The crisis which initiated in 2007 in the subprime real estate segment in the U.S., assumed larger proportions, affecting large financial institutions with global reach, becoming a systemic crisis driven by a generalized lack in confidence, which resulted in a wide-ranging crisis in terms of financial liquidity.

In Brazil, the increased aversion to risk led to a significant flight by investors to assets considered safer, provoking a great deal of volatility in the exchange rate market. At the end of 2008, the U.S dollar was quoted at R$2.332, corresponding to an appreciation in the Brazilian Real of 31.7% compared with the same year-ago period, when the U.S. Dollar closed the year at R$1.7713.

The slowing of the pace in economic activity, as a result of increased credit restrictions, forced a revision in expectations as to the level of future global economic growth.

At the end of 2008 the main areas in which Duratex operates – the building and furniture sectors -which account for approximately 80% of the company’s direct and indirect sales, continued to perform well, boosted by the large number of real-estate projects launched previously, and the increase in total economic payroll, together with widely available credit.