vehicles and which carry out
extensive home delivery to individual retail stores which sell small quantities
of LPG cylinders. No special licenses are required for stores that sell LPG
cylinders, although each municipality establishes safety regulations applicable
to such stores, including the minimum proximity of such stores to certain
locations, such as schools. As of December 31, 2001, Ultragaz had 389
distributors in the greater Sao Paulo area, 758 distributors in the southeast
region, 701 distributors in the northeast region and 852 distributors in the
south region. In 2001, approximately 89% of Ultragaz's residential sales volume
were made through independent dealers.


                                      24
<PAGE>


     The terms of agreements with certain independent dealers provide that the
dealer must use the Ultragaz trademark and require that the vehicles used for
deliveries and the uniforms worn by delivery personnel display the Ultragaz
logo. In such cases, all proprietary rights in the trademark and logo are
retained by Ultragaz. Most independent dealers are Ultragaz's exclusive
representatives. Under these arrangements, the dealer agrees not to deliver any
LPG cylinders other than Ultragaz cylinders and Ultragaz agrees that it will
not enter into dealer agreements with any other LPG distribution companies
within the areas the representatives operate.

     In order to strengthen the relationship with its independent dealers
network, Ultragaz has created the project SOMAR - Marketing Solutions Applied
to Independent Dealers, recommending changes to their operating procedures,
helping to improve the efficiency of their operations and encouraging the
adoption of best practices. Ultragaz believes that improving the efficiency of
independent dealers is a key factor to improve the profitability of the
distribution chain of LPG.

     Distribution Channels to Non-Residential Consumers. Ultragaz has three
principal distribution methods for industrial and commercial consumers: large
cylinders, small bulk and large bulk.

     Ultragaz uses large cylinders, i.e. 20 kg, 45 kg and 90 kg cylinders, for
delivery to commercial users and also to small industrial users. Large bulk
distribution, classified by Ultragaz as consumption of more than 5 tons per
month and comprised almost exclusively of industrial users, is made by tanker
trucks that deliver the LPG directly to the storage tanks located at the
customers' premises. Small bulk distribution, classified by Ultragaz as
consumption of between 0.5 and 5 tons per month and comprised of commercial
users and smaller industrial users, is made by bob-tail trucks, to enable
delivery to be made to commercial users whose tanks are not readily accessible
by traditional bulk delivery equipment. Ultragaz uses the UltraSystem trade
name in connection with its small bulk distribution through bob-tail trucks.
Ultragaz makes bulk sales directly to customers using its own fleet and
transportation provided by third parties, including Transultra.

     Ultragaz makes deliveries to its commercial and industrial customers in
cylinders and in bulk. Ultragaz's strategy is to make substantially all of its
deliveries to commercial and industrial users in bulk and, as a result,
Ultragaz is currently investing in its bulk delivery capability.

     Bulk delivery may only be effected where the customer maintains an LPG
storage tank. Ultragaz installs a tank at the customer's premises and enters
into a long-term contract with the customer for the supply and purchase of LPG.
Ultragaz's bulk supply contracts vary in term between two years and five years.
Such contracts provide for a fixed price over the term of the contract, subject
to adjustments in response to changes in the refinery prices Petrobras charges.
See "-- Markets and Marketing."

     A key element of Ultragaz's bulk strategy is to convert its most important
commercial and industrial customers to bulk delivery. Bulk delivery has
advantages both for Ultragaz and the customer as compared to the delivery of
LPG in cylinders and bulk distribution has a lower cost per ton than
distribution in cylinders. In addition, long-term contracts ensure a stable
supply relationship for the term of the contract. Because bulk storage provides
a larger quantity of LPG at the customer's premises, and thus a more reliable
supply of LPG, consumption tends to increase when customers move from cylinders
to bulk distribution. The terms of bulk supply contracts generally provide that
the tank is installed at the expense of Ultragaz and that Ultragaz retains
ownership of the tank. The terms of the bulk supply contracts also provide that
the tank provided by Ultragaz may only be filled with LPG delivered by
Ultragaz. At the expiration of the bulk contract, the contract may either be
renegotiated or the tank removed by Ultragaz. As the installation of the tank
represents a significant investment for Ultragaz, Ultragaz seeks to ensure that
its return on the investment is realized within the period of the original bulk
contract with the customer. See "-- Markets and Marketing."

     Payment Terms. Ultragaz's sales through its retail stores and through home
delivery are made on a cash basis. Ultragaz's sales to independent dealers and
to industrial and commercial users are paid within 10 to 30 days after
delivery.


                                      25
<PAGE>


  Swapping Centers and Requalification

     Swapping Centers. Pursuant to the Self-Regulatory Code, the LPG
distributors have established sixteen operating swapping centers to facilitate
the return of third-party cylinders to the appropriate distributor. Under the
Self-Regulatory Code, while LPG distributors may pick up any empty LPG
cylinders tendered by customers in exchange for full LPG cylinders, whether or
not such empty cylinders were put in circulation by that distributor, after
October 1997, LPG distributors were not permitted to re-fill third-party
cylinders. Accordingly, LPG distributors may deliver third-party cylinders to a
swapping center where such cylinders may be exchanged for cylinders placed in
circulation by such LPG distributor. The swapping centers currently charge a
fee of R$0.14 per LPG cylinder exchanged at the swapping center. In areas where
only one LPG distributor has a sizable market share, it is often the practice
to use the facilities of that distributor as an unofficial swapping center for
which there may be an additional cost.

     Prior to the establishment of the swapping centers, Ultragaz incurred
significant costs associated with the return of its own cylinders, as it did
not follow the widespread industry practice of filling third-party cylinders.
Ultragaz estimates its costs relating to swapping centers and cylinder returns
were approximately R$3.7 million, R$3.9 million and R$ 4.8 million in 1999,
2000 and 2001, respectively. As the swapping centers represent a sharing
between the LPG distributors of the costs of returning third-party LPG
cylinders, Ultragaz's costs associated with the return of its cylinders was
reduced significantly when the swapping centers were created, but then
increased due to the geographic expansion of Ultragaz. Ultragaz estimates that
costs associated with swapping centers and the return of cylinders in 2002 will
be approximately R$5 million.

     Requalification of Cylinders. The useful life of a cylinder varies
depending on a number of factors, the most important of which are the extent to
which the cylinder has been subject to corrosion from the atmosphere and
whether the cylinder has been damaged. The Self-Regulatory Code provides that
all cylinders must be requalified after their first 15 years' use, and every 10
years thereafter. Each cylinder is visually inspected for damage and corrosion
to determine if it is of a sufficient quality to be requalified or if it should
be discarded as scrap metal. In the case of cylinders which pass the quality
and safety checks, several procedures are followed before the cylinders are
stamped with the year of requalification and the next year in which they are
due for requalification. Ultragaz currently carries out approximately 90% of
its requalification operations in its own plants.

   Competition

     Ultragaz's main competitors are AgipLiquigas, Butano, Supergasbras and
Minasgas S.A., known as Minasgas. AgipLiquigas, a subsidiary of AgipPetroli
SpA, the Italian oil and gas conglomerate, has been operating in the Brazilian
LPG distribution sector for over 40 years. Butano is a domestic Brazilian LPG
distributor which has been present in the market for over 45 years.
Supergasbras and Minasgas were incorporated in 1946 and 1955, respectively, and
operate mainly in the south, southeast and mid-west regions. SHV Energy is a
major multinational LPG distributor, which entered the Brazilian LPG market in
1995 with the acquisition of interests in Supergasbras and Minasgas, both
established Brazilian LPG companies. SHV Energy shares control of Supergasbras
with the original controlling family and owns 100% of Minasgas.

                                               Market Share on
               LPG Distributor                December 31, 2001*
               ----------------------------   ------------------
               AgipLiquigas                          20.7%
               Ultragaz                              19.3%
               Butano                                19.0%
               Supergasbras                          13.2%
               Minasgas                              10.4%
               Other                                 17.4%
               Total                                100.0%
               * Source: Sindigas

     Prior to 1990, under the system of governmental regulation then in effect,
the areas in which LPG distributors were permitted to operate were specified by
the government and each LPG distributor was allotted quotas limiting its LPG
sales in each geographic region in which it operated. These quotas effectively
limited the growth of larger


                                      26
<PAGE>


LPG distributors and limited competition among the LPG distributors. These
restrictions were lifted as part of the deregulation process, resulting in a
substantial increase in competition among domestic LPG distributors.

     As the residential market for LPG is a mature market with relatively low
consumption growth, competition in the residential sector is based largely upon
attempts by the LPG distributors to increase market share at the expense of
their competitors. LPG distributors in the residential market compete primarily
on brand awareness and reliability of delivery and the service provided to
customers in connection with the supply of LPG. Ultragaz believes that it is
competitive in all of these respects, with a strong brand recognition based on
its safety, reliability of delivery and service. As all LPG distributors
currently purchase all of their LPG requirements from Petrobras, and Petrobras
supplies all LPG distributors at the same price, LPG distributors compete on
the basis of efficiencies in distribution and delivery rather than on the cost
of supply of LPG. As Ultragaz's principal markets, including the cities of Sao
Paulo, Salvador and Curitiba, contain heavy concentrations of residential
consumers, distribution to this market can be carried out with the greatest
economies of scale resulting in lower distribution costs to Ultragaz.

     Since May 2001, LPG retail store prices throughout Brazil have been freely
determined by each LPG distributor, without governmental interference. The
retail store price will increasingly depend on a number of factors including
the level of competition among LPG distributors in a particular region and on
brand recognition.

     In addition to competing with other LPG distributors, Ultragaz competes
with other energy companies that offer alternative energy sources to LPG, such
as fuel oil, electricity, wood and natural gas.

     While fuel oil is somewhat less expensive than LPG, LPG has some
performance and environmental advantages over fuel oil in industrial use. When
compared to other energy sources, LPG is a clean, portable and economic
alternative. In addition, Brazil faces a potential electricity generation
problem. In the second half of 2001, Brazil experienced an electricity shortage
that led the government to implement rationing measures. It is anticipated that
there could be future shortages of electricity in Brazil unless the country's
generating capacity is substantially increased in the near future. Natural gas
is currently less expensive than LPG for large volume industrial consumers,
although substantially more expensive than LPG in the residential market, since
its supply requires significant investments.

     The following chart provides a comparison of the consumer prices charged
for LPG in Brazil to consumer prices of other sources of energy in U.S. dollars
per million BTU as of January 2002. The price of natural gas for industrial
purposes is based on a monthly consumption of 300 thousand tons.

          ----------------------------------------------------
          Diesel                                        10.46
          Gasoline                                      20.98
          ----------------------------------------------------
          Electricity Domestic                          22.34
          Natural Gas Domestic                          20.46
          LPG delivered at home                         15.89
          LPG at the point of Sale                      11.63
          ----------------------------------------------------
          Electricity Industrial                        10.59
          Fuel Oil A1                                    5.03
          Natural Gas Industrial                         6.30
          LPG Industrial                                10.41
          ----------------------------------------------------

     Due to an increase in demand of electric energy in Brazil and the increase
in availability of natural gas through the Brazil-Bolivia pipeline, the
Brazilian government is promoting the construction of thermoelectric power
plants, which use natural gas. We believe that natural gas will be used in
Brazil primarily for electricity generation, as it was during the first few
years of operation of the pipeline.


                                      27
<PAGE>


  Environmental Matters

     Ultragaz is subject to the Brazilian federal, state and local laws and
regulations relating to the protection of the environment. Pursuant to specific
regulation, each of Ultragaz's bottling units are required to obtain operating
permits from the state environmental agencies and from the fire department. See
"-- Industry and Regulatory Overview."

  Insurance

     Ultragaz maintains adequate insurance policies covering a number of risks
to which it believes to be exposed, including damages and/or losses caused by
fire, lightning, explosion of any nature, flooding, aircraft crashes, smoke and
electrical damage, covering the filling plants and satellite stations, and also
the pipelines owned and/or used by Utingas.

     Our insurance for civil liabilities covering damages and/or losses to
third-parties due to accidents related to commercial/industrial operations
and/or distribution and trade of products and services in the aggregate amount
of U.S.$150 million also covers Ultragaz.

     Ultragaz management and its advisers believe that this insurance coverage
is in line with industry standards in Brazil.

Petrochemicals and Chemicals

     We conduct petrochemical and chemical activities through Oxiteno, the sole
Brazilian producer of ethylene oxide, ethylene glycol, ethanolamines, glycol
ethers and methyl-ethyl-ketone, known as MEK. Oxiteno is also a major producer
of specialty chemicals. Oxiteno's products are used in many industries,
including polyester, packaging, paints and varnishes and cosmetics. In 2001,
Oxiteno sold 446 thousand tons of chemical and petrochemical products. Oxiteno
is a publicly traded company. We indirectly own 65.4% of the voting share
capital and 47.9% of the total share capital of Oxiteno.

  Industry and Regulatory Overview

     The petrochemical industry transforms crude oil by-products or natural gas
into widely used consumer and industrial goods. The Brazilian petrochemical
industry is generally organized into three sectors, each characterized by the
stage of transformation of various petrochemical feedstocks: first generation
companies, second generation companies and third generation companies.

     First Generation Companies. Brazil's first generation companies, which are
referred to as "crackers", break down or "crack" naphtha, their principal
feedstock, into basic petrochemicals. The crackers currently purchase their
naphtha, which is a by-product of the oil refining process, from Petrobras. The
basic petrochemicals produced by the crackers include olefins, primarily
ethylene, propylene and butadiene and aromatics, such as benzene, toluene and
xylenes. Copene, Companhia Petroquimica do Sul, known as Copesul, and PQU --
Brazil's three crackers -- sell these basic petrochemicals to second generation
companies. The basic petrochemicals, which are in the form of either gases or
liquids, are transported to the second generation companies through pipelines
for further processing.

     Second Generation Companies. Second generation companies process the basic
petrochemicals purchased from the crackers to produce intermediate
petrochemicals, such as:

     o    polyethylene, ethylene oxide, polystyrene and polyvinylchloride , or
          PVC, each produced from ethylene;

     o    polypropylene, oxo-alcohols and acrylonitrile, each produced from
          propylene;

     o    caprolactam, produced from benzene;

     o    purified terephtalic acid, or PTA, produced from p-xylene; and

     o    styrene butadiene rubber, or SBR, and polybutadiene, each produced
          from butadiene.


                                      28
<PAGE>


     There are approximately 50 second generation companies operating in
Brazil, including Oxiteno. The intermediate petrochemicals are produced in
solid form as plastic pellets or powders and in liquid form and are transported
through roads, railroads or by ship to third generation companies.

     Third Generation Companies. Third generation companies, known as
transformers, purchase the intermediate petrochemicals from the second
generation companies and transform them into final products, including:

     o    plastics produced from polyethylene, polypropylene and PVC;

     o    acrylic fibers produced from acrylonitrile;

     o    polyester produced from PTA and ethylene glycol;

     o    nylon produced from caprolactam; and

     o    elastomers produced from butadiene.

     The third generation companies produce a variety of consumer and
industrial goods, including containers and packaging materials, such as bags,
film and bottles, textiles, detergents and paints as well as automobile parts,
toys and consumer electronic goods. There are over 6,000 third generation
companies operating in Brazil.

     Petrochemical Complexes. The production of first and second generation
petrochemicals in Brazil centers around three complexes. These are the
Northeast Complex, the Sao Paulo Petrochemical Complex, and the Southern
Petrochemical Complex. Each complex has a single first generation producer or
cracker, and several second generation companies that purchase feedstock from
the crackers.

     The Northeast Complex, located in the municipality of Camacari in the
state of Bahia, began operations in 1978. The Northeast Complex consists of
approximately 21 second generation companies, including Oxiteno, situated
around Copene as the cracker. Copene has at present an ethylene production
capacity of 1.28 million tons per annum.

     The Sao Paulo Complex, at Capuava in the state of Sao Paulo, was created
in 1972 and is the oldest petrochemical complex in Brazil. Its cracker, PQU,
supplies first generation petrochemicals to 25 second generation companies
including Oxiteno. PQU has an ethylene production capacity of 500,000 metric
tons per annum.

     The Southern Complex, located in the municipality of Triunfo in the
southern state of Rio Grande do Sul, is based around the raw materials center,
Copesul, and includes 7 second generation companies. Copesul has an ethylene
production capacity of 1.135 million metric tons per annum.


                                      29
<PAGE>


                               [GRAPHIC OMITTED]

     Graphic shows a map of Brazil noting the location of the Northeast, Sao
Paulo and Southern petrochemical complexes.

     Structure of the Chemical and Petrochemical Sectors. The current structure
of the petrochemical complexes reflects the Brazilian government's plan,
developed during the 1970s, to establish a domestic petrochemical industry to
serve Brazilian markets. First and second generation companies are located
within close proximity of each other to integrate the common use of facilities
and to facilitate feedstock delivery. Even after the privatization of the
crackers and second generation companies, production capacity expansions at
these facilities continue to be coordinated to ensure that demand meets the
supply of petrochemicals. The infrastructure that developed around or near the
complexes further fostered the interdependence of first and second generation
companies, as limited facilities were constructed to facilitate the
transportation and storage of feedstock for importation or exportation.

     The Brazilian government developed the Brazilian petrochemical industry by
promoting the formation of tripartite joint ventures among the Brazilian
government, foreign petrochemical companies and private Brazilian investors.
Petrobras' majority-owned subsidiary, Petroquisa, participated in each joint
venture as the representative of the Brazilian government; a foreign
petrochemical company provided technology; and a Brazilian private sector
company provided management.

     In 1992, the Brazilian government began a privatization program to reduce
significantly its interests in, and influence over, the petrochemical industry,
particularly with respect to first and second generation companies. This
program was designed to increase private investment in the petrochemical
industry and to spur its consolidation and rationalization. As a result of
privatization auctions, the Brazilian government's ownership of the voting
stock of Copesul, Copene, and PQU has been reduced, and the second generation
companies' ownership of the voting stock of the crackers has increased.


                                      30
<PAGE>


     The following table sets forth the interests held in the crackers' voting
stock before the privatization of each of them and as of December 31, 2001.

<TABLE>
                            Before Privatization                                       As at December 31, 2001
                     --------------------------------                              --------------------------------
                                     2nd                                                           2nd
                     Government   Generation   Others   Date of Privatization      Government   Generation   Others
                     ----------   ----------   ------   ---------------------      ----------   ----------   ------
<S>                     <C>         <C>        <C>      <C>                           <C>          <C>        <C>
Copesul............     67.2%        2.1%      30.7%    May 15, 1992                  15.6%        58.9%      26.1%
PQU ...............     67.8%       31.9%       0.3%    January 24, 1994              17.5%        60.5%      22.0%
Copene.............     48.2%       50.4%       1.4%    August 15, 1995               15.4%        60.1%      24.5%
</TABLE>

     In July 2001, the Odebrecht and Mariani groups acquired control of Copene
with the intent of consolidating in one company, Braskem, Copene's activities
and those of several second generation petrochemical companies (OPP, Trikem and
Nitrocarbono).

     Role of Petrobras. Naphtha is the feedstock used in Brazil for the
production of basic petrochemicals such as ethylene and propylene. Petrobras is
the sole naphtha supplier in Brazil, even though its legal monopoly ended in
August 2000. See "-- Distribution of Liquefied Petroleum Gas -- Industry and
Regulatory Overview" for a discussion of the termination of the Petrobras
monopoly. Due to constraints of Petrobras' refining capacity, Petrobras
imported approximately 30% of the naphtha it sold in Brazil in 2001. Copene,
the largest petrochemical cracker in Brazil, has initiated investments in
facilities that will enable it to import naphtha directly.

     The Ministry of Finance and the Ministry of Mines and Energy regulate the
price at which Petrobras sells naphtha. According to their regulations, naphtha
prices were to be freely negotiated between Petrobras and the petrochemical
crackers as of August 9, 2000. In July 2000, the naphtha price was 9% above the
Amsterdam, Rotterdam and Antwerp Region price, known as the ARA price, which is
the international reference price. In October 2000, the petrochemical crackers
and Petrobras agreed on a new naphtha price adjustment formula, which
essentially leads to a domestic naphtha price that is 3% above the ARA price.
Currently the naphtha price is U.S.$7.00 per ton higher than the ARA price and
is being negotiated between the crackers and Petrobras.

     Environmental, Health and Safety Standards. Oxiteno is subject to
Brazilian federal, state and local laws and regulations governing the
protection of the environment. Oxiteno is regulated at the federal level
primarily by the Brazilian Institute of the Environment and Renewable Natural
Resources, or Instituto Brasileiro de Meio Ambiente e Recursos Naturais
Renovaveis -- IBAMA, and by CONAMA.

     Pursuant to federal and state environmental laws and regulations, Oxiteno
is required to obtain permits for its manufacturing facilities. Authorities in
the state where a plant is located may regulate its operations by prescribing
specific environmental standards in its operating permits. These environmental
standards are prescribed and updated by governmental regulations. In addition,
Oxiteno must satisfy regulatory authorities that the operation, maintenance,
and reclaiming of facilities are in compliance with regulations and are not
prejudicial to the environment.

     Environmental regulations apply to all operations of Oxiteno, and in
particular to the discharge, handling and disposal of gaseous, liquid and solid
products and by-products of Oxiteno's manufacturing activities. Rules issued by
CONAMA and by state authorities also prescribe preventive measures relating to
environmental pollution and waste treatment requirements. In addition, the
transportation and storage of Oxiteno's products and supplies are subject to
specific standards designed to prevent spills, leakages and other accidents.

     Historically, environmental regulations have imposed increasingly strict
standards, higher fines, and greater exposure to liability and increased
operating costs and capital expenditures. In addition, civil, administrative
and criminal sanctions, including fines and the revocation of licenses may
apply to violations of environmental regulations. Under applicable law, Oxiteno
is strictly liable for environmental damages. Oxiteno actively participates in
the "responsible care program", which establishes international standards for
environmental and occupational health and safety practices for chemical
manufacturers.

     Oxiteno also is subject to federal, state and local laws and regulations
that prescribe occupational health and safety standards. In accordance with
such laws and regulations, Oxiteno is required to report on its occupational,


                                      31
<PAGE>


health and safety records on a yearly basis to the local office of the Ministry
of Labor in each of the states in which it operates.

     In addition, Oxiteno is subject to all federal, state and local government
regulation and supervision generally applicable to companies doing business in
Brazil, including labor laws, social security laws, public health, consumer
protection, securities laws and antitrust laws.

     In March 2002, Oxiteno obtained the SA 8000 certificate, which imposes
certain requirements related to social responsibility. Health, safety, labor
relationships and compliance with legislation are issues covered by the SA 8000
certificate.

  Oxiteno

     We conduct petrochemical and chemical activities through our subsidiary
Oxiteno, a second generation company, in which we indirectly own 65.4% of the
voting capital and 47.9% of the total capital. Oxiteno's products are used in
many domestic and international industries, including polyester, packaging,
paints and varnishes and cosmetics. In 2001, Oxiteno sold 446 thousand tons of
chemical and petrochemical products.

     Oxiteno believes that it has certain competitive advantages, including:

     o    its position as the sole Mercosul producer of ethylene oxide and
          certain derivatives;

     o    technologically advanced production processes;

     o    a research and development center for the improvement of production
          processes and for the development of new applications for its
          products;

     o    economies of scale and operating flexibility;

     o    a high quality workforce; and

     o    a production capacity higher than the Brazilian demand.

     History. We entered the chemical industry in 1965 and, until 1970, we
concentrated on the production of fertilizers. In 1970, we entered the
petrochemical industry, as one of the founding partners of Oxiteno. Oxiteno
began operations in 1973 with the production of ethylene oxide and ethylene
oxide derivatives at its plant in the Sao Paulo Petrochemical Complex, the
first ethylene oxide plant in South America. In 1974, we sold our fertilizer
operations to concentrate on the production of ethylene oxide and its
derivatives.

     During the 1970's, we, through our subsidiaries, acquired various
specialty chemical operations. In 1978, Oxiteno began operations at the
Camacari plant in the Northeast Complex, which was expanded in 1997 to
significantly increase its ethylene oxide capacity production. See "--
Property, Plants and Equipment-Oxiteno." In 1986, some of Oxiteno's founding
shareholders sold their respective interests in Oxiteno. Oxiteno became a
publicly traded company, and its common and preferred shares are currently
listed on the Bovespa under the ticker symbols "OXIT3" and "OXIT4",
respectively.

  Products and Markets

     Products. Oxiteno's products can be divided into two principal groups:
commodity chemicals and specialty chemicals. "Commodity" chemicals are
generally higher-volume products, with standard features, while "specialty"
chemicals tend to be lower-volume products sold on the basis of chemical
composition and suitability to meet a particular end-use requirement. Oxiteno's
principal commodity chemicals are ethylene oxide, several derivatives of
ethylene oxide, including ethylene glycol, ethanolamines, glycol ethers and
glycol ether acetates, and MEK. Oxiteno's principal specialty chemicals include
a wide variety of products that are used as surfactants, softeners,
dispersants, emulsifiers and hydraulic fluids.


                                      32
<PAGE>


     The following chart outlines the principal raw materials used by Oxiteno
and the intermediate and final products produced by Oxiteno.

             Major Raw Materials, Intermediates and Final Products

                               [OBJECT OMITTED]

     The fact that the production of ethylene by Brazilian crackers is already
committed to existing second generation companies, coupled with the significant
investment needed for the construction of a new cracker, constitute barriers
for the entry of new local producers in this market. In addition, the
characteristics of ethylene oxide (highly flammable at room temperature and
atmospheric pressure), make the importation of this product difficult. Ethylene
derivatives are regularly imported by the major international petrochemical
companies and by international and domestic trading companies.

     The Brazilian petrochemical industry primarily serves the domestic market,
but also sells products in the international market. While Oxiteno sells most
of its specialty and commodity chemical products in Brazil, it exports a
portion of its products to over 35 countries in Asia, Latin America, Europe and
North America. In 1999, 2000 and 2001, Oxiteno derived 24%, 30% and 28%,
respectively, of its gross sales from exports.


                                      33
<PAGE>


     The following table sets forth Oxiteno's sales volume for each category of
its products for the periods indicated.

                                                   Year Ended December 31,
                                             -----------------------------------
Category                                        2001        2000          1999
------------------------------------------   ---------    ---------    ---------
                                                      (in metric tons)
Commodity Products
     Ethylene Oxide ....................       12,907       14,385       15,393
     Ethylene Glycols ..................      248,570      236,696      245,704
     Ethanolamines .....................       18,180       18,727       20,683
     Glycol Ethers .....................       23,637       21,542       24,537
     Acetates ..........................       17,674       16,393       14,950
     Methyl Ethyl Ketone ...............       24,544       33,429       28,160
                                             --------     --------     --------
         Total .........................      345,512      341,172      349,427
                                             ========     ========     ========
Specialty Products
     Blends ............................       12,110       11,303       10,703
     Ethoxylated Alcohols ..............       12,866       14,056       11,651
     Ethoxylated alkylphenols ..........       27,216       21,512       19,203
     Ethoxylated Fatty Esters ..........        3,639        3,271        3,318
     Ployethyleneglycols ...............        5,098        4,574        3,998
     Sulphonates/Sulphates .............       23,350       16,922       10,693
     Other(1) ..........................       15,851       15,310       15,196
                                             --------     --------     --------
         Total .........................      100,129       86,948       74,762
                                             ========     ========     ========

TOTAL ..................................      445,641      428,120      424,189

                                             ========     ========     ========

Exports ................................      188,957      188,916      157,816
                                             --------     --------     --------
Domestic ...............................      256,684      239,204      266,373
                                             ========     ========     ========
---------
(1)  Includes alcohol, catalysts, EO/PO copolymers, fatty esters, other
     ethoxylated, other formulated, polymerics.

     Commodity Products.

     The following are Oxiteno's principal commodity products and their
principal uses and markets.

     Ethylene oxide. Ethylene oxide is a colorless and highly flammable gas at
room temperature and atmospheric pressure. Ethylene oxide is produced in a
continuous production process by gaseous phase catalytic partial oxidation of
ethylene by oxygen at high temperature and pressure. In 2001, Oxiteno used
approximately 95% of its ethylene oxide production in the production of
derivatives and sold the remaining 5% to other petrochemical companies.

     Ethylene glycols. The principal ethylene glycol produced by Oxiteno is
mono-ethylene glycol, known as MEG. Oxiteno also produces di- and tri-ethylene
glycol. Mono-ethylene glycol is a clear, non-flammable, non-volatile liquid at
room temperature and atmospheric pressure. Ethylene glycols are produced in a
continuous process from an ethylene oxide solution. In 2001, approximately 67%
of the ethylene glycol produced by Oxiteno was sold to chemical companies for
the manufacture of polyester fibers and polyethylene terephthalate known as
PET, with the remainder sold for use in the production of antifreeze, brake
fluids, solvent and other chemicals.

     Ethanolamines. Ethanolamines, comprising mono-, di-, and
tri-ethanolamines, are clear, non-flammable, non-volatile liquids at room
temperature and atmospheric pressure. Ethanolamines are produced in a
continuous process whereby ethylene oxide and ammoniacal solutions are fed to a
multiple-stage tubular reactor. Ethanolamines are largely used in the
manufacture of surfactants and in gas purification for removal of acid gases,
such as carbon dioxide and hydrogen sulfide. Mono-ethanolamine is also used in
the manufacture of ethyleneamines and surfactants. The major markets for
di-ethanolamine are for natural gas stabilization and surfactants and
herbicides production. Tri-ethanolamine is widely used in surfactants.


                                      34
<PAGE>


     Glycol ethers. Ethylene oxide-based glycol ethers are clear, flammable and
volatile liquids at room temperature and atmospheric pressure. Glycol ethers
are produced by combining ethylene oxide with an anhydrous alcohol, usually
methyl, ethyl or butyl alcohol. In 2001, substantially all of the glycol ethers
produced by Oxiteno were sold for use as solvents for formulations such as
paints, inks and cleaning fluids, with the remainder sold for use in
non-solvent applications, including use as an anti-icing agent in jet fuel, as
fluids for hydraulic systems, and as chemical intermediates for plasticizers
and other compounds.

     Glycol ether acetates. Glycol ether acetates are clear, flammable,
non-volatile liquids at room temperature and atmospheric pressure. Glycol ether
acetates are produced in a continuous process whereby acetic acid and glycol
ether are fed into a reactor operating at mild temperature and pressure.
Ethyl-glycol ether acetate is a versatile solvent for nitrocellulose and
acrylic lacquers, for varnish removers, for wood stains and also as a retarding
agent for thinner preparation. Butyl-glycol ether acetate is a solvent for
polyurethane systems and a coalescent aid in latex paints.

     Methyl-ethyl-ketone. MEK, a clear, volatile, flammable liquid at room
temperature and atmospheric pressure, is Oxiteno's principal commodity chemical
not produced from ethylene oxide. MEK is used as a fast evaporation solvent for
thinners, paints, lacquers and adhesives and also as an active solvent for
several resins such as cellulosics, acrylics, polyesters, polyuretanics, PVC,
neoprene and maleic.

     Specialty Chemicals. The following chart sets forth Oxiteno's principal
specialty chemical products and their principal uses and markets.

<TABLE>
Major Markets                      Specialty Chemicals                        Uses
---------------------------        ----------------------------------------   -------------------------------------------------
<S>                                <C>                                        <C>
Detergents.................        Alkylbenzene sulfonic acids,               Dispersants, solubilizing agents,
                                   alkylsulfates, alkyl ether sulfates,       emulsifiers, foam stabilizers,
                                   ethoxylated alkylphenols, ethoxylated      adjuvants, moisteners, detergent bases
                                   fatty alcohols, polyethyleneglycols,
                                   alkanolamides, betaines,
                                   sulphosuccinates, block copolymers EO/PO

Agricultural Chemicals.....        Ethoxylated fatty amines, ethoxylated      Emulsifiers, moisteners, dispersants,
                                   alkylphenols, alkyl ether sulfates,        humectants
                                   blends, naphthalene sulfonate,
                                   ethoxylated vegetable oil, copolymers
                                   EO/PO

Cosmetics..................        Alkyl sulfates, alkyl ether sulfates,      Emollients, densifiers, emulsifiers,
                                   betaines, ethoxylated fatty alcohols,      foam stabilizers, adjuvants, moisteners,
                                   polyethyleneglycols, alkanolamides,        detergent
                                   ethoxylated sorbitan esters, sorbitan
                                   fatty esters

Foods......................        Sorbitan fatty esters, ethoxylated         Emulsifiers, stabilizers, dispersants
                                   sorbitan esters

Textiles...................        Ethoxylated alkylphenols, ethoxylated      Antistatic agents, lubricants,
                                   fatty alcohols, ethoxylated vegetable      softeners, emulsifiers, antifoamers,
                                   oils, ethoxylated fatty amines             mercerizing additives, humectants, low
                                                                              foam detergents

Leather....................        Ethoxylated alkylphenols,                  Depilatory agents, degreasers,
                                   polyethyleneglycols, naphthalenes,         dispersants, softeners, synthetic tannins
                                   sulfonates

Oil Field Chemicals........        Block copolymers EO/PO, condensed          Dispersants, surfactants, emulsion
                                   naphthalenes, sulphonates, sorbitan        preventers
                                   fatty esters
</TABLE>


                                      35
<PAGE>


     Domestic Sales. The following chart shows Oxiteno's domestic market sales
volumes by market segment for the periods indicated.

                                               Year Ended December 31,
                                        -----------------------------------
Market Sector                             2001          2000          1999
-------------------------------------   -------       -------       -------
                                                  (in metric tons)
Polyester ...........................    83,632        77,148       112,991
Paints and varnishes ................    16,465        14,587        16,305
Chemical Industries .................    22,994        25,901        23,510
Detergents ..........................    21,365        18,908        17,451
Hydraulic fluids ....................    15,188        16,323        17,555
Agricultural chemicals ..............    11,920         9,813         9,106
Resins ..............................    17,441        15,191        16,666
Cosmetics ...........................    15,285        10,087         6,437
Leather / Paper .....................     7,725         6,867         5,747
Textiles ............................     4,822         4,632         3,848
Food ................................     2,765         2,396         2,345
Oilfield applications ...............     5,117         4,724         3,284
Distributors ........................    25,533        26,610        26,984
Others(1) ...........................     6,432         6,017         4,144
                                        -------       -------       -------
Total domestic market ...............   256,684       239,204       266,373
                                        =======       =======       =======
---------
(1)  Others includes catalysts producers, civil construction companies,
     pharmaceutical and veterinary companies.

     In the domestic market, the polyester market constitutes the largest
market for Oxiteno's products. MEG produced by Oxiteno is sold to chemical
companies that manufacture polyester fiber, which is used to make a variety of
fabrics, and is also sold to producers of PET, which is a polymer used to make
packaging, such as soft drink bottles.

     A great portion of Oxiteno's product prices in the domestic market are set
by reference to international contract prices in U.S. dollar, as they are
commodity chemicals, but are denominated in reais. The sales are made on a
negotiated basis rather than pursuant to long-term written contracts. In the
case of specialty chemicals which meet the requirements of a particular demand
and which are not subject to ready substitution by imports, Oxiteno's pricing
is more flexible and takes into account the value-added to its customers by the
particular specialty chemical.

     Oxiteno's sales force in the domestic market consists of 40 persons,
organized by industry sector. In 2001, over 90% of Oxiteno's sales in the
domestic market were made directly by Oxiteno. The remaining sales, principally
to smaller regional customers, were made through independent dealers.

     Oxiteno's principal customers in the domestic Brazilian market include
Rhodia-Ster Fibras e Resinas Ltda., which principally purchases ethylene
glycols, Clariant S.A., which principally purchases ethylene oxide and
ethoxylated products, and IGL Indl. Ltda, which principally purchases
sulphates. In 2001, Oxiteno's ten largest customers in the domestic market
accounted for 40% of domestic market revenues. Oxiteno believes that by
distributing its products to a variety of markets it is able to protect itself,
to a certain extent, from the effects of a decrease in economic activity in any
particular market.


                                      36
<PAGE>


     Export Sales. The following table sets forth Oxiteno's sales by volume in
tons for each geographic market served by Oxiteno in the periods indicated.

<TABLE>
                                                Year Ended December 31,
                                  ------------------------------------------------
                                        2001             2000             1999
                                  ------------------------------------------------
Region                                 (in metric tons and percentage of total)
-------------------------------   ------------------------------------------------
<S>                               <C>       <C>    <C>       <C>    <C>       <C>
Mercosul (not including Brazil)    51,043    27%    52,827    28%    44,573    28%
Other Latin America ...........     3,113     2      2,603     1      3,096     2
USA/Canada ....................    30,177    16     31,474    17     15,814    10
Europe ........................    31,247    17     22,016    12     11,749     7
South Africa ..................     5,321     3      2,218     1      3,085     2
Far East ......................    67,714    36     77,594    41     78,740    50
Australia .....................   342,000     0        184     0        804     1
                                  -------   ---    -------   ---    -------   ---
     Total ....................   188,957   100%   188,916   100%   157,861   100%
                                  =======   ===    =======   ===    =======   ===
</TABLE>

     Oxiteno exports a wide variety of chemical products including glycols,
MEK, ethoxylated alkylphenols, glycol ether acetates, glycol ethers,
ethanolamines, ethoxylated fatty amines and other ethoxylated products. In the
international market, Oxiteno sells both to industrial customers, including
Eastman Argentina S.R.L, Unilever de Argentina S.A. and Cognis S.A., as well as
trading companies and other third-party distributors. Oxiteno's largest
customer in the international market is a major European trading company for
glycol, which accounted for approximately 22% of international revenues in
2001. In the same period, two other customers each accounted for more than 10%
of Oxiteno's sales in the international market. In most cases, Oxiteno's sales
prices for its commodity chemicals in both the domestic and export markets are
based on international "contract" prices rather than international spot prices.
International contract prices are fixed by reference to published data
regarding the price at which the relevant product has been sold by industry
participants.

     In general, Oxiteno's operating margins on products sold in the export
market are substantially lower than operating margins for similar products sold
in the domestic market. Nevertheless, Oxiteno considers it very important to
maintain a presence in markets outside of Brazil, partially because the
domestic market is currently not large enough to accommodate all of its sales.
Oxiteno intends to shift sales to the domestic market as local demand for its
products increases, but will continue its presence in the export market.

     Customers. Oxiteno's customers for its commodity chemicals are principally
chemical companies, surface coating producers and polyester producers, and its
customers for specialty chemicals comprise a variety of industrial and
commercial enterprises including brake fluid distributors, agrochemical
producers, manufacturers of food additives and manufacturers of detergents and
cosmetics.

  Competition

     Since 1994, with the opening of foreign trade in Brazil, Oxiteno has faced
increasing competition from imports from multinational petrochemical companies.
As imported products are mostly commodity chemicals, competition is based
principally on price. However, factors such as product quality, timely
delivery, reliability of supply and technical service and support are also
important competitive factors. Oxiteno, as a local producer, believes it has a
competitive advantage over imports with regard to certain of these criteria.

     Oxiteno's principal competitors are Shell Brasil Ltda., Union Carbide
Quimica Ltda., Exxon Quimica Ltda., Ipiranga Comercial Quimica S.A., Productora
de Alcoholes Hidratados C.A. and BASF S.A. Importers incur additional costs
when selling their products in the Brazilian market, due to import tariffs and
additional freight charges.

     Oxiteno estimates that its share of the domestic market in 2001 was
approximately 70%. In the case of specialty chemicals, Oxiteno competes
primarily with other Brazilian producers and price, although important, is a
less decisive competitive factor than with true commodity chemicals, while
conformity with specifications, product performance and reliability of service
are comparatively more important. Access to technology and research and
development are important factors with regard to conformity to specifications
and product performance, especially in the development of new products to meet
customers' needs. As Oxiteno competes with companies that have


                                      37
<PAGE>


greater technology and research and development resources, its strategy
involves ensuring access to technology through purchases of technology,
licensing and joint ventures, if appropriate opportunities become available.

  Transportation and Storage

     As of December 31, 2001, Oxiteno had a total storage capacity of 75
thousand cubic meters, of which 45.3 thousand cubic meters were located in its
plants and the remaining was leased from third parties. Oxiteno leases storage
capacity from Tequimar on an arm's length basis and also from unaffiliated
storage companies. See "-- Business Overview -- Transportation and Storage --
Tequimar."

     Raw materials such as ethylene, oxygen, rafinate II and ammonia are
transported to Oxiteno's plants by pipeline and other raw materials are
transported by truck.

     In 2001, 53% of Oxiteno's products were transported directly to customers
by truck and 4% were transported by truck to a sea terminal for coastal
transportation to other ports in Brazil and further delivery by truck. The
remaining 43%, representing most of Oxiteno's sales in the international
market, were transported by ship.

  Raw Materials

     Oxiteno's principal raw material is ethylene. In 2001, ethylene accounted
for approximately 54% of Oxiteno's variable costs of production and
approximately 45% of its total cost of goods sold. Oxiteno's other principal
raw materials include ethyl, butyl and lauryl alcohols, oxygen, acetic acid and
rafinate II.

     Ethylene Supply. Ethylene is used for the production of ethylene oxide at
the Camacari plant and the Maua plant. Copene supplies all of Oxiteno's
ethylene requirements for the Camacari plant and PQU supplies all of Oxiteno's
ethylene needs at the Maua plant. The Camacari plant and the Maua plant are
connected by pipeline with Copene and PQU, respectively, thus minimizing the
costs of delivery of ethylene and helping to ensure the reliability of supply.

     Oxiteno has a long-term contract with Copene relating to the volume of
ethylene to be supplied to, and purchased by, Oxiteno. This contract expires in
2012. Pursuant to this agreement, Copene is required to supply Oxiteno with up
to 197 thousand tons of ethylene per year, and Oxiteno is required to purchase
at least 138 thousand tons per year. The contract does not provide a price for
the ethylene, but provides that the price will be negotiated between the
parties from time to time and will be the same for all buyers of ethylene. The
price is currently set pursuant to a margin sharing agreement between Copene
and its customers, including Oxiteno. In the case of PQU, Oxiteno, like other
purchasers from PQU, does not have a long term contract relating to the volume
or price of ethylene supplied.

     The following table sets forth information regarding Oxiteno's usage of
ethylene at its Camacari and Maua plants for the periods indicated.

                                 Oxiteno's ethylene usage
                            ------------------------------------
                                  Year Ended December 31,
                            ------------------------------------
          Plant             2001    2000    1999    1998    1997
-------------------------   ----    ----    ----    ----    ----
                                        (in thousands of tons)
Camacari.................    185     173     183     178     138
Maua ....................     42      40      41      39      41

     Ethylene is difficult and expensive to store and transport, as it must be
kept at a temperature below -200 degrees Fahrenheit or -100 degrees Celsius
during storage and transportation. As a result, ethylene is not imported or
exported in substantial quantities. Accordingly, the naphtha crackers,
including Copene and PQU, are largely dependent for their sales upon the second
generation petrochemical companies, such as Oxiteno, located in the respective
petrochemical complexes.

     Correspondingly, Oxiteno is entirely dependent on Copene and PQU for the
supply of ethylene to its Camacari and Maua plants and, therefore, for its
ability to operate such plants, since imports of ethylene from other producers


                                      38
<PAGE>


are not readily available. Oxiteno does not maintain any significant storage of
ethylene and any unexpected interruptions in supply from the crackers would
have an immediate impact on Oxiteno's production. The last unexpected
interruption in the ethylene supply was in 1993, due to a pipeline fire that
affected the naphtha delivery from Petrobras to Copene, which caused a shutdown
in Copene's naphtha cracking operations, resulting in a 14-day shutdown in the
Camacari plant's operations.

     In 2001, Copene and PQU had annual ethylene production capacity of 1.2
million tons and 500 thousand tons, respectively. The deregulation and the
termination of Petrobras' monopoly in the production and importation of oil and
oil related products could impact the supply and price of naphtha significantly
in the future. See " -- Price of Ethylene" and "-- Industry and Regulatory
Overview."

     Price of Ethylene. The price of ethylene supplied by Copene to Oxiteno for
the production of goods to be sold in Brazil is determined in a margin sharing
agreement entered into in March 1997, and is the same for all of Copene's
ethylene customers. Prior to March 1997, the price of ethylene was negotiated
between Copene and its ethylene customers on a monthly basis.

     Under the margin sharing arrangement, the price paid for ethylene depends
upon the weighted average market price charged by the ethylene customers in the
Brazilian market during the previous month for a basket of goods derived from
ethylene. The weight of each product in the basket depends upon the relative
proportion of the total supply of ethylene used in the production of such
product as compared with the other products in the basket. Certain cost
elements are then deducted from the weighted average price. The remaining
"margin" after the deduction of such cost elements from the average weighted
price is shared between Copene and the ethylene customers based on the
respective investment of Copene and such customers. The respective investments
are calculated based on U.S. benchmarks rather than the actual investments of
the parties.


                                      39
<PAGE>


     A different margin sharing arrangement is currently in place with respect
to products produced from ethylene for the export market. Under this
arrangement, the price paid for ethylene depends upon the gross margin of each
export transaction of Copene's customers. Subject to certain limits, the
resulting margin is divided by 45% for Copene and by 55% to the exporters.The
following chart shows price information per metric ton for ethylene used in the
production of products to be sold in Brazil charged by Copene and PQU for the
years indicated.

<TABLE>
Year ended December 31,                                                  Copene            PQU
----------------------------------------------------------------------------------------------------
<S>                                                                  <C>              <C>
1999                                                                  (in reais per metric ton)
     First Quarter............................................       R$  532.33       R$  616.67
     Second Quarter...........................................           592.33           679.00
     Third Quarter............................................           700.33           779.67
     Fourth Quarter...........................................           858.00           904.00
High price....................................................           922.00           985.00
Low price.....................................................           485.00           574.00
Average.......................................................           670.75           744.83
2000
     First Quarter ...........................................       R$1,035.67       R$1,091.67
     Second Quarter...........................................         1,068.00         1,137.00
     Third Quarter............................................         1,159.67         1,224.33
     Fourth Quarter...........................................         1,217.00         1,272.67
High price....................................................         1,217.00         1,288.00
Low price.....................................................           990.00         1,036.00
Average.......................................................         1,120.08         1,181.42
2001
     First Quarter............................................       R$1,138.33       R$1,247.67
     Second Quarter...........................................         1,226.33         1,300.33
     Third Quarter............................................         1,253.00         1,314.67
     Fourth Quarter...........................................         1,207.08         1,273.00
High price....................................................         1,360.00         1,397.00
Low price.....................................................         1,089.00         1,179.00
Average.......................................................         1,206.19         1,283.93
</TABLE>

     As naphtha accounts for approximately 90% of variable costs of ethylene
production, fluctuations in the price of naphtha strongly influence
fluctuations in the price of ethylene. Because the main determinant of the
price of naphtha is the price of crude oil, the price of naphtha, and thus
ethylene, is subject to fluctuations based on changes in the international oil
price. See "Item 3. Key Information-- Risk Factors-- Risks Relating to Ultrapar
and the Petrochemical and Chemical Industries."

     The current price for naphtha paid by Brazil's naphtha crackers is
negotiated between those crackers and Petrobras and is currently determined
using a formula that leads to a domestic naphtha price that is 3% above the ARA
price. See "--Industry and Regulatory Overview." Any increases in the price of
naphtha, and thus ethylene, could have a material adverse effect on the
business of Oxiteno, particularly as increased international competition in the
petrochemical industry could make it difficult for Oxiteno to pass on price
increases to its customers.

     Other Materials. In 2001, other raw materials, comprising principally
oxygen, lauryl alcohol, ethanol, butyl alcohol, acetic acid, rafinate II,
lauric oil, nonene, phenol, primary fatty amine, fusel oil and LAB accounted
for approximately 34% of Oxiteno's variable costs and 28% of its total costs of
sales.

     Oxiteno generally obtains these other raw materials from a variety of
sources, with the exception of phenol, which Oxiteno purchases principally from
a single supplier. Oxiteno uses oxygen in the production of ethylene oxide.
Oxygen for the Camacari plant is purchased pursuant to a long-term contract
with White Martins and Copene, which expires in 2010. Oxygen for the Maua plant
is purchased from Oxicap, Oxiteno's joint venture with Air Liquide.

     C4, used for the production of MEK at the Triunfo plant, is purchased from
Copesul, the naphtha cracker in the Southern Complex.


                                      40
<PAGE>


     Utilities. Steam, electric power and natural gas are the main utilities
required for Oxiteno's production. Part of the electricity and steam used by
Oxiteno is generated internally and part is purchased from electricity
companies and third-party suppliers of steam in the regions where Oxiteno's
plants are located. Natural gas is purchased from local companies.

   Tax-Exempt Status

     Oxiteno has an income tax exemption on operating profits from sales of all
of its products at the Camacari plant through the year 2006. This tax exemption
was obtained pursuant to legislation offering fiscal incentives to industrial
companies located in the northeast region of Brazil and common to all of the
companies in the Northeast Complex, including Copene. The full rate of income
tax is currently 25%. Amounts which would otherwise be payable as income tax
are charged to income and credited to a reserve account in shareholders'
equity. After 2006, the income resulting from the Camacari plant operation will
be subject to income tax at the rate of 19%. However, no assurance can be given
that the applicable legislation will not be changed.

   Maintenance and Quality Control

     Oxiteno carries out a program of preventive maintenance at each of its
plants and utilizes statistical analysis to help predict production problems.
The stoppages due to the maintenance program take place at the same time as the
stoppages for the change of the ethylene oxide catalyst. In the case of the
ethylene oxide and ethylene glycol units at the Maua and Camacari plants, which
have continuous production processes, maintenance is preferably scheduled for
periods when the relevant cracker, which supplies ethylene to the plant, is
scheduled to be shut down for maintenance. Each cracker is typically shut down
for maintenance for a period of approximately 20 days approximately every 36 to
48 months. The same happens to the Triunfo plant, which receives butene from
Copesul. In the case of the other production units at such plants and the
Tremembe plants, maintenance is performed during scheduled breaks in
production. Oxiteno uses its own employees for specialized maintenance and uses
third-party contractors for routine maintenance. In addition, Oxiteno has a
team of employees responsible for quality control that operates continuously.
As of December 31, 2001, Oxiteno had 102 employees engaged in maintenance.

   Health, Safety and Environmental Matters

     Oxiteno is subject to the environmental laws and regulations of the states
in which it operates, which specify and detail federal legislation on these
matters. See "-- Industry and Regulatory Overview." Oxiteno continuously
monitors its compliance with federal, state and municipal legislation
applicable to its various places of operation. In addition, Oxiteno voluntarily
complies with the standards set forth by the Responsible Care Program,
promulgated by ABIQUIM, the Brazilian Chemical Industries Association.

     Each of Oxiteno's plants is licensed by the local state environmental
authorities. Licenses granted in certain states are valid for a fixed period
and then must be renewed. The licenses for the Tremembe and Naua plants are for
an unlimited duration. The term of the other licenses varies according to
applicable legislation and to the periodic inspections performed by
environmental authorities. Currently, Oxiteno possesses all legally required
licenses for its operations.

     Waste products from the industrial plants are discharged according to the
legal requirements. Liquid waste products are discharged and treated in a
treatment center owned by Oxiteno or by petrochemical complexes where the
company has activities. Solid waste products are preferably reprocessed in
cement furnaces. Where the reprocessing is not recommended, these products are
incinerated or deposited on locations owned by Oxiteno. Oxiteno often controls
these discharge areas, and does not have any significant environmental
liability.

     Our indexes relating to health and safety are comparable to the
international standards, and are a priority in Oxiteno's activities and in the
action plans for the upcoming years.

   Insurance

     Oxiteno has several insurance policies covering a number of risks to which
it believes it is exposed. In addition, Oxiteno maintains insurance policies
covering pecuniary damages. Its insurance policy for "all risks" covers its
assets and inventories against the risks to which they are exposed and also
against losses due to accidents related to these risks. Oxiteno's management
and its advisers believe that this insurance coverage is in line with chemical
and petrochemical industries standards in Brazil.


                                      41
<PAGE>


Transportation and Storage

     We conduct transportation and storage activities through Ultracargo, one
of the leading providers of integrated transportation and storage services to
the LPG, petrochemical and chemical industries in Brazil. Ultracargo's
subsidiary, Transultra, operates a fleet of tanker trucks and provides
transportation services to the LPG distribution industry and the petrochemical
and chemical industries. Ultracargo's subsidiary, Tequimar, provides storage
facilities to most of the companies in the Northeast Complex and other chemical
companies, and also maintains and operates storage facilities at port terminals
for the storage of petrochemical and chemical products. See "--Petrochemicals
and Chemicals--Industry and Regulatory Overview."

     The following table sets forth Ultracargo net revenues by region for the
periods indicated:

<TABLE>
                                                      Year Ended December 31,
                  -------------------------------------------------------------------------------------------
                              2001                             2000                           1999
                  ---------------------------       --------------------------      -------------------------
                  Net Sales        Percentage       Net Sales       Percentage      Net Sales      Percentage
                  ---------        ----------       ---------       ----------      ---------      ----------
                                           (in thousands of reais, except percentages)
<S>               <C>                 <C>           <C>                <C>           <C>              <C>
Northeast......   R$ 60,431            57%           R$52,755           56%          R$47,562          60%
Southeast......      43,305            41              40,019           42             30,507          38
South..........       1,592             2               1,430            2              1,273           2
                   --------           -----          --------          -----          -------         ---
     Total.....   R$105,328           100.0%         R$94,204          100.0%        R$79,342         100%
                   ========           =====          ========          =====          =======         ===
</TABLE>

     Ultracargo owns 100% of the voting capital of Transultra and 80% of the
voting capital of Tequimar. The remaining 20% of Tequimar's voting stock is
indirectly owned by Ultrapar.

     Ultracargo is seeking to integrate these two businesses by means of
intermodal terminals which will increase operating efficiencies. Also,
Ultracargo is implementing training programs for its personnel, in order to
improve relationships with customers.

     An example of this integration is the new intermodal terminal built by
Ultracargo in the state of Sao Paulo in response to its strategic decision to
manage bulk solids and position itself as a logistics operator. The terminal
provides storage for solid, liquid and gaseous products as well as intermodal
transportation. Today, its main activities include the storage of products
originating from Argentina and the Camacari petrochemical complex for future
distribution throughout Brazil.

     Ultracargo has also implemented the Integrated Transport System (SIT),
which will result in a greater level of automation and control over transport
operations. This system integrates data from all of its plants and branches
through established dedicated lines.

   Transultra

     Transultra's principal market for transportation is the chemical and
petrochemical industry, for which transportation is provided by truck between
and among port terminals and first, second and third generation petrochemical
companies operating at the various petrochemical complexes. Transultra has
established long-standing relationships with significant companies in the
chemical and petrochemical industries, and provides its services on a
negotiated basis with individual customers. No written contracts for the
provision of services are customarily entered into in the transportation
industry. Transultra obtained ISO 9002 certifications for its Capuava
operations in 1997 and for its Camacari operations in 1999. In 2001, Transultra
was the first company in the sector to receive the SASSMAQ Certificate, granted
by the ABIQUIM, the Brazilian Chemical Industries Association, to


                                      42
<PAGE>

companies that employ procedures that guarantee operational safety while
respecting the environment and health of their workers.

     Transultra offers transportation services for LPG, chemical and
petrochemical products in several major industrial regions in Brazil, as well
as in Chile and Argentina. In 2001, Transultra operated a fleet of
approximately 148 tractors and 400 trailers and, in 2000 and 2001, transported
2,168 and 2,559 thousand tons, respectively. Transultra estimates that its
total share of its targeted chemical markets, excluding its participation in
LPG transportation, is around 18%.

     Transultra also operates a fleet of tanker trucks and provides
transportation services to the LPG distribution industry. In the LPG
distribution industry, Transultra provides transportation from Petrobras'
facilities to filling stations operated by LPG distributors, principally
Ultragaz, and also provides a limited amount of transportation service in the
bulk delivery market. Transultra provides 98% of its transportation service in
the LPG industry to Ultragaz. All transactions between Transultra and Ultragaz
or Oxiteno are carried out on an arm's length basis.

     In 1997 Transultra began operating in the market for bulk transport of
solid products, an important segment of the transport business in the domestic
market in which products are transported utilizing special silos and
semitrailers. Transultra believes that there is significant opportunity for
growth in this market. In 2001, Transultra transported approximately 121
thousand tons of solid products.

   Tequimar

     Tequimar provides storage facilities to Copene and most of the second
generation petrochemical companies in the Northeast Complex, including Oxiteno,
as well as other chemical companies. It also maintains and operates port
terminals for the storage of chemical and petrochemical products at the Aratu
Port in the state of Bahia, the Suape port industrial complex in the state of
Pernambuco, the Maceio terminal in the state of Alagoas, the Santos marine
terminal in the state of Sao Paulo, and the intermodal terminal in the city of
Paulinia in the state of Sao Paulo, known as TIP. Tequimar estimates that its
total share of the Brazilian liquid storage market is 30%, the largest share in
the Brazilian market. In 1997, Tequimar increased its capacity at the Aratu
terminal, the major port serving the Northeast Complex, and now owns 70% of the
storage capacity at this port. In 1997, Tequimar was awarded the ISO 9002
certificate for many of its storage operations.

   Environmental Matters

     Ultracargo is subject to Brazilian federal and state laws and regulations
relating to the protection of the environment.

   Insurance

     Ultracargo maintains insurance policies covering a number of risks, in
particular those relating to the transportation and storage of chemical and
petrochemical products. Transportation activities are covered by policies
covering damages caused by accidents and stolen cargo.

     Both Ultracargo's properties and Tequimar's pipelines are insured against
fire, lightning, explosion, flooding, aircraft crash, smoke and electrical
damages.

     Ultracargo also maintains insurance policies for civil liabilities. The
storage operations are insured by policies covering damages to products in
storage, including contamination.

     Ultracargo's management and its advisers believe that the insurance
maintained covers in all material respects the risks to which Ultracargo is
exposed, and that it is consistent with industry practices in Brazil.


                                      43
<PAGE>

C.   Organizational Structure

     The following chart shows our current organizational structure, including
our principal intermediate holding companies and operating companies.
Percentages represent approximate ownership of voting share capital and total
capital (voting capital/total capital).

                               [GRAPHIC OMITTED]

     We conduct LPG distribution through our subsidiary Ultragaz Participacoes
S.A., of which we own 77% of the total share capital. The remaining 23% of
Ultragaz Participacoes S.A.'s share capital is held by Ultra S.A. Ultragaz
Participacoes S.A. operates through its three primary subsidiaries, Companhia
Ultragaz S.A., Bahiana and Utingas. Companhia Ultragaz and Bahiana operate in
the bottling and distribution of LPG. Bahiana operates primarily in the
northeast region of Brazil and Companhia Ultragaz serves the other regions of
the country. Utingas is an LPG storage company, with facilities in the states
of Sao Paulo and Parana.

     We conduct petrochemical and chemical activities through our subsidiary
Oxiteno, of which we own 47.9% of the total share capital and 65.4% of the
voting capital. Oxiteno operates in the petrochemical and chemical segment
directly and through its subsidiary, Oxiteno Nordeste. Oxiteno operates two
plants located in the state of Sao Paulo, and Oxiteno Nordeste operates one
plant in Camacari, in the state of Bahia, and a second plant in Triunfo, in the
state of Rio Grande do Sul.

     Ultracargo conducts our transportation and our storage activities through
its subsidiaries Transultra and Tequimar, respectively. Transultra provides
transportation services throughout Brazil and in Argentina and Chile. Tequimar
maintains storage facilities at four port terminals located near two of the
main petrochemical complexes in Brazil: Camacari and Sao Paulo.

     All of our subsidiaries are organized under the laws of the Federative
Republic of Brazil.

D.   Property, Plants and Equipment

   Ultragaz

     Plant. Ultragaz's LPG distribution network includes 16 filling plants,
including 9 primary plants and 7 secondary plants. LPG is transported to
Ultragaz's primary plants through a pipeline from Petrobras' facilities, and to
its secondary filling plants by truck. Ultragaz maintains storage facilities
for LPG cylinders and satellite bulk distribution plants at strategic locations
in order to maintain supplies of LPG closer to its customer bases and thus to
reduce transportation costs. Substantially all of the LPG transported by truck
from Petrobras to Ultragaz's secondary plants is transported in Transultra's
fleet of tanker trucks on an arm's length basis. LPG is stored in the


                                      44
<PAGE>

filling plants in large LPG storage tanks with a capacity of 60 tons per tank.
In the case of LPG to be delivered in bulk, the LPG is pumped directly from the
storage tanks into the bulk tankers. In the case of LPG to be delivered in
cylinders, the LPG is pumped from the storage tanks into a number of filling
heads, which deliver the LPG into cylinders.

     When cylinders are delivered to the plant they are initially assessed to
determine if they are required to be requalified, and if so, are either
processed at the plant or by third-party contractors.

     The following table sets forth the total current storage and total filling
capacity and monthly actual filling volumes during 2001 for each of Ultragaz's
primary and secondary filling stations and satellite stations in each
geographic area in which Ultragaz operates.

<TABLE>
                                                                                        Average
                                                             Storage      Filling       Actual        Idle
    Location                  Plant              Type       capacity     Capacity       Filling     Capacity
    --------                  -----              ----       --------     --------       -------     --------
                                                            (in tons)  (in tons per  (in tons per    (% of
                                                                           month)        month)     capacity)
<S>                    <C>                     <C>           <C>          <C>           <C>           <C>
Greater Sao Paulo      Maua                    Satellite        540           --            --          --
                       Capuava                 Primary          720       13,000         9,300         28%
                       Santos                  Primary          960        3,770         3,116         17%
                       Ipiranga                Satellite        660           --            --          --
                       Barueri                 Secondary      1,510        4,410         3,391         23%

Southeast Region       Paulinia                Primary        1,008        8,657         7,007         19%
                       Sao Jose dos Campos     Primary          360        3,500         3,515          0%
                       Sao Jose do Rio Preto   Satellite         54           --            --          --
                       Aracatuba               Secondary        180        2,458         2,444          1%
                       Ribeirao Preto          Secondary        180        4,000         3,679          8%
                       Bauru                   Satellite         60           --            --          --
                       Goiania (1)             Secondary        180        3,200         1,115         65%
                       Pouso Alegre            Satellite         60           --            --          --
                       Duque de Caxias (2)     Primary          504        4,500         3,455         23%

Southern Region        Cascavel                Satellite        120
                       Araucaria               Primary          240       10,200         6,100         40%
                       Canoas                  Primary          600        4,116         2,486         40%
                       Londrina                Satellite         60           --            --          --
                       Blumenau                Satellite         32           --            --          --
                       Chapeco                 Satellite         60           --            --          --
                       Florianopolis           Satellite         32           --            --          --
                       Joinville               Satellite         32           --            --          --
                       Caxias do Sul           Satellite         60           --            --          --

Northeast Region       Mataripe                Primary          840       12,331        10,668         13%
                       Juazeiro                Satellite         56           --            --          --
                       Aracaju                 Secondary        240        3,770         2,988         21%
                       Suape                   Primary          504        5,795         4,090         29%
                       Ilheus                  Secondary        336        4,769         3,561         25%
                       Caucaia (3)             Secondary        420        4,500         2,772         38%
                       Piraja                  Satellite         57           --            --          --
         Total.............................................  10,665       92,976        69,687         25%
</TABLE>

---------
(1)  Operations started in September 2000.
(2)  Operations started in the second half of 2001.
(3)  Operations started in February 2002.

     In line with its strategy of geographic expansion, Ultragaz has been
investing in new filling plants in its target markets. Over the last four
years, six new filling plants started operations, including Goiania in the
state of Goias, Caucaia in the state of Ceara and Duque de Caxias in the state
of Rio de Janeiro. In 2002, another filling plant will start operations in
Betim in the state of Minas Gerais. In addition, Ultragaz maintains its head
office in the city of


                                      45
<PAGE>

Sao Paulo and regional offices in the areas in which it operates. Ultragaz also
maintains 66 retail stores, including outlets at each of its plants.

     Equipment. LPG cylinders are manufactured from steel and are fitted with a
collar at the top of the cylinder and a rim at the base of the cylinder. The
cylinders are fitted with a valve through which the cylinder is filled and
through which the LPG is discharged during use. The 13 kg cylinders, which are
used in the residential sector, also have a safety plug, which is designed to
discharge LPG if the temperature in the cylinder exceeds a certain limit. 13 kg
cylinders are approximately 46 centimeters high, one meter in circumference and
weigh approximately 26.6 kg when full.

     All of Ultragaz's cylinders are painted in a shade of blue that
corresponds to the Ultragaz logo. Ultragaz believes that its use of distinctive
blue cylinders has been an important element in developing consumer awareness
of the Ultragaz brand.

     Ultragaz has a number of alternative sources of supply for most types of
cylinders and tanks. Each cylinder manufactured for Ultragaz is stamped with
the Ultragaz logo and the month and year of manufacture by the manufacturer. In
2001, the average market price per cylinder for 13kg cylinders, 20kg cylinders
and 45kg cylinders was approximately R$33.00, R$150.00 and R$155.00,
respectively.

     The tanker trucks are used to distribute LPG in both the small bulk and
large bulk markets. In the small bulk market, Ultragaz uses the "UltraSystem"
trade name and delivers LPG using bob-tail trucks, which are fitted with a
longer delivery hose, in order to be able to access tanks of commercial and
smaller industrial users. The bob-tail trucks have a capacity ranging from 6 to
9 tons and can fill tanks with a capacity ranging from 45kg to 125kg. In the
large bulk markets, Ultragaz delivers LPG in larger tanker trucks with an
average capacity of 20 tons, which fill tanks with a capacity ranging from 30
to 60 tons.

   Oxiteno

     Oxiteno has four plants, including the Camacari plant in the Northeast
Complex, the Maua plant in the Sao Paulo Complex, the Triunfo plant in the
Southern Complex and the Tremembe plant in the state of Sao Paulo. On average,
Oxiteno spends R$30 million per year in maintenance of its equipment and
facilities.

     The following table sets forth the principal product lines and capacity of
Oxiteno's plants.

<TABLE>
                                                                       Maximum Capacity             Production
                                                                    (thousands of metric       (thousands of metric
                                                                       tons per year)             tons per year)
                                                                   ----------------------     ----------------------
       Plant                       Product Lines                   1999     2000     2001     1999     2000     2001
--------------------   --------------------------------------      ----     ----     ----     ----     ----     ----
<S>                    <C>                                          <C>      <C>      <C>      <C>      <C>      <C>
Camacari............   Ethylene Oxide and Derivatives........       690      690      705      511      506      558
Maua................   Ethylene Oxide and Derivatives and
                           Specialty Chemicals...............       189      189      209      151      147      147
Tremembe............   Specialty Chemicals...................        58       58       60       20       29       36
Triunfo.............   MEK ..................................        33       33       33       29       33       26
</TABLE>

     Maximum capacity at the Camacari and Maua plants is the sum of each
plant's ethylene oxide capacity and the capacities of its production units for
ethylene oxide derivatives. However, as the aggregate capacity for ethylene
oxide derivatives at these plants demands more ethylene oxide than the plant's
effective ethylene oxide capacity, the plant's actual production of derivatives
is less than the capacity. Oxiteno's production capacity of ethylene oxide
derivatives results in a degree of operating flexibility to the company, which
enables it, to a certain extent, to mitigate the effects of reductions in
demand for certain products resulting from downturns in the petrochemical
business cycle. During such downturns, Oxiteno is able, to a certain extent, to
switch production to products which are less affected by the cyclical downturn,
switching its ethylene oxide output between production units for derivative
products depending on relative demand.

     Oxiteno generally produces its commodity petrochemical products through
continuous production processes and produces specialty chemicals through batch
processes.

     Camacari Plant. The Camacari plant, located in the Northeast Complex, was
built by Oxiteno and commenced production in 1978. The Camacari plant produces
ethylene


                                      46
<PAGE>

oxide and ethylene oxide derivatives, such as ethylene glycols, ethanolamines,
glycol ethers and ethoxylated derivatives. In addition to the production units,
the Camacari plant has drumming, warehouse, and cogeneration of electricity and
steam and maintenance facilities. As of December 31, 2001, Oxiteno had 220
employees at the Camacari plant.

     In late 1994, Oxiteno commenced a major modernization project at the
Camacari plant, involving the addition of 105 thousand tons of ethylene oxide
capacity. The new capacity began producing ethylene oxide in July 1997. Since
the scale of production is one of the most important factors in the costs of
production of ethylene oxide and derivatives, the Camacari expansion has
contributed to a significant reduction of its unit costs. Productivity improved
by 74% from 1996 to 2001. In particular, while the expansion project increased
Oxiteno's ethylene oxide capacity by 80%, there was no major increase in the
labor force at the plant. Oxiteno believes that the scale of ethylene oxide
production at its Camacari plant is comparable with some of the largest
ethylene oxide plants in the world. Oxiteno also believes that the Camacari
plant is currently the largest ethylene oxide plant in Latin America.

     The following table sets forth the current production capacity of the
Camacari plant for each of its principal products.

        Units                                          Current Capacity
        ------------------------------------------ -------------------------
                                                   (in metric tons per year)
        Ethylene Oxide............................          260,000
        Ethylene Glycols..........................          285,000
        Ethanolamines.............................           45,000
        Glycol Ethers.............................           25,000
        Ethoxylated derivatives...................          100,000

     In the table above and in the table immediately following, the capacity
shown for each derivative of ethylene oxide represents the maximum amount of
such product, which Oxiteno could produce each year based on the capacity of
the relevant production unit. As Oxiteno's capacity for ethylene oxide
derivatives exceeds its ethylene oxide production capacity, Oxiteno cannot
produce the maximum amount of each derivative product in any year and,
accordingly, actual production of ethylene oxide derivatives is less than
capacity.

     Maua plant. The Maua plant, located in the Sao Paulo Complex, was the
first plant built by Oxiteno and commenced production in 1974. The Maua plant
has process units for ethylene oxide, ethylene glycols, glycol ethers, glycol
ether acetates, natural alcohols and ethoxylated derivatives. In addition to
the production units, the plant has drumming, storage, warehouse and
maintenance facilities and also houses Oxiteno's principal research and
development laboratory. As of December 31, 2001, Oxiteno had 307 employees at
the Maua plant.

     The following table sets forth the current production capacity of the Maua
plant for each of its principal products.

        Units                                          Current Capacity
        ------------------------------------------ -------------------------
                                                   (in metric tons per year)
        Ethylene Oxide............................          52,000
        Ethylene Glycols..........................          25,000
        Glycol Ethers.............................          35,000
        Acetates..................................          32,000
        C4+C5 Alcohols............................          10,000
        Ethoxylated Derivatives...................          16,500
        Alkylation................................          17,300
        Hydraulic fluids .........................          30,000
        Esterification............................           3,100
        Emulsification............................           1,300

     Tremembe Plant. The Tremembe plant, located at Bairro dos Guedes,
Tremembe, in the state of Sao Paulo, has three principal production units, a
sulfonation/sulfation unit and two multipurpose units. The Tremembe plant
commenced production in 1970 and was subsequently acquired by us in 1985. In
addition to the principal production units, other facilities at the plant
include a quality control laboratory, a warehouse and a maintenance shop. As of
December 31, 2001, Oxiteno had 107 employees at the Tremembe plant.


                                      47
<PAGE>

     The following table shows the current capacity of the principal units at
the Tremembe plant.

        Units                                          Current Capacity
        ------------------------------------------ -------------------------
                                                   (in metric tons per year)
        Esterification............................           5,000
        Amidification.............................           5,000
        Polymerization............................           2,500
        Specialties...............................           2,000
        Sulfonation/Sulfation.....................          30,000
        Betaines..................................          10,000
        Hydraulic fluids .........................           3,000
        Naphthalenes Sulfonates...................           3,000

     Triunfo Plant. The Triunfo plant is located in the Southern Complex. The
Triunfo plant was built by Oxiteno and started production in October 1989. It
had been inactive for two years when, in 1995, Oxiteno recommenced production
of MEK at this plant. The Triunfo plant has two process units, one for the
production of secondary butyl alcohol, which is used in the production of MEK,
and one for the production of MEK. In addition to these production units, the
Triunfo plant also has warehouse and maintenance facilities. As of December 31,
2001, Oxiteno had 53 employees at the Triunfo plant.

     The following table shows the current capacity of the principal units at
the Triunfo plant.

        Units                                          Current Capacity
        ------------------------------------------ -------------------------
                                                   (in metric tons per year)
        Methyl-Ethyl-Ketone (MEK).................           40,000
        Secondary Butyl Alcohol...................           35,000

     ISO 9001 Quality Systems Certificates. In 1995, the management and the
research and development departments of the Maua and Camacari plants were
awarded the ISO 9001 quality system certificate. The Tremembe plant was awarded
the ISO 9001 certificate in 1996; and the Triunfo plant was awarded the ISO
9001 certificate in 1997. The ISO 9001 certificate acknowledges the adequate
maintenance of a management system committed to quality improvement in all of
Oxiteno's departments. In 2001, each department at Oxiteno was awarded the ISO
9001 certificate, already in accordance with the 2000 requirements.

     ISO 14001 Environment Certificate. In January 2001, the management and the
research and development departments of the Triunfo plant were awarded the ISO
14001 certificate. The remaining departments are expected to be awarded such
certificate at the end of 2002. The ISO 14001 certificate acknowledges the
adequate maintenance of a management system committed to environmental
preservation.

     SA 8000 Certificate. Oxiteno was the first chemical and petrochemical
company in Brazil to receive the SA 8000 certificate, which establishes quality
management systems requirements related to social responsibility. The SA 8000
certificate addresses issues such as health, safety, labor relationship and
compliance with applicable legislation.

     QS 9000 Certificate. In 1998, Oxiteno was awarded the QS 9000 certificate,
which establishes management requirements for the automobile sector, in
connection with its sales of chemical products to this sector. Oxiteno was the
first Brazilian company to receive this certificate.


                                      48
<PAGE>

   Tequimar

     The following table sets forth the principal products stored at and the
storage capacity of Tequimar's plants.

<TABLE>
Plant                                                Product Lines                                Capacity (in m3)
------------------------- ----------------------------------------------------------------------- ----------------
<S>                       <C>                                                                          <C>
Aratu (BA)............... Glycols, aromatics, acrylates, acrylonitrile, EDC, TDI, normal
                          paraffins, linear alkyl benzene (LAB), linear alkyl sulphonate-LAS,
                          methanol, ethers, alcohols.............................................      131,450
Suape (PE)............... Fuels, VAM, acetic acid, styrene, butadiene............................       34,850
Maceio (AL).............. Alcohol, soybean oil...................................................       12,800
TIP Granel (SP).......... PET....................................................................        1,881
TIP Quimico (SP)......... Para-xylene,LAB, LAS...................................................        8,000
</TABLE>

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

A.   Operating Results

   Overview

     The principal businesses consolidated under Ultrapar are:

     o    the LPG distribution business, consolidated under Ultragaz;

     o    the chemical and petrochemical business, consolidated under Oxiteno;
          and

     o    the transportation and storage businesses, consolidated under
          Ultracargo.

     The following table sets forth the contribution of each of these
businesses to our net sales in 2001, 2000 and 1999. Intercompany transactions
are eliminated upon the consolidation at the Ultrapar level.

<TABLE>
                                                  Year Ended December 31,
                  ---------------------------------------------------------------------------------------
                             2001                           2000                          1999
                  --------------------------      -------------------------      ------------------------
                  Net Sales       Percentage      Net Sales      Percentage      Net Sales     Percentage
                  ---------       ----------      ---------      ----------      ---------     ----------
                                         (in millions of reais, except percentages)
<S>               <C>               <C>           <C>              <C>           <C>             <C>
Ultragaz.......   R$1,380.9          60.5%        R$1,125.7         60.0%        R$  937.3        58.8%
Oxiteno........       832.1          36.4             686.1         36.5             587.5        36.8
Ultracargo.....        71.7           3.1              66.1          3.5              56.6         3.5
Others.........        --            --                 0.1                           13.2         0.8
                  ---------         -----         ---------        -----         ---------       -----
     Total.....   R$2,284.7         100.0%        R$1,878.0        100.0%        R$1,594.6       100.0%
                  =========         =====         =========        =====         =========       =====
</TABLE>

   Presentation of Financial Information

     The following discussion should be read together with our financial
statements, including the notes thereto, appearing elsewhere in this document.
Our financial statements have been prepared in accordance with the Brazilian
corporate law and contain in the notes a description of the principal
differences between the Brazilian corporate law and U.S. GAAP as they relate to
us, and a reconciliation to U.S. GAAP of net income and shareholders' equity
for and as of the end of the periods covered.

     For your convenience, certain information has been converted into U.S.
dollars at the rate of R$2.3204 per U.S.$1.00, the commercial selling rate
reported by the Central Bank on December 31, 2001.

     All companies in Brazil are required to prepare financial statements on
the basis of the accounting methodology introduced in 1976 through the
Brazilian corporate law, Law No. 6,404, which, as of dates and for periods
ended prior to January 1, 1996, provides for monetary correction to compensate
for the effects of inflation on the financial statements. Companies registered
with the Comissao de Valores Mobiliarios, or CVM, in addition to preparing


                                      49
<PAGE>

financial statements in accordance with the Brazilian corporate law
methodology, have, for periods ended, and as of dates prior to January 1, 1996,
the choice to prepare financial statements in accordance with the CVM
methodology, which provides for comprehensive monetary correction of the
financial statements. The CVM methodology of adjusting for the effects of
inflation is more encompassing than that required by the Corporate Law
methodology. See Note 2 to the audited financial statements.

     The index used to adjust our financial statements until December 31, 1995
was the UFIR. For the year ended December 31, 1997, our financial statements
were adjusted for inflation by using the Indice Geral de Precos Disponibilidade
Interna, Or IGP-DI. See "-- U.S. GAAP Reconciliation" and Note 2 and 19(I)(a)
and (b) of our consolidated financial statements.

     The table below shows the inflation rate for the periods indicated, as
measured by the IGP-DI Index, published by Fundacao Getulio Vargas, as well as
the devaluation of the Brazilian currency against the U.S. dollar.

<TABLE>
                                                                    Year Ended December 31,
                                                           ----------------------------------------
Index                                                        1999            2000            2001
--------------------------------------------------------   --------        --------        --------
<S>                                                           <C>             <C>             <C>
 General Price Index--IGP-DI............................      20%             10%             10%
 Devaluation of the real against the U.S. dollar........      48%              9%             19%
</TABLE>

     Our consolidated financial statements are presented in this annual report
in accordance with the accounting principles determined by the Brazilian
corporate law, rather than in accordance with Brazilian GAAP. See
"Introduction." For a consistent presentation and to enable period-to-period
comparison, financial information presented in this annual report has been
restated for all periods presented in accordance with the Brazilian corporate
law method and thus differs from financial information reported in previous
annual reports for 2000 and 1999.

   Discussion of Critical Accounting Policies

     In connection with the preparation of the financial statements included in
this annual report, we have relied on variables and assumptions derived from
historical experience and various other factors that we deemed reasonable and
relevant. Although we review these estimates and assumptions in the ordinary
course of business, the portrayal of our financial condition and results of
operation often requires our management to make judgments regarding the effects
of matters that are inherently uncertain on the carrying value of our assets
and liabilities. Actual results may differ from those estimated under different
variables, assumptions or conditions. In order to provide an understanding
about how management forms its judgments about future events, including the
variables and assumptions underlying the estimates, and the sensitivity of
those judgments to different variables and conditions, we have included
comments related to each critical accounting policy described as follows:

     o    revenue recognition and accounts receivable;

     o    costs and inventory valuation;

     o    goodwill, intangible assets and amortization;

     o    impairment of assets;

     o    deferred taxes; and

     o    contingent liabilities

     Revenue Recognition and Accounts Receivable

     Revenue is recognized as our clients take delivery of purchased goods or
services. In the gas segment 12 percent of our sales are cash sales. The
balance of our sales in the gas segment as well as our sales to the Brazilian
market in the chemicals segment and our sales in the transportation and storage
businesses are credit sales, with a


                                      50
<PAGE>

collection period of up to 61 days - see note 19V(b) for additional information
about our credit policies. Our accounts receivables from these sales do not
accrue interest or indexation charges.

     Revenue from our exports in the chemical segment is recognized when
products are delivered to the customer or services performed, when the transfer
of risks, rights and obligations associated with the ownership of the products
take place. Typically, we finance our exports through US dollar denominated
debt instruments provided by banks with maturities and amounts that match the
terms of each export so financed. The average collection period for exports is
67 days after shipping. No interest accrues on these exports. However, with
respect to our exports which are not financed, we accrue on a monthly basis the
exchange rate variations from the date of shipment to the payment date.

     The allowance for doubtful accounts is recorded in an amount we consider
sufficient to cover any probable losses on realization of our accounts
receivable from our customers and is included in selling expenses; no
adjustment is made to net sales revenue. To establish the allowance for
doubtful accounts our management constantly evaluates the amount and
characteristics of our accounts receivable. When significant delays occur and
the likelihood of receiving these payments decreases, a provision is made. In
case receivables in arrears are guaranteed or there are reasonable grounds to
believe they will be paid, no provision is made. In December 2001, we made
provisions for some of our clients in Argentina. See Note 12 to our
consolidated financial statements.

     Costs and inventory valuation

     Inventories are comprised of finished goods, raw materials, including
liquefied petroleum gas (LPG), cylinders for resale and materials for
consumption. We account for these items at the average cost of purchase or
production. In case the replacement or realization values are lower than the
average cost, we use the lower amount. However, this has not been the case in
the periods presented in the financial statements included in this annual
report.

     Goodwill, Intangible Assets and Amortization

     We have made acquisitions in the past that, under U.S. GAAP, as of
December 31, 2001, included R$ 10.7 million of goodwill. We have no other
intangible assets recorded in our financial statements. We have been amortizing
goodwill on a straight line basis over a total period of 20 years, with 9 years
still remaining as of December 31, 2001. See Note 19V to our consolidated
financial statements for additional details regarding goodwill.

     "Impairment" of assets

     As required under Brazilian corporate law and U.S. GAAP, we perform cash
flow studies to determine if the accounting value of our assets, namely our
fixed assets, is compatible with the profitability resulting from their use. If
the profitability is lower than the accounting value, the asset will be subject
to a provision for impairment. As noted in Note 19V(c) to our consolidated
financial statements, this has not happened to date, and there are no
provisions for impairment recorded in our consolidated financial statements.

     Deferred Taxes

     We recognize deferred tax assets and liabilities based on the differences
between the financial statement carrying amounts and the tax basis of assets
and liabilities. We regularly review the deferred tax assets for recoverability
and establish a valuation allowance, as required, based on historical taxable
income, projected future taxable income, and the expected timing of the
reversals of existing temporary differences. In the event we or one of our
subsidiaries operate at a loss or are unable to generate sufficient future
taxable income, or if there is a material change in the actual effective tax
rates or time period within which the underlying temporary differences become
taxable or deductible, we evaluate the need to establish a valuation allowance
against all or a significant portion of our deferred tax assets resulting in an
increase in our effective tax rate. See Note 16 to our consolidated financial
statements for additional discussion about taxes.

     Contingencies

     We are currently involved in certain legal and administrative proceedings
that arise from our normal course of business, as described in Notes 10 and 12
to our financial statements and in "Item 8. Financial Information -
Consolidated Statements and Other Information - Legal Proceedings" of this
annual report. We believe that the


                                      51
<PAGE>

extent to which these contingencies are recognized in our financial statements
is adequate. It is our policy to record accrued liabilities in regard to
contingencies that could have a material adverse impact on the result of our
operations or our financial condition, to the extent not covered by insurance,
and that are probable to occur in the opinion of our legal advisers.

   Results of Operations - Year Ended December 31, 2001 Compared to Year Ended
December 31, 2000.

     Net Sales. Our net sales increased 22%, to R$2,284.7 million in 2001 from
R$1,878.0 million in 2000, due to: (i) an increase in Ultragaz's net sales of
23%, to R$1,381.1 million in 2001 from R$1,125.9 million in 2000 and (ii) an
increase in Oxiteno's net sales of 21%, to R$ 832.2 million in 2001 from
R$686.2 million in 2000. The increase in Ultragaz's net sales was due in part
to sales volume growth of 4.4% in 2001, while the overall Brazilian LPG market
decreased by 0.5%, mainly due to an increase in use of natural gas derived from
the Brazil-Bolivia pipeline. The increase in Ultragaz's net sales was also a
consequence of the increase of 18% in the R$ per ton net sales, due to
increases in the refinery prices charged by Petrobras. At Oxiteno, sales volume
increased by 4% compared to 2000. At Ultracargo, net revenue increased by 12%
in 2001, reaching R$105.3 million.

     Cost of Goods Sold and Gross Profit. Our cost of goods sold increased by
21%, to R$1,698.3 million in 2001 from R$1,399.6 million in 2000, mainly due to
a 25% increase in cost of goods sold at Ultragaz, to R$1,105.2 million in 2001
from R$886.6 million in 2000, basically due to the adjustment of LPG prices
charged by Petrobras in the domestic market to prices charged in the
international market. At Oxiteno, cost of goods sold increased by 16%, to
R$563.8 million in 2001 from R$484.6 million in 2000. This increase was mainly
due to the impact of the devaluation of the exchange rate on the price of raw
materials, which is linked to the U.S. dollar variation.

     Our gross profit increased by 23%, to R$586.4 million in 2001 from R$478.4
million in 2000. Both Ultragaz and Oxiteno contributed to this increase. At
Ultragaz, gross profit in 2001 was R$275.9 million, representing an increase of
15% compared to 2000. At Oxiteno, gross profit reached R$268.4 million in 2001,
representing an increase of 33% compared to 2000.

     Selling, General and Administrative Expenses. Our selling, general and
administrative expenses increased by 19%, to R$317.7 million in 2001 from
R$266.2 million in 2000, mainly due to the increase of expenses at Ultragaz.

     At Ultragaz, depreciation expenses increased to R$61.9 million in 2001
from R$42.3 million in 2000, due to an increase in fixed assets as a result of
an increase in investments. Other expenses increased to R$115.5 million in 2001
from R$102.9 million in 2000, mainly due to non-recurring expenses related to
marketing campaigns and sales promotions as a result of pre-sales activities
and the opening of new filling plants.

     At Oxiteno, selling, general and administrative expenses increased by 14%,
to R$123.7 million in 2001 from R$108.0 million in 2000. This increase was
mainly due to an increase in selling expenses, to R$53.9 million in 2001 from
R$43.2 million in 2000, as a result of the bad debt provision of R$6.1 million,
related to the worsening of the Argentina crisis, and to an increase of
international freight costs, impacted by the devaluation of the real against
the U.S. dollar.

     Net Financial Income (Expense). We recorded a net financial expense of
R$31.1 million in 2001, compared to net financial income of R$43.4 million in
2000, mainly due to the impact of the currency devaluation on our U.S.
dollar-linked liabilities. At December 31, 2001, our total cash position was
R$656.0 million, of which R$294.6 million was held in U.S. dollar indexed
assets. The distribution of extraordinary dividends in September 2001, in the
amount of R$200.1 million, decreased our revenues from investments in
marketable securities in the fourth quarter of 2001. Total debt at December 31,
2001 was R$414.7 million, and the amount of liabilities in foreign currency was
R$205.2 million.

     Non-operating Income (Expense). Our net non-operating expenses increased
by 3% to R$17.0 million in 2001, from R$16.5 million in 2000.

     Income before taxes, equity earnings and minority interest. Income before
taxes, equity earnings and minority interest decreased by 4% to R$230.8 million
in 2001 from R$240.4 million in 2000.


                                      52
<PAGE>

     Equity in earnings of affiliates. This account registered a gain of R$1.9
million in 2001 compared to a gain of R$9.6 million in 2000. This reduction is
primarily due to a decrease in Copene's results of operations in 2001. Our
subsidiary Oxiteno has a 10.4% ownership interest in Norquisa, Copene's parent
company.

     Minority Interest. Minority interest decreased to R$73.0 million in 2001,
from R$74.2 million in 2000, principally due to a reduction of income before
taxes at Ultragaz.

     Net Income. Our net income increased to R$132.2 million in 2001 from
R$128.5 million in 2000, primarily due to Oxiteno's results.

     EBITDA. Our EBITDA increased by 22% to R$372.5 million in 2001 from
R$304.3 million in 2000. Ultragaz's EBITDA increased by 16%, to R$163.0 million
in 2001 from R$140.9 million in 2000. Oxiteno's EBITDA increased by 34%, to
R$176.8 million in 2001 from R$132.4 million in 2000. Our EBITDA margin
remained stable at 16%.

   Results of Operations - Year Ended December 31, 2000 Compared to Year Ended
December 31, 1999

     Net Sales. Our net sales increased by 18% to R$1,878.0 million in 2000
from R$1,594.6 million in 1999, principally as a result of an increase in net
sales at Ultragaz and Oxiteno. Ultragaz's net sales increased by 20% to
R$1,125.9 million in 2000 from R$937.4 million in 1999. Oxiteno's net sales
increased by 17%, to R$686.2 million in 2000 from R$587.5 million in 1999.

     Ultragaz's net sales increased due to an increase in sales volume to
1,288.3 thousand tons in 2000, from 1,242.3 thousand tons in 1999, and to an
overall increase in prices.

     Oxiteno's sales volume increased by 1% to 428.2 thousand tons in 2000 from
424.2 thousand tons in 1999. Oxiteno's average prices in reais increased from
1999 to 2000, as a result of the recovery of international petrochemical prices
due to higher oil and oil derivative prices.

     Cost of Goods Sold and Gross Profit. Our cost of goods sold increased by
26% (compared to a 18% increase in net sales) to R$1,399.6 million in 2000 from
R$1,106.7 million in 1999, primarily due to a 37% increase in Oxiteno's cost of
goods sold to R$484.6 million in 2000 from R$353.7 million in 1999. The
increase in Oxiteno's cost of goods sold was primarily due to higher ethylene
prices as a consequence of the higher naphtha prices. Ultragaz's cost of goods
sold increased by 23% to R$886.6 million in 2000 from R$722.0 million in 1999,
primarily as a result of the higher refinery price charged by Petrobras, as a
consequence of higher international LPG prices.

     Our gross profit decreased by 2% to R$478.4 million in 2000 from R$487.9
million in 1999, as a result of a decrease in Oxiteno's gross profit to R$201.6
million in 2000 (a 14% decrease from gross profit in 1999). Ultragaz's gross
profit in 2000 was R$239.3 million, representing a decrease of 11% compared to
1999.

     Selling, General and Administrative expenses. Our selling, general and
administrative expenses increased by 14%, to R$266.2 million in 2000 from
R$233.6 million in 1999, primarily as a result of an increase of Ultragaz's
expenses.

     Ultragaz's depreciation expenses increased to R$42.3 million in 2000, from
R$33.6 million in 1999, due to an increase in fixed assets derived from the
high level of investments made. Other expenses increased to R$102.9 million in
2000 from R$83.9 million in 1999, due mainly to salary increases resulting from
labor agreements, and to an increase in the number of employees, resulting from
the opening of new filling plants.

     Oxiteno's selling, general and administrative expenses increased by 13% to
R$108.0 million in 2000 from R$95.5 million in 1999. The R$12.5 million
increase results from an increase in export sales, which increased the selling
expenses by R$4.0 million, and from a bad debt provision of R$2.5 million in
June 2000, to account for an eventual loss resulting from default by a South
African distributor. In addition, administrative expenses increased R$6.0
million due to salary increases implemented by labor agreements.

     Net Financial Income (Expense). We recorded a net financial income of
R$43.4 million in 2000, compared to a net financial expense of R$34.4 million
in 1999, driven mainly by the currency devaluation that occurred in January


                                      53
<PAGE>

1999, which negatively affected our financial results for that year, and by an
increase in our financial income due to an increase in our cash position in
2000. At December 31, 2000, our cash position was R$862.2 million of which R$
65.6 million were held in U.S dollar indexed assets, and our total debt was
R$425.9 million, of which R$213.3 million were linked to the U.S. dollar. In
relation to December 31, 1999, our net cash position increased by R$49.0
million.

     Non-operating Income (Expense). Our net non-operating expense decreased by
11% to R$16.5 million in 2000 from R$18.3 million in 1999.

     Income before taxes, equity earnings and minority interest. Income before
taxes, equity earnings and minority interest increased by 17% to R$240.4
million in 2000 from R$205.4 million in 1999, principally due to the above
mentioned improvement in our financial results, and to a lesser extent, to a
17% decrease in our operating profit to R$213.5 million in 2000 from R$258.1
million in 1999.

     Equity in earnings of affiliates. This account registered a gain of R$9.6
million in 2000 compared to a loss of R$3.2 million in 1999. This increase is
primarily due to an improvement in Copene's results of operation in 2000. Our
subsidiary Oxiteno has a 10.4% ownership interest in Norquisa, Copene's parent
company.

     Minority Interest. Minority interest increased by 1% to R$74.2 million in
2000 from R$73.7 million in 1999.

     Net Income. Our net income increased to R$128.5 million in 2000 from
R$87.9 million in 1999, primarily due to the improvement in our net financial
income in 2000.

     EBITDA. Our EBITDA decreased by 10% to R$304.3 million in 2000 from
R$337.0 million in 1999. Ultragaz's EBITDA increased by 5% to R$140.9 million
in 2000 from R$134.3 million in 1999. Oxiteno's EBITDA decreased by 24% to
R$132.4 million in 2000 from R$175.3 million in 1999, mainly due to a decrease
in operating profits resulting from higher ethylene prices. EBITDA margin
decreased to 16% in 2000 from 21% in 1999.

   Inflation

     See "--Presentation of Financial Information" for a discussion of
accounting presentation relating to inflation.

   Currency Fluctuations

     The principal foreign exchange risk we face arises from our U.S. dollar
indebtedness and from our U.S. dollar denominated operating expenses.

     A portion of our debt obligations is denominated in U.S. dollars. In
addition, a portion of our operating expenses, including certain raw materials,
is denominated in or indexed to U.S. dollars. Most of our revenues are
denominated in reais, although sales prices of products of the chemicals
segment are linked to international market prices established in U.S. dollars.
As a result, we are exposed to currency exchange risks that may adversely
affect our business, financial condition and results of operations, as well as
our ability to meet our debt service obligations. However, the fact that some
of our revenues are linked to U.S. dollars as well as our policy of managing
the foreign exchange risk of our foreign currency indebtedness may, to a
certain extent, offset this effect.

     Our policy is to manage the risk of all scheduled disbursements related to
liabilities in foreign currency by investing in U.S. dollar-denominated mutual
funds and foreign currency/interest swap contracts, under which we pay variable
interest in Brazilian currency based on the interbank certificate of deposit
rate, or CDI, and receive fixed interest in U.S. currency. As of December 31,
2001, our total debt was R$414.7 million, and our total liabilities in foreign
currency were R$217.4 million. At December 31, 2001, our total cash position,
including marketable securities, was R$656.0 million, of which R$304.8 million
were held in U.S. dollar indexed assets.


                                      54
<PAGE>

   Government Policies

     Brazilian economic, fiscal, monetary and political policies and factors
have affected us in the past and will affect us in the future. See "Item 3. Key
Information--Risk Factors--Risks relating to Brazil" for a description of some
of these policies and factors that can affect our results.

B.   Liquidity and Capital Resources

   Sources of Funds

     Our cash flow from operations was R$339.7 million, R$302.7 million and
R$373.9 million in 2001, 2000 and 1999, respectively. Cash flow from borrowings
amounted to R$54.4 million, R$66.9 million and R$43.7 million in 2001, 2000 and
1999, respectively. In connection with our IPO in 1999, we raised net proceeds
of approximately R$330.6 million. We believe we have sufficient working capital
for our present requirements.

   Uses of Funds

     Acquisitions of property, plant and equipment consumed cash of R$145.7
million, R$143.5 million and R$70.0 million in 2001, 2000 and 1999,
respectively. Payment of dividends and interest on shareholders' equity
consumed cash flow of R$244.3 million, R$52.7 million and R$33.3 million in
2001, 2000 and 1999, respectively. Repayment of debt consumed cash flow of
R$85.3 million, R$70.4 million and R$93.2 million in 2001, 2000 and 1999,
respectively.

   Debt

     As of December 31, 2001, our long-term debt (including the short-term
portion of long-term debt) was as follows:

<TABLE>
                                                                                                  Principal amount
Debt                                                                   Interest Payable              outstanding
-------------------------------------------------------------  -------------------------------  --------------------
                                                                                               (in millions of reais)
<S>                                                            <C>                                   <C>
U.S. dollar-denominated loans:
IFC..........................................................             9.4%                        R$23.3
Eximbank and others..........................................         5.9% to 10.5%                      8.7
Bonds........................................................              9%                          139.6
Trade Related................................................          2.8% to 6%                       33.6
Real-denominated loans:
Banco Nacional de Desenvolvimento Economico e Social -
BNDES (1) ...................................................  UMBNDES plus 10.2% to 11.8%              10.4
                                                                  TJLP plus 1.8% to 6%                 181.4
                                                                     IGP-M plus 6.5%                    16.2
Repass Loans (1).............................................         TJLP plus 4%                       1.5
                                                                                                     -------
     Total...................................................                                        R$414.7
                                                                                                     =======
</TABLE>

---------
(1)  The TJLP is a nominal interest rate established on a quarterly basis. In
     2001, the TJLP amounted to 9.5% per year. The UMBNDES is based on the
     average cost of the BNDES's currency basket. The currency basket is a
     bundle of BNDES debt obligations in foreign currencies.


                                      55
<PAGE>

     Our long-term debt as of December 31, 2001 matures in accordance with the
following schedule:

                                                              Amount
       Year ending December 31,                       (in million of  reais)
       2003 ........................................         R$ 72.7
       2004 ........................................            39.1
       2005 ........................................           161.3
       2006 and thereafter..........................            17.1
                                                      ----------------------
       Total........................................         R$290.2
                                                      ======================

     As of December 31, 2001, R$36.4 million of our debt was secured by
property, plant and equipment, R$16.3 million was secured by shares of
affiliated companies and R$60.6 million was secured by third party guarantees.

     We and our subsidiary Ultragaz are subject to covenants as guarantors in
accordance with the terms of an indenture relating to the issuance by Companhia
Ultragaz of U.S.$60,000,000 of notes, which mature in 2005 and have put and
call options in June 2002. Such covenants restrict our ability to incur
indebtedness, constitute liens, make dividend payments and other distributions
and conduct sale-leaseback transactions, mergers and asset sales. Companhia
Ultragaz is in compliance with such covenants and believes that they do not
significantly restrict its ability to manage its activities.

     In May 2002, Companhia Ultragaz assigned its right to repurchase the notes
under the put and call option to LPG International Inc., a subsidiary of
Ultragaz Participacoes S.A. LPG International Inc. entered into a syndicated
loan which matures in August 2004 to finance the repurchase of the notes. In
May 2002, LPG International Inc. exercised the call and purchased the notes.
The notes remain outstanding and Companhia Ultragaz remains subject to the note
covenants.

     Oxiteno and its subsidiary Oxiteno Nordeste S.A. are also subject to
covenants contained in a loan agreement entered into with the International
Finance Corporation, which restrict their ability to incur indebtedness,
constitute liens, make dividend payments and other distributions, and conduct
consolidations, mergers and asset sales.

     None of these covenants have restricted our ability to conduct our
business in the ordinary course as of the date of this annual report.

     As a result of the devaluation of the real in January 1999, our
dollar-denominated debt generated a significant accounting loss. As of December
31, 2001, we had R$217.4 million in dollar-denominated debt and R$304.8 million
in dollar-denominated assets. See Note 12 of our consolidated financial
statements.

     The contractual obligations of the company for the next years are as
follows (in million of reais):

<TABLE>
Contractual Obligations                            Total        2002     2003 to 2004  2005 to 2006  2007 to 2012
--------------------------------------------   -----------  -----------  ------------  ------------  ------------
<S>                                               <C>           <C>          <C>           <C>         <C>
  Long-Term Debt............................        290.2           -        111.8         173.9           4.5
  Unconditional Purchase Obligations........      2,014.0       183.1        366.2         366.2       1,098.5
                                               -----------  -----------  ------------  ------------  ------------
Total Contractual Cash Obligations..........      2,304.2       183.1        478.0         540.1       1,103.0
                                               -----------  -----------  ------------  ------------  ------------
</TABLE>

---------
     (1) The unconditional purchase obligation refers to the long-term contract
that we have with Copene, regarding the minimum annual volume of 138,000 tons
of ethylene that we are obligated to purchase, until 2012. This contract does
not define the price for the ethylene, so the amount in reais is based on the
ethylene price as of December 31, 2001.


                                      56
<PAGE>

   Investments and Capital Expenditures

     Investments. In November 1997, Ultracargo acquired the shares it did not
already own in Tequimar, Ultracargo's operating subsidiary for its storage
business, from Copene and from the public, for a total of R$28.1 million. As a
result of this operation, we indirectly control 100% of Tequimar's total voting
share capital. We financed the purchase mainly with internal cash flow.

     In August 1999, we acquired the remaining 10% of the total voting share
capital of Bahiana.

     On May 23, 2001, we acquired the 35% voting interest of Transultra, that
we did not already own, from Petrobras Distribuidora S.A. We made this
acquisition through our wholly-owned subsidiary, Ultracargo, in an auction held
at the Bovespa. The acquisition value corresponded to the minimum price at the
auction, which was set at R$21 million. Of that amount, 5% was paid in cash,
and the remaining 95% was paid with government securities.

     In March 2002, Oxiteno made a tender offer for the acquisition of the
shares of its subsidiary Oxiteno Nordeste. The tender offer was completed on
April 16, 2002, through the acquisition of 93,871 shares of Oxiteno Nordeste by
Oxiteno, representing approximately 73.3% of the shares held by minority
shareholders. Oxiteno increased its share ownership from 97% to 98.9% for
approximately R$4.4 million.

     Capital Expenditures. The following table shows our capital expenditures
for property, plant and equipment in 2001, 2000 and 1999, as well as the
projections for 2002.

<TABLE>
                                         Projected for the
                                            Year Ended
                                            December 31,                Year Ended December 31,
                                         -----------------     ----------------------------------------
                                                2002             2001             2000            1999
                                              -------          -------          -------          ------
                                                                (in millions of reais)
<S>                                           <C>              <C>              <C>              <C>
Ultragaz ...........................          R $90.0          R$148.2          R$120.4          R$62.3
Oxiteno ............................             40.0             42.0             49.9            21.0
Ultracargo .........................             10.0             11.9             11.6            10.4
Other ..............................             --                0.1              0.5             0.8
                                              -------          -------          -------          ------
   Total ...........................          R$140.0          R$203.1          R$182.4          R$94.5
                                              =======          =======          =======          ======
</TABLE>

     Oxiteno's estimated capital expenditures for 2002 include the expansion of
its production capacity, the implementation of quality programs and of
Enterprise Resource Planning, or ERP, a management integration software, and
include the modernization and renewal of its industrial plants.

     At Ultragaz, 2001 investments included the expansion of its operations to
the non-residential segment, the building of new filling plants and the
acquisition of new cylinders. In 2002, Ultragaz intends to maintain this
investment strategy.

     In 2001, Ultracargo invested in the renewal and expansion of its operating
capacity. For 2002, the company expects to invest in the expansion of its
units.

   U.S. GAAP Reconciliation

     Our net income under the Brazilian corporate law for the years ended
December 31, 2001, 2000 and 1999 was R$132.2 million, R$128.5 million and
R$87.9 million, respectively. Under U.S. GAAP, we have reported net income of
R$123.0 million, R$123.8 million and R$98.7 million for the years ended
December 31, 2001, 2000 and 1999, respectively.


                                      57
<PAGE>

     Our shareholders' equity under the Brazilian corporate law as of December
31, 2001 and 2000, was R$799.9 million and R$897.7 million, respectively. Under
U.S. GAAP, we would have reported shareholders' equity of R$748.5 million and
R$854.6 million as of December 31, 2001 and 2000, respectively.

     In 1999, we had higher expenses under Brazilian corporate law due to the
obligation to charge the expenses related to the IPO against our net income,
whereas under U.S. GAAP these expenses are included directly in our
shareholders' equity.

     The reconciliation of our net income and shareholders' equity to U.S.
GAAP, includes the effects of inflation using the IGP-DI and the UFIR indexes.
The principal differences other than inflation accounting between the Brazilian
corporate law and U.S. GAAP that affect our net income and shareholders'
equity, relate to the treatment of the following items:

     o    capitalized interest;

     o    fixed assets revaluation reversal;

     o    reversal of deferred charges;

     o    restatement of property, plant and equipment to adjust for the
          effects of inflation between January 1, 1996 and December 31, 1997,
          and its respective depreciation, not required by the Brazilian
          corporate law;

     o    deferred tax effects on the foregoing adjustments;

     o    differences in equity accounting;

     o    securities available for sale;

     o    purchase value adjustments relating to business combinations;

     o    accounting for IPO expenses; and

     o    mark-to-market of financial instruments.

     See Note 19 to our consolidated financial statements for a description of
these differences as they relate to us and a reconciliation to U.S. GAAP of net
income and total shareholders' equity.

C.   Research and Development, Patents and Licenses, etc.

     Ultragaz' research and development activities focus primarily in two
areas. Firstly, Ultragaz has developed products such as Ultracort for
alternative cutting fuel, and is developing the use of LPG for agribusiness
purposes, including for grain drying and for the thermal control of noxious
weeds. Secondly, Ultragaz is exploring certain uses for LPG, such as gas power
generators, LPG vaporizers, indoor space heating and gas refrigerators.

     Oxiteno conducts extensive research and development activities,
principally related to the application of specialty chemicals and production
process improvements. Oxiteno's principal research, development and engineering
facility is located at the Maua plant. As of December 31, 2001, 115 Oxiteno
employees were engaged in research, development and engineering activities.
Oxiteno's expenditures on research and development in 2001, 2000 and 1999 were
R$10.2 million, R$9.5 million and R$9.5 million, respectively. Oxiteno
purchases and licenses technology from time to time, particularly for the
development of specialty chemical products.

D.   Trend Information

   Deregulation of the Oil and LPG Industries in Brazil

     Termination of Petrobras' Monopoly. Historically, Petrobras has been the
only supplier of LPG to the distribution market. Petrobras has also been the
only supplier of naphtha, which is the raw material used by the first
generation petrochemical industries. Notwithstanding the termination of
Petrobras' legal monopoly in August 2000, Petrobras effectively remains the
principal naphtha supplier in Brazil. In the LPG sector, Petrobras remained the
sole provider to the Brazilian market until December 2001, when the government
ended the sector deregulation process, and officially opened the market to the
importation of LPG. We expect domestic prices to reflect


                                      58
<PAGE>

international prices. Currently, the naphtha price is U.S.$7.00 per ton above
the international reference (ARA), and the LPG price, is U.S.$50.00 per ton
above the international price (following the Mont Belvieu reference).

     Deregulation of LPG Prices. The Brazilian government has historically
regulated both the refinery price and the retail price of LPG. Since the
mid-1990's, the government has promoted the deregulation process of these
prices. As of December 2000, the government had deregulated the LPG retail
prices in the states of Sao Paulo, Rio de Janeiro, Minas Gerais, Espirito
Santo, Parana, Santa Catarina and Rio Grande do Sul and, by May 2001, had
deregulated the retail price in the remaining northeast and mid-west regions.
In January 2002, the government created the CIDE, a new tax which replaces the
PPE and is applied equally to both domestic and imported products. Currently,
LPG prices charged by Petrobras in the domestic market are at about the same
levels as prices charged in the international market plus an average of U.S.$
50 per ton, to pass through handling expenses. Prior to deregulation, the
government's control of the refinery and the retail store prices tended to
reduce the volatility of our LPG distribution business's operating margins. In
a deregulated environment, the refinery price of LPG is expected to fluctuate
according to the international market. In case of an increase in the LPG
refinery price, Brazilian LPG distributors, including Ultragaz, will have to
maintain their operating margins by increasing their prices and/or improving
their operating performance.

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A.   Directors and Senior Management

   Our Management

     The following table sets forth the names and positions of our directors
and executive officers.

<TABLE>
                                                                                          Years with
Name                                               Position                               the Company       Age
-------------------------------------------------  -----------------------------------   -------------   ---------
<S>                                                <C>                                         <C>           <C>
Board of Directors
Paulo Guilherme Aguiar Cunha.....................  Chairman                                    34            62
Lucio de Castro Andrade Filho....................  Vice Chairman                               24            57
Ana Maria Levy Villela Igel......................  Director                                     3            60
Renato Ochman....................................  Director                                     2            42
Nildemar Secches.................................  Director                                    --            53
Paulo Vieira Belotti.............................  Director                                     3            70

Executive Officers
  Paulo Guilherme Aguiar Cunha...................  Chief Executive Officer                     34            62
  Lucio de Castro Andrade Filho..................  Vice-President                              24            57
  Fabio Schvartsman..............................  Chief Financial Officer,                    17            48
                                                        Ultrapar
  Jose Carlos Guimaraes de Almeida...............  Chief Operating Officer,                    41            67
                                                        Ultragaz
  Pedro Wongtschowski............................  Chief Operating Officer, Oxiteno            24            56
</TABLE>

     Paulo Guilherme Aguiar Cunha. Mr. Cunha is our chief executive officer and
chairman of our board of directors. Mr. Cunha joined Ultrapar in 1967 and was
appointed vice-president in 1973 and chief executive officer in 1981. Mr. Cunha
has also served as a member of the National Monetary Council, BNDESPAR, a
subsidiary of BNDES, ABNT, known as the National Standards Institute, and as
chief executive officer of IBP, the Brazilian Petroleum Institute. Mr. Cunha is
the vice-president of ABIQUIM, the Brazilian Association of Chemical Companies,
a board member of the Superior Council of Economy and of the Consultative
Council for Industry of FIESP, the state of Sao Paulo Industry Association, the
founder and member of the board of IEDI - Research Institution for the
Industrial Development, a member of the board of CSN - Companhia Siderurgica
Nacional and of Monteiro Aranha. Mr. Cunha is also a member of the board of
IBMEC Business School and of the board of IPT - Technological Research
Institution. Mr. Cunha received a degree in industrial mechanical engineering
from Catholic University in Rio de Janeiro in 1962. Mr. Cunha also was a
Professor of Engineering at Catholic University and at the Federal University
of Rio de Janeiro from 1963 to 1966.


                                      59
<PAGE>

     Ana Maria Levy Villela Igel. Ms. Villela Igel joined us as a member of the
board of directors in October 1998. She is also a member of the Board of
Directors of Ultra S.A. and Igel Participacoes, or Igel. She has served as a
secretary in the finance department at the United Nations and as a counselor
for CIEE-Centro de Integracao Empresa Escola, an organization which assists
students in transitioning to the professional environment, and as a counselor
and member of the Executive Committee of Alumni Association - Bi-National
Cultural Center. She is also involved in several organizations that promote
social welfare activities for children and the elderly throughout Brazil.

     Renato Ochman. Mr. Ochman joined us in April 2001 as a member of the board
of directors. Mr. Ochman is a partner in the law firm Ochman Advogados
Associados S/C and General Secretary of the Chamber of Commerce and Industry of
Brazil-Israel. Mr. Ochman is a member of the Youth's Committee of the United
Nations - Brazil and is also a member of the audit committee of the Association
for Assistance to Handicapped Infants. Previously, Mr. Ochman taught commercial
law at the Fundacao Getulio Vargas and acted as legal counsel for the Brazilian
Association of Supermarkets. Mr. Ochman has obtained a law degree from the
Catholic University of Rio Grande do Sul and a commercial law masters degree
and post-graduate degree from the Catholic University of Sao Paulo.

     Nildemar Sechhes. Mr. Secches joined us in April 2002 as a member of the
board of directors. Mr. Secches is the chief executive officer of Empresas
Perdigao since 1995, chief executive officer of ABEF -- Brazilian Association
of Chicken Producers and Exporters and vice-president of ABIPECS -- Brazilian
Association of Pork Producers and Exporters Industries. Mr. Sechhes is also a
member of the board of WEG S.A. From 1972 to 1990 , Mr. Secches worked for
Banco Nacional de Desenvolvimento Economico e Social - BNDES, serving as an
executive officer from 1987 to 1990. From 1990 to 1994, Mr. Secches served as
chief executive officer of Grupo Iochpe-Maxion. Mr. Secches received a degree
in mechanical engineering from the University of Sao Paulo, a Master's Degree
in Finance from Pontificia Universidade Catolica of Rio de Janeiro and a
Doctoral Degree in Economics from the University of Campinas (state of Sao
Paulo).

     Paulo Vieira Belotti. Mr. Belotti joined us in October 1998 as a member of
our board of directors. Mr. Belotti has also served as chief executive officer
of several companies including Petrobras Distribuidora S.A., Petrobras
Mineracao S.A., Petrobras Quimica S.A., Petrobras Comercio Internacional S.A.,
Petrobras Fertilizantes S.A. and Norcell S.A. He has also served as a member of
the board of directors of Nordon Industria Metalurgica S.A. Mr. Belotti
received a degree in civil engineering from the National School of Engineering
at the University of Brazil, a bachelor's degree in mathematics from the
University of Guanabara and a degree in nuclear engineering from Oak Ridge
School of Technology in Tennessee.

     Lucio de Castro Andrade Filho. Mr. Andrade Filho is the vice chairman of
our board of directors and vice president executive officer. He joined Ultrapar
in 1977 and has also been a member of the board of directors of Oxiteno and
Oxiteno Nordeste since 1993. Mr. Andrade Filho has held a number of positions
at Ultrapar in both the LPG and the chemical and petrochemical businesses. Mr.
Andrade Filho is also the chief executive officer of GLP-- Qualidade
Compartilhada, an LPG industry association and a member of the board of
directors of the Brazilian Petroleum Institute or Instituto Brasileiro de
Petroleo - IBP. Mr. Andrade Filho received degrees in civil engineering and in
administration from Mackenzie University in Sao Paulo in 1968 and 1972,
respectively.

     Jose Carlos Guimaraes de Almeida. Mr. Almeida joined Ultrapar in 1960 and
has served as an executive officer since 1985 and as a member of the board of
directors of Ultragaz since 1982. Mr. Almeida is the chief operating officer of
Ultrapar's LPG distribution business. Prior to joining us, Mr. Almeida was the
Chief Executive Officer of Ultralar Aparelhos e Servicos S.A., general
superintendent and member of the consultative council of Ultracred Credito,
Financiamento e Investimentos S.A., treasury officer of Unidade Interamericana
de Publicidade, and director general of Vedebrasil II Participacoes S.A., the
holding company in Brazil of Vendex International. Since 1990, Mr. Almeida has
been the chief executive officer of Metalplus-Metalurgica Plus S.A. and of
Plenogas Ditribuidora de Gas S.A. Mr. Almeida received a degree in civil
engineering in 1962 from Pontificia Universidade Catolica of Rio de Janeiro and
a Master's Degree in Economic Engineering.

     Fabio Schvartsman. Mr. Schvartsman joined Ultrapar in 1985 and has held a
number of positions, including planning officer, planning and control officer
and financial superintendent officer. Mr. Schvartsman has served as our
executive officer since 1990 and as a director of Companhia Ultragaz since
1994. Prior to joining us, Mr. Schvartsman worked in the finance area at
Duratex S.A. Mr. Schvartsman is our chief financial officer and our


                                      60
<PAGE>


investor relations officer. Mr. Schvartsman received a degree in production
engineering and a master's degree in business administration from the Business
School of Sao Paulo/Getulio Vargas Foundation in 1979.

     Pedro Wongtschowski. Mr. Wongtschowski has served as executive officer
since 1985. Mr.Wongtschowski was employed at our former chemical fertilizer
company from 1970 until 1972 and rejoined Ultrapar in 1977. Mr. Wongtschowski
is also the chief executive officer of the superior council of ABEQ- Brazilian
Association of Chemical Engineering, vice-chairman of the board of directors of
Tequimar and a member of the board of directors of ABIQUIM - Brazilian Chemical
Industries Association and APLA-Latin American Petrochemical and Chemical
Associations. Mr. Wongtschowski is the chief operating officer of our chemical
and petrochemical businesses. Mr. Wongtschowski received a degree in chemical
engineering, master's degree in chemical engineering and a doctoral degree in
chemical engineering from the University of Sao Paulo. Mr. Wongtschowski is the
author of the book "Industria Quimica - Riscos e Oportunidades" (Chemical
Industry - Risks and Opportunities), published in 1999.

B.   Compensation

     For the year ended December 31, 2001, the aggregate compensation of all
our directors and executive officers was approximately R$3.7 million. Except
for the provisions related to Ultraprev - Associacao de Previdencia
Complementar, known as Ultraprev, which manages our pension plan, we have not
set aside or accrued any additional amounts for pension, retirement or similar
benefits for our directors and executive officers. See "- Employees."

     On April 27, 2001, our shareholders approved a stock option plan for our
management and senior employees, and those at our subsidiaries. Management of
this plan will be conducted by an implementation committee, comprised of at
least three members elected by the board of directors. The committee will have
the authority to select the beneficiaries of this plan and to determine the
dates on which options for Ultrapar shares may be exercised. As of March 31,
2002, no options had been granted under this plan.

C.   Board Practices

     We are managed by a board of directors (i.e., Conselho de Administracao)
which consists of no fewer than four and no more than six members, all of them
shareholders, as prescribed by the Brazilian corporate law, as well as by our
executive officers (i.e., Diretoria).

     Board of Directors. Our board of directors generally meets quarterly or
whenever called together by its chairman or by any two directors. Each board of
directors meeting requires a quorum of a minimum of three members, including
the chairman or the vice-chairman. The board of directors is responsible for
the general business policies of Ultrapar, for electing the executive officers
and supervising their management of Ultrapar, and for deliberating capital
increases up to the authorized capital, on distributions of dividends and
interest on shareholders' equity, investments in other companies, Ultrapar's
dissolution or incorporation and the appointment of independent auditors.

     Members of our board of directors are appointed by our shareholders for a
period of one year and may be reelected.

     According to Law 10,303, dated October 31, 2001, shareholders that are not
a controlling shareholder but together hold (i) preferred shares representing
at least 10% of our total share capital; or (ii) common shares representing at
least 15% of our voting capital; are entitled to appoint one member and its
respective alternate to our board of directors. If no group of common or
preferred shareholders meets the thresholds described above, shareholders
holding preferred or common shares representing at least 10% of our total share
capital are entitled to combine their holdings to appoint one member and its
respective alternate to our board of directors. Until 2005, the board members
that may be elected by holders of preferred shares representing 10% of our
capital or by the combined holdings of holders of preferred and common shares
are to be chosen from a list of three names drawn up by the controlling
shareholder. These holders have to prove the continuing ownership of the shares
demanded, during a period of at least three months, immediately before the
annual shareholders' meeting. Any board members elected by minority
shareholders will have veto powers on the selection of our independent
auditors.


                                      61
<PAGE>

     Executive Officers. Our executive officers include our chief executive
officer and a minimum of three and a maximum of six other members. The
executive officers work as a board and are responsible for our day-to-day
management. Each of our current executive officers has been appointed by the
board of directors for a one-year term, which began on April 29, 2002 and may
remain in office until reappointed or replaced. Executive officers may be
successively reappointed.

     Audit Committee. Under the Brazilian corporate law and our by-laws, we are
not required to, and currently do not, maintain a permanent audit committee. We
would, however, be required to establish an audit committee upon the request of
shareholders who, in the aggregate, hold 2% of the common shares or 1% of the
preferred shares. The primary responsibility of the audit committee, which, if
established, would act independently from our management and external auditors,
would be to review our financial statements and report on them to our
shareholders.

D.   Employees

     As of December 31, 2001, Ultrapar had 5,592 employees.

     The following table sets forth Ultrapar's number of employees per line of
business at the dates indicated.

                                                       As of December 31,
                                                  ---------------------------
    Business                                       1999       2000       2001
    -----------------------------------------     -----      -----      -----
    LPG Distribution.........................     3,906      4,014      4,022
    Chemical and petrochemical...............       892        911        902
    Transportation and storage service.......       600        596        627
    Others...................................        46         38         41
                                                  -----      -----      -----
       Total.................................     5,444      5,559      5,592
                                                  =====      =====      =====

     Ultragaz's employees are covered by a collective bargaining agreement with
the union representing the employees in the LPG industry.

     According to Brazilian legislation, Oxiteno's employees are represented by
labor unions, and are currently covered by five collective bargaining
agreements, which are renewed annually.

     Tequimar's employees are covered by a collective bargaining agreement
entered into between their trade union and Tequimar, and Transultra's employees
are covered by a collective bargaining agreement entered into between their
trade union and Transultra.

     On February 15, 2001, our board of directors approved the adoption of a
defined contribution pension plan to be sponsored by Ultrapar and each of its
subsidiaries. Participating employees have been contributing to this plan,
managed by Ultraprev - Associacao de Previdencia Complementar, known as
Ultraprev, since August 2001. Under the terms of the plan, every year each
participating employee chooses his or her basic contribution to the plan. Each
sponsoring company provides a matching contribution in an amount equivalent to
each basic contribution, up to a limit of 11% of the employee's reference
salary, according to the rules of the plan. As participating employees retire,
they may choose to receive either (i) a monthly sum ranging between 0.5% and
1.0% of their respective contribution in Ultraprev or (ii) a fixed monthly
amount which will exhaust their respective contribution over a period of 5 to
25 years. The sponsoring company does not guarantee the amounts or the duration
of the benefits received by each employee that retires. The total number of
participating employees at December 2001 was 4,939. To date, there are no
retired employees under the plan.

     In general, we consider our employee relations to be good.

E.   Share Ownership

     The table below sets forth the number of our common shares beneficially
owned by each of our directors and executive officers.


                                      62
<PAGE>

<TABLE>
Name                                                Number of Common Shares        Percentage
-----------------------------------------------     -----------------------      --------------
<S>                                                       <C>                          <C>
Board of Directors
Paulo Guilherme Aguiar Cunha...................           3,926,121,437                10.3%
Lucio de Castro Andrade Filho..................           1,073,102,570                 2.8
Ana Maria Levy Villela Igel....................           7,119,955,720                18.7
Renato Ochman..................................                  15,000                --
Nildemar Secches...............................                  15,000                --
Paulo Vieira Belotti...........................                  15,000                --

Executive Officers(1)
Fabio Schvartsman..............................             456,552,742                 1.2
Jose Carlos Guimaraes de Almeida...............             536,543,643                 1.4
Pedro Wongtschowski............................             456,552,742                 1.2
</TABLE>

---------
(1)  Mr. Cunha's and Mr. Andrade Filho's total beneficial ownership in us is
     included in the board of directors figures.

     Our board members and executive officers beneficially own our common
shares primarily through their participation in holding companies that control
Ultrapar. See "Item 7. Major Shareholders and Related Party Transactions --
Major Shareholders." All of our common shares carry the same voting rights. Our
preferred shares are non-voting shares. Each ADS represents 1,000 preferred
shares.


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<PAGE>


ITEM 7.     MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A.   Major Shareholders

     The following table sets forth certain information regarding the
beneficial ownership of our common shares as of December 31, 2001.

<TABLE>
                                                                   Common Shares
                                                          ----------------------------
                    Shareholder                               Shares            %
          -----------------------------------------       -------------     ----------
                                                                  (in thousands)
<S>                                                         <C>                <C>
          Gipoia Participacoes Ltda................         15,055,755         39.6%
          Ultra S.A. Participacoes.................         11,334,481         29.8
          Daisy Igel...............................
             Parth Investments Company.............          9,311,730         24.5
             Ultra-- DI Participacoes S.A..........            490,095          1.3
          Others...................................          1,791,952          4.8
                Total..............................         37,984,013        100.0%
</TABLE>

     At December 31, 2001, approximately 5.3 billion preferred shares were held
by international investors in the form of ADSs.

     Until September 1998, we were controlled by Pery Igel, the son of Ernesto
Igel, founder of Ultragaz and our group. In 1984, Pery Igel put in place a
succession plan for the transfer of our control from him to our executive
officers. This succession plan allowed for a smooth transition of control
following Mr. Igel's death in September 1998. Daisy Igel, Pery Igel's sister,
controls Parth Investments Company and Ultra -- DI Participacoes S.A., which
together hold 18.5% of our total share capital.

   Ownership and Capital Structure of Ultra S.A.

     Ultra S.A. owns directly and, through Gipoia Participacoes Ltda.,
indirectly, approximately 69% of our voting shares. The voting stock of Ultra
S.A. is, in turn, currently owned as to approximately 49.5% by Igel
Participacoes S.A., known as Igel, 49.5% by Avare Participacoes S.A., known as
Avare, 0.2% by Ana Maria Levy Villela Igel and 0.8% by Paulo Guilherme Aguiar
Cunha, our chief executive officer and chairman of our board of directors. Igel
is a holding company, which holds the interests of certain members of Pery
Igel's family.

     Avare is a holding company, which is 69% owned and controlled by certain
members of our senior management. The remaining shares in Avare are owned by
the family of Helio Beltrao and by Pery Igel's heirs. Helio Beltrao was one of
our former executive officers and directors. The management shareholders'
holdings in Avare were transferred to them by Pery Igel on terms that each
management shareholder should remain a member of our management team until
December 31, 2004.

     In addition to his participation in Avare as a management shareholder, Mr.
Cunha holds 519,209 shares in Ultra S.A., representing 0.8% of its voting share
capital, which were transferred to him by Pery Igel pursuant to an arrangement
under Brazilian law similar in certain respects to a trust. Under this
arrangement, Mr. Cunha was given temporary ownership of these shares subject to
Mr. Pery Igel's right to vote the shares, until December 16, 2004, provided
that he remain involved as a member of our management team until such date and
complies with certain other conditions. Upon Mr. Igel's death, the voting
rights in these shares passed to Mr. Cunha. Ownership of these shares passes to
Mr. Igel's children on December 16, 2004 unless any of the children predeceases
Mr. Cunha, in which event a proportionate amount of such shares become the
absolute property of Mr. Cunha. If Mr. Cunha passes away before the transfer of
the shares, such shares will be property of Mr. Igel's children.


                                      64
<PAGE>

   Shareholders' Agreement of Ultra S.A.

     On May 22, 1997, Ultra S.A.'s shareholders entered into the "2004
Shareholders' Agreement", which sets forth that (i) the holding companies Igel
and Avare will be liquidated on December 16, 2004, and each of their respective
shareholders will directly receive, as capital reimbursement for the
liquidation of both companies, shares of Ultra S.A. and (ii) after December 16,
2004, all the shareholders of Ultra S.A. shall give each other the right of
first refusal in the acquisition of Ultra S.A. shares and the corresponding
subscription rights relating thereto, except with respect to the transfer of
shares to a shareholder's spouse or direct descendant or ascendant.

     The term of the 2004 Shareholders' Agreement is five years from the date
on which the current shareholders of Avare and Igel directly receive shares of
Ultra S.A., which is expected to take place on December 16, 2004, as described
above.

Related Party Transactions

     We and our subsidiaries and affiliated companies enter into intercompany
loans on a regular basis. In certain cases, group companies maintain offsetting
credits and debits on matching terms. In the case of intercompany loans
involving Oxiteno, Utingas and Transultra, loans are made on an arm's length
basis. In the case of intercompany loans among Ultrapar and other subsidiaries
and affiliates, loans may be extended on other financial terms so as to
maximize consolidated profits at the Ultrapar level. See Note 15 to our
consolidated financial statements for a detailed breakdown of intercompany
loans as of December 31, 2001.

     Transultra provides transportation services to Ultragaz and Oxiteno on
arm's length terms. Similarly, Tequimar leases storage capacity for chemicals
and petrochemicals to Oxiteno on arm's length terms. In 2001 and 2000, payments
from Utragaz and Oxiteno to Transultra in connection with these services
totaled R$25.4 million and R$4 million, respectively. In 2001, payments from
Oxiteno to Tequimar in connection with the leased storage capacity totaled
R$3.9 million.

     Utingas' by-laws allow each of its shareholders to use a proportion of
Utingas' total storage capacity equal to such shareholders' proportionate
ownership of Utingas. Accordingly, Ultragaz is entitled to use 4.2 thousand
tons of LPG storage capacity at Utingas' facilities, which reflects Ultragaz's
56% ownership in Utingas. Ultragaz currently uses approximately 2.5 thousand
tons of such capacity. The amount of payments made by Ultragaz to Utingas in
2001 with respect to the use of storage capacity at Utingas' facilities totaled
R$3.6 million.

     Oxiteno purchases all of its ethylene requirements from Copene and PQU on
an arm's length basis. Payments from Oxiteno to PQU totaled R$65.4 million in
2001. Payments from Oxiteno to Copene totaled R$268.2 million in 2001.

     Ultragaz provides financial and administrative services to some of our
subsidiaries and affiliates on an arm's length basis. The cost of these
services is approximately R$16.8 million in 2001. We, along with Ultragaz and
Oxiteno, lease office space from Imaven on an arm's length basis in the
building in Sao Paulo in which our head offices are located. The total amount
of rent payments under these leases is R$6.7 million in 2001.

B.   Interests of Expert and Counsel

     Not applicable.

ITEM 8.     FINANCIAL INFORMATION

A.   Consolidated Statements and Other Financial Information

     For our financial statements and notes thereto see Item 19.

   Dividend and Distribution Policy

     Under the Brazilian corporate law, shareholders are generally entitled to
receive an annual mandatory distribution set forth in each company's by-laws,
which may not be lower than 25%. If a company's by-laws are


                                      65
<PAGE>

silent, the percentage is deemed to be 50%. Our by-laws provide for a mandatory
distribution equal to 50% of the distributable amount. In addition, under the
Brazilian corporate law and our by-laws, the amount we distribute in respect of
each preferred share must be equal to 110% of the amount we distribute in
respect of each of our common shares. "Distributable amount" means a company's
net income as determined in accordance with the Brazilian corporate law, as
reduced by (i) accumulated losses for prior years, and (ii) amounts allocated
to the legal reserve and other reserves established in accordance with law, and
as increased by the reversal of any reserve established in a prior year. A
company is permitted to allocate to a reserve all income from equity gains in
subsidiaries that are not distributed to the company in the form of cash
dividends. When such gains are distributed to the company in the form of cash
dividends, the company is required to reverse the reserve. See "Item 3. Key
Information -- Risk Factors -- Risks Relating to the Preferred Shares and
ADSs." In addition to the mandatory distribution, the board of directors may
recommend to the shareholders payment of interim distributions from other funds
legally available therefor. Any payment of an interim distribution may be set
off against the amount of the mandatory distribution for that fiscal year.

     In addition to dividends, Brazilian companies may distribute "interest on
shareholders' equity", which payments may be treated by a company as an expense
for income tax purposes. Payments of interest on shareholders' equity may be
made at the discretion of our board of directors, subject to the approval of
the holders of our common stock. Payments of interest on shareholders' equity,
net of withholding tax, may be used to satisfy a company's mandatory
distribution obligation. The rate of such interest may not exceed the Taxa de
Juros de Longo Prazo , or TJLP, the long-term interest rate published by BNDES
-- Banco Nacional de Desenvolvimento Economico e Social, the Brazilian
development bank, for the applicable period, and its payment is conditioned
upon the existence of profits, calculated prior to the deduction of the
interest being paid, or of retained earnings, in an amount equivalent or
superior to twice the interest being paid.

     Under the Brazilian corporate law, a company may suspend the mandatory
distribution either in the form of dividends or payments of interest on
shareholders' equity if its board of directors determines prior to the annual
shareholders' meeting that payment of the mandatory distribution for the
preceding fiscal year would be inadvisable in view of the company's financial
condition. The holders of common stock must ratify such determination at the
annual shareholders' meeting and any such determination must be reported to the
CVM within five days of the relevant shareholders' meeting. Under Brazilian
law, mandatory distributions that are suspended and not offset against losses
in future years must be paid as soon as the financial condition of the company
permits.

     In 2001, Ultrapar distributed dividends amounting to R$212 million. Of
this amount, R$87 million relates to the distributable amount. We do not intend
to pay dividends in excess of the distributable amount on a regular basis.

   Legal Proceedings

     Ultragaz, together with other LPG distributors, is a defendant in a suit
brought by Servgas Distribuidora de Gas S.A., known as Servgas, an LPG bottling
and distribution company, seeking to change the rule that prohibits LPG
distributors from filling LPG cylinders stamped with the brand of another
distributor. In March 1996, the court ruled against Servgas. Servgas appealed,
and the appeal is in the final stages of review.

     In December 1996, Companhia Ultragaz and Bahiana filed a suit against the
former Departamento Nacional de Combustiveis - DNC, which has been replaced by
the Agencia Nacional do Petroleo - ANP, and Petrobras claiming reimbursement of
approximately R$7.4 million from the Freight Price Unification System Fund, or
Frete de Unificacao de Precos -- FUP, also known as the Fund, in relation to
LPG shipments by the plaintiffs in 1992 and 1993. The Fund, which is controlled
by the ANP, was created to maintain uniform LPG prices throughout Brazil by
reimbursing LPG distributors for freight costs incurred in shipping LPG in
Brazil. This price maintenance system was terminated in 1994. The former DNC
suspended certain payments from the Fund in 1993 due to alleged wrongful claims
for reimbursement by LPG distributors. A preliminary order in favor of the
plaintiffs was made in December 1996, pursuant to which the plaintiffs received
R$8.1 million from the Fund. The former DNC and Petrobras have filed an appeal
and the parties are currently awaiting the outcome of this appeal. If the
preliminary order is overturned by a higher court, the plaintiffs would be
required to repay such R$8.1 million to the Fund. Based on the advice of
counsel, Ultragaz believes that it is unlikely that the preliminary order will
be overturned.


                                      66
<PAGE>

     Ultragaz is the defendant in approximately 565 legal suits arising from
its normal business activities, including approximately 400 labor claims.
Although the amount of any liability that could arise with respect to these
actions cannot be accurately determined, Ultragaz believes that such actions,
if decided adversely to Ultragaz, would not, individually or in the aggregate,
have a material adverse effect on the financial condition of Ultragaz.

     In particular, Ultragaz is the defendant in 70 wrongful death suits in
which the plaintiffs are claiming damages for the loss of economic benefit and
for pain and suffering arising from fires or gas explosions caused by LPG
cylinders or accidents caused by Ultragaz trucks. With the exception of one
such case in which the plaintiff is claiming approximately R$600,000, the
amount claimed in any individual suit ranges from R$10,000 to R$150,000. Such
amounts are generally covered by Ultragaz's third-party insurance policies,
subject to the terms of such policies. Civil suits are generally followed by
criminal investigation procedures, which can result in criminal liability for
Ultragaz employees if such employees have been criminally negligent. For those
suits involving death or permanent disabilities, the value of the claim is
established by the courts and is based on the average salary and age of the
victim. In addition, Ultragaz is involved in approximately six labor claims
brought by former employees claiming damages and, in some cases, reinstatement
of employment, in respect of injuries incurred in delivering LPG cylinders.

     Ultragaz is a defendant in legal suits relating to damages caused by an
explosion in 1996 in a shopping mall in the city of Osasco. The largest single
claim involving Ultragaz is an insurance subrogation claim for approximately
R$9 million brought against Ultragaz, the builder of the shopping mall, the
management of the shopping mall and the engineer responsible for the building's
project. In addition, individual suits filed by victims of the explosion claim
damages from Ultragaz for the loss of economic benefit and for pain and
suffering in an aggregate amount of approximately R$26 million. Subsequently, a
public prosecutor commenced an action, in which Ultragaz was not named as a
defendant, for the benefit of all victims using a procedural mechanism similar
to a class action.

     Ultragaz believes that it has produced evidence that defective gas pipes
in the shopping mall caused the accident and that Ultragaz's on-site LPG
storage facilities did not contribute to the explosion. Ultragaz believes that
the class action brought by the public prosecutor deters individual suits
directed at Ultragaz. Ultragaz also believes that its insurance coverage for
damages up to R$50 million is sufficient to cover the aggregate amount of all
claims filed.

     Oxiteno is the defendant in approximately 65 labor proceedings and 25
civil and tax proceedings arising in the normal course of its business. In
common with other Brazilian companies, Oxiteno is currently disputing the
constitutional validity of a number of taxes. In addition, Oxiteno is disputing
the amounts payable by it in relation to certain sales taxes. The aggregate
amount of outstanding tax claims against Oxiteno is approximately R$2 million.

     Ultragaz, Oxiteno and several of our other subsidiaries filed individual
suits against the Brazilian fiscal authorities contesting the increase in
certain taxes introduced by Law 9,718 of November 28, 1998. Law 9,718 increased
taxation on gross sales by 1% and introduced a taxation of 3.65% on gross
financial income. Furthermore, Law 9,718 introduced a mechanism by which
certain of Ultragaz's taxes on sales would be withheld by Petrobras, thereby
effectively increasing overall taxation for Ultragaz. Based on our legal
proceedings regarding Law 9,718, we were granted preliminary injunctions
allowing our subsidiaries to continue to pay taxes according to regulations
prevailing prior to the introduction of Law 9,718. Nevertheless, we have taken
full provisions for the increase in taxation. These provisions amounted to
R$49.3 million in December 31, 2001, of which R$31.3 million corresponded to
Ultragaz and R$10.5 million to Oxiteno. In the event we lose these lawsuits,
the amounts provisioned would be payable to the tax authorities, but would not
affect our statement of operations.

     Our indirect subsidiary Tequimar obtained a favorable ruling on its suit
contesting the payment of social contribution on net income introduced by Law
7,689/88. The decision was a final ruling, however, the Federal Government
filed an action to overturn it. Tequimar has accrued a liability for the unpaid
social contribution in the amount of R$10.4 million.

     The Petrochemical Industry Labor Union, which represents the employees of
the indirect subsidiary Oxiteno Nordeste, filed class action suits against
Oxiteno Nordeste in 1991 demanding compliance with the adjustments established
in collective labor agreements or other specific indexes, in lieu of the salary
policies effectively practiced. Based on the opinion of its legal advisors, who
analyzed the final ruling of the Federal Supreme Court,


                                      67
<PAGE>

known as STF, on the class action suit in which the labor union is a plaintiff,
as well as the status of the specific suit against Oxiteno Nordeste, our
management does not believe that it is necessary to record a provision at
December 31, 2001.

B.   Significant Changes

     None.

ITEM 9.     THE OFFER AND LISTING

A.   Offer and Listing Details

     On October 6, 1999, we concluded an initial public offering of our
preferred shares, which commenced trading on the Bovespa and on the New York
Stock Exchange, in the form of ADSs. Our preferred shares were issued at
R$26.45 per thousand shares, corresponding to U.S.$13.50 per ADS, with each ADS
representing 1,000 preferred shares.

     The following table sets forth trading information for our ADSs, as
reported by the New York Stock Exchange, and for our preferred shares, as
reported by Bovespa, for the periods indicated.

<TABLE>
                                                             Price per ADS in U.S.   Price per 1,000 Preferred Shares
                                                                     dollars                      in reais
                                                           ------------------------ ----------------------------------
Year ended                                                     High           Low           High            Low
--------------------------------------------------------   ------------------------ ----------------------------------
<S>                                                           <C>            <C>          <C>             <C>
December 31, 1999.......................................      13.56          8.50         25.50           18.51
December 31, 2000.......................................      13.56          8.00         25.00           15.00
December 31, 2001 ......................................      10.75          4.95         21.65           14.00

Quarter ended
--------------------------------------------------------
March 31, 2000..........................................      13.56         10.19         25.00           18.10
June 30, 2000...........................................      11.63          8.00         20.50           15.00
September 31, 2000......................................      12.38          9.69         22.60           17.60
December 31, 2000.......................................      11.75          8.25         21.60           16.70
March 31, 2001..........................................      10.75          8.56         21.20           17.00
June 30, 2001...........................................       8.90          6.55         19.50           16.50
September 31, 2001......................................       8.24          5.10         21.65           14.00
December 31, 2001.......................................       7.99          4.95         18.80           14.00
March 31, 2002 .........................................       9.32          7.65         22.00           18.10

Month ended
--------------------------------------------------------
November 30, 2001 ......................................       7.00          5.10         17.50           15.00
December 31, 2001 ......................................       7.99          6.60         18.80           16.50
January 31, 2002........................................       8.50          7.65         20.41           18.10
February 28, 2002.......................................       8.80          7.95         21.99           20.00
March 31, 2002..........................................       9.32          8.65         22.00           20.00
April 30, 2002..........................................       9.55          8.40         22.00           20.00
</TABLE>

B.   Plan of Distribution

     Not applicable.

C.   Markets

     Our preferred shares are listed on the Sao Paulo Stock Exchange under the
ticker symbol "UGPA4" and the ADSs are listed on the New York Stock Exchange
under the symbol "UGP."

D.   Selling Shareholders

     Not applicable.


                                      68
<PAGE>

E.   Dilution

     Not applicable.

F.   Expenses of the Issue

     Not applicable.

ITEM 10.      ADDITIONAL INFORMATION

A.   Share Capital

     Not applicable.

B.   Memorandum and Articles of Association

     Ultrapar Participacoes S.A. is registered with the commercial registry of
the state of Sao Paulo under the registration number 35.300.109.724. Pursuant
to Chapter I, Article 3 of our by-laws, the corporate purpose of Ultrapar is
the "investment of its capital in the trade, industry and agriculture and in
companies providing services, upon the subscription for or acquisition of
shares or quotas in companies."

     There are no provisions in our by-laws with respect to (i) a director's
power to vote on proposals in which the director is materially interested, (ii)
a director's power to vote compensation to him or herself in the absence of an
independent quorum, (iii) borrowing powers exercisable by the directors, (iv)
age limits for retirement of directors, (v) required shareholding for director
qualification, (vi) anti-takeover mechanisms or other procedures designed to
delay, defer or prevent changes in control of Ultrapar, (vii) disclosure of
share ownership, (viii) redemption of shares, (ix) sinking funds, or (x)
liability to further capital calls by the company. More detailed information
with respect to our shares, shareholder rights, and limitations on share
ownership, is incorporated herein by reference to our Registration Statement on
Form F-1, Registration Number 33-10818, declared effective by the Securities
and Exchange Commission on October 6, 1999.

C.   Material Contracts

     Shareholders' Agreement

     On March 22, 2000, the controlling shareholders of Ultrapar entered into a
shareholders' agreement designed to ensure the equal treatment of all
non-controlling shareholders in the event of any change in control. Pursuant to
the agreement, any transfer of control of Ultrapar, either directly or
indirectly, may only be executed in conjunction with a public tender offer by
the acquiring entity to purchase the shares of all minority shareholders in the
same proportion and under the same price and payment terms as those offered to
the controlling shareholders. The agreement provides that there will be no
discount or price differentiation between the shares in the public tender offer
and those being sold by the controlling shareholders. The offer must be made on
both the Sao Paulo Stock Exchange and the New York Stock Exchange.

     We did not enter into any material contract in 2001.

D.   Exchange Controls

     There are no restriction on ownership of our preferred shares by
individual or legal entities domiciled outside Brazil. However, the right to
convert dividend payments and proceeds from the sale of our shares into foreign
currency and to remit such amounts outside Brazil is subject to restrictions
under foreign investment legislation which generally requires, among other
things, that the relevant investment be registered with the Central Bank and
CVM.

     Foreign investors may register their investment under Law No. 4,131 of
September 3, 1962 or Resolution No. 2,689 of January 26, 2000 of the National
Monetary Council. Registration under Resolution No. 2,689 affords


                                      69
<PAGE>

favorable tax treatment to foreign investors who are not residents in a tax
haven jurisdiction (i.e. country that does not impose income tax or where the
maximum income tax rate is lower than 20%), as defined by Brazilian tax laws.

     Under Resolution No. 2,689, foreign investors may invest in almost all
financial assets and engage in almost all transactions available in the
Brazilian financial and capital markets, provided that certain requirements are
fulfilled. In accordance with Resolution No. 2,689, the definition of foreign
investor includes individuals, legal entities, mutual funds and other
collective investment entities, domiciled or headquartered abroad.

     Under Resolution No. 2,689, a foreign investor must:

     o    appoint at least one representative in Brazil, with powers to perform
          actions relating to its investment,

     o    appoint an authorized custodian in Brazil for its investment,

     o    register as a foreign investor with the CVM, and

     o    register its foreign investment with the Central Bank.

     Securities and other financial assets held by foreign investors pursuant
to Resolution No. 2,689 must be registered or maintained in deposit accounts or
under the custody of an entity duly licensed by the Central Bank or the CVM. In
addition, securities trading is restricted to transactions carried out in the
stock exchanges or through organized over-the-counter markets licensed by the
CVM, except for transfers resulting from a corporate reorganization, or
occurring upon the death of an investor by operation of law or will.

     Resolution No. 1,927 of the National Monetary Council, which is the
restated and amended Annex V to Resolution No. 1,289, the Annex V Regulations,
provides for the issuance of depositary receipts in foreign markets in respect
of shares of Brazilian issuers. Accordingly, the proceeds from the sale of ADSs
by holders of American depositary receipts outside Brazil are free of Brazilian
foreign investment controls and holders of the ADSs who are not resident in a
tax haven jurisdiction will be entitled to favorable tax treatment.

     The right to convert dividend payments and proceeds from the sale of our
capital stock into foreign currency and to remit such amounts outside Brazil is
subject to restrictions under foreign investment legislation which generally
requires, among other things, that the relevant investment be registered with
the Central Bank. Restrictions on the remittance of foreign capital abroad
could hinder or prevent the custodian for the preferred shares represented by
ADSs, or holders who have exchanged ADSs for preferred shares, from converting
dividends, distributions or the proceeds from any sale of preferred shares, as
the case may be, into U.S. dollars and remitting such U.S. dollars abroad.
Delays in, or refusal to grant any required government approval for conversions
of Brazilian currency payments and remittances abroad of the preferred shares
underlying the ADSs could adversely affect holders of ADSs.

     We have obtained a certificate of registration in the name of Bank of New
York, the depositary. The custodian on behalf of the depositary maintains this
certificate. Pursuant to this certificate, the custodian and the depositary are
able to convert dividends and other distributions with respect to the preferred
shares represented by ADSs into foreign currency and to remit the proceeds
outside Brazil. If a holder exchanges ADSs for preferred shares, such holder
may continue to rely on the depositary's certificate of capital registration
for only five business days after such exchange. After that, such holder must
seek to register its investment directly with the Central Bank. Thereafter,
unless the holder has registered its investment with the Central Bank, such
holder may not convert into foreign currency and remit outside Brazil the
proceeds from the disposition of, or distributions with respect to, such
preferred class A shares. Such holder generally will be subject to less
favorable Brazilian tax treatment than a holder of ADSs.

     There are two principal foreign exchange markets in Brazil:

     o    the commercial rate exchange market, and

     o    the floating rate exchange market.


                                      70
<PAGE>

     Most trade and financial foreign-exchange transactions, including
transactions relating to the purchase or sale of shares or the payment of
dividends or interest with respect to shares, are carried out on the commercial
market. Only a Brazilian bank authorized to buy and sell currency in the
commercial market may effect purchases of foreign currencies in that market. In
both markets, rates are freely negotiated, but may be strongly influenced by
Central Bank intervention. See "Item 3. Key Information--Selected Financial
Data--Exchange Rates."

     Under Brazilian law, whenever there is a serious imbalance in Brazil's
balance of payments or reasons to foresee a serious imbalance, the Brazilian
government may impose temporary restriction on the remittance to foreign
investors of the proceeds of their investment in Brazil, and on the conversion
of Brazilian currency into foreign currencies. Such restrictions may hinder or
prevent the custodian or holders who have exchanged ADSs for underlying
preferred shares from converting distributions or the proceeds from any sale of
such shares, as the case may be, into U.S. dollars and remitting such U.S.
dollars abroad.


E.   Taxation

   Brazil

     The following discussion summarizes the material Brazilian tax
consequences of the acquisition, ownership and disposition of preferred shares
or ADSs by a holder that is not domiciled in Brazil for purposes of Brazilian
taxation and, in the case of a holder of preferred shares, which has registered
its investment in the preferred shares with the Central Bank as a U.S. dollar
investment, in each case, a non-Brazilian holder. It is based on Brazilian law
as currently in effect. Any change in such law may change the consequences
described below. The following discussion summarizes the material tax
consequences applicable under current Brazilian law to non-Brazilian holders of
preferred shares or ADSs; it does not specifically address all of the Brazilian
tax considerations applicable to any particular non-Brazilian holder, and each
non-Brazilian holder should consult his or her own tax adviser concerning the
Brazilian tax consequences of an investment in preferred shares or ADSs. It is
emphasized that the tax consequences described below do not take into account
tax treaties entered into by Brazil and other countries. Nevertheless, please
note that Brazil has not entered into any tax treaty with the Unites States.

   Taxation of Dividends

     Cash dividends and other dividends paid by Brazilian corporations in
property to the depositary in respect of the preferred shares, or to a
non-Brazilian holder of the preferred shares, are not subject to withholding
income tax in Brazil. Dividends relating to profits generated prior to January
1, 1996 are subject to withholding income tax at varying rates, depending on
the year the profits were generated (1994 and 1995 - 15%, before 1994 - 25%).

   Payments on Shareholders' Equity

     Law No.9,249, dated December 26, 1995 permits Brazilian corporations to
make distributions to shareholders of interest attributed to shareholders'
equity. These distributions may be paid in cash. This interest is calculated in
accordance with the daily pro rata variation of the Brazilian government's
long-term interest rate, or TJLP, as determined by the Brazilian Central Bank
from time to time, and cannot exceed the greater of:

     o    50% of net income, after the deduction of social contribution on net
          income and before the deduction of income tax provision and already
          considering the deduction of the own interest amount attributable to
          shareholders, related to the period in respect of which the payment
          is made; or

     o    50% of the sum of retained profits and profit reserves as of the date
          of the beginning of the period in respect of which the payment is
          made.

     Any payment of interest to shareholders, including holders of ADSs in
respect of preferred shares, is subject to withholding income tax at the rate
of 15% or 25% in the case of a shareholder domiciled in a tax heaven. These
payments may be qualified, at their net value, as part of any mandatory
dividend.


                                      71
<PAGE>

     To the extent that payments of interest on shareholders' equity are
qualified as part of a mandatory dividend, the corporation is required to
distribute an additional amount to ensure that the net amount received by
shareholders, after payment of the applicable withholding income tax, is at
least equal to the mandatory dividend.

     Distributions to non-Brazilians of interest attributed to shareholders'
equity in respect of preferred shares, including the preferred shares
underlying the ADSs, may be converted into U.S. dollars and remitted outside
Brazil, subject to applicable exchange control.

   Taxation of Gains and Income

     Initially, it is important to highlight that in accordance with Brazilian
law gains and income are treated differently for income tax purposes. The
remuneration derived from any investment, which is not originated from
transference of the ownership of such investment, by any nature qualifies as
income. Differently, for tax purposes, the positive difference between the
acquisition cost of the investment and the respective price derived from the
transference of the ownership by any nature, such as in a sale, redemption,
liquidating distribution, etc., qualifies as a gain.

     Gains generated outside Brazil by a non-Brazilian resident on the sale of
preferred shares or ADSs to another non-Brazilian resident are not subject to
Brazilian income tax.

     For purposes of Brazilian taxation, there are three types of non-Brazilian
holders of ADSs or preferred shares:

     o    market investors, which represent those non-Brazilian residents who
          register with the Central Bank and the CVM to invest in Brazil, in
          accordance with Resolution 2,689, or those investors holding ADSs;

     o    ordinary non-Brazilian holders, which include any and all
          non-residents in Brazil who invest in the country through any other
          means; and

     o    investors that reside in a tax haven, i.e., a country that does not
          impose income tax, or where the income tax rate is lower than 20%,
          regardless of registration under Resolution 2,689.

     The comments contained below are applicable to all non-Brazilian holders,
including market investors, except where otherwise noted.

     The favorable tax treatment currently afforded to holders of ADSs and to
market investors that do not reside in tax havens is also applicable to all
non-Brazilian holders of preferred shares that have:

     o    appointed a representative in Brazil with powers to take actions
          relating to their investment;

     o    appointed an authorized custodian in Brazil for their investments;

     o    registered as a foreign investor with the CVM; and

     o    registered their investment with the Central Bank.

     Under Resolution 2,689, assets held by foreign investors must be
maintained under the custody of, or in deposit accounts with, financial
institutions duly authorized by the Central Bank and the CVM. In addition,
securities' trading is restricted to transactions carried out on a Brazilian
stock exchange by certain qualified non-Brazilian holders.

     The difference between the amount previously registered, or the
acquisition cost, as the case may be, and the average price of the preferred
share is considered a capital gain subject to income tax at rate of 15%, except
in the case of market investors who are not residents in a tax haven
jurisdiction. The average price shall be calculated as follows:

     o    the average price per preferred share on Brazilian stock exchange on
          which the greater number of such shares were sold on the day of
          deposit; or


                                      72
<PAGE>

     o    if no preferred shares were sold on that day, the average price on
          the Brazilian stock exchange on which the greatest number of
          preferred shares were sold during the 15 preceding trading sessions.

     The withdrawal itself of preferred shares in exchange for the ADSs is not
subject to any Brazilian income tax. On the receipt of the underlying preferred
shares, the non-Brazilian holder will be entitled to register the U.S. dollar
value of the shares with the Central Bank.

     Ordinary non-Brazilian holders , those not registered under Resolution
2,689, are also not subject to tax in Brazil on gains derived from sales of
preferred shares and ADSs that occur outside of Brazil to persons who do not
reside in Brazil. The proceeds of a redemption of, or liquidating distribution
with respect to the ADSs, under the same conditions, are not subject to
Brazilian taxes.

     With reference to proceeds of a redemption of, or a liquidating
distribution with respect to preferred shares having as the paying source a
Brazilian resident, the difference between the amount effectively received by
the shareholder and the amount of foreign currency registered with the Central
Bank translated into reais at the commercial market rate on the date of the
redemption or liquidating distribution, will be treated as a capital gain
derived from sale or exchange of shares not carried out on a Brazilian stock
exchange market, afterwards being subject to income tax at the rate of 15%.

     Ordinary non-Brazilian holders are subject to withholding income tax at
the rate of 15% on gains derived from sales or exchanges of the preferred
shares in Brazil outside of the stock exchange market.

     Differently, ordinary non-Brazilian holders are subject to the income tax
at a rate of 20% on gains derived from the sale or exchange of preferred shares
that occur on a Brazilian stock exchange, and on gains derived from investments
made through funds and the sale of stocks negotiated in the cash stock exchange
market. In case the sale is made by a non-Brazilian holder that is not resident
in a tax haven jurisdiction within five business days of the withdrawal of the
preferred shares in exchange ADSs, and the proceeds are remitted abroad within
the same five-day period, any capital gains derived from the sale will be
exempt from the Brazilian withholding income tax.

     Equally, if the beneficiary is an investor qualified under Resolution
2,689, any capital gains derived from the sale will be exempt from the
Brazilian withholding income tax.

     The gain obtained as a result of a transaction on a Brazilian stock
exchange market is the difference between the amount in reais realized on the
sale or exchange and the acquisition cost measured in reais, without any
correction for inflation. The acquisition cost of shares registered as an
investment with the Central Bank is calculated on the basis of the foreign
currency amount registered with the Central Bank translated into reais at the
commercial market rate on the date of the sale or exchange.

     The income paid to market investors and/or to those investors holding ADSs
will be subject to the withholding income tax at the rate of 10%, in case of
remuneration from investments clubs and funds, swap transactions and
transactions made in the future market outside the stock exchange market with
any asset. Differently, the income derived from transactions of any other
nature will be subject to the withholding income tax at the rate of 15%.

   Beneficiaries Residing or Domiciled in Tax Havens or Low Tax Jurisdictions

     Law No. 9,779, dated January 19, 1999 states that, with the exception of
limited circumstances, any income or gains derived from transactions carried
out by a beneficiary that resides or is domiciled in a country considered to be
a tax haven are subject to the Brazilian withholding income tax at the rate of
25%. Accordingly, if the distribution of interest attributed to shareholders'
equity is made to a beneficiary residing or domiciled in a tax haven, the
income tax will apply at the rate of 25% instead of 15%.

     Dividends paid to beneficiaries that reside or are domiciled in a tax
haven are not subject to the Brazilian withholding income tax.


                                      73
<PAGE>

     As already mentioned, non-Brazilian holders of ADSs or preferred shares
which are resident in tax havens are also excluded from the tax treatment
granted to holders of ADSs and market investors as of January 1, 2000,
afterwards being subject to the same tax treatment applicable to ordinary
non-Brazilian holders.

   Taxation of Foreign Exchange Transactions

     A financial transaction tax is imposed on the conversion of reais into
foreign currency and on the conversion of foreign currency into reais. Although
the current applicable rate for almost all foreign currency exchange
transactions is zero, the Ministry of Finance may increase the rate at any
time, up to 25%. However, any increased rates may only apply with respect to
future transactions. In case of notes with put and/or call clause with respect
to anticipation of its maturity, in which such right is exercised before a 90
day period counted from the issuance of the note, the rate will be of 5%
instead of 0%.

   Taxation of Bonds and Securities Transactions

     Transactions involving bonds and securities, even if the transaction is
made in the Brazilian stock exchange market, may be subject to the Tax on
Financial Transactions - "IOF." The rate of IOF with respect to transactions
involving preferred shares and ADSs is currently zero, although it may increase
up to 1.5% per day of the terms of the securities, but only with respect to
future preferred shares and ADSs transactions.

   Other Brazilian Taxes

     There are no Brazilian inheritance, gift or succession taxes applicable to
the ownership, transfer or disposition of preferred shares or ADSs, except for
gift and inheritance taxes imposed by some Brazilian states on gifts or
bequests by individuals or entities not domiciled or domiciled in Brazil to
individuals or entities domiciled or residing within such States. There are no
Brazilian stamp, issue, registration, or similar taxes or duties payable by
holders of preferred shares or ADSs.

     Transactions carried out by the depositary or by holders of preferred
shares, which involve the transference of Brazilian currency from an account
maintained with any Brazilian financial institution are subject to the CPMF tax
at the rate of 0.38%. Under Amendment No. 31 to the Brazilian constitution,
dated December 12, 2000, the 0.38% CPMF tax rate will be applicable from March
18, 2001 to June 17, 2002. However, another amendment to the constitution
extending the term of this tax has been submitted to the Brazilian congress. If
this amendment is approved, it will only become effective after 90 days from
the date of its publication.

     The CPMF is withheld from the transferred amounts and collected in favor
of the Brazilian IRS by the financial institution that carries out the relevant
financial transaction. When the non-Brazilian holder transfers the proceeds
derived from sale of preferred shares by a currency exchange transaction, the
CPMF tax is imposed on the amount in reais to be remitted abroad.

   Registered Capital

     The amount of an investment in preferred shares held by a non-Brazilian
holder that qualifies under Resolution 2,689 and obtains registration with the
CVM, or by the depositary representing such holder, is eligible for
registration with the Central Bank. The amount so registered is referred to as
Registered Capital. Such registration allows the remittance outside Brazil of
foreign currency, converted at the commercial market rate, acquired with the
proceeds of distributions on, and amounts realized with respect to dispositions
of, such preferred shares. The Registered Capital for each preferred share
purchased in Brazil and deposited within the depositary will be equal to its
purchase price in U.S. dollars. The Registered Capital for a preferred share
that is withdrawn upon surrender of an ADS will be the U.S. dollar equivalent
of (i) the average price of a preferred share on the Brazilian stock exchange
on which the greatest number of such shares was sold on the day of withdrawal,
or (ii) if no preferred shares were sold on that day, the average price on the
Brazilian stock exchange on which the greatest number of preferred shares were
sold in the fifteen trading sessions immediately preceding such withdrawal. The
U.S. dollar value of the preferred shares is determined on the basis of the
average commercial market rates quoted by the Central Bank on the day of
withdrawal or, if the average price of preferred shares is determined under
clause (ii) of


                                      74
<PAGE>

the preceding sentence, the average of such average quoted rates on the fifteen
dates used to determine the average price of the preferred shares.

     A non-Brazilian holder of preferred shares may experience delays in
affecting registration with the Central Bank, which may delay remittances
abroad. Such a delay may adversely affect the amount in U.S. dollars received
by the non-Brazilian holder.

United States

     The following is a discussion of the material U.S. federal income tax
consequences of the acquisition, ownership and disposition of preferred shares
or ADSs, but it does not purport to be a comprehensive description of all of
the tax consideration that may be relevant to acquire preferred shares or ADSs,
and does not address state, local or other tax laws. The discussion applies
only to holders that hold preferred shares or ADSs as capital assets, and does
not address special classes of holders, such as dealers in securities,
financial institutions, insurance companies, tax exempt entities, persons
owning, directly, indirectly or constructively, 10% or more of our voting
shares, persons holding preferred shares or ADSs as part of a hedging or
conversion transaction or straddle, persons entering into a "constructive sale"
with respect to preferred shares or ADSs, persons whose functional currency is
not the U.S. dollar, persons liable for alternative minimum tax, partnerships
or other entities classified as partnerships for U.S. federal income tax
purposes, or persons who have ceased to be United States citizens or to be
taxed as resident aliens. You are advised to consult your own tax advisers
concerning the overall tax consequences to you, including the consequences
under foreign, state and local laws, of the acquisition, ownership and
disposition of preferred shares or ADSs.

     This discussion is based on the tax laws of the United States, including
the Internal Revenue Code of 1986, as amended, administrative pronouncements,
judicial decisions and final, temporary and proposed Treasury Regulations, all
as currently in effect and changes to any of which may affect tax consequences
described herein, possibly with retroactive effect. In addition, this
discussion is based in part on representations of the depositary and assumes
that each obligation provided for in or otherwise contemplated by the Deposit
Agreement and any other related document will be performed in accordance with
their terms.

     This discussion applies to you only if you are "U.S. Holder." For purposes
of this discussion, a "U.S. Holder" is a beneficial owner of preferred shares
or ADSs that is for U.S. federal income tax purposes (i) a citizen or resident
of the United States of America, (ii) a corporation, or other entity taxable as
a corporation, organized under the laws of the United States of America or any
state thereof, or (iii) an estate or trust the income of which is subject to
United States federal income taxation regardless of its source.

     U.S. Holders of ADSs will be treated for U.S. federal income tax purposes
as owners of the preferred shares underlying the ADSs. Accordingly, except as
noted, the U.S. federal income tax consequences discussed below apply equally
to U.S. Holders of ADSs and preferred shares, and references to preferred
shares should also be treated as references to ADSs. Exchanges of preferred
shares for ADSs and ADSs for preferred shares will not be subject to U.S.
federal income tax.

     Taxation of Dividends. Subject to the discussion below under the heading
"Passive Foreign Investment Companies", distributions paid with respect to
preferred shares, will be includable in the income of a U.S. Holder as ordinary
dividend income to the extent paid out of current or accumulated earnings and
profits of Ultrapar, as determined for U.S. federal income tax purposes. For
purposes of these rules, the amount of any distribution of property other than
cash will be the fair market value of such property on the date of
distribution. In addition, the taxable amount of any distribution will include
the amount of Brazilian tax withheld on the amount distributed, and the amount
of a distribution paid in reais will be measured by reference to the exchange
rate for converting reais into U.S. dollars in effect on the date the
distribution is received by the custodian, in the case of ADSs, or the U.S.
Holder, in the case of preferred shares directly held by a U.S. Holder.
Dividends paid by us generally will constitute foreign source "passive" income
for U.S. foreign tax credit purposes. Subject to certain limitations, Brazilian
withholding tax, if any, paid in connection with any distribution with respect
to preferred shares may be claimed as a credit against the U.S. federal income
tax liability of a U.S. Holder if such U.S. Holder elects for that year to
credit all foreign income taxes; otherwise, such Brazilian withholding tax may
be taken as a deduction. U.S. Holders should consult their own tax advisors
concerning the availability and utilization of the foreign tax credit.


                                      75
<PAGE>

     Taxation of Capital Gains. Subject to the discussion below under the
heading "Passive Foreign Investment Companies", gain or loss realized by U.S.
Holder upon the sale, exchange or other disposition of a preferred share will
be subject to United States federal income tax as U.S. source capital gain or
loss in an amount equal to the difference between the amount realized on the
disposition of the preferred share and the U.S. Holder's tax basis in the
preferred share. The gain or loss will be long term capital gain or loss if the
U.S. Holder's holding period in the preferred share exceeds one year. U.S.
Holders should consult their tax advisors regarding the United States federal
tax treatment of capital gains, which may be taxed at lower rates than ordinary
income for individuals, and losses, the deductibility of which is subject to
limitations.

     Passive Foreign Investment Companies. Special U.S. tax rules apply to U.S.
Holders that own shares in a passive foreign investment company, known as PFIC.
In general, we will be classified as a PFIC in a particular taxable year if
either:

     o    75% or more of our gross income consists of passive income, such as
          dividends, interest, rents and royalties; or

     o    50% or more of our assets, by value, determined on the basis of a
          quarterly average, consists of assets that produce, or are held for
          the production of, passive income.

     Based on a review of our income and assets, we believe that we were not a
PFIC year 2001. However, since PFIC status depends upon the composition of a
company's income and assets and the market value of its assets (including,
among others, goodwill and less than 25 percent equity investments) from time
to time, there can be no assurance that we will not be considered a PFIC for
any taxable year.

     If we are a PFIC in any taxable year during which a U.S. Holder own
preferred shares, gain recognized by such U.S. Holder on sale or other
disposition of the preferred share will be allocated ratably over the U.S.
Holder's holding period for the preferred share. The amounts allocated to the
taxable year of the sale or other exchange and to any year before we become a
PFIC will be taxable as ordinary income. The amount allocated to each other
taxable year will be subject to tax at the highest rate in effect for that year
for individuals or corporations, as appropriate, and an interest charge will be
imposed on the amount allocated to such taxable year. Further, any distribution
in respect of the preferred shares in excess of 125 percent of the average of
the annual distribution on preferred shares received by the U.S. holder during
the preceding three years or the U.S. Holder's holding period, whichever is
shorter, will be subject to taxation as described above.

     However, so long as our preferred shares are treated as "marketable
stock", a U.S. holder of our preferred shares may make a mark-to-market
election. A U.S. Holder making this election will not be subject to the PFIC
rules described above. Instead, such U.S. Holder will in general (i) include as
ordinary income each year the excess, if any, of the fair market value of the
shares at the end of the taxable year over the adjusted basis in such shares,
and (ii) recognize the additional gain, if any, on sale or other disposition of
the shares as ordinary income for that taxable year. Such U.S. Holder will also
be allowed to take an ordinary loss in respect of the excess, if any, of the
adjusted basis of the shares over their fair market value at the end of the
taxable year or over their final sale or disposition prices, but only to the
extent of the net amount of previously included income as a result of the
mark-to-market election. Such U.S. Holder's basis will be adjusted to reflect
any such income or loss amounts. For purposes of this election, preferred
shares regularly traded on the New York Stock Exchange should be considered as
"marketable stock."

     Special rules apply to determine the foreign tax credit with respect to
withholding taxes imposed on distributions on shares in a PFIC. A U.S. Holder
who owns preferred shares during any year that we are classified as a PFIC must
file Internal Revenue Service Form 8621, describing any distributions received
from the ownership of shares, any gain realized on the sale or other
disposition of shares and information relevant to the mark-to-market election,
if made.

   United States Backup Withholding and Information Reporting

     Payment of dividends and other proceeds in connection with the preferred
shares made within the United States or through certain U.S.-related financial
intermediaries generally are subject to information reporting and to backup


                                      76
<PAGE>

withholding, unless the U.S. Holder (i) is a corporation or comes within
certain other exempt categories and, when required, demonstrates this fact, or
(ii) provides a taxpayer identification number on a properly completed Form W-9
or a substituted form and certifies that no loss of exemption from back-up
withholding has occurred. The amount of any backup withholding will be
creditable against the U.S. Holder's federal income tax liability and may
entitle the U.S. Holder to a refund, provided that the required information is
furnished to the Internal Revenue Service.

F.   Dividends and Paying Agents

     Not applicable.

G.   Statement by Experts

     Not applicable.

H.   Documents on Display

     Statements contained in this annual report as to the contents of any
contract or other document referred to are not necessarily complete, and each
of these statements is qualified in all respects by reference to the full text
of such contract or other document filed as an exhibit hereto. A copy of the
complete annual report including the exhibits and schedules filed herewith may
be inspected without charge at the public reference facilities maintained by
the SEC in Judicial Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and
at the SEC's regional offices located at Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661 and 233 Broadway, New York, New
York 10279, and copies of all or any part of the annual report may be obtained
from these offices upon payment of the fees prescribed by the SEC.

     We are subject to the information and periodic reporting requirements of
the Securities Exchange Act of 1934, as amended, and, in accordance therewith,
file periodic reports and other information with the SEC. However, as a foreign
private issuer, we are exempt from the rules under the Exchange Act relating to
the furnishing and content of proxy statements and relating to short-swing
profits reporting and liability.

     We furnish to The Bank of New York, as depositary, copies of all reports
we are required to file with the SEC under the Exchange Act, including our
annual reports in English, containing a brief description of our operations and
our audited annual consolidated financial statements which are prepared in
accordance with Brazilian corporate law and include a reconciliation to U.S.
GAAP. In addition, we are required under the Deposit Agreement to furnish the
depositary with copies of English translations to the extent required under the
rules of the SEC of all notices of meetings of holders of preferred shares and
other reports and communications that are generally made available to holders
of preferred shares. Under certain circumstances, the depositary will arrange
for the mailing, at our expense, of these notices, other reports and
communications to all ADS holders.

I.   Subsidiary Information

     Not applicable.

ITEM 11.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     We are exposed to various market risks, primarily related to variable
interest rates and foreign exchange rates. Market risk is the potential loss
arising from adverse changes in market rates and prices, such as foreign
currency exchange rates and interest rates. We do not enter into derivative
financial instruments for speculative purposes. Our market risks are mitigated
by our high level of financial investments.

     See Notes 3(m), 12 and 16(V)(d) and (e) to our consolidated financial
statements for a discussion of the accounting policies for derivative
instruments and information with respect to those financial instruments.

   Foreign Exchange Risk

     The real continues to fluctuate against the U.S. dollar. See "Item 3. Key
Information--Selected Financial Data--Exchange Rates."


                                      77
<PAGE>

     A substantial portion of our debt obligations is denominated in U.S.
dollars. In addition, a significant portion of our operating expenses,
including certain raw materials, are denominated in or indexed to U.S. dollars.
Most of our revenues are denominated in reais, although sales prices of
products of the chemicals segment are linked to international market prices
established in U.S. dollars. As a result, we are exposed to currency exchange
risks that may adversely affect our business, financial condition and results
of operations, as well as our ability to meet our debt service obligations.
However, the extent to which our revenues are linked to U.S. dollars and our
policy with respect to hedging our foreign currency indebtedness may offset
this effect.

     Our policy is to manage the exchange risks of all scheduled disbursements
related to our liabilities in foreign currency by investing in U.S.
dollar-denominated mutual funds and foreign currency/interest swap contracts,
under which we pay variable interest in Brazilian currency based on the
interbank certificate of deposit rate, or CDI, and receive fixed interest in
U.S. currency.

     As of December 31, 2001, Ultrapar had a position in floating rate versus
U.S. dollar swap with maturity between January 2002 and December 2003, which
fair value is approximately the book value as summarized in the table below
(See Note 12 as per our Consolidated Financial Statements).

                                                  Expected Maturity Date
                                               -----------------------------
Interest Rate Swaps                               2002               2003
--------------------------------------         ----------         ----------
Variable to Fixed (R$ million)(**)               191.7               12.9
   Average pay rate(*)                          100% CDI           100% CDI
   Average receive rate                        US$ + 6.3%         US$ + 8.3%

Fixed to Variable (R$ million)(**)                9.6                 -
   Average pay rate                               9.7%                -
   Average receive rate(*)                      100% CDI              -

---------
(*)  CDI - Interbank Deposit Certificate
(**) Notional amount based on the average sell rate (PTax-800) as of December
     31, 2001

     Interest Rate Risk

     Substantially all of our debt obligations in Brazilian currency are
subject to variable rates of interest based on either the TJLP or the IGP-M
inflation index. Our foreign currency borrowings, however, are subject to fixed
rates of interest. As of December 31, 2001, we did not have any derivative
contracts outstanding which could limit exposure to variations in the TJLP or
the IGP-M, primarily because such instruments are not affordably available in
the Brazilian market. Nevertheless, our exposure to interest rate risk is
partially limited by our Brazilian currency variable interest investments,
which generally earn the overnight interest rates paid on interbank
certificates of deposit. In addition to the exposure with respect to existing
borrowings, we would be exposed to interest rate volatility with respect to any
future debt issuance.

     The table below provides information about our debt obligations in U.S.
dollars and in Brazilian currency that are subject to variable rates of
interest. The table summarizes information on instruments and transactions that
are sensitive to foreign currency exchange rates and interest rates (in
millions of reais as of December 31, 2001):

<TABLE>
                                                                                         Principal by year of maturity
                                                                               -----------------------------------------------------
                                                          Average   Estimated
                                                          Interest   fair
Debt                                                        Rate     value     2002     2003     2004     2005     2006   Thereafter
-------------------------------------------------------   --------  ---------  ----     ----     ----     ----     ----   ----------
<S>                                                         <C>       <C>       <C>      <C>      <C>      <C>      <C>      <C>
U.S. dollar borrowings ................................      8.4%    205.2     52.0     14.0       --    139.2       --       --
Borrowings indexed to the
  UMBNDES .............................................     11.5%     10.4      1.6      2.5      3.0      1.8      1.4      0.1
Borrowings indexed to the TJLP ........................      3.3     182.9     68.9     54.3     33.8     17.5      8.4       --
Borrowings indexed to the IGP-M .......................      6.5      16.2      2.0      1.9      2.3      2.8      2.8      4.4
Subtotal ..............................................       --     414.7    124.5     72.7     39.1    161.3     12.6      4.5
</TABLE>

ITEM 12.    DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

     Not applicable.

PART II

ITEM 13.    DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

     None.


                                      78
<PAGE>

ITEM 14.    MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND
            USE OF PROCEEDS

     Not applicable.

ITEM 15.    [Reserved]

ITEM 16.    [Reserved]

PART III

ITEM 17.    FINANCIAL STATEMENTS

     We have responded to Item 18 in lieu of responding to this Item.

ITEM 18.    FINANCIAL STATEMENTS

     We file the following financial statements, together with the report of
independent accountants as part of this annual report:

Index to Consolidated Financial Statements

<TABLE>
<S>                                                                                                       <C>
Report of Independent Public Accountants............................................................      F-2
Consolidated Balance Sheet at December 31, 2000 and 2001............................................      F-4
Consolidated Statement of Operations for the Years Ended December 31, 1999, 2000 and 2001...........      F-6
Consolidated Statement of Changes in Shareholders'
     Equity for the Years Ended December 31, 1999, 2000 and 2001....................................      F-7
Consolidated Statement of Changes in Financial Position for the Years Ended December 31, 1999, 2000
     and 2001.......................................................................................      F-9
Notes to the Consolidated Financial Statements......................................................      F-11
</TABLE>

ITEM 19.    EXHIBITS

     We file the following documents as part of this annual report:

     1.   Ultrapar By-laws*

     2.   Ultra S.A.'s Shareholders' Agreement

     8.   List of Subsidiaries of Ultrapar

     10.  Letter from Ultrapar regarding certain representations given by
          Arthur Andersen

---------
     * Incorporated by reference to Annual Report on Form 20-F for fiscal year
ended December 31, 2000 (File No. 001-14950) filed with the SEC on May 25,
2001.


                                      79
<PAGE>


                                   SIGNATURES

     Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the registrant certifies that it meets all requirements for filing on
Form 20-F and has duly caused this annual report to be signed on its behalf by
the undersigned, thereunto duly authorized.


                                        ULTRAPAR PARTICIPACOES S.A.


                                        By: /s/ Fabio Schvartsman
                                            -----------------------------------
                                            Name:   Fabio Schvartsman
                                            Title:  Chief Financial Officer

Date: May 29, 2002

<PAGE>


                                    GLOSSARY

Petrochemicals and Chemicals

Acetates                      Chemical substances derived from acetic acid,
                              which are used as solvents in the production of
                              paints and coatings.

Acetic Acid                   One of the largest produced organic acids and is
                              used in the production of acetates.

Acrylates                     Derivatives from acrylic acid, that are used in
                              the plastic industry.

Acrylonitrile                 Derivative compounds from propylene having a
                              nitrile group.

Alcohol                       Flammable liquid obtained by fermentation of
                              sugary substances, or by synthetics operations.

Alcohol Sulfates              Fatty alcohol-derived sulfates, with surfactant
                              characteristics, mainly used in the production of
                              detergents.

Alkanolamides                 Substances produced by reaction of fatty acids
                              with alcanolamines, mainly used as emulsifiers in
                              cosmetic preparation.

Alkyl Benzene                 Substance with an aromatic ring and an aliphatic
                              chain.

Aromatics                     A major group of organic chemical compounds with
                              a ring shaped carbon chain. Aromatics are derived
                              chiefly from petroleum and coal tar, and used to
                              make a broad range of downstream chemical
                              products.

Butadiene                     By-product of the cracking process; used
                              primarily as a feedstock for synthetic rubber,
                              elastomers and fibers.

Butyl Alcohol                 An alcohol used primarily in the production of
                              solvents and plasticizers.

Commodity Chemicals           A term applied to chemical substances, which are
                              sold on a generic basis and, unlike specialty
                              chemicals, are not generally manufactured to meet
                              specific end-use performance characteristics.

Condensed Naphthalene         Polymer mainly used as a super-fluidizer and
                              curing agent for cement preparation.

Crackers                      First generation companies that thermally
                              breakdown or "crack" ethane, naphtha and gas oil
                              into basic petrochemicals, such as ethylene and
                              propylene.

Dispersants                   Class of chemicals whose main property is to
                              maintain the stability of a mixture by preventing
                              particles from settling out of the mixture.

EDC                           Ethylene Dichloride, raw material of VCM.

Elastomer                     Broad category of "rubber" polymers which may be
                              natural or synthetic, such as natural rubber,
                              nitrile rubber and styrene-butadiene rubbers.

Emulsifiers                   A class of chemical generally used to promote the
                              dispersion of materials throughout a solution or
                              mixture.

Ethanolamines                 Ethanolamines, comprising mono-, di-, and
                              tri-ethanolamines, are clear, non-flammable,
                              liquids at atmospheric pressure and room
                              temperature conditions, and are produced from
                              ethylene oxide and ammonium.


                                      G-1
<PAGE>


Ethers                        Organic compound with one oxygen atom interpoled
                              between two carbon atoms.

Ethoxylated Alcohol           Produced by reaction of ethylene oxide with
                              alcohols. Ethoxylated alcohols are used mainly as
                              surfactants.

Ethoxylated Alkylphenols      Ethoxylated alkylphenols range from clear liquids
                              to colored solids and is produced by the reaction
                              of ethylene oxide with alkylphenol.

Ethoxylated Fatty Alcohols    Substances produced by reaction of ethylene oxide
                              with fatty alcohols and are used mainly as a raw
                              material for detergent production.

Ethoxylated Fatty Amines      Substances produced by reaction of ethylene oxide
                              with fatty amines and are used mainly as
                              emulsifiers for agrochemicals.

Ethoxylated Fatty Esters/     Substances produced by reaction of ethylene oxide
Ethoxylated Vegetable Oil     with hydroxylated fatty esters and are used
                              mainly as emulsifiers in the cosmetic industry.

Ethoxylated Sorbitan Esters   Substances produced by reaction of ethylene oxide
                              with sorbitan esters and are mainly used as food
                              emulsifiers, especially for bakery products.

Ethyl Alcohol                 A flammable liquid known as ethanol. It is used
                              as automotive fuel, alone or in mixture with
                              gasoline, as solvent in personal care products,
                              such as aftershave lotion and mouthwashes.

Ethylene                      A chemical substance, mainly derived from thermal
                              cracking of ethane, gas oil and naphtha, and used
                              to make polyethylene and many organic chemical
                              intermediates, such as ethylene oxide, vinyl
                              chloride, styrene and acetaldehyde.

Ethylene Glycols              Includes mono-, di-, tri- and other ethylene
                              glycols. Mono-ethylene glycol or MEG is a clear,
                              non-flammable, non-volatile liquid at room
                              temperature and atmospheric pressure. Ethylene
                              glycols are produced from ethylene oxide.

Ethylene Oxide                Ethylene oxide is a colorless and highly
                              flammable gas at room temperature and atmospheric
                              pressure and is produced by catalytic partial
                              oxidation of ethylene by oxygen, at high
                              temperature and pressure.

First Generation Company      A petrochemical cracker.

Fuels                         Any substance that envolves energy in a chemical
                              reaction.

Glycol Ether Acetate          Flammable liquids at room temperature and
                              atmospheric pressure produced by reaction with
                              acetic acid and glycol ether.

Glycols                       Alcohols containing two hydroxyl groups.

Glycol Ethers                 Substances produced by reaction of ethylene oxide
                              and an alcohol, or methyl, ethyl and butyl
                              alcohol.

Hydraulic Fluids              Mixture of high molecular weight glycols and
                              glycol ethers used as cooling medium and
                              mechanical action transmitters in automotive
                              braking systems.

Lauryl Alcohol                Substance of twelve-carbon fatty alcohol raw
                              material for ethoxylated fatty alcohol, alcohol
                              sulfate and ethoxylated alcohol sulfate
                              production, which are intermediates for detergent
                              production.


                                      G-2
<PAGE>

Linear Alkyl Benzene (LAB)    Straight chain alkyl benzene used as surfactant
                              intermediate.

Linear Alkyl Sulphonate (LAS) Straight chain alkyl benzene sulfate used as
                              surfactant intermediate.

Lubricants                    Broad class of chemicals which are generally used
                              to provide a film between the moving parts of
                              machines and engines.

Methyl Ethyl Ketone (MEK)     A clear, volatile, flammables liquid at room
                              temperature and atmospheric pressure and is
                              mainly used as a solvent.

Metric Ton                    Equal to 1,000 kilograms (2,204.62 pounds).

Naphtha                       A by-product of crude oil refining which is used
                              by crackers as feedstock.

Nitrile                       Organic compound containing CN group.

Normal Paraffins              Class of aliphatic hydrocarbons with a single
                              carbon chain.

Olefin                        Hydrocarbons with double bonds with the general
                              chemical formula CnH2n. Olefins, along with
                              aromatics, are produced mainly in crackers and
                              are regarded as the "building blocks" of the
                              petrochemical industry.

Paraxylene                    Organic compound with two methyl radicals in
                              p-position.

PET                           Polyethylene terephthalate, a polymer produced by
                              polycondensation of ethylene glycol with either
                              Dimethyl Terephthalate, or therephtalic acid.
                              Used to produce fibers, resins and packaging such
                              as carbonated soft drink bottles (PET bottle
                              grade).

Phosphate Esters              Phosphoric acid derived esters, used primarily as
                              "detergent builders" in powder detergent
                              production.

Polyethylene                  Intermediate petrochemical produced by second
                              generation companies from ethylene; used in many
                              plastic applications.

Polyethylene Glycols          Ethylene oxide derived polymers used in many
                              applications, including as fillers, lubricants
                              and viscosity builders.

Polystyrene                   Intermediate petrochemical produced by second
                              generation companies from styrene.

Polyvinyl Chloride            Intermediate petrochemical produced by companies
                              from basic petrochemicals.

Propylene                     A chemical substance, mainly derived as a co-
                              product with ethylene through the cracking
                              process of gas oil or naphtha, often used to make
                              polypropylene, which is a common plastic.

Rafinate II                   A by-product of naphtha cracking mainly composed
                              of butane and used in the production of MEK.

Sec-Butanol                   A secondary four-carbon atom alcohol obtained by
                              the hydration of butenes, contained in raffinate
                              II. Sec-butanol is the raw material for
                              methyl-ethyl-ketone production.

Second Generation Company     A producer of intermediate chemical products
                              based largely on raw materials purchased from
                              upstream, first generation companies, also known
                              as crackers.


                                      G-3
<PAGE>


Softeners                     A class of surfactant products mainly used as
                              co-agents in the textile industry and domestic
                              laundries.

Solvents                      Chemical compounds, usually in liquid form,
                              capable of dissolving another substance; often
                              used as a medium in which other chemical
                              reactions may take place.

Sorbitan Esters               Substances produced by the reaction of sorbitan
                              with fatty acids used as a raw material for
                              ethoxylated sorbitan esters.

Soybean Oil                   Oil from soya beans

Styrene                       Aromatic compound with ethylene group. Monomer of
                              polystyrene.

Specialty Chemicals           Chemicals which are usually produced in smaller
                              quantities than commodity chemicals and which
                              performances are more relevant than the
                              specification.

Stabilizers                   Chemicals which are used to prevent chemical
                              degradation of a product or chemical compound.

Sulfonates/Sulfates           Class of sulfur trioxide modified surfactants,
                              used as a raw material for detergent production.

Surfactants                   Generally defines a group of chemicals which,
                              when dissolved in a solvent, modify the liquid
                              properties at a liquid/liquid or liquid/solid
                              interface, including increased solubilization,
                              foaming, frothing, emulsification, dispersing or
                              wetting; a major end-use market for surfactants
                              is the detergent market.

TDI                           Toluene diisocyanate used as raw material of
                              polyurethane.

Third Generation Company      A producer that transforms intermediate products
                              into end products such as films, piping and
                              containers.

Tons                          Metric tons.

VAM                           Vinyl acetate monomer. Monomer of PVA - polyvinyl
                              acetate.

VCM                           Vinyl chloride monomer.


                                      G-4
<PAGE>


PRICEWATERHOUSECOOPERS [GRAPHIC]             [GRAPHIC] ANDERSEN




Ultrapar Participacoes S.A.
and Subsidiaries

Index to Consolidated Financial Statements

Report of Independent Public Accountants                                     F-2
Consolidated Balance Sheet at December 31, 2000 and 2001                     F-4
Consolidated Statement of Operations for the Years
    Ended December 31, 1999, 2000 and 2001                                   F-6
Consolidated Statement of Changes in Stockholders'
    Equity for the Years Ended December 31, 1999, 2000 and 2001              F-7
Consolidated Statement of Changes in Financial Position
    for the Years Ended December 31, 1999, 2000 and 2001                     F-9
Notes to the Consolidated Financial Statements                              F-11

<PAGE>

PRICEWATERHOUSECOOPERS [GRAPHIC]             [GRAPHIC] ANDERSEN




Report of Independent Public Accountants


To the Board of Directors and Stockholders
Ultrapar Participacoes S.A.



1    We have audited the accompanying consolidated balance sheets of Ultrapar
     Participacoes S.A. (a Brazilian corporation) and subsidiaries as of
     December 31, 2000 and 2001, and the related consolidated statements of
     operations, of changes in stockholders' equity and of changes in financial
     position for each of the three years in the period ended December 31,
     2001, expressed in Brazilian reais, in conformity with accounting
     principles prescribed by Brazilian corporate law. These financial
     statements are the responsibility of the Company's management. Our
     responsibility is to express an opinion on these financial statements
     based on our audits.

2    We conducted our audits in accordance with auditing standards generally
     accepted in Brazil and the United States of America. Those standards
     require that we plan and perform the audit to obtain reasonable assurance
     about whether the financial statements are free of material misstatement.
     An audit includes examining, on a test basis, evidence supporting the
     amounts and disclosures in the financial statements, assessing the
     accounting principles used and significant estimates made by management,
     as well as evaluating the overall financial statement presentation. We
     believe that our audits provide a reasonable basis for our opinion.

3    In our opinion, the consolidated financial statements referred to above
     present fairly, in all material respects, the financial position of
     Ultrapar Participacoes S.A. and subsidiaries as of December 31, 2000 and
     2001 and the results of their operations, the changes in stockholders'
     equity and the changes in their financial position for each of the three
     years in the period ended December 31, 2001 in conformity with accounting
     principles prescribed by Brazilian corporate law (Notes 2 and 3).


                                      F-2
<PAGE>

PRICEWATERHOUSECOOPERS [GRAPHIC]             [GRAPHIC] ANDERSEN



Ultrapar Participacoes S.A.


4    Accounting principles prescribed by Brazilian corporate law vary in
     certain significant respects from accounting principles generally accepted
     in the United States of America (US GAAP). A description of the
     significant differences between Brazilian corporate law and US GAAP and
     the approximate effects of those differences on net income and
     stockholders' equity are set forth in Note 19 of the notes to the
     consolidated financial statements.

     Sao Paulo, Brazil
     January 31, 2002

     /s/ PricewaterhouseCoopers               /s/ Arthur Andersen S/C

     PricewaterhouseCoopers                   Arthur Andersen S/C
     Auditores Independentes


                                      F-3
<PAGE>

Ultrapar Participacoes S.A. and Subsidiaries

Consolidated Balance Sheet at December 31
In millions of reais, unless otherwise stated
--------------------------------------------------------------------------------

<TABLE>
Assets                                                                                      2000            2001
                                                                                    ------------    ------------
<S>                                                                                      <C>             <C>
Current assets
    Cash and cash equivalents                                                              862.2           656.0
    Trade accounts receivable, net                                                         139.2           149.2
    Inventories                                                                             86.5            94.5
    Taxes recoverable                                                                       82.2           121.2
    Other                                                                                   18.6            20.9
    Prepaid expenses                                                                         2.1             3.4
                                                                                    ------------    ------------

                                                                                         1,190.8         1,045.2
                                                                                    ------------    ------------

Long-term receivables
    Related companies                                                                        1.5             1.7
    Deferred income tax and social contribution                                             23.0            27.3
    Judicial deposits                                                                        6.8             6.7
    Other                                                                                    4.5             6.3
                                                                                    ------------    ------------

                                                                                            35.8            42.0
                                                                                    ------------    ------------

Permanent assets
    Investments
       Associated companies                                                                 61.1            63.0
       Other                                                                                26.7            25.8
    Property, plant and equipment                                                          655.9           707.9
    Deferred charges                                                                        44.2            68.1
                                                                                    ------------    ------------

                                                                                           787.9           864.8
                                                                                    ------------    ------------

Total assets                                                                             2,014.5         1,952.0
                                                                                    ============    ============
</TABLE>


                                      F-4
<PAGE>

Ultrapar Participacoes S.A. and Subsidiaries

Consolidated Balance Sheet at December 31
In millions of reais, unless otherwise stated                        (continued)
--------------------------------------------------------------------------------


<TABLE>
Liabilities and stockholders' equity                                                        2000            2001
                                                                                    ------------    ------------
<S>                                                                                      <C>             <C>
Current liabilities
    Financings                                                                             134.1           124.5
    Suppliers                                                                               86.8            88.4
    Salaries and related charges                                                            44.7            50.2
    Taxes                                                                                    8.6             5.8
    Dividends                                                                               27.1            33.6
    Income tax and social contribution                                                       4.6             2.0
    Other                                                                                   15.7            19.4
                                                                                    ------------    ------------

                                                                                           321.6           323.9
                                                                                    ------------    ------------
Long-term liabilities
    Financings                                                                             291.8           290.2
    Related companies                                                                       11.6            11.0
    Deferred income tax and social contribution                                             23.5            24.0
    Other taxes and contributions -  contingent liabilities                                 53.4            62.4
    Other                                                                                    3.7             0.8
                                                                                    ------------    ------------

                                                                                           384.0           388.4
                                                                                    ------------    ------------

Minority interest                                                                          411.2           439.8
                                                                                    ------------    ------------

Commitments and contingencies (Note 10)

Stockholders' equity
    Capital - authorized and issued - 37,984,012,500 common shares and
       15,015,987,500 preferred shares with no par value at
       December 31, 2000 and 2001                                                          433.9           433.9
    Revaluation reserve                                                                     29.1            25.9
    Revenue reserves                                                                       314.8           340.1
    Retained earnings                                                                      119.9
                                                                                    ------------    ------------

                                                                                           897.7           799.9
                                                                                    ------------    ------------

Total liabilities and stockholders' equity                                               2,014.5         1,952.0
                                                                                    ============    ============
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.


                                      F-5
<PAGE>


Ultrapar Participacoes S.A. and Subsidiaries

Consolidated Statement of Operations
Years Ended December 31
In millions of reais, unless otherwise stated
--------------------------------------------------------------------------------

<TABLE>
                                                                               1999                    2000                    2001
                                                               --------------------    --------------------    --------------------
<S>                                                                  <C>                     <C>                     <C>
Gross sales and service revenues                                            1,927.0                 2,301.2                 2,862.5
Returns and sales and service tax                                            (332.4)                 (423.2)                 (577.8)
                                                               --------------------    --------------------    --------------------

Net sales and services                                                      1,594.6                 1,878.0                 2,284.7
Cost of sales and services                                                 (1,106.7)               (1,399.6)               (1,698.3)
                                                               --------------------    --------------------    --------------------

Gross profit                                                                  487.9                   478.4                   586.4
                                                               --------------------    --------------------    --------------------

Operating (expenses) income
    Selling                                                                   (85.3)                  (95.8)                 (120.0)
    General and administrative                                               (106.8)                 (120.1)                 (127.8)
    Directors' fees                                                            (3.2)                   (3.5)                   (3.7)
    Depreciation and amortization                                             (38.3)                  (46.8)                  (66.2)
    Other operating income, net                                                 3.8                     1.3                    10.2
                                                               --------------------    --------------------    --------------------

                                                                             (229.8)                 (264.9)                 (307.5)
                                                               --------------------    --------------------    --------------------

Operating profit before financial results                                     258.1                   213.5                   278.9

    Financial income                                                          172.6                   140.0                   120.7
    Financial expenses                                                       (207.0)                  (96.6)                 (151.8)
    Expenses for public offering of shares                                    (15.8)
    Other non-operating expenses, net (Note 13)                                (2.5)                  (16.5)                  (17.0)
                                                               --------------------    --------------------    --------------------

                                                                              (52.7)                   26.9                   (48.1)
                                                               --------------------    --------------------    --------------------

Income before taxes, equity in earnings and
    Minority interests                                                        205.4                   240.4                   230.8
                                                               --------------------    --------------------    --------------------

Social contribution and income tax
    Current                                                                   (67.2)                  (81.7)                  (58.4)
    Deferred                                                                   (2.8)                    4.7                     3.9
    Benefit of tax holidays                                                    29.4                    29.7                    27.0
                                                               --------------------    --------------------    --------------------

                                                                              (40.6)                  (47.3)                  (27.5)
                                                               --------------------    --------------------    --------------------

Income before equity  in earnings and
    minority interests                                                        164.8                   193.1                   203.3
                                                               --------------------    --------------------    --------------------

       Equity in earnings (losses) of affiliates                               (3.2)                    9.6                     1.9
       Minority interests                                                     (73.7)                  (74.2)                  (73.0)
                                                               --------------------    --------------------    --------------------

Net income for the year                                                        87.9                   128.5                   132.2
                                                               ====================    ====================    ====================

Number of shares outstanding at year end                             53,000,000,000          53,000,000,000          53,000,000,000
                                                               ====================    ====================    ====================

Earnings per thousand shares - whole R$                                       1.658                   2.425                   2.494
                                                               ====================    ====================    ====================
</TABLE>


The accompanying notes are an integral part of these consolidated financial
statements.


                                      F-6
<PAGE>


Ultrapar Participacoes S.A. and Subsidiaries

Consolidated Statement of Changes in Stockholders' Equity
Years Ended December 31
In millions of reais, except amounts per thousand shares
--------------------------------------------------------------------------------

<TABLE>
                                                                                  1999             2000             2001
                                                                         -------------    -------------    -------------
<S>                                                                              <C>              <C>              <C>
Common shares and preferred shares (Note 9)
    At the beginning of the year                                                 101.0            433.9            433.9
    Capitalization of revenue reserves                                             2.3
    Issuance of preferred shares                                                 330.6
                                                                         -------------    -------------    -------------

    At the end of the year                                                       433.9            433.9            433.9
                                                                         =============    =============    =============

Subsidiaries' revaluation reserve
    At the beginning of the year                                                  91.2             53.5             29.1
    Realization of revaluation reserve                                           (10.0)            (6.2)            (3.4)
    Reversal of revaluation reserves of associated companies                     (28.2)           (19.0)
    Social contribution and income tax on realization
       of revaluation reserves of subsidiary companies                             0.5              0.8              0.2
                                                                         -------------    -------------    -------------

    At the end of the year                                                        53.5             29.1             25.9
                                                                         =============    =============    =============

Revenue reserves

Legal reserve
    At the beginning of the year                                                   2.3              4.4             10.8
    Appropriation of net income                                                    4.4              6.4              6.6
    Transfer to share capital                                                     (2.3)
                                                                         -------------    -------------    -------------

    At the end of the year                                                         4.4             10.8             17.4
                                                                         -------------    -------------    -------------

Unrealized profits
    At the beginning of the year                                                 160.0            220.5            304.0
    Appropriation of net income                                                   65.0             83.5
    Transfer to unappropriated retained earnings                                  (4.5)                           (304.0)
                                                                         -------------    -------------    -------------

    At the end of the year                                                       220.5            304.0
                                                                         -------------    -------------    -------------

Retention of profits
    Transfer from unappropriated retained earnings                                                                 322.7
                                                                         -------------    -------------    -------------

At the end of the year                                                                                             322.7
                                                                         -------------    -------------    -------------

At the end of the year                                                           224.9            314.8            340.1
                                                                         =============    =============    =============
</TABLE>


                                      F-7
<PAGE>

Ultrapar Participacoes S.A. and Subsidiaries

Consolidated Statement of Changes in Stockholders' Equity
Years Ended December 31
In millions of reais, except amounts per thousand shares             (continued)
--------------------------------------------------------------------------------

<TABLE>
                                                                                       1999               2000               2001
                                                                            ---------------    ---------------    ---------------
<S>                                                                                   <C>                <C>                <C>
Unappropriated retained earnings

At the beginning of the year                                                          119.6              107.3              119.9
Realization of revaluation reserve in subsidiaries                                      9.6                6.2                3.3
Effect of adoption of CVM Deliberation 273/98
    regarding deferred income tax                                                       2.7
Social contribution and income tax on realization
    of revaluation reserve of subsidiary companies                                     (1.9)              (1.1)              (0.5)
Spin-off of assets of Imaven and Imaven Fortaleza                                     (22.7)
Net income for the year                                                                87.9              128.5              132.2
Transfer to legal reserve                                                              (4.4)              (6.4)              (6.6)
Realization of the unrealized profits reserve                                           4.5                                 304.0
    Transfer to unrealized profits reserve                                            (65.0)             (83.5)
    Transfer to retention of profits reserve                                                                               (322.7)
Supplementary dividends (R$ 0.32 and R$ 0.35 per thousand common and
    thousand preferred shares, respectively)                                                                                (17.6)
Interest on own capital (R$ 0.27 and R$ 0.57 per thousand common
    shares, and R$ 0.30 and R$ 0.63 per thousand preferred shares in
    2000 and 2001, respectively)                                                                         (14.6)             (31.0)
Dividends (R$ 0.48, R$ 0.30 and R$ 3.32 per thousand
    common shares, and R$ 0.53, R$ 0.33 and R$ 3.65 per
    thousand preferred shares in 1999, 2000 and 2001,
     respectively)                                                                    (23.0)             (16.5)            (181.0)
                                                                            ---------------    ---------------    ---------------

At the end of the year                                                                107.3              119.9
                                                                            ===============    ===============    ===============

Total stockholders' equity at the end of the year                                     819.6              897.7              799.9
                                                                            ===============    ===============    ===============
</TABLE>


The accompanying notes are an integral part of these consolidated financial
statements.


                                      F-8
<PAGE>

Ultrapar Participacoes S.A. and Subsidiaries

Consolidated Statement of Changes in Financial Position
Years Ended December 31
In millions of reais, unless otherwise stated
--------------------------------------------------------------------------------

<TABLE>
                                                                                   1999               2000               2001
                                                                        ---------------    ---------------    ---------------
<S>                                                                               <C>                <C>                <C>
Financial resources were provided by
    Operations
       Net income for the year                                                     87.9              128.5              132.2
       Expenses (income) not affecting working capital
           Depreciation and amortization                                           78.9               90.8              102.4
           Equity in the results of affiliates                                      3.2               (9.6)              (1.9)
           Long-term interest and monetary variations                              62.8               22.5               34.4
           Deferred income tax and social contribution                              2.8               (4.7)              (3.9)
           Minority interests                                                      73.7               74.2               73.0
           Residual value of disposed permanent assets                             33.2               29.4               31.2
           Other long-term taxes and contributions                                 12.0               25.5               10.6
           Loss (gain) on change in ownership percentage                           (4.3)               2.9
           Amortization of goodwill and negative goodwill
              on investments                                                        0.4                0.2               (8.7)
           Provision (reversal) for losses on investments                           5.5               (5.2)              (5.3)
                                                                        ---------------    ---------------    ---------------

                                                                                  356.1              354.5              364.0
                                                                        ---------------    ---------------    ---------------

    Proceeds from offering of shares to the public                                330.6

    Third parties
       Increase in long-term liabilities                                                               0.9
       Decrease in long-term receivables                                            2.4                2.9                0.5
       Dividends received                                                           2.1                                   1.3
       Loans                                                                       53.6               64.5               52.9
                                                                        ---------------    ---------------    ---------------

                                                                                   58.1               68.3               54.7
                                                                        ---------------    ---------------    ---------------

Total                                                                             744.8              422.8              418.7
                                                                        ---------------    ---------------    ---------------
</TABLE>


                                      F-9
<PAGE>


Ultrapar Participacoes S.A. and Subsidiaries

Consolidated Statement of Changes in Financial Position
Years Ended December 31
In millions of reais, unless otherwise stated                        (continued)
--------------------------------------------------------------------------------

<TABLE>
                                                                                       1999              2000              2001
                                                                             --------------    --------------    --------------
<S>                                                                                 <C>               <C>               <C>
Financial resources were used for
    Permanent assets
       Investment                                                                       0.1               0.8
       Property, plant and equipment                                                   72.7             149.0             145.7
       Deferred charges                                                                21.7              32.6              57.4
                                                                             --------------    --------------    --------------

                                                                                       94.5             182.4             203.1
                                                                             --------------    --------------    --------------

    Dividends and interest on own capital, including
       minorities                                                                      65.0              54.3             250.8
                                                                             --------------    --------------    --------------

    Transfer from long-term liabilities to current liabilities                         82.0              71.3              86.7
    Decrease in long-term liabilities                                                                                      11.5
    Taxes on realization of revaluation reserve                                         2.1               0.7               0.7
    Decrease in minority interest                                                       3.2               1.5              13.8
                                                                             --------------    --------------    --------------

                                                                                       87.3              73.5             112.7
                                                                             --------------    --------------    --------------

Total funds used                                                                      246.8             310.2             566.6
                                                                             --------------    --------------    --------------

Increase (decrease) in working capital                                                498.0             112.6            (147.9)
                                                                             ==============    ==============    ==============

Changes in working capital
Current assets
    At the beginning of the year                                                      532.4           1,112.9           1,190.8
    At the end of the year                                                          1,112.9           1,190.8           1,045.2
                                                                             --------------    --------------    --------------

                                                                                      580.5              77.9            (145.6)
                                                                             --------------    --------------    --------------

Current liabilities
    At the beginning of the year                                                      273.8             356.3             321.6
    At the end of the year                                                            356.3             321.6             323.9
                                                                             --------------    --------------    --------------

                                                                                       82.5             (34.7)              2.3
                                                                             --------------    --------------    --------------

Increase (decrease) in working capital                                                498.0             112.6            (147.9)
                                                                             ==============    ==============    ==============
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.


                                     F-10
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


1    The Company and its Operations

     Ultrapar Participacoes S.A. (the "Company" or "Ultrapar") is a holding
     company organized under the laws of the Federative Republic of Brazil
     which, through its ownership of various operating subsidiaries, is engaged
     in the distribution of Liquefied Petroleum Gas (LPG) in Brazil, the
     production of chemicals and petrochemicals, and related services such as
     the storage and transportation of LPG and chemicals.

     The Company purchases the principal raw material for its chemical and
     petrochemical business (ethylene) from two of Brazil's three naphtha
     crackers. Petroleo Brasileiro S.A. - Petrobras is the sole source of
     supply for naphtha in Brazil. Petrobras is also the sole source of supply
     for LPG in Brazil.


2    Basis of Presentation of Financial Statements

     These financial statements were prepared according to the accounting
     practices emanating from the Brazilian corporate law (Law 6,404/76, as
     amended), and rules and instructions issued by the Brazilian Securities
     Commission (CVM), which include the indexation of permanent assets and
     stockholders' equity only December 31, 1995. Until the year ended December
     31, 2000, the financial statements of the Company presented in documents
     filed with the Securities and Exchange Commission of the United States
     (SEC) were submitted pursuant to Brazilian GAAP, which required the
     continuation of full indexation using the constant currency method after
     January 1, 1996.

     These financial statements have been translated into English from the
     original statements issued in Portuguese. In addition, certain terminology
     changes have been made, and the notes to the financial statements have
     been expanded to conform them more closely to reporting practices
     prevailing in the United States of America.

(a)  Changes in the presentation of the financial statements

     In common with other Brazilian SEC registrants, the Company, as from the
     year ended December 31, 2000, has been granted the option to present its
     primary financial statements on the basis of accounting principles
     established under Brazilian corporate law. This accommodation arose from a
     position paper prepared by the "International Task Force" of the American
     Institute of Certified Public Accountants (AICPA).


                                     F-11
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


     To harmonize the presentation format of financial statements to be used by
     stockholders in the United States with those used in the Brazilian market,
     management has prepared the Company's financial statements pursuant to the
     principles set forth in the Brazilian corporate law.

     All periods are presented according to the Brazilian corporate law, since
     the change in the reporting currency from reais of constant purchasing
     power of the latest balance sheet date to nominal reais requires a
     restatement of all periods presented, so as to maintain consistency in the
     presentation of the financial statements.

(b)  The corporate law method of inflation accounting

     The corporate law method provided a simplified methodology for accounting
     for the effects of inflation. It consisted of restating permanent assets
     (property, plant and equipment, investments and deferred charges) and
     stockholders' equity accounts using indices mandated by the Federal
     Government. The net effect of these restatements was credited or charged
     to the statement of operations in a single account, usually entitled
     "monetary correction adjustments" or "inflation adjustments". As described
     above, the corporate law method of inflation accounting was required to be
     discontinued after December 31, 1995.

(c)  The constant currency method of inflation accounting

     Under the constant currency method, all historical Brazilian real amounts
     in the financial statements and notes thereto are expressed in constant
     purchasing power as of the latest balance sheet date, in accordance with
     standards prescribed by CVM for publicly-traded companies. The constant
     currency method of inflation accounting remained effective even after the
     discontinuation of the corporate law method as of December 31, 1995.

(d)  Summarized financial statements for the two preceding years in constant
     purchasing power currency

     The financial statements previously filed with the SEC for 1999 and 2000,
     which were prepared in accordance with the Brazilian constant currency
     method and stated in constant currency of December 31, 2000 purchasing
     power, are summarized below:


                                     F-12
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


                                                       Condensed balance sheets
                                                    ---------------------------

                                                                    December 31
                                                    ---------------------------

                                                            1999           2000
                                                    ------------   ------------

Current assets                                           1,237.2        1,204.0
Long-term receivables                                       48.0           76.0
Permanent assets                                         1,159.0          986.6
                                                    ------------   ------------

                                                         2,444.2        2,266.6
                                                    ============   ============


Current liabilities                                        392.0          323.0
Long-term liabilities                                      399.5          389.2
Minority interest                                          579.3          508.4
Stockholders' equity                                     1,073.4        1,046.0
                                                    ------------   ------------

                                                         2,444.2        2,266.6
                                                    ============   ============


                                                  Condensed statement of income
                                                  -----------------------------

                                                       Years ended December 31,
                                                  -----------------------------

                                                            1999           2000
                                                  --------------   ------------

Net revenue                                              1,911.8        1,961.1
Gross profit                                               559.5          461.3
    Income before equity earnings and
    minority interest                                      136.7           36.7
Net income                                                  66.4           39.1


                                     F-13
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


(e)  Reconciliation of corporate law and constant currency financial statements

     The reconciliation between stockholders' equity and net income (loss)
     under both methods is as follows:

<TABLE>
                                                                                 Stockholders' equity                   Net income
                                                                           --------------------------   --------------------------

                                                                                          December 31      Years ended December 31
                                                                           --------------------------   --------------------------

                                                                                  1999           2000          1999           2000
                                                                           -----------    -----------   -----------    -----------
<S>                                                                            <C>            <C>              <C>            <C>
Corporate law financial statements before monetary restatement                   819.6          897.7          87.9          128.5
Monetary restatement through December 31, 2000                                    81.6                          8.8
                                                                           -----------    -----------   -----------    -----------

Corporate law financial statements monetarily restated                           901.2          897.7          96.7          128.5

Monetary restatement of permanent assets and equity                              165.7          120.0         (33.3)        (111.2)
Deferred income tax                                                               (1.2)          21.1          (1.5)          22.3
Monetary restatement of inventories and discount to
   present value of receivables and payables                                       7.7            7.2           4.5           (0.5)
                                                                           -----------    -----------   -----------    -----------


Consolidated constant currency
   financial statements                                                        1,073.4        1,046.0          66.4           39.1
                                                                           ===========    ===========   ===========    ===========
</TABLE>

3    Summary of Accounting Policies

     The Company's accounting policies comply with Brazilian corporate law,
     which differ in certain respects from accounting principles generally
     accepted in the United States of America (US GAAP). Accordingly,
     additional information has been included in the financial statements to
     comply with the regulations of the SEC for foreign registrants. See Note
     19 for further discussions of the differences and the reconciliations of
     stockholders' equity and net income under both sets of principles.


                                     F-14
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


     The following is a summary of significant accounting policies followed in
     the preparation of the financial statements:

(a)  Consolidation principles

     The consolidated financial statements include the accounts of the Company
     and all of its subsidiaries in which the Company directly or indirectly
     controls more than 50% of the voting share capital, as listed below. All
     significant intercompany accounts and transactions are eliminated upon
     consolidation. The minority interests of consolidated subsidiaries in the
     Company's statement of operations and stockholders' equity are stated in
     specific accounts.

<TABLE>
                                                                                          Company
                                                                        ownership interest - %(i)
                                                                     ----------------------------

                                                                                         December
                                                                     ----------------------------

                                                                          2000               2001
                                                                     ---------          ---------
<S>                                                                        <C>                <C>
Subsidiary companies
Ultragaz Participacoes S.A. (+)                                             77                 77
    Companhia. Ultragaz S.A.                                                86                 86
    Bahiana Distribuidora de Gas Ltda.                                     100                100
    Utingas Armazenadora S.A.                                               56                 56
Ultraquimica Participacoes S.A. (+)                                        100                100
    Ultraquimica Florestal Ltda.                                           100                100
    Melamina Ultra S.A. Industria Quimica                                   93                 93
    Oleoquimica do Nordeste Ltda.                                           60                100
    Oxiteno S.A. - Industria e Comercio (ii)                                48                 48
       Oxiteno International Corporation                                                      100
           Oxiteno Overseas Co.                                            100                100
       Camacari Renovada S.A.                                              100                100
       Oxiteno Nordeste S.A. - Industria e Comercio                         93                 97
       Terminal Quimico de Aratu S.A. - Tequimar (iii)                      19                 19
Ultracargo Participacoes Ltda. (+)                                         100                100
    Transultra S.A. Armazenamento e Transporte Especializado                65                100
    Terminal Quimico de Aratu S.A. Tequimar (iii)                           67                 80
Ultratecno Participacoes Ltda. (+)                                         100                100
Ultradata S/C Ltda. (+)                                                    100                100
Imaven Imoveis e Agropecuaria Ltda. (+)                                    100                100
    Imaven Importadora e Exportadora Ltda.                                  90                 98
</TABLE>


                                     F-15
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


      (i)   Represents total ownership interest in both voting and non-voting
            stock. Indirect interests are stated at the percentage owned by the
            direct subsidiary.

      (ii)  Consolidated since a controlled subsidiary company owns more than
            50% of voting stock.

      (iii) Consolidated since two controlled subsidiary companies together own
            more than 50% of the voting stock.

      (+)   Direct subsidiary.

      At the extraordinary general meeting (EGM) held on December 26, 2001,
      approval was given to delist the shares and cancel the CVM registration
      of the indirect subsidiary company Oxiteno Nordeste S.A. Industria e
      Comercio. At this meeting, the subsidiary company Oxiteno S.A. Industria
      e Comercio declared that it would make a public offer for the purchase of
      all the outstanding Class B preferred shares of Oxiteno Nordeste S.A.
      Industria e Comercio through an auction to be held at the Sao Paulo Stock
      Exchange (BOVESPA), after approval by the CVM.

      On May 23, 2001, the subsidiary company Ultracargo Participacoes Ltda.
      acquired from Petrobras Distribuidora S.A. a 35% ownership interest,
      corresponding to 12,250,000 common shares, in the indirect subsidiary
      company Transultra S.A. Armazenamento e Transporte Especializado.

      The other activities involving indirect holdings derive from the purchase
      of minority interests in the indirect subsidiary companies Oxiteno
      Nordeste S.A. - Industria e Comercio and Oleoquimica do Nordeste Ltda.,
      the capitalization of loans to indirect subsidiary company Imaven -
      Importadora e Exportadora Ltda. and payment of capital in the indirect
      subsidiary Oxiteno International Corporation through the delivery of
      shares in the indirect subsidiary Oxiteno Overseas Corporation.

(b)   Cash and cash equivalents

      This account comprises highly liquid temporary cash investments (with
      original maturity dates of three months or less or readily convertible to
      cash) which are carried at market value.

(c)   Trade accounts receivable

      Trade accounts receivable are stated at estimated net realizable values.
      The allowance for doubtful accounts is based on the estimated losses and
      considered by management to be sufficient to cover eventual losses on the
      realization of the accounts receivable.


                                     F-16
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


     Discounted notes are deducted from the gross trade accounts receivable and
     represent R$ 44.3 at December 31, 2000 and R$ 49.6 at December 31, 2001.

(d)  Inventories

     Inventories are stated at the lower of the average cost of purchase (or
     production), and replacement or realizable values.

(e)  Other assets

     The other current assets and receivables are stated at the lower of cost
     or payable realizable values, including, when applicable, accrued earnings
     and monetary variations or provisions for eventual losses.

(f)  Investments in affiliated companies

     Investments in affiliated companies, where the Company owns more than 20%
     and less than 50% of the voting capital, and certain less than 20% - owned
     affiliates in which the Company owns more than 10% of the voting stock,
     are accounted for by the equity method. See Note 6.

(g)  Other investments

     Other investments are recorded at cost less provision for losses, if
     expected to be other than temporary.

(h)  Property, plant and equipment

     Property, plant and equipment are substantially stated at amounts
     established by independent technical appraisals. Revaluation increments
     arising from revaluing assets to appraised values are credited to the
     revaluation reserve component of stockholders' equity when recorded and
     subsequently transferred from the reserve to retained earnings as the
     related assets are depreciated or upon disposal.

     Depreciation of property, plant and equipment is computed on the
     straight-line method at the annual rates stated in Note 7.


                                     F-17
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


(i)  Deferred charges

     Deferred charges primarily comprise expenditures incurred on the
     implementation of systems modernization projects (2000 - R$ 0.4, 2001 - R$
     11.0), which will be amortized over five to ten years, and expenditures
     for the installation of Ultrasystem equipment at customer locations (2000
     - R$ 41.1, 2001 - R$ 55.9), which will be amortized over the lives of the
     LPG supply contracts with these customers.

(j)  Income tax

     Income tax and social contribution (a federally mandated tax based on
     income) are accrued on taxable results at the applicable tax rates.

     The provision for income tax, when applicable, includes fiscal incentives.
     Deferred income tax and social contribution on temporary differences are
     established within the context of CVM Deliberation 273/98.

(k)  Other current liabilities

     Other current liabilities are stated at known or estimated amounts,
     including, whenever applicable, the corresponding financial charges and
     monetary variations incurred through each balance sheet date. The Company,
     due to periodic shutdowns for maintenance at its petrochemical units,
     recognizes a reserve to cover these costs, classified based on the
     expected utilization period.

(l)  Compensated absences

     The liability for future compensation for employee vacations is fully
     accrued earned.

(m)  Assets and liabilities denominated in foreign currency or subject to
     indexation

     Assets and liabilities denominated in foreign currencies are translated
     into reais at the exchange rate reported by the Brazilian Central Bank
     (BACEN) at each balance sheet date. Exchange gains and losses are
     recognized in income.


                                     F-18
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


     Assets and liabilities denominated in reais and contractually or legally
     subject to indexation are restated to the balance sheet date by applying
     the corresponding index, with gains and losses recognized in income.

(n)  Revenues and expenses

     Revenues from sales are recognized when products are delivered to the
     customer or services performed, when the transfer of risks, rights and
     obligations associated to the ownership of products takes place. Expenses
     are accounted for on the accrual basis. Advertising expenses, which are
     expensed as incurred, amounted to R$ 4.6, R$ 3.4 and R$ 6.6 in the years
     ended December 31, 1999, 2000 and 2001, respectively.

(o)  Cost of goods sold and services rendered

     Cost of goods sold and services rendered includes the cost of LPG,
     chemical and petrochemical products, distribution, transport and filling
     costs.

(p)  Earnings per share

     Earnings per share are calculated based on the total number of shares
     outstanding at each balance sheet date and do not reflect retroactively
     the impacts of stock splits.

(q)  Use of estimates

     The preparation of financial statements in accordance with Brazilian
     corporate law requires management to make estimates and assumptions that
     affect the reported amounts of assets and liabilities at the date of the
     financial statements and the reported amounts of revenues and expenses for
     the periods presented. Actual results in the future could differ from
     those estimates.


                                     F-19
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


(r)  Reclassifications

     Certain reclassifications have been made to prior year amounts in order to
     conform them to the current year presentation.


4    Taxes Recoverable

     Taxes recoverable mainly refer to R$ 59.6 (2000 - R$ 42.4) of Value-Added
     Tax on Sales and Services (ICMS) arising from the "tax substitution"
     procedure and credit balances and R$ 54.1 (2000 - R$ 36.2) of prepayment
     of income tax to be offset against future payments. Under the tax
     substitution procedure, the taxes which would be due through the final
     sale to the customer are effectively paid in advance using a theoretical
     mark-up over the original cost.


5    Inventories

                                                                   December 31
                                                           -------------------

                                                               2000       2001
                                                           --------   --------

     Finished products                                         45.2       60.1
     Raw materials                                             14.2       12.5
     Liquefied petroleum gas (LPG)                              6.8        7.9
     Consumption materials and cylinders for resale            20.3       14.0
                                                           --------   --------

                                                               86.5       94.5
                                                           ========   ========


                                     F-20
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


6    Investments in Affiliated Companies

     A summary of financial information for the Company's equity investments is
     as follows:

<TABLE>
                                                                                                 December 31, 1999
                               -----------------------------------------------------------------------------------
                                                                        Fabrica
                                     Plenogas           Oxicap       Carioca de         Nordeste        Quimica da
                                Distribuidora     Industria de    Catalisadores          Quimica   Bahia Industria
                                  De Gas S.A.      Gases Ltda.             S.A.             S.A.   e Comercio S.A.
                               --------------   --------------   --------------   --------------   ---------------
<S>                                 <C>                  <C>        <C>               <C>                <C>
Shares or quotas held               1,384,308              125      125,536,199       60,426,077         3,174,500
Stockholders' equity -
  millions of reais                                        1.0             44.2            412.6              10.1
Net income (loss) for the
  year - millions of reais                                (0.1)             3.0             32.6
Percent stockholding                    33.33            25.00            20.00             8.73             45.56

<CAPTION>
                                                                                                       Year ended December 31, 1999
                               ----------------------------------------------------------------------------------------------------
                                                                        Fabrica
                                     Plenogas           Oxicap       Carioca de         Nordeste        Quimica da
                                Distribuidora     Industria de    Catalisadores          Quimica   Bahia Industria
                                  De Gas S.A.      Gases Ltda.             S.A.             S.A.   e Comercio S.A.            Total
                               --------------   --------------   --------------   --------------   ---------------   --------------
<S>                                 <C>                    <C>             <C>              <C>                <C>             <C>
Changes in investments
  At the beginning of the year                             0.2             13.7             35.6               4.6             54.1
    Dividends                                                              (2.2)                                               (2.2)
    Write-off                                                                               (0.4)                              (0.4)
    Equity accounting                                                      (2.6)             0.9                               (1.7)
                               --------------   --------------   --------------   --------------   ---------------   --------------

  At the end of the year                                   0.2              8.9             36.1               4.6             49.8
                               ==============   ==============   ==============   ==============   ===============   ==============
</TABLE>


                                     F-21
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


<TABLE>
                                                                                                 December 31, 2000
                               -----------------------------------------------------------------------------------
                                                                        Fabrica
                                     Plenogas           Oxicap       Carioca de         Nordeste        Quimica da
                                Distribuidora     Industria de    Catalisadores          Quimica   Bahia Industria
                                  De Gas S.A.      Gases Ltda.             S.A.             S.A.   e Comercio S.A.
                               --------------   --------------   --------------   --------------   ---------------
<S>                                 <C>                  <C>        <C>               <C>                <C>
Shares or quotas held               1,384,308              125      125,536,199       60,426,077         3,174,500
Stockholders' equity -
   millions of reais                                       2.8             60.7            499.5              10.1
Net income (loss) for the
   year - millions of reais                               (0.3)             2.4             65.1
Percent stockholding                    33.33            25.00            20.00             8.73             45.56

<CAPTION>
                                                                                                       Year ended December 31, 2000
                               ----------------------------------------------------------------------------------------------------
                                                                        Fabrica
                                     Plenogas           Oxicap       Carioca de         Nordeste        Quimica da
                                Distribuidora     Industria de    Catalisadores          Quimica   Bahia Industria
                                  De Gas S.A.      Gases Ltda.             S.A.             S.A.   e Comercio S.A.            Total
                               --------------   --------------   --------------   --------------   ---------------   --------------
<S>                                 <C>                    <C>             <C>              <C>                <C>             <C>
Changes in investments
  At the beginning of the year                             0.2              8.9             36.1               4.6             49.8
    Capital increase                                       0.6                                                                  0.6
    Equity accounting                                     (0.1)             3.2              7.6                               10.7
                               --------------   --------------   --------------   --------------   ---------------   --------------

  At the end of the year                                   0.7             12.1             43.7               4.6             61.1
                               ==============   ==============   ==============   ==============   ===============   ==============
</TABLE>


                                     F-22
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


<TABLE>
                                                                                                 December 31, 2001
                               -----------------------------------------------------------------------------------
                                                                        Fabrica
                                     Plenogas           Oxicap       Carioca de         Nordeste        Quimica da
                                Distribuidora     Industria de    Catalisadores          Quimica   Bahia Industria
                                  De Gas S.A.      Gases Ltda.             S.A.             S.A.   e Comercio S.A.
                               --------------   --------------   --------------   --------------   ---------------
<S>                                 <C>                  <C>        <C>               <C>                <C>
Shares or quotas held               1,384,308              125      125,536,199       60,426,077         3,174,500
Stockholders' equity -
  millions of reais                                        2.8             77.0            486.8              10.1
Net income (loss) for the
  year - millions of reais                                (0.3)            10.9             (4.6)
Percent stockholding                    33.33            25.00            20.00             8.73             45.56

<CAPTION>
                                                                                                       Year ended December 31, 2001
                               ----------------------------------------------------------------------------------------------------
                                                                        Fabrica
                                     Plenogas           Oxicap       Carioca de         Nordeste        Quimica da
                                Distribuidora     Industria de    Catalisadores          Quimica   Bahia Industria
                                  De Gas S.A.      Gases Ltda.             S.A.             S.A.   e Comercio S.A.            Total
                               --------------   --------------   --------------   --------------   ---------------   --------------
<S>                                 <C>                    <C>             <C>              <C>                <C>             <C>
Changes in investments
  At the beginning of                                      0.7             12.1             43.7               4.6             61.1
    the year
      Dividends                                                            (0.9)            (0.4)                              (1.3)
      Reversal of revaluation
       reserve                                                                              (0.3)                              (0.3)
      Equity accounting                                                     4.2             (0.7)                               3.5
                               --------------   --------------   --------------   --------------   ---------------   --------------

  At the end of the year                                   0.7             15.4             42.3               4.6             63.0
                               ==============   ==============   ==============   ==============   ===============   ==============
</TABLE>

The investments of the indirect subsidiary company Oxiteno S.A. - Industria e
Comercio in the associated companies Oxicap Industria de Gases Ltda. and FCC -
Fabrica Carioca de Catalisadores S.A. are recorded on the equity method based
on financial statements at November 30, 2001. The investment of the indirect
subsidiary company Oxiteno Nordeste S.A. - Industria e Comercio in the
affiliated company Nordeste Quimica S.A. - Norquisa is evaluated by the equity
method only until July 31, 2001, after which it no longer had an influence over
the management of the company, as established in CVM Instruction 247/96.
Subsequent to July 31, 2001, it is stated at cost.


                                     F-23
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


7    Property, Plant and Equipment

<TABLE>
                                                                                            December 31
                           ----------------------------------------------------------------------------

                                                            2000                                  2001
                           -------------------------------------  -------------------------------------
                                                                                                             Annual
                                  Cost,                                 Cost,                                depre-
                              including  Accumulated                including    Accumulated                ciation
                           revaluations depreciation         Net  revaluations  depreciation        Net   rates - %
                           ------------ ------------  ----------  ------------  ------------  ---------  ----------
<S>                             <C>            <C>         <C>          <C>            <C>        <C>      <C>
Land                               33.1                     33.1         39.1                      39.1
Buildings                         286.0         87.5       198.5        302.2           97.7      204.5           4
Machinery and equipment           465.6        221.7       243.9        521.7          249.7      272.0     5 to 10
Gas tanks and cylinders           149.7         72.5        77.2        175.0           80.9       94.1          10
Vehicles                           84.7         55.2        29.5         90.6           60.4       30.2    20 to 30
Furniture and fixtures             12.2          8.1         4.1         10.0            3.2        6.8          10
Construction in progress
  and other                        83.8         14.2        69.6         78.2           17.0       61.2    10 to 20
                             ----------   ----------  ----------   ----------     ----------  ---------

                                1,115.1        459.2       655.9      1,216.8          508.9      707.9
                             ==========   ==========  ==========   ==========     ==========  =========
</TABLE>

Capitalized interest amounted to R$ 8.5, R$ 7.6, and R$ 7.1 for the years ended
December 31, 1999, 2000 and 2001, respectively.

Construction in progress refers mainly to renovations of the industrial
complexes of the subsidiary companies. Imports in transit refer mainly to
equipment and parts for the Ultrasystem project (small and medium-sized LPG
installations for commercial and residential customers).

The parcels of land on which the Suape and Aratu terminals of the indirect
subsidiary Terminal Quimico de Aratu S.A. - Tequimar were constructed belong,
respectively, to the SUAPE Port Complex and to Companhia Docas do Estado da
Bahia - CODEBA. The Suape land is under lease for ten years through 2005. The
terms and amounts of the lease for the Aratu land are pending negotiation.


                                     F-24
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


8    Loans

(a)  Composition

<TABLE>
                                                                                                       December 31
                                                                                      ----------------------------

                                                  Index/                      Annual
                                                  currency               charges - %           2000           2001
                                                  ------------------  --------------  -------------  -------------
<S>                                               <C>                   <C>                   <C>            <C>
Foreign currency
   International Finance Corporation  (IFC)       US$                            9.4           29.4           23.3
   US$ 60 million - 9% Guaranteed notes
     due 2005                                     US$                            9.0          117.7          139.6
   Loans to finance acquisition of property,
     plant and equipment and inventories          US$                    5.9 to 10.5           18.6            8.7
   Short-term loans
     Pre-export financing                         US$                     2.8 to 6.0           47.6           33.6
                                                                                      -------------  -------------

Subtotal                                                                                      213.3          205.2
                                                                                      -------------  -------------

Local currency
   National Bank for Economic and                 UMBNDES               10.2 to 11.8            4.2           10.4
     Social Development (BNDES)
   Government Agency for Machinery                TJLP and IGP-M          1.8 to 6.5          169.8          169.9
     and Equipment Financing (FINAME)             TJLP                    1.8 to 5.5           34.8           27.7
   Pass-through loans                             TJLP                           4.0            3.7            1.5
   Short-term loans                                                          Various            0.1
                                                                                      -------------  -------------

Subtotal                                                                                      212.6          209.5
                                                                                      -------------  -------------

Total                                                                                         425.9          414.7

Less current maturities                                                                      (134.1)        (124.5)
                                                                                      -------------  -------------

Long-term                                                                                     291.8          290.2
                                                                                      =============  =============
</TABLE>

The TJLP is a long-term nominal interest rate set by the government on a
quarterly basis. The UMBNDES is a "basket" of currencies, representing the
composition of BNDES's debt.


                                     F-25
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


(b)  Maturities of the principal of long-term loans

                                                                 December 31,
                                                                         2001
                                                                 ------------

     2003                                                                72.7
     2004                                                                39.1
     2005                                                               161.3
     2006                                                                12.6
     after 2006                                                           4.5
                                                                 ------------

     Total                                                              290.2
                                                                 ============

(c)  Collateral

                                                                  December 31
                                                 ----------------------------

                                                          2000           2001
                                                 -------------   ------------
     Amount of borrowing secured by:
         Property, plant and equipment                    53.4           36.4
         Shares of affiliated companies                   15.1           16.3
         Third party guarantees                           89.5           60.6
                                                 -------------   ------------

                                                         158.0          113.3

     Unsecured borrowings                                267.9          301.4
                                                 -------------   ------------

                                                         425.9          414.7
                                                 =============   ============

(d)  Covenants

     With respect to the issue of the US$ 60 million 9% notes by the subsidiary
     Companhia Ultragaz S.A. (jointly and severally and unconditionally
     guaranteed by the Company and Ultragaz Participacoes S.A.), which fall due
     in 2005 and have put/call options exercisable in 2002, the Company has
     entered into covenants which, among other things, limit liens,
     indebtedness, certain payments, dividends and other payments of certain
     subsidiaries, transactions with stockholders and affiliates,
     sale-leaseback transactions and defined consolidations, mergers and asset
     sales. The Company is in compliance with such covenants and believes that
     they do not significantly restrict the ability to manage its activities.


                                     F-26
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


     With respect to the loan from the IFC, the subsidiary Oxiteno Nordeste has
     entered into covenants which limit indebtedness of such subsidiary and of
     Oxiteno (guarantor of the loan), conditions for transactions with
     affiliates and subsidiaries of Oxiteno Nordeste and of Oxiteno, dividends,
     liens, transactions with stockholders, and certain investments, and
     defined consolidations, mergers and asset sales. The subsidiaries are in
     compliance with such covenants and believe that they do not significantly
     restrict the ability to manage their activities.


9    Stockholders' Equity

(a)  Capital

     The company is a listed corporation with shares traded on the Sao Paulo
     and New York Stock Exchanges. Subscribed and paid-in capital is
     represented by 53,000,000,000 shares with no nominal value, of which
     37,984,012,500 are common and 15,015,987,500 are preferred. On December
     31, 2001, 5,293,346,000 preferred shares were in circulation outside
     Brazil.

     Preferred shares are not convertible to common shares and have no right to
     vote, but their holders have the right to a dividend which is at least 10%
     greater than that paid to common stockholders, as well as priority over
     common shares on liquidation of the company, without a premium.

(b)  Subsidiaries' revaluation reserve

     This reserve represents the unrealized portion of the revaluation of the
     subsidiaries' property, plant and equipment.

     The realized portion of the revaluation reserve, based on depreciation,
     write-off or sale of the revalued assets of subsidiary and associated
     companies, is transferred to retained earnings, together with the
     corresponding tax effects recorded by the subsidiary and associated
     companies.

     In some cases, the taxes on the revaluation reserve of certain subsidiary
     and associated companies are recognized only on realization of this
     reserve, because the revaluations occurred prior to the publication of CVM
     Deliberation 183/95. The unrecognized deferred tax charges on these
     reserves total R$ 9.3 (2000 - R$ 10.0).


                                     F-27
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


(c)  Revenue reserves

     Legal reserve

     Under Brazilian corporate legislation, the Company is required to
     appropriate 5% of annual earnings determined based on statutory accounting
     records, until the balance reaches 20% of capital stock, to a legal
     reserve which is restricted as to distribution. The reserve may be used to
     increase capital or absorb losses, but may not be distributed as
     dividends.

     Reserve for unrealized profits

     This reserve is established in conformity with the Brazilian corporate
     law, and realization normally occurs on the receipt of dividends, sale and
     reduction of investments. Considering the favorable financial conditions,
     management realized the full amount of this reserve in 2001 by
     transferring it to retained earnings and, consequently, included this
     amount in the calculation basis of the proposed dividends.

     Reserve for retention of profits

     This reserve is supported by the Company's investment program, as required
     by Brazilian corporate law.

(d)  Dividends

     Stockholders are assured in the by-laws of a minimum annual dividend of
     50% of adjusted net income, calculated under the terms of Brazilian
     corporate law.

     The proposed dividends reflected in the Company's financial statements,
     subject to approval at the general stockholders meeting, are calculated
     under the terms of Brazilian corporate law, particularly articles 196 and
     197, as follows:


                                     F-28
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


                                                                           2001
                                                                     ----------

     Net income for the year                                              132.2
     Legal reserve transfer                                                (6.6)
     Reversal of reserve for unrealized profits                           245.2
                                                                     ----------

     Dividend calculation basis                                           370.8
                                                                     ==========

     Dividends proposed                                                   181.0
     Interest on own capital                                               31.0
                                                                     ----------

     Total dividends and interest on own capital                          212.0
                                                                     ==========

     Percentage of dividends and interest on own capital gross
     of income tax, in relation to the dividend calculation basis            57
                                                                     ==========

     Of the total amount of dividends and interest on own capital, the Company
     has distributed R$ 190.0 on an interim basis, leaving R$ 22.0 payable as
     of December 31, 2001.

     As permitted by Law 9249/95, in a meeting held on August 21, 2001, the
     Company's management approved the payment of interest on own capital to
     its stockholders, based on the TJLP rate, to be considered as part of the
     minimum compulsory dividend and as a deductible expense for the
     calculation of taxable income.

     Management has transferred the remaining balance of retained earnings to
     the Reserve for retention of profits, in order to support the business
     expansion project established in its investment plan.


10   Commitments and Contingencies

(a)  Disputed taxes, contributions and labor claims

     The Company and its subsidiaries are contesting the payment of certain
     taxes and contributions and have made court escrow deposits of equivalent
     or lesser amounts pending final legal decisions. In addition, the Company
     and its subsidiaries are exposed to labor claims filed by former
     employees. Management believes that the accrued liability for legal
     proceedings and accumulated interest, which is recorded in other
     liabilities, is sufficient to meet probable and reasonably estimable
     losses in the event of unfavorable rulings on these matters.


                                     F-29
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


     Although there can be no assurance that the Company will prevail in every
     case, management does not believe that the ultimate disposition of tax,
     legal and labor contingencies not provided for will have a material effect
     on the Company's financial condition or results of operations.

     Probable losses, recorded as liabilities of the Company based on the
     advice of external legal counsel, are summarized below:

<TABLE>
                                                                                       December 31
                                        ----------------------------------------------------------

                                                              2000                            2001
                                        --------------------------      --------------------------

                                          Judicial       Provision        Judicial       Provision
                                          deposits            made        deposits            Made
                                        ----------      ----------      ----------      ----------
<S>                                            <C>            <C>              <C>            <C>
     Income tax                                0.7             1.5             0.1             0.7
     Social contribution                       0.3             7.7                            10.4
     Labor claims                              3.3                             4.9             0.4
     Taxes on revenues                         1.1            43.6             0.1            50.9
     Other                                     1.4             0.6             1.6
                                        ----------      ----------      ----------      ----------

     Total claims                              6.8            53.4             6.7            62.4
                                        ==========      ==========      ==========      ==========
</TABLE>

     The Company and its subsidiaries obtained preliminary injunctions to pay
     PIS (Social Integration Program) and COFINS (Social Contribution on
     Revenues) taxes without the changes introduced by Law 9,718. The companies
     are contesting the addition of 1% to the COFINS rate as well as incidence
     of PIS and COFINS on other revenue. However, the main issue concerns the
     collection of these taxes by the LPG supplier using the "tax substitution"
     procedure, which is described in Note 4, system instead of by the indirect
     subsidiary companies Companhia Ultragaz S.A. and Bahiana Distribuidora de
     Gas Ltda. The tax substitution procedure increased the calculation basis
     of PIS and COFINS to four times the LPG price charged by the refineries
     until June 30, 2000. After this date, the rates of theses taxes charges at
     the refineries were increased, the calculation basis was reduced to the
     refinery price, and the rates for the LPG distributors were reduced to
     zero. The amounts that were not paid, with respect the changes introduced
     by Law 9,718, were accrued in the financial statements of the Company and
     subsidiaries totaling R$ 49.3 (2000 - R$ 42.4).


                                     F-30
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


     The indirect subsidiary Terminal Quimico de Aratu S.A. - Tequimar obtained
     a favorable ruling on its suit contesting the payment of social
     contribution on net income introduced by Law 7,689/88. The favorable
     decision to the subsidiary was a final ruling, however, the Federal
     Government filed an action to overturn the previous decision. The indirect
     subsidiary company has accrued a liability for the unpaid social
     contribution in the amount of R$ 10.4 (2000 - R$ 7.4).

     The Petrochemical Industry Labor Union, which represents the employees of
     the indirect subsidiary Oxiteno Nordeste S.A. - Industria e Comercio,
     filed class action suits against the Company in 1991 demanding compliance
     with the adjustments established in collective labor agreements or other
     specific indexes, in lieu of the salary policies effectively practiced.
     Based on the opinion of its legal advisors, who analyzed the final ruling
     of the Federal Supreme Court (STF) on the class action suit in which the
     labor union is a plaintiff, as well as the status of the specific suit
     against the indirect subsidiary, management does not believe that it is
     necessary to record a provision at December 31, 2001.

     The Company and its subsidiary companies have other ongoing administrative
     and judicial suits, which the internal and external legal advisors
     consider to be of low or remote risk; therefore, no provisions for
     possible losses on these cases have been recorded.

(b)  Environmental issues

     The Company and its subsidiaries are subject to federal, state and local
     laws and regulations relating to the environment. These laws generally
     provide for control of air and effluent emissions and require responsible
     parties to undertake remediation of hazardous waste disposal sites. Civil
     penalties may be imposed for non-compliance. The Company provides for
     remediation costs and penalties when a loss is probable and the amount is
     reasonably determinable. It is not presently possible to estimate the
     amount of all remediation costs that might be incurred or penalties that
     may be imposed; however, management does not presently expect that such
     costs and penalties, to the extent not previously provided for, will have
     a material effect on the Company's consolidated financial position or
     results of operations.

     At present management is aware of no unasserted environmental claims or
     assessments.


                                     F-31
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


(c)  Take or pay commitments

     The indirect subsidiary Oxiteno Nordeste has a supply contract with Copene
     Petroquimica do Nordeste S.A., which establishes a minimum level of annual
     consumption of ethylene until 2012. If the minimum purchase commitment is
     not met, the subsidiary is obliged to pay a penalty of 40% of the current
     ethylene price for the quantity not purchased. The annual minimum purchase
     commitment and the actual consumption in the years ended December 31,
     1999, 2000 and 2001, expressed in tons of ethylene, are summarized in the
     table below.

<TABLE>
                                                                                        Actual demand
                                                            -----------------------------------------
                                       Minimum purchase
                                             commitment           1999           2000            2001
                                       ----------------     ----------     ----------     -----------
<S>                                             <C>            <C>            <C>             <C>
     In tons                                    137,900        183,505        173,067         184,772
</TABLE>

(d)  Responsibilities for sureties and guarantees

     The Company is responsible for sureties and guarantees offered to
     subsidiary companies amounting to R$ 248.7 for the year ended December 31,
     2001.


11   Financial Income and Expenses

<TABLE>
                                                                                            Years ended December 31
                                                                             --------------------------------------

                                                                                   1999          2000          2001
                                                                             ----------    ----------    ----------
<S>                                                                              <C>            <C>          <C>
     Financial income

           Interest on cash and cash equivalents                                   80.4         126.0         103.3
           Indexation income and foreign exchange gains                            84.1           6.0          12.2
           Interest from customers                                                  2.1           1.6           4.0
           Other                                                                    6.0           6.4           1.2
                                                                             ----------    ----------    ----------

                                                                                  172.6         140.0         120.7
                                                                             ==========    ==========    ==========
</TABLE>


                                     F-32
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


<TABLE>
                                                                                            Years ended December 31
                                                                             --------------------------------------

                                                                                   1999          2000          2001
                                                                             ----------    ----------    ----------
<S>                                                                              <C>            <C>          <C>
     Financial expenses

           Interest on loans                                                      (57.3)        (52.4)        (51.3)
           Banking charges                                                         (4.2)         (3.9)         (4.2)
           Indexation charges and foreign exchange losses                        (127.8)        (18.3)        (61.0)
           CPMF, PIS, COFINS and IOF taxes on financial transactions              (15.8)        (21.2)        (29.0)
           Other                                                                   (1.9)         (0.8)         (6.3)
                                                                             ----------    ----------    ----------

                                                                                 (207.0)        (96.6)       (151.8)
                                                                             ==========    ==========    ==========
</TABLE>

12   Risks and Financial Instruments

     The main risk factors to which the Company and the subsidiary companies
     are exposed reflect strategic-operating and economic-financial aspects.
     The strategic-operating risks (such as demand, competition, technology and
     innovation, relevant structural changes in the industry, etc.) are
     addressed by the Company's management model. The economic-financial risks
     mainly reflect customer defaults, macroeconomic variables such as foreign
     exchange and interest rates, as well as the characteristics of the
     financial instruments used by the Company. These risks are managed through
     control policies, specific strategies and the determination of limits, as
     follows:

     Customer default - These risks are managed by specific rules for accepting
     customers and credit analysis and are mitigated by diversification of
     sales. The subsidiary companies Oxiteno S.A. - Industria e Comercio and
     Oxiteno Nordeste S.A. - Industria e Comercio recorded allowances of R$ 6.1
     for probable losses on receivables from customers in Argentina. At
     December 31, 2001 receivables from Argentine customers amount to R$ 28.0,
     net of this provision.

     Interest rates - The Company and its subsidiary companies adopt
     conservative policies to raise and invest financial resources and to
     minimize the cost of capital. The investments of the Company and its
     subsidiaries are maintained in transactions linked to the Interbank
     Deposit Certificates (CDI) rate. A portion of the financial assets is
     destined for foreign currency risk management, as mentioned below. Raised
     funds originate from BNDES financings and from abroad, as shown in Note 8.


                                     F-33
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


     Foreign exchange rate - The Company and the subsidiary companies use
     foreign currency risk management instruments available in the financial
     market to cover their liabilities in foreign currency. Given the volatile
     exchange fluctuations during the year 2001, the Company protected all of
     its foreign currency exposure. The following summary presents the assets
     and liabilities in foreign currency at December 31, 2001:

     Financings in foreign currency                                        205.2
     Accounts payable in U.S. dollars for imports                           12.2
                                                                        --------

     Total U.S. dollars liabilities                                        217.4
                                                                        --------

     Financial investments in foreign currency instruments                 213.4
     Financial investments in U.S. dollars                                  81.2
     Accounts receivable from foreign customers, net of advances
         on export contracts                                                10.2
                                                                        --------

     Total U.S. dollars assets                                             304.8
                                                                        --------

     Net U.S. dollars asset position                                        87.4
                                                                        ========

     The Company and its subsidiary companies recorded the net effect of the
     devaluation of the real in 2001 in net income for the year, and did not
     use the deferral option described in CVM Deliberation 404/01.

     Except for the holding of the indirect subsidiary company Oxiteno S.A. -
     Industria e Comercio in the capital of Petroquimica Uniao S.A., described
     below, financial instruments recorded in the December 31, 2001 financial
     statements were determined in conformity with the accounting criteria and
     practices described in the accompanying notes, and their book values
     approximate fair values.

     The investment in Petroquimica Uniao S.A., representing 1.95% of the total
     capital, was purchased in a privatization auction held in 1994, and is
     reflected in the financial statements at cost restated through December
     31, 1995, of R$ 18.7. The market value of this investment at December 31,
     2001, based on the quotation of the company's shares on the stock
     exchange, was approximately R$ 12.0. Management believes that the use of
     the cost method is appropriate, considering that the investment in
     Petroquimica Uniao S.A. is of a strategic and permanent nature,
     considering that the investee is an important supplier of raw material to
     Oxiteno S.A. Industria e Comercio. Additionally, the acquisition of this
     investment was made using long-term financing from the BNDES, at favorable
     interest rates compared to those available in the market.


                                     F-34
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


13   Other Non-operating Expenses, Net

<TABLE>
                                                                                     Years ended December 31
                                                                          ----------------------------------

                                                                              1999         2000         2001
                                                                          --------     --------     --------
<S>                                                                           <C>         <C>          <C>
     Net gain (loss) on disposal of investments, property,
         plant and equipment                                                   1.5         (3.3)       (12.4)
     Write off of deferred expenses related to unsuccessful bid
         for control of Copene Petroquimica do Nordeste S.A                                             (8.0)
     Reversal (provision) for losses on investments, projects
         and fixed assets                                                     (8.2)        (9.9)         3.4
     Gain (loss) on change in ownership percentage in
         investees                                                             4.3         (2.9)
     Other                                                                    (0.1)        (0.4)
                                                                          --------     --------     --------

     Net non-operating income (expenses)                                      (2.5)       (16.5)       (17.0)
                                                                          ========     ========     ========
</TABLE>

14   Insurance Coverage

     The companies maintain insurance coverage in amounts considered sufficient
     to cover losses from eventual damage to assets, as well as their civil
     responsibility for involuntary, material and/or physical damages caused to
     third parties arising from their industrial and commercial operations,
     considering the nature of their activities and the advice of their
     insurance consultants.


                                     F-35
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


15   Related Companies

     The Company and the subsidiary companies enter into a number of related
     party transactions with affiliated companies, including the purchase of
     data processing services, transport services, services related to the
     corporate headquarters building and the provision of financing, among
     others.

<TABLE>
                                                                                   Loans               Trade accounts
                                                               -------------------------     ------------------------

                                                                   Assets    Liabilities     Receivables     Payables
                                                               ----------    -----------     -----------    ---------
<S>                                                                   <C>           <C>              <C>         <C>
     Serma Associacao dos Usuarios de Equipamentos de
         Processamentos de Dados e Servicos Correlatos                0.1            2.7
     Associacao dos Proprietarios e Locatarios EEI                    0.3
     Associacao dos Usuarios do Sistema de Comunicacao e
         do Edificio Ernesto Igel                                     0.4
     Petroquimica Uniao S.A.                                                                                      2.7
     Oxicap Industria de Gases Ltda.                                                                              0.5
     Agip do Brasil S.A.                                                                             0.2
     Quimica da Bahia Industria e Comercio S.A.                                      6.7
     Petroleo Brasileiro S.A. - Petrobras                                                                        32.0
     Metalplus - Metalurgica Plus S.A.                                               0.4
     Copagas Distribuidora de Gas S.A.                                                               0.1
     Minasgas S.A. Distribuidora de Gas Combustivel                                                  0.1
     Copene Petroquimica do Nordeste S.A                                                                          7.4
     Supergasbras Distribuidora de Gas S.A.                                                          0.2
     Cia. Termeletrica do Planalto Paulista - TPP                     0.9
     Plenogas - Distribuidora de Gas S.A.                                            1.2
                                                               ----------     ----------      ----------    ---------

     Total 2001                                                       1.7           11.0             0.6         42.6
                                                               ==========     ==========      ==========    =========

     Total 2000                                                       1.5           11.6             0.7         44.5
                                                               ==========     ==========      ==========    =========
</TABLE>


                                     F-36
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


<TABLE>
                                                                             Transactions
                                                                             -----------------------------------------
                                                                                                             Financial
                                                                                                                income
                                                                                   Sales      Purchases      (expense)
                                                                             -----------     ----------     ----------
<S>                                                                                 <C>         <C>               <C>
     Petroquimica Uniao S.A.                                                                       65.4
     Onogas S.A Comercio e Industria                                                 0.3
     Cetrel - Central de Tratamento de Efluentes                                                    0.9
     Oxicap Industria de Gases Ltda.                                                                3.8
     Agip do Brasil S.A.                                                             3.0
     Quimica da Bahia Industria e Comercio S.A.                                                                   (0.6)
     Petroleo Brasileiro S.A. - Petrobras                                                         898.8
     Servgas Distribuidora de Gas S.A.                                               0.7
     Petrogaz Distribuidora S.A.                                                     0.7
     Tegal - Terminal de Gases Ltda.                                                                0.2
     Copagas Distribuidora de Gas S.A.                                               1.2
     Petrobras Distribuidora S.A.                                                                   1.6
     Minasgas S.A. Distribuidora de Gas Combustivel                                  0.7
     Copene Petroquimica do Nordeste S.A                                             9.2          265.5
     Supergasbras Distribuidora de Gas S.A.                                          2.5
     Cia. Termeletrica do Planalto Paulista - TPP                                                                  0.1
                                                                             -----------     ----------     ----------

     Total 2001                                                                     18.3        1,236.2           (0.5)
                                                                             ===========     ==========     ==========

     Total 2000                                                                      9.6          977.9           (0.5)
                                                                             ===========     ==========     ==========

     Total 1999                                                                      8.4          816.2           (0.6)
                                                                             ===========     ==========     ==========
</TABLE>

     The loan balances with Quimica da Bahia Industria e Comercio S.A. and with
     Cia. Termeletrica do Planalto Paulista - TPP are indexed to the Long-term
     Interest Rate (TJLP). The other loans do not have financial charges nor
     determined maturity dates. Sale and purchase transactions mainly refer to
     the purchase of raw materials, other materials and storage services, which
     are carried out based on normal prices and market conditions.


                                     F-37
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


16   Income Taxes

(a)  Deferred income tax and social contribution

     The Company and its subsidiary companies recognize deferred tax assets and
     liabilities, which do not expire, arising from tax losses, temporary
     differences, inflationary profit, revaluation of property, plant and
     equipment and others, based on the assumption that these deferred tax
     effects will be realized through future operating profitability.
     Management expects to realize these deferred tax assets over a maximum
     period of three years.

     The deferred income tax and social contribution are presented in the
     following main groups:

<TABLE>
                                                                                     December 31
                                                                       -------------------------

                                                                             2000           2001
                                                                       ----------     ----------
<S>                                                                          <C>            <C>
     Long-term receivable
     Deferred income tax and social contribution
         Expenses temporarily non-deductible in
            calculation of taxable income                                    18.2           24.1
         Tax losses available for offset, net of valuation
         Allowance                                                            4.8            3.2
                                                                       ----------     ----------

                                                                             23.0           27.3
                                                                       ==========     ==========
     Long-term liabilities
         Profits from abroad                                                 17.3           21.5
         Revaluations of property, plant and equipment                        2.9            2.5
         Deferred inflationary profit                                         3.3
                                                                       ----------     ----------

                                                                             23.5           24.0
                                                                       ==========     ==========
</TABLE>


                                     F-38
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


(b)  Income tax reconciliation

     Income tax and social contribution are reconciled to official tax rates as
     follows:

<TABLE>
                                                                                        Years ended December 31
                                                                         --------------------------------------

                                                                               1999          2000          2001
                                                                         ----------    ----------    ----------
<S>                                                                           <C>           <C>           <C>
     Income before taxes, equity in earnings and
         minority interests                                                   205.4         240.4         230.8
                                                                         ----------    ----------    ----------

         Official tax rates - %                                                  37            34            34
                                                                         ----------    ----------    ----------

         Tax expense at statutory rates                                       (76.0)        (81.7)        (78.5)
         Adjustments to derive effective tax rate:
            Operating provisions, non-deductible expenses
               and non-taxable income                                          (4.8)         (2.6)          8.0
            Profit from abroad taxed at different rates                                      (2.1)         (4.2)
            Benefit for deductibility of interest on own capital                              5.4          10.5
            Other adjustments                                                  10.8           4.0           9.7
                                                                         ----------    ----------    ----------
                                                                              (70.0)        (77.0)        (54.5)

         Benefit of tax holidays                                               29.4          29.7          27.0
                                                                         ----------    ----------    ----------

         Tax and social contribution charges recorded in the
              statement of operations                                         (40.6)        (47.3)        (27.5)
                                                                         ==========    ==========    ==========
</TABLE>

(c)  Tax loss carryforwards

     At December 31, 2001 the Company has a full valuation allowance against
     deferred tax assets of certain subsidiaries with limited prospects of
     generating taxable income, which amount to R$ 3.4 (2000 - R$ 3.4) with
     respect to income tax loss carryforwards and R$ 0.8 (2000 - R$ 0.8) with
     respect to social contribution loss.

     Tax loss carryforwards may be used to offset up to 30% of taxable income
     for future periods and do not expire.


                                     F-39
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


(d)  Tax exemption

     The following indirect controlled companies obtained partial or total
     exemption of federal income tax in connection with a governmental program
     for the development of the Northeast Region of Brazil, as follows:

<TABLE>
     Subsidiary company               Industrial unit                 Exemption - %    Termination
     ------------------------------   -----------------------------   -------------    -----------
     <S>                              <C>                                      <C>            <C>
     Oxiteno Nordeste S.A. -          Camacari plant                            100           2006
     Industria.e Comercio.

     Bahiana Distribuidora de Gas     Mataripe base                             100           2003
     Ltda.                            Ilheus and Aracaju bases                   50           2000
                                      Juazeiro base                             100           2004
                                      Suape base                                100           2007

     Terminal Quimico de Aratu S.A.   Aratu terminal                            100           2003
     - Tequimar                       Suape terminal
                                        Acetic acid and butadiene
                                            by-products                        37.5           2000
                                        Other products                          100           2005
</TABLE>

     The subsidiary companies record the tax benefits from the partial or the
     total exemption from income tax in a specific capital reserve in
     stockholders' equity. In the consolidated statement of operations, these
     benefits are reported as "Benefit of tax holidays".

17   Stock Option Plan

     At the General Ordinary and Extraordinary Meeting of stockholders held on
     April 27, 2001, the stockholders approved the Stock Option Plan, to be
     offered to managers and employees in positions of responsibility of the
     Company and its subsidiary companies. No options had been granted under
     this plan up to December 31, 2001.


                                     F-40
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


18   Employee Benefits and Private Pension Plan

     The Company and its subsidiary companies offer benefits to employees, such
     as life insurance, health care and a pension plan. In addition, they offer
     loans for the acquisition of vehicles and personal computers to employees
     of certain subsidiary companies. These benefits are recorded on the
     accrual basis and terminate at the end of the employment relationship.

     In August 2001, the Company and its subsidiary companies started to offer
     their employees a defined contribution pension plan. Adoption of this
     plan, which managed by Ultraprev - Associacao de Previdencia Complementar
     (Ultraprev), was approved at the Board of Directors Meeting held on
     February 15, 2001. Under the terms of the plan, the basic contribution of
     each participating employee is defined annually by the participant as
     between 0% and 11% of his /her salary. The sponsoring companies provide a
     matching contribution in an identical amount as the basic contribution. As
     participants retire, they may opt to receive monthly (i) a percentage
     varying between 0.5% and 1.0% of the fund accumulated in their name in
     Ultraprev or (ii) a fixed monthly amount which will extinguish the fund
     accumulated in the participant's name over a period of between 5 and 25
     years. As such, neither the Company nor its subsidiary companies assume
     responsibility for guaranteeing the levels of amounts or periods of
     receipt for the participants that retire under this plan. In 2001, the
     Company and its subsidiary companies contributed R$ 1.2 to Ultraprev,
     which was recorded as an expense in the results of operations for the
     year. The total number of employee participants in December 2001 was
     4,939, with no participants already retired.

     Additionally, Ultraprev has 3 active participants and 34 former employees
     receiving defined benefits according to the policies of a previous
     multi-employer plan. Considering that the fair market value of the plan's
     assets amply exceeds the present actuarial value of the accumulated
     benefit obligations, the sponsoring entities have not been contributing to
     the plan for these 37 participants. On the other hand, the sponsoring
     entities do not believe that it would be possible to recover any amounts
     from the plan, based on legislation applicable to closed private pension
     entities. As a result, no asset or liability relating to these
     participants has been recorded in the financial statements of the
     sponsoring companies.


                                     F-41
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


19   Summary and Reconciliation of the Differences
     between Brazilian Corporate Law and US GAAP

I    Description of the GAAP differences

     The accounting policies of the Company comply with, and its financial
     statements are prepared in accordance with, Brazilian corporate law. Note
     3 to the financial statements summarizes the accounting policies adopted
     by the Company. Accounting policies which differ significantly from US
     GAAP are summarized below.

(a)  Inflation accounting for the years ended in December 31, 1996 and 1997

     As discussed in Note 2, in the corporate law financial statements,
     accounting for the effects of inflation was discontinued as of December
     31, 1995. Under US GAAP, Brazil was considered to be a hyper-inflationary
     economy until July 1, 1997, and the recognition of the effect of inflation
     was required until no later than December 31, 1997.

     In determining amounts under US GAAP, the effects of inflation for the
     years ended December 31, 1996 and 1997 were determined using the Indice
     Geral de Precos do Mercado- IGP-M index.

     As described in Note 2, in 2001 the Company changed its method of
     presenting its primary financial statements filed with the SEC. Through
     December 31, 2000, the primary financial statements were presented in
     accordance with Brazilian GAAP, which required the use of the constant
     currency methodology. Beginning in 2001, the Company has elected to
     present its primary financial statements, and the related reconciliation
     to accounting principles generally accepted in the United States of
     America (US GAAP), using the accounting principles determined by Brazilian
     corporate law.

     A reconciliation of the differences between the reconciled US GAAP
     balances as previously presented and as currently presented is as follows:


                                     F-42
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


<TABLE>
                                                                  Stockholders' equity          Net income for the
                                                                       at December, 31     year ended December, 31
                                                              ------------------------    ------------------------

                                                                    1999          2000          1999          2000
                                                              ----------    ----------    ----------    ----------
<S>                                                                <C>           <C>            <C>          <C>
     Amounts as previously presented (in constant
        reais of purchasing power of December 31, 2000)            889.4         944.1          72.8          84.6
     Reversal of monetary restatements between
        January 1, 1998 and December 31, 2000                      (75.7)       (133.8)         (6.3)         (0.9)
     Deferred tax effects                                           44.9          68.3          41.5          11.7
     Minority interests                                            (98.5)        (24.0)         (9.3)         28.4
                                                              ----------    ----------    ----------    ----------

     Amounts currently presented (in nominal reais)                760.1         854.6          98.7         123.8
                                                              ==========    ==========    ==========    ==========
</TABLE>

(b)  Inflation accounting methodology and indices

     Through December 31, 1995, the Company used indices established by the
     government to restate balances and transactions for purposes of its
     corporate law financial statements. Such indices do not necessarily
     represent changes in general price levels, as would be required under US
     GAAP.

     Because the Company's management believes that the General Price Index
     computed by Fundacao Getulio Vargas is the most appropriate and consistent
     measure of the general price inflation in Brazil and because of its
     availability, for US GAAP purposes the Company adopted the IGP-DI for
     purposes of restatement of its financial statements through December 31,
     1995, replacing the government mandated index. This procedure is
     consistent with the recommendation by the Brazilian Task Force (organized
     under the AICPA International Practices Task Force to review the issue of
     the appropriate index to be used for preparing price-level adjusted
     financial statements of Brazilian companies filing with the SEC) of using
     the IGP-M or IGP-DI for such purposes. Thus, all non-monetary assets and
     liabilities were restated using the IGP-DI since the inception of the
     Company.

(c)  Reversal of fixed asset revaluations and related deferred tax liabilities

     For US GAAP reconciliation purposes, the revaluation of fixed assets and
     the related deferred tax effects recorded in the Brazilian corporate law
     financial statements have been eliminated in order to present fixed assets
     at historical cost less accumulated depreciation. Accordingly, the
     depreciation on such revaluation charged to income has also been
     eliminated for US GAAP reconciliation purposes.


                                     F-43
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


(d)  Deferred charges

     Brazilian corporate law permits deferral of research and development costs
     and of pre-operating expenses incurred in the construction or expansion of
     a new facility until the facility begins commercial operations. Deferred
     charges are amortized over a period of five to ten years.

     For US GAAP reconciliation purposes, such amounts do not meet the
     conditions established for deferral and accordingly have been charged to
     income.

(e)  Investments in affiliates

     As from 1996 Brazilian corporate law requires certain less than 20% -
     owned affiliates in which an investor owns more than 10% of voting stock
     to be accounted for on the equity method.

     For US GAAP reconciliation purposes, less than 20% - owned affiliates have
     been accounted for on the basis of cost for all years presented.

(f)  Capitalization of interest costs in relation to construction in progress

     Under Brazilian corporate law, prior to January 1, 1996 the Company did
     not capitalize the interest cost of borrowed funds as part of the cost of
     the related asset. Under US GAAP, capitalization of borrowed funds during
     construction of major facilities is recognized as part of the cost of the
     related assets.

     Under US GAAP, interest on construction-period borrowings denominated in
     foreign currencies is capitalized using contractual interest rates,
     exclusive of foreign exchange or monetary correction gains or losses.
     Interest on construction-period borrowings denominated in reais is
     capitalized.

(g)  Income taxes

     Under Brazilian corporate law and US GAAP, the liability method of
     accounting for income taxes is followed.


                                     F-44
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


     Under the Brazilian Constitution, prior to September 2001, the President
     could issue provisional measures which have the force of law for 30 days
     or upon rejection by the Congress, if earlier. Provisional measures were
     frequently reissued repetitively by the president after the 30-day period
     had passed. At December 31, 2000, the social contribution rate established
     by enacted law was 8%, and an outstanding provisional measure had changed
     the rate to 9% through December 31, 2002. The 9% rate was not enacted into
     permanent law until September 2001, as part of a constitutional amendment
     regarding the use of provisional measures.

     For the calculation of deferred taxes, Brazilian corporate law requires
     the use of the tax rate that is expected to be in effect when the
     temporary differences or tax loss carryforwards will be realized. When
     applying this rule, provisional measures which provide for changes in tax
     rates are considered to have been substantively enacted and are utilized
     to calculate the deferred taxes. At December 31, 2001, the enacted social
     contribution rate of 8% was used to calculate deferred taxes for US GAAP
     purposes. At December 31, 2001, the same social contribution rates were
     used to calculate deferred taxes in both the Brazilian corporate law
     financial statements and for US GAAP purposes.

     Under US GAAP, only enacted tax rates may be used to calculate deferred
     taxes. Tax rates for future periods which have been established by
     provisional measures are not considered to have been enacted and are
     ignored.

(h)  Acquisitions and business combinations

     Under Brazilian corporate law and US GAAP, business combinations are
     generally accounted for by the purchase method. However, under Brazilian
     corporate law, assets and liabilities of acquired entities are reflected
     at book values, whereas under US GAAP fair values are utilized.

     For US GAAP reconciliation purposes, fair values have been assigned to
     acquired assets and liabilities in business combinations in accordance
     with US practices applicable to each specific transaction. For US GAAP
     purposes, the balance of goodwill at December 31, 2001 is R$ 10.7, which
     was being amortized to income over 9 years. See Note 19 I (o) for changes
     to be implemented in 2002.


                                     F-45
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


     Under Brazilian corporate law, purchases by subsidiaries of treasury stock
     from minority stockholders are initially recorded at cost. Upon
     cancellation of these shares, the difference between cost and the related
     book value of the subsidiary's stockholders' equity is recorded by the
     parent company and in the consolidated financial statements as a capital
     gain or loss. Direct purchases by the parent company of subsidiaries'
     stock from minority stockholders are recorded at cost, with the difference
     between cost and the related book value of the subsidiaries' stockholders'
     equity recorded as a capital gain or loss by the parent company and in the
     consolidated financial statements.

     Under US GAAP, purchases of treasury stock by subsidiaries from minority
     stockholders and direct purchases by the parent company of subsidiaries'
     stock from minority stockholders are recorded as step acquisitions under
     the purchase method, with assignment of the purchase price to the
     underlying assets and liabilities based on their fair values and recording
     of goodwill to the extent that the purchase price exceeds the
     proportionate amount of the net fair value of the assets and liabilities.
     No gain or loss is recognized upon either purchase or cancellation of the
     shares.

(i)  Earnings per share

     Under Brazilian corporate law, earnings per share are determined based
     upon the total number of shares, common and preferred, outstanding as of
     the end of the period, without giving retroactive effect to stock splits.

     Under US GAAP, earnings per share are determined based upon the weighted
     average number of shares outstanding during the period, giving retroactive
     effect to stock splits. Entities whose capital structures include
     non-convertible securities that may participate in dividends with common
     stock according to a predetermined formula should use the two-class method
     of computing earnings per share as described in Statement of Financial
     Accounting Standards No. 128, "Earnings per Share" (SFAS 128). The
     calculation of earnings per share under US GAAP is shown in Note 19V (a).

(j)  Available-for-sale securities

     Under Brazilian corporate law available-for-sale securities are generally
     carried at cost, less provisions charged to the statement of operations if
     a loss in value is considered to be other than temporary.


                                     F-46
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


     For US GAAP reconciliation purposes, available-for-sale securities have
     been recorded at estimated market value, and the resulting adjustments
     have been recognized as a separate component of stockholders' equity, net
     of deferred tax effects, until realization. During the years presented, no
     securities classified under US GAAP as available-for-sale were disposed
     of.

(k)  Expenses for public offering of shares

     Costs associated with the offering of shares to the public are recorded as
     expenses under Brazilian corporate law. Under US GAAP these costs, net of
     related tax benefits, directly reduce the proceeds of the offering
     recorded in capital.

(l)  Accounting for financial instruments

     Brazilian corporate law does not specifically address the accounting for
     derivative financial instruments. In the Company's corporate law
     derivative financial instruments are recorded at net settlement price as
     determined on each balance sheet date, with gains and losses of designated
     hedge instruments deferred until realization of the hedged item.

     Under US GAAP, effective January 1, 2001, all derivative financial
     instruments must be reported at fair value on each balance sheet date.
     Also under US GAAP, the requirements for a derivative instrument to
     qualify for hedge accounting and deferral of gains and losses are more
     restrictive than under Brazilian corporate law.

(m)  Classification of debt with written put options

     Under Brazilian corporate law, debt instruments with put options are
     classified in the balance sheet based on the final maturity date, instead
     of the put option exercise date, unless there is sufficient persuasive
     evidence that a substantial portion of the debtholders will exercise the
     put option.

     Under US GAAP, the exercise date of the put option is considered when
     determining the balance sheet classification.

(n)  Financial statement note disclosures

     Brazilian corporate law requires, in general, less information to be
     disclosed in the notes to the financial statements than US GAAP. The
     additional disclosures required by US GAAP which are relevant to the
     accompanying financial statements are included in Note 19 V.


                                     F-47
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


(o)  Recently issued accounting pronouncements

     In July 2001, the Financial Accounting Standards Board issued Statement
     No. 141, "Business Combinations ", and Statement No. 142, " Goodwill and
     Other Intangible Assets". Statement No. 141 requires that the purchase
     method of accounting be used for all business combinations initiated after
     June 30, 2001. Statement No. 142 will be effective for the Company
     beginning in 2002, and requires that goodwill and intangible assets with
     indefinite useful lives no longer be amortized but instead tested for
     impairment at least annually. The Company currently has unamortized
     goodwill of approximately R$ 10.7, which will be subject to the transition
     provisions of Statement No. 142. Under the new rules, the Company would
     eliminate the amortization expense related to goodwill (which totalled R$
     0.6, R$ 0.7 and R$ 0.6 in 1999, 2000 and 2001, respectively). The Company
     is currently evaluating the full impact of adopting Statement No. 142.

     In June 2001, the Financial Accounting Standards Board issued Statement
     No. 143 "Accounting for Asset Retirement Obligations", which addresses
     financial accounting and reporting for obligations associated with the
     retirement of tangible long-lived assets and the associated asset
     retirement costs. SFAS 143 is effective for the Company beginning on
     January 1, 2002. The Company does not expect the adoption of Statement No.
     143 to have a material effect on its financial position or results of
     operations.

     In August 2001, the Financial Accounting Standards Board issued Statement
     No. 144, "Accounting for the Impairment or Disposal of Long-lived Assets",
     which clarifies the accounting for asset impairments and changes the
     reporting of discontinued operations. Statement No. 144 is effective for
     the Company beginning in 2002. The Company does not expect the adoption of
     Statement No. 144 to have a material effect on its financial position or
     results of operations.


                                     F-48
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


II   Reconciliation of the differences between
     US GAAP and Brazilian corporate law in net income

<TABLE>
                                                                                                Years ended December 31
                                                                                    -----------------------------------

                                                                                         1999         2000         2001
                                                                                    ---------    ---------    ---------
<S>                                                                                      <C>          <C>           <C>
     Net income as reported under Brazilian corporate law                                87.9        128.5        132.2
                                                                                    ---------    ---------    ---------

     Reversal of revaluation adjustments
         Depreciation of property, plant and equipment                                   21.6         55.0          5.1
         Deferred tax effects                                                            (1.3)       (13.6)        (0.4)
         Minority interests                                                              (9.5)       (30.7)        (0.9)
                                                                                    ---------    ---------    ---------

                                                                                         10.8         10.7          3.8
                                                                                    ---------    ---------    ---------

     Inflation accounting for the years ended
        December  31, 1996 and 1997
          Property, plant and equipment - incremental depreciation                       (8.1)        (6.9)        (4.2)
           Inventories and other non-monetary assets - incremental cost of
                production                                                               (0.8)        (0.4)        (0.4)
                                                                                    ---------    ---------    ---------

                                                                                         (8.9)        (7.3)        (4.6)
            Deferred tax effects                                                          2.9          2.4          1.5
             Minority interests                                                           2.1          2.3          1.5
                                                                                    ---------    ---------    ---------

                                                                                         (3.9)        (2.6)        (1.6)
                                                                                    ---------    ---------    ---------
</TABLE>


                                     F-49
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


<TABLE>
                                                                                        Years ended December 31
                                                                         --------------------------------------

                                                                               1999          2000          2001
                                                                         ----------    ----------    ----------
<S>                                                                            <C>          <C>           <C>
     Restatement  based on IGP-DI, replacing the government
        index for periods prior to 1996
          Property, plant and equipment                                        (9.1)         (0.8)          0.9
          Other non-monetary assets                                             1.4                         0.7
                                                                         ----------    ----------    ----------

                                                                               (7.7)         (0.8)          1.6
           Deferred tax effects                                                 2.5           0.2          (0.5)
           Minority interests                                                  (0.1)         (0.4)         (0.9)
                                                                         ----------    ----------    ----------

                                                                               (5.3)         (1.0)          0.2
                                                                         ----------    ----------    ----------

     Different criteria for
        Equity method of accounting                                             3.0          (8.9)         (7.3)
        Cancellation of subsidiaries' treasury stock                           (4.9)         (0.9)          0.9
        Deferred charges expensed                                              (4.3)        (12.4)        (14.1)
        Capitalization of interest costs during construction,
          net of depreciation                                                  (1.0)         (1.0)         (1.0)
        Fair value adjustments relating to accounting for
          derivative instruments and hedging activities                                                     4.1
        Other individually insignificant adjustments                           (0.7)         (1.1)         (1.0)
        Expenses for public offering of shares, net of tax benefits            13.9
                                                                         ----------    ----------    ----------

                                                                                6.0         (24.3)        (18.4)
        Deferred tax effects                                                    7.4           7.8           5.2
         Minority interests                                                    (3.2)          5.7           2.6
                                                                         ----------    ----------    ----------

                                                                               10.2         (10.8)        (10.6)
                                                                         ----------    ----------    ----------

        Fair value adjustments relating to business combinations               (1.5)         (1.5)         (1.5)
        Deferred tax effect                                                     0.5           0.5           0.5
                                                                         ----------    ----------    ----------

                                                                               (1.0)         (1.0)         (1.0)
                                                                         ----------    ----------    ----------

     Net income under US GAAP                                                  98.7         123.8         123.0
                                                                         ==========    ==========    ==========

     Basic earnings per thousand shares under US GAAP
        (in accordance with SFAS 128) - R$

     Basic earnings per thousand common shares                                 2.24          2.24          2.23
     Basic earnings per thousand preferred shares                              2.50          2.57          2.55
</TABLE>

     Dilutive earning (losses) per thousand shares have not been disclosed,
     since the Company has no dilutive shares. The calculation of earnings per
     thousand shares is summarized in Note 19 V (a).


                                     F-50
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


III  Reconciliation of the differences between
     US and Brazilian corporate law in stockholders' equity

<TABLE>
                                                                                       December 31
                                                                        --------------------------

                                                                              2000            2001
                                                                        ----------      ----------
<S>                                                                          <C>             <C>
     Stockholders' equity as reported under
         Brazilian corporate law                                             897.7           799.9
                                                                        ----------      ----------

     Reversal of revaluation adjustments
         Property, plant and equipment                                       (59.4)          (54.0)
         Deferred tax effects                                                  2.9             2.5
         Minority interests                                                   15.2            14.3
                                                                        ----------      ----------

                                                                             (41.3)          (37.2)
                                                                        ----------      ----------

     Inflation accounting for the years ended
         December 31, 1996 and 1997
             Property, plant and equipment                                    46.9            42.7
             Other non-monetary assets                                         7.6             7.2
                                                                        ----------      ----------

                                                                              54.5            49.9
             Deferred tax effects                                            (18.0)          (16.5)
             Minority interests                                              (14.9)          (13.4)
                                                                        ----------      ----------

                                                                              21.6            20.0
                                                                        ----------      ----------

     Restatement based on IGP-DI, replacing the government
         index for periods prior to 1996
             Property, plant and equipment                                    (1.8)           (0.9)
             Other non-monetary assets                                        (3.4)           (2.7)
                                                                        ----------      ----------

                                                                              (5.2)           (3.6)
             Deferred tax effects                                              1.7             1.2
             Minority interests                                                5.5             4.6
                                                                        ----------      ----------

                                                                               2.0             2.2
                                                                        ----------      ----------
</TABLE>


                                     F-51
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


<TABLE>
                                                                                           December 31
                                                                             -------------------------

                                                                                   2000           2001
                                                                             ----------     ----------
<S>                                                                               <C>            <C>
     Different criteria for
        Equity method of accounting                                               (31.1)         (38.4)
        Cancellation of subsidiaries' treasury stock                               (7.3)          (6.4)
        Deferred charges                                                          (44.2)         (58.3)
        Capitalization of interest costs during
           construction, net of depreciation                                        5.1            4.1
        Fair value adjustments relating to accounting for
           derivative instruments                                                                  4.1
        Other individually insignificant adjustments                                1.4            1.0
                                                                             ----------     ----------

                                                                                  (76.1)         (93.9)
        Deferred tax effects                                                       29.2           34.4
        Minority interests                                                         16.8           19.6
                                                                             ----------     ----------

                                                                                  (30.1)         (39.9)
                                                                             ----------     ----------

        Fair value adjustments relating to
           business combinations                                                   10.8            9.3
        Deferred tax effect                                                        (3.6)          (3.1)
                                                                             ----------     ----------

                                                                                    7.2            6.2
                                                                             ----------     ----------

        Available-for-sale securities (temporary unrealized losses)                (8.0)          (8.7)
        Deferred tax effect                                                         2.7            2.9
        Minority interest                                                           2.8            3.1
                                                                             ----------     ----------

                                                                                   (2.5)          (2.7)
                                                                             ----------     ----------

     Approximate stockholders' equity under US GAAP                               854.6          748.5
                                                                             ==========     ==========
</TABLE>


                                     F-52
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


IV   Statement of changes in stockholders' equity
     in accordance with US GAAP

<TABLE>
                                                                                  Years ended December 31
                                                                   --------------------------------------

                                                                         1999          2000          2001
                                                                   ----------    ----------    ----------
<S>                                                                     <C>           <C>           <C>
     Stockholders' equity under US GAAP as
       of beginning of the year                                         388.2         760.1         854.6

        Additional paid in capital                                        0.7           0.7           0.7

        Net income for the year                                          98.7         123.8         123.0
        Dividends and interest on own capital                           (23.0)        (31.1)       (229.6)
        Spin-off of assets of Imaven and Imaven Fortaleza               (22.7)
        Unrealized losses (gains) on available-for-sale
          securities, net of tax                                          1.5           1.1          (0.2)
        Issuance of preferred shares                                    330.6
        Expenses for public offering of shares, net of tax              (13.9)
                                                                   ----------    ----------    ----------

     Stockholders' equity under US GAAP as
       of the end of the year                                           760.1         854.6         748.5
                                                                   ==========    ==========    ==========

     Comprehensive income (under FAS 130)

       Net income for the year                                           98.7         123.8         123.0
       Unrealized losses on available-for-sale investments                1.5           1.1          (0.2)
                                                                   ----------    ----------    ----------

     Total comprehensive income                                         100.2         124.9         122.8
                                                                   ==========    ==========    ==========

     Accumulated other comprehensive loss
       as of the end of the year                                         (3.6)         (2.5)         (2.7)
                                                                   ==========    ==========    ==========
</TABLE>


                                     F-53
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


V    Additional disclosures required by US GAAP

(a)  Earnings per share

     The following table provides a reconciliation of the numerators and
     denominators used in computing earnings per share and the allocation of
     distributed and undistributed income between common and preferred
     stockholders under the two-class method of computing earnings per share as
     required by SFAS 128.

<TABLE>
                                                                                                            1999
                                                                 -----------------------------------------------

                                                                        Common        Preferred            Total
                                                                 -------------    -------------    -------------
<S>                                                                 <C>              <C>              <C>
     Distributed income                                                   20.5              2.5             23.0
     Undistributed income                                                 67.5              8.2             75.7
                                                                 -------------    -------------    -------------

     Net income                                                           88.0             10.7             98.7
                                                                 =============    =============    =============

     Weighted average shares outstanding (in thousands)             39,346,839        4,278,161
                                                                 -------------    -------------

     Earnings per thousand shares - whole R$                              2.24             2.50
                                                                 =============    =============

<CAPTION>
                                                                                                            2000
                                                                 -----------------------------------------------

                                                                        Common        Preferred            Total
                                                                 -------------    -------------    -------------
<S>                                                                 <C>              <C>              <C>
     Distributed income                                                   21.7              9.4             31.1
     Undistributed income                                                 63.5             29.2             92.7
                                                                 -------------    -------------    -------------

     Net income                                                           85.2             38.6            123.8
                                                                 =============    =============    =============

     Weighted average shares outstanding (in thousands)             37,984,013       15,015,987       53,000,000
                                                                 -------------    -------------    -------------

     Earnings per thousand shares - whole R$                              2.24             2.57
                                                                 =============    =============
</TABLE>


                                     F-54
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


<TABLE>
                                                                                                            2001
                                                                 -----------------------------------------------

                                                                        Common        Preferred            Total
                                                                 -------------    -------------    -------------
<S>                                                                 <C>              <C>              <C>
     Distributed income                                                   60.6             26.4             87.0
     Distributed reserves                                                 87.1             37.9            125.0
     Supplementary dividends from net income
         for the year ended December 31, 2000                             12.2              5.4             17.6
                                                                 -------------    -------------    -------------

     Total distributions                                                 159.9             69.7            229.6
     Distributions from retained earnings                                (75.2)           (31.4)          (106.6)
                                                                 -------------    -------------    -------------

     Net income                                                           84.7             38.3            123.0
                                                                 =============    =============    =============


     Weighted average shares outstanding (in thousands)             37,984,013       15,015,987       53,000,000
                                                                 -------------    -------------    -------------

     Earnings per thousand shares - whole R$                              2.23             2.55
                                                                 =============    =============
</TABLE>

(b)  Concentration of credit risk

     Financial instruments which potentially subject the Company to credit risk
     are cash and cash equivalents and trade receivables. The Company manages
     its credit risk with respect to cash equivalents by investing only in very
     short-term instruments with highly-rated financial institutions. In
     addition, investments are diversified in several institutions, and credit
     limits are established for each individual institution.

     The allowance for doubtful accounts at December 31, 2001 amounts to R$
     11.3 (2000 - R$ 3.8).

     Credit risk from accounts receivable is managed following specific
     criteria for each of the segments in which the Company operates, as
     follows:


                                     F-55
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


     Chemical segment

     Oxiteno's customers for its commodity chemicals are principally chemical
     companies, surface coating producers and polyester resin producers, and
     customers for its specialty chemicals comprise a variety of industrial and
     commercial entreprises. No single customer or group accounts for more than
     10% of total revenue. Management believes that by distributing its
     products to a variety of markets it is able to protect itself, to a
     certain extent, from the effects of negative trends in any particular
     market. Oxiteno acts as a member of a Credit Committee of the Brazilian
     chemical manufacturers which meets monthly to review the financial
     position of clients showing past due accounts.

     Historically, the Company has not experienced significant losses on trade
     receivables.

     The Company has discounted with financial institutions certain notes under
     export financing arrangements. If the original debtors fail to pay their
     obligations when due, the Company would be committed to repay such
     amounts. The amount of these contingent obligations was R$ 44.3 and R$
     49.6 at December 31, 2000 and 2001, respectively. Credit risk related to
     such notes, associated with the chemical segment, is managed following the
     criteria described above.

     Gas segment

     Ultragaz sells its products to the retail, commercial and industrial
     markets.

     Sales to the retail market are carried out directly by Ultragaz using cash
     terms, from which no significant credit risk exists, or through outside
     distributors. Credit risk in sales to outside distributors is reduced due
     to the large customer base, the ongoing control procedures that monitor
     the creditworthiness of distributors, and by short payment terms (20 days
     on average) that permit continuous monitoring of distributors'compliance.

     Sales to the commercial and industrial markets are made to customers which
     have signed a credit agreement with the Company and have provided personal
     guarantees or security. Periodic monitoring of these accounts is performed
     by specific staff with the support of financial information systems.


                                     F-56
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


     No single customer or group accounts for more than 10% of total revenue.

     Historically, the Company has not experienced significant losses on trade
     receivables.

(c)  Impairment of long-lived assets

     SFAS 121- "Accounting for the Impairment of Long-lived Assets to be
     Disposed of" requires that an impairment loss be recognized when
     circumstances indicate that the carrying value of an asset may not be
     recoverable. Management reviews most long-lived assets, primarily
     property, plant and equipment to be held and used in the business,
     investments accounted for under the equity method and goodwill, for the
     purpose of determining and measuring impairment on a recurring basis or
     when events or changes in circumstances indicate that the carrying value
     of an asset or a group of assets may not be recoverable, and provisions
     deemed appropriate are recorded.

     Assets are grouped and evaluated for possible impairment at a plant level.
     Impairment is assessed on the basis of the expected undiscounted cash
     flows over the estimated remaining lives of the assets related to those
     plants.

(d)  Statement of cash flows

     Brazilian corporate law does not require the presentation of a statement
     of cash flows as required by US GAAP. Changes in working capital are
     presented in the statement of changes in financial position. US GAAP
     requires the presentation of a statement of cash flows describing a
     Company's cash flows from operating, financing and investing activities.
     Statements of cash flows using Brazilian corporate law information are as
     follows (the reconciling items to US GAAP under note II relate exclusively
     to operating activities):


                                     F-57
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


<TABLE>
                                                                                                Years ended December 31
                                                                                    -----------------------------------

                                                                                         1999         2000         2001
                                                                                    ---------    ---------    ---------
<S>                                                                                     <C>         <C>          <C>
     Cash flows from operating activities
       Net income                                                                        87.9        128.5        132.2
       Adjustments to reconcile net income
           to cash provided by operating activities
              Depreciation and amortization                                              78.9         90.8        102.4
              Amortization of goodwill (negative goodwill), net                           0.4          0.2         (8.7)
              Loss on sale of property, plant and equipment                               4.7         29.1         21.9
              Unrealized foreign exchange and indexation losses on liabilities          125.7         31.0         74.1
              Increase (decrease) in provision for losses on investments                  5.5         (5.2)        (5.3)
              Equity in (earnings) the results of associated companies                    3.2         (9.6)        (1.9)
              Dividends received from affiliates                                          2.1                       1.3
              Deferred tax expense and social contribution                                2.8         (4.7)        (3.9)
              Provision for contested taxes on revenues                                  12.0         25.5         10.6
              Loss (gain) on change in ownership percentage of investees                 (4.3)         2.9
              Minority interest                                                          73.7         74.2         73.0
              Expenses for public offering of shares                                     15.8
              Other                                                                                   (0.2)         0.1
       Decrease (increase) in operating assets
          Trade accounts receivable                                                     (40.3)       (20.2)       (10.0)
          Taxes recoverable                                                             (10.8)       (39.3)       (39.0)
          Other receivables                                                              (2.8)        (3.7)        (2.3)
           Inventories                                                                  (15.5)        (7.3)        (8.0)
           Prepaid expenses                                                              (0.2)        (1.1)        (1.3)
       Increase (decrease) in operating liabilities
          Suppliers                                                                      33.3         13.8          1.6
          Accrued interest                                                               (3.2)        (2.6)        (0.8)
          Salaries and provision for vacation                                             6.8          6.5          5.5
          Taxes                                                                          (0.1)         1.4         (2.8)
          Income tax and social contribution                                             (6.0)        (4.9)        (2.6)
          Other                                                                           4.3         (2.4)         3.6
                                                                                    ---------    ---------    ---------

       Net cash provided by operating activities                                        373.9        302.7        339.7
                                                                                    ---------    ---------    ---------

     Cash flows from investing activities
        Additions to investments                                                         (0.1)        (0.8)
        Additions to property, plant and equipment                                      (70.0)      (143.5)      (145.7)
        Additions to deferred charges                                                   (21.7)       (32.6)       (57.4)
        Acquisition of minority interests                                                (9.6)        (1.5)       (13.8)
        Proceeds from sales of property, plant and equipment                              5.8          5.1          9.3
        Other                                                                            (0.8)         2.8          0.9
                                                                                    ---------    ---------    ---------

     Net cash used in investing activities                                              (96.4)      (170.5)      (206.7)
                                                                                    ---------    ---------    ---------
</TABLE>


                                     F-58
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


<TABLE>
                                                                                                Years ended December 31
                                                                                 --------------------------------------

                                                                                       1999          2000          2001
                                                                                 ----------    ----------    ----------
<S>                                                                                   <C>           <C>           <C>
     Cash flows from financing activities
       Short-term debt, net                                                            (4.1)        (70.7)        (51.5)
           Long-term loans
              Issuances                                                                43.7          66.9          54.4
              Repayments                                                              (93.2)        (70.4)        (85.3)
           Loans from affiliated companies
              Issuances                                                                10.0           2.9           3.9
              Repayments                                                               (7.1)         (4.5)         (5.2)
       Dividends paid                                                                 (33.3)        (52.7)       (244.3)
       Proceeds from issuance of preferred shares, net of expenses on issuance        314.8
       Other                                                                            2.5           1.9         (11.2)
                                                                                 ----------    ----------    ----------

       Net cash provided by (used in) financing activities                            233.3        (126.6)       (339.2)
                                                                                 ----------    ----------    ----------

     Net increase (decrease) in cash and cash equivalents                             510.8           5.6        (206.2)
       Cash and cash equivalents at the beginning of the year                         345.8         856.6         862.2
                                                                                 ----------    ----------    ----------

       Cash and cash equivalents at the end of the year                               856.6         862.2         656.0
                                                                                 ==========    ==========    ==========

     Supplemental disclosure of cash flow information
       Cash paid during the year for
           Interest, net of amounts capitalized                                        44.7          38.8          38.3
           Taxes on income                                                             21.2          44.7          20.6
       Non-cash transactions
           Direct supplier financing of acquisition
               of property, plant and equipment                                         2.7           5.5
           Distribution of Imaven assets to stockholders                               22.7
</TABLE>

(e)  Segment information

     The Company has two reportable segments: the chemical segment and the gas
     segment. The chemical segment produces primarily ethylene oxide, ethylene
     glycols, ethanolamines and glycol ethers. The gas segment distributes LPG
     to retail, commercial and industrial consumers mainly in the States of Sao
     Paulo, Parana and Bahia. Although the Company is also engaged in
     transportation and storage of chemicals and real estate activities, none
     of such activities meets the criteria for a reportable segment. Reportable
     segments are strategic business units that offer different products and
     services. Each of the reportable segments has a responsible senior officer
     who reports to the Board of the Company. Intersegment sales are transacted
     at prices approximating those that the selling entity is able to obtain on
     external sales.


                                     F-59
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


     Financial information about each of the Company's reportable segments,
     which is based on the segments' Brazilian corporate law accounting
     records, is as follows:

<TABLE>
                                                                                      Year ended December 31, 1999
                                       ---------------------------------------------------------------------------

                                                Gas     Chemicals           Other    Eliminations     Consolidated
                                       ------------  ------------   -------------    ------------    -------------
<S>                                       <C>             <C>            <C>              <C>           <C>
Net revenues from sales to unaffiliated
  companies                                   937.4         593.4            63.8                          1,594.6
Intersegment sales                                                           23.5           (23.5)
                                       ------------  ------------   -------------    ------------    -------------

Net revenues                                  937.4         593.4            87.3           (23.5)         1,594.6
                                       ============  ============   =============    ============    =============

Operating profit before financial
  income (expense)                            100.7         141.2            16.2                            258.1
                                       ============  ============   =============    ============    =============

Financial income (expenses), net                                                                             (34.4)
Expenses for public offering of shares                                                                       (15.8)
Non-operating expense, net                                                                                    (2.5)
Equity in earnings (losses) of
affiliates                                                                                                    (3.2)
                                                                                                     -------------

Income before taxes and minority
interests                                                                                                    202.2
                                                                                                     =============

Additions to property, plant and
  equipment
  Brazilian corporate law                      40.9          22.2             9.6                             72.7
  US GAAP                                      40.9          22.2             9.6                             72.7
                                       ============  ============   =============    ============    =============

Depreciation and amortization charges
  Brazilian corporate law                      33.6          37.4             7.9                             78.9
  US GAAP                                      22.5          26.7             9.6            (1.2)            57.6
                                       ============  ============   =============    ============    =============
</TABLE>


                                     F-60
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


<TABLE>
                                                                                      Year ended December 31, 2000
                                       ---------------------------------------------------------------------------

                                                Gas     Chemicals           Other    Eliminations     Consolidated
                                       ------------  ------------   -------------    ------------    -------------
<S>                                       <C>             <C>            <C>              <C>           <C>
Net revenues from sales to unaffiliated
  companies                                 1,125.9         693.0            59.1                          1,878.0
Intersegment sales                                                           34.7           (34.7)
                                       ------------  ------------   -------------    ------------    -------------

  Net revenues                              1,125.9         693.0            93.8           (34.7)         1,878.0
                                       ============  ============   =============    ============    =============

Operating profit before financial
  income (expense)                             98.6          97.0            17.9                            213.5
                                       ============  ============   =============    ============    =============

Financial income (expense), net                                                                               43.4
Non-operating expenses, net                                                                                  (16.5)
Equity in earnings (losses) of
affiliates                                                                                                     9.6
                                                                                                     -------------

Income before taxes and minority
interest                                                                                                     250.0
                                                                                                     =============


Additions to property, plant and
  equipment
  Brazilian corporate law                      89.6          49.0            10.4                            149.0
  US GAAP                                      89.6          49.0            10.4                            149.0
                                       ============  ============   =============    ============    =============
Depreciation and amortization charges
  Brazilian corporate law                      42.3          39.1             9.4                             90.8
  US GAAP                                      27.6          26.5            10.7            (1.2)            63.6
                                       ============  ============   =============    ============    =============
</TABLE>


                                     F-61
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


<TABLE>
                                                                                      Year ended December 31, 2001
                                       ---------------------------------------------------------------------------

                                                Gas     Chemicals           Other    Eliminations     Consolidated
                                       ------------  ------------   -------------    ------------    -------------
<S>                                       <C>             <C>            <C>              <C>           <C>
Net revenues from sales to unaffiliated
  companies                                 1,381.1         840.6            63.0                          2,284.7
Intersegment sales                                                           40.3           (40.3)
                                       ------------  ------------   -------------    ------------    -------------

  Net revenues                              1,381.1         840.6           103.3           (40.3)         2,284.7
                                       ============  ============   =============    ============    =============

Operating profit before financial
income (expense)                              101.1         149.7            28.1                            278.9
                                       ============  ============   =============    ============    =============

Financial income (expense), net                                                                              (31.1)
Non-operating expense, net                                                                                   (17.0)
Equity in earnings of affiliates                                                                               1.9
                                                                                                     -------------

Income before taxes and minority
interest                                                                                                     232.7
                                                                                                     =============

Additions to property, plant and
  equipment
  Brazilian corporate law                      97.9          37.1            10.7                            145.7
  US GAAP                                      97.9          37.1            10.7                            145.7
                                       ============  ============   =============    ============    =============

Depreciation and amortization charges
  Brazilian corporate law                      61.9          31.2             9.3                            102.4
  US GAAP                                      36.1          29.7            10.3            (1.2)            74.9
                                       ============  ============   =============    ============    =============
</TABLE>


                                     F-62
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


<TABLE>
                                                                                         December 31
                                                                  -----------------------------------

                                                                             2000               2001
                                                                  ----------------   ----------------
<S>                                                                       <C>                <C>
Identifiable assets - Brazilian corporate law
Gas                                                                         652.5              753.2
Chemical                                                                    937.4              986.7
Other                                                                       810.6              676.6
Eliminations                                                               (386.0)            (464.5)
                                                                  ---------------    ---------------

Total consolidated assets                                                 2,014.5            1,952.0
                                                                  ===============    ===============

Identifiable assets - US GAAP
Gas                                                                         611.0              699.5
Chemical                                                                    947.9              994.4
Other                                                                       794.3              657.4
Eliminations                                                               (385.6)            (459.3)
                                                                  ---------------    ---------------

Total consolidated assets                                                 1,967.6            1,892.0
                                                                  ===============    ===============

Investments in equity investees - Brazilian corporate law
Chemical                                                                     61.1               63.0
                                                                  ---------------    ---------------

Total consolidated                                                           61.1               63.0
                                                                  ===============    ===============

Investments in equity investees - US GAAP
Gas                                                                           1.2                1.5
Chemical                                                                     32.2               33.8
                                                                  ---------------    ---------------

Total consolidated                                                           33.4               35.3
                                                                  ===============    ===============
</TABLE>


                                     F-63
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


(f)  Geographical area information

     All long-lived assets are located in Brazil. The Company generates
     revenues from operations in Brazil as well as from exports of products to
     clients located in foreign countries as shown below:

<TABLE>
                                                                        Years ended December 31
                                                     ------------------------------------------

                                                           1999            2000            2001
                                                     ----------      ----------      ----------
<S>                                                       <C>             <C>             <C>
     Gross sales
         Brazil                                         1,759.2         2,064.1         2,595.7
         Foreign countries                                167.8           237.1           266.8
                                                     ----------      ----------      ----------

     Total                                              1,927.0         2,301.2         2,862.5
                                                     ==========      ==========      ==========

     Exports
         Latin America, other than Brazil                  67.3            84.8           107.8
         Far East                                          60.1            42.0            84.0
         Europe                                            21.9            26.4            31.4
         North America                                     13.4            80.9            33.3
         Other                                              5.1             3.0            10.3
                                                     ----------      ----------      ----------

                                                          167.8           237.1           266.8
                                                     ==========      ==========      ==========
</TABLE>

(g)  Research and development expenses

     Total research and development expense amounted to R$ 9.5, R$ 9.5 and R$
     10.2 in the years ended December 31, 1999, 2000 and 2001, respectively.

(h)  Employee severance fund and termination payments

     The Company is required to contribute 8% of each employee's gross pay to
     an account maintained in the employee's name in the Government Severance
     Indemnity Fund (FGTS). No other contributions to the FGTS are required.
     Additionally, effective September 2001, the Company is required to pay an
     additional tax equal to 0.5% of gross pay. Contributions are expensed as
     incurred.


                                     F-64
<PAGE>

     Ultrapar Participacoes S.A. and Subsidiaries

     Notes to the Consolidated Financial Statements
     Expressed in millions of reais, unless otherwise stated
     ---------------------------------------------------------------------------


     Under Brazilian law, the Company is also required to pay termination
     benefits to employees who have been dismissed. The amount of the benefit
     is calculated as 40% of the accumulated contributions made by the Company
     to the FGTS during the employee's period of service. Additionally,
     effective September 2001, the company is required to pay a social tax of
     10% of these accumulated contributions. The Company does not accrue for
     these termination costs before a decision to terminate has been made,
     since the benefits are neither probable nor reasonably estimable. Actual
     termination costs paid on dismissal totalled R$ 3.0, R$ 3.5 and R$ 3.8 in
     the years ended December 31, 1999, 2000 and 2001, respectively.


                                     * * *


                                     F-65
<PAGE>


                                 EXHIBIT INDEX


Exhibit Number
--------------

      1.        Ultrapar Bylaws*
      2.        Ultra S.A.'s Shareholders' Agreement
      8.        List of Subsidiaries of Ultrapar
     10.        Letter from Ultrapar regarding certain representations given by
                Arthur Andersen

--------
     * Incorporated by reference to Annual Report on Form 20-F for fiscal year
ended December 31, 2000 (File No. 001-14950) filed with the SEC on May 25,
2001.