They’re smaller. They’re better. And they do something that bigger materials can’t do. But somebody still has to close the deal. Is selling nanomaterials any different from selling anything else? Small Times’ David Forman asked senior executives responsible for sales at three nanomaterials firms about their strategies.
Q: Which of your nanomaterials have been most successful? Why?
Worldwide sales manager
Criscuolo: Our NanoSolve concentrate for sporting goods applications has been the most successful in the current marketplace. The reason for this success is that Zyvex has been able to provide a cost-effective solution for customers who are interested in improving the mechanical performance of epoxy resin systems.
Cross: We have had the most success to date in markets where there is both a market pull, versus a technology push, and nanomaterials provide definite value, especially a multifunctional value. Markets where both exist and we have had definitive success (revenue growth) are sunscreens and personal care, CMP (chemical mechanical polishing) for semiconductors and optics, and coatings and plastics. Each of these markets have definitive needs and nanomaterials provide value.
Graham: To date we have seen the most success in our lithium, lanthanum and titania product lines. In all cases the success is in large part attributable to a market need that can be addressed by the Altairnano materials. In the case of the lithium battery materials there is a need for a fast charge, safe, long-life battery to make the EV market a reality. With our lanthanum material we can provide a dosage format for the treatment of hyperphosphatemia in end stage renal disease patients that will improve the lifestyle of the patient and expand the market for this type of product by increasing compliance levels. The industrial machinery market is seeking new materials for improving the output efficiency, life and time between maintenance for everything from gas turbine engines to petrochemical plants. Using the Altairnano titania material in a thermal spray application as a coating to equipment parts can deliver on these requirements.
Q: What recent trends have you seen in the demand for nanomaterials overall? And specifically for your nanomaterials, what end use markets are driving sales? How has that changed over the years?
Criscuolo: We continue to see a rise in the demand for our technology. This has been driven by our early success in the sporting goods arena and has enabled Zyvex to establish credibility in the marketplace. Zyvex continues to see a strong demand from the sporting goods, aerospace, automotive and defense industries. Zyvex’s strong IP position in dispersion technology has allowed us to become a recognized leader in this space. That has opened new markets for our materials and provides us with the credibility required to be successful in an emerging technology area such as nanotechnology.
President and chief executive officer
Nanophase Technologies Corp.
Cross: First, the adoption cycle is increasing on a global basis. Europe appears to be leading, specifically Germany, followed by the U.S. and then Asia. Interest has evolved from being focused in the research areas in companies to product development groups, which are years closer to the market relative to new product introduction.
End markets where there appears to be real pull include: sunscreens and personal care; chemical mechanical polishing for semiconductors, optics, and LCD screens; coatings, plastics, adhesives and sealants; antimicrobial agents; catalysts; electronic materials; and specific textile applications.
Changes over the last three years: more serious and real global interest and product development; more market interest; increasing appreciation for the value of the technology. Relative to Nanophase, the platform of integrated nanomaterial technologies that we have developed over the past four years has increased the ability to engineer nanomaterial solutions for applications and made it technically easier for customers to develop applications.
Graham: The commercial acceptance of nanomaterials is gaining ground. Altairnano’s ability to consistently manufacture tonnage quantities of materials to a defined specification at economic prices has been a turning point for many potential consumers of nanomaterials. Our ability to “industrialize” nanomaterials sets us apart from many other nanomaterials companies, many of whom are R&D shops. By providing tonnage quantities of materials off the shelf we have seen many large corporates realize that nanomaterials are now real. The larger end use markets driving this adoption are those that have traditionally embraced new technology first - the pharmaceutical, electronics, industrial equipment and automotive markets.
Q: How do you find new applications and customers for your nanomaterials when the possibilities are so diverse?
Criscuolo: It is just as important in business to decide what to do as what not to do. While we have a broad view of any given market (through market analysis and interaction), we rapidly focus on a niche marketing strategy that we can exploit for our technology. We take a broad view, then we come in with laser precision and exploit our core competencies in the area.
Cross: First, we are only interested in “market pull” product development where a potential customer has a definitive market need. Second, we qualify and quantify the opportunity based on time-to-market, potential revenue and growth ramp, and the cost of entry. Obviously, if we perceive horizontal markets, that is also a consideration. If the cost is considered too high, we tend to ask the potential customer to cover the development cost. If they cannot or will not, we tend to think the level of commitment on their part is inadequate.
President & CEO
Tech 2020 / Innovation Valley Nano Alliance in Tennessee
Graham: We are focused on nano-ceramics so we look for markets that will see dramatic improvements through the use of our materials. Before we invest in a new technology we look at its market potential and likelihood of rapid adoption. This rigorous business approach avoids the pitfall of developing a new material that then needs to find a market. Often we work with our customers to develop new materials so we know there will be a market.
Q: To what extent are nanomaterials sales driven by commodity pricing pressures? Or do the attributes of specific nanomaterials change the equation?
Criscuolo: Pricing and cost containment are paramount issues in the materials world. Having said that, Zyvex has managed to find higher value yet lower volume applications where cost and price are not the driving concern. Zyvex is working diligently to reduce costs and increase its volumes in order to access mid- to lower value/higher volume applications in the marketplace and to gain additional revenues. There are certainly applications that we are currently working on and developing where cost is not our primary concern. These involve applications in aerospace and defense, space and homeland security.
Cross: Nanomaterials do not compete with commodities, period. Those who routinely state this apparently have little to no understanding of the markets. Competition does exist in alternative materials, for instance, organic sunscreens versus nanomaterial sunscreens that are inorganic. Commodities only affect cost and pricing; when commodity pricing increases, since commodities are generally used as precursors for nanomaterials, it impacts nanomaterial costs and pricing.
Again, for nanomaterials to sell and be attractive to markets there must be a value proposition in performance. If the value proposition is adequate, then the unique attributes of nanomaterials are appealing.
Graham: The key is to pursue markets where the value of the use of the material far outweighs its cost. An example would be in the gas turbine engine market. If using our material a multi-million dollar gas turbine engine can produce, say, 10 percent more electricity at the same raw material cost and can remain in service for two years longer and have its service interval double, then the value is measured in potentially millions of dollars.
Q: What kind of questions are you getting from customers about workplace and environmental safety of your nanomaterials? What are your answers to those questions?
Criscuolo: We take our role as a nanomaterials developer very seriously and have volunteered to participate in a number of government sponsored initiatives to create nanotech standards. We have developed and implemented (for some time) a rigorous nanotech safety program and adhere to the guidelines of our ISO 9001:2000 certified processes. We normally direct potential customers to the appropriate government agency regarding rules and regulation around nano-based products.
Cross: There seems to be much less concern in the industrial community than there is in the press, academia, and the Woodrow Wilson International Center. Industrial companies have sophisticated methods to handle materials and minimize or eliminate exposure to personnel. From a pragmatic position, nanoparticles or surface treated nanoparticles tend to agglomerate or stick together due to electrostatic attraction and act like larger materials. In dispersion, their presence is likely innocuous.
In our own manufacturing, we have taken a rigorous approach to employee health and safety and created procedures and handling systems that are many times above the current OSHA (Occupational Safety and Health Administration) or EPA (Environmental Protection Agency) standard levels. Based on all of our considerable testing, there seems to be sufficient equipment and methods available to provide adequate workplace safety.
Graham: There is heightened awareness and much misinformation on the potential affects of nanomaterials on the environment. Our passion, commitment and responsibility extend beyond our business objectives. It also includes taking a leadership role in the product stewardship of nanostructured materials to protect our employees, customers and the communities where we operate. We have initiated programs with the National Institute of Occupational Safety and Health and a leading university to develop the metrics, measurement techniques and analytical framework to ensure the safety of our products, manufacturing and handling procedures.>