Filling a critical void in the value-chain for Graphene commercialisation (The Graphene Council Newsletter July 2014)
Producers and end-users alike require several key components in the value chain to be met before successful and sustainable trade in a material can occur. This is certainly also the case with nanomaterials and therefore Graphene in its myriad forms.
Despite the relative nascence of Graphene compared to more traditional and established materials in global output and usage, there is no reason to think that it is somehow exempt from market forces and the kind of essential pre-requisites that need to be addressed before widespread industrial adoption of the material can occur. Indeed, the relatively low volume of trade in the material despite the wide range of superlatives attributable to its physical characteristics is a very clear indication that there are one or more issues that need to be addressed.
Among the key components in the value chain necessary for bulk industrial use of Graphene, the most important are; appropriate unit production costs and supply volumes of the raw material, as well as downstream refining capabilities such as functionalization and dispersion techniques. These advanced processing methods for nanomaterials are currently insufficient or missing entirely to enable an industrial end-user base to integrate nanomaterials into their existing structures.
It therefore inevitably follows that any nanomaterial producer who fails to achieve appropriate competence in even one of these core refining elements will find it difficult or impossible to sell their materials into the market at an industrial scale. Producers who decry industry for simply ‘not being ready’, or being ‘ignorant or not interested enough’ in graphene, we suggest could do well to shift their gaze internally and examine whether they are not able to sell their products to industry due to critical voids in their own value proposition. The plain reality is that successful trade requires commitment in both directions; leading from producer to end user.
At Fullerex, we frequently hear feedback from companies in industries such as advanced composites and polymers with the same general theme. Nanomaterial producers (including some Graphene producers) often send their raw material samples to end buyers to be tested as performance additives in their products. In some instances, lab scale testing on minute samples of product have yielded results good enough to convince a buyer to consider larger scale purchases. However, laboratory scale processes under ideal conditions often fall short of being scalable for commercial use. In some cases the processes are simply incompatible with current industrial process technology.
Many companies are unable or unwilling to disperse these raw nanomaterial samples in-house into their own bulk product for a whole host of technical reasons. Those that attempt to however, often lack expertise or data on the correct loading ratios to employ and utilize technologies and techniques to distribute the materials that are inappropriate and therefore ineffective for nano-scale additives. Moreover, graphene is chemically inert (a reason why it is a great barrier against corrosion) and so does not readily covalently bond to a large range of materials, ultimately failing to impart its significant mechanical performance across the bulk material into which it is blended unless functionalised with chemical end groups to improve interfacial adhesion, something which many producers can not do.
The end result is therefore almost always the same; A range of quality in the performance enhancements in the final dispersion that falls well below the “on paper” properties of the material.
Graphene is then deemed too expensive and not good enough to replace or augment the end users incumbent suite of additives. In these cases, the cost, dispersion and performance of the material are inadequate. Agglomerates have formed, the loadings were wrong, the dispersion was nowhere near homogenous, no interfacial adhesion to the polymer or composite was achieved.
The producer has probably by then been deemed unreliable by the company trying the sample, the latter potentially feeling that they have effectively been asked to pay for very expensive graphite flakes.
Unfortunately, that negative impression of Graphene would be bestowed on all producers of the material, even those that focus to get the value chain balance right. This is particularly true considering market confusion due to the sheer range of different "graphene materials" but also we have to admit a reflection of the evolution from promising R&D to industrial uptake of emerging materials generally.
A nanomaterial producer who badly manages industry engagement with their particular grades of material will invariably hinder industry uptake in the material class as a whole. The nanomaterial industry has witnessed a similar story unfold with the carbon nanotube hype evident over the course of the past decade, the consequence being the commercial folding of many CNT producers despite the immense promise this material also holds.
A nanomaterial producer might take pains to sell their Graphene as a product unique to them, with a wide range of different brands already on the market made with an array of patented processes and feedstocks. However, existing industry just sees one word: “Graphene” as a raw material requiring further conversion to a specialty and excessive "branding" based on single supply sources can serve to confuse rather than educate.
Conversely, a producer that correctly refines their Graphene into a state that can be used directly by industry (either by functionalizing and homogeneously dispersing it into an appropriate carrier or otherwise) and sells it at appropriate cost will result in product performance that meets expectations, falls inside price/performance envelopes and most importantly, generates market pull in the material.
Some of these issues can of course be mitigated through the producer working very closely with individual companies, generally on an exclusive end use basis or joint venture. Every time a producer wishes to open up a new sales channel in this manner they need to fully integrate a custom product into a completely bespoke supply chain. While offering some security to the producer, this is a very time and resource intensive process as well as reducing the efficiency of the producer and being quite unscalable in the long term. It is also possible for producers to vertically integrate themselves further to the point of manufacturing objects, devices and end-products. This is another strategy but it is high risk and requires significant additional capital from investors to continue up the value chain.
Moreover, because of the inherent risk in sourcing material from a single producer (the risk of not having redundancy in supply), as well as inflexibility in payment terms, lack of insurability and overall industry unfamiliarity with Graphene as a material, end buyers will undervalue the material and therefore only be willing to buy the material from the producer at a discount. Graphene is a synthetic material and therefore already subject to continuous negative price pressure. Producers that still have yet to refine their production processes do not want to accelerate this price decline faster than they can reduce costs by selling Graphene at anything below what the wider market values it at.
Tesla recently announced that they welcome other car companies to make electric cars using their patented technology. CEO Elon Musk knows that electric car companies aren’t really competing against each other at the moment, but against mainstream gasoline car manufacturers. Customer growth for electric cars will happen faster if there are multiple manufacturers working to improve car performances, get the infrastructure systems in place such as charging stations, and provide consumers with more choice, thereby making the cars as cheap and convenient as possible. While we do not agree that fully opening up IP in that way is appropriate for the nanomaterial industry, we certainly agree with the mindset that for a fledgling industry like graphene to overcome the barriers put in place by traditional materials. Producers need to leverage a much wider suite of production, process and refining techniques to improve adoption rates of their material.
Participation by producers on the INSCX exchange effectively serves to eliminate several of the value-chain shortfalls highlighted in this article. By essentially acting in a capacity as a nanomaterial refinery, the collective producer base can outsource formulation for eventual production at industrial-scale, funded through an R&D commitment from end-buyers. By ‘refining’ I simply mean converting raw nanomaterial feedstock into a usable form by industry, ready for manufacture-use. For example, an engineering polymer producer may need to receive chemically functionalized graphene platelets homogenously dispersed into a monomer under a nitrogen blanket for purchase and polymerization. Refining nanomaterials in this way bridges the gap between producers of raw materials and end buyers and without this step the eventual trade would simply not occur. The refining of nanomaterials enables a producer to bridge the void between what they are able to make and what the end user needs in their production process.
By considering some of the points raised, Graphene producers can sharpen their focus on what they do best; manufacturing, accelerating production to match growing commercial demand in next generation materials and advancing the field of material science.
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