EXTON, PA, January 13, 2000 /-Nanocomposites incorporate low loadings (typically less than 5% by weight) of high aspect ratio mineral or carbon nanotube fillers that have a unique structure. The resultant high surface area and high aspect ratio fillers provide similar reinforcing performance of traditional minerals and fibers used in plastics, and yet do not increase density since loading levels are low. Due to the nanometer size of the particles, which is smaller than the wavelength of visible light, the reinforced polymer remains transparent. Other characteristics of the composites include high barrier performance and improved thermal stability, which make these compounds suitable for many applications.

The field of nanocomposites is at an embryonic stage of development today. Although researched for a couple of decades and first commercially developed by Toyota CRDL in Japan in the late 1980s, only now have polymer producers taken the first major proactive steps towards evaluating the technology for commercial pursuits. Nylon 6 was the first polymer to be used in the development of nanocomposites over a decade ago. Development activities have spread to all regions of the world, and active programs are now focused on creating compounds based on PP, PET, PVC, acrylics, ETPs, and a range of elastomers, as well as traditional thermosets.

More than 70 companies, government agencies, and academic institutions are identified as having R&D activities in nanocomposites in 1999. However, relatively few have commercial activities. The market is served by several suppliers of nano-sized fillers (i.e. clays or carbon tubes), and a handful of companies currently offer commercial volumes of nanocomposite materials, including Bayer, RTP, Ube and Unitika.

The global market for nanocomposites totaled merely 3 million lb, of which 2 million lb were nanoclay-reinforced nylon produced by Unitika and Ube Industries in Japan for automotive and packaging applications, respectively. The remaining 1 million lb was carbon nanotube-filled PPO/nylon alloy produced in North America for automotive body parts. The market is in the very early stages of product and process development, and considerable uncertainty surrounds the technical and economic viability of the developmental products.

Each of these developing product technologies is poised for strong growth over the next 10 years. Market projections show that demand in each major region will grow at comparable rates from 2004 through 2009. The market will reach nearly 1.2 billion lb in 2009, of which 1 billion lb is nanoclay-reinforced compound and 160 million lb is carbon nanotube-filled products.

Nanocomposite technology is applicable to a wide range of polymers, cutting across the material classes of thermoplastics, thermosets, and elastomers. Over the coming 10 years, nanoclay composites of nearly 20 polymers are expected to be commercialized.

Nanoclay composites are currently used in two commercial applications: automotive underhood components and food packaging. These end markets will continue to be the primary outlets for nanocomposites over the next 10 years. Other markets, including non-food packaging and a range of other durables markets, will begin to adopt nanocomposite materials by 2004, and significant growth in demand will occur through 2009.

The diverse range of nanocomposite materials will serve an equally wide set of applications across these markets. In all cases, market growth in the latter five-year period is projected to proceed at double digit rates, however, the base volume is invariably small.

Patent protection in the area of nanocomposites is somewhat controversial. There are many patents in the field, with over 50 relevant patents awarded. Assignment of a patent on a particular methodology for making nanocomposites does not preclude other suppliers from marketing or even patenting a similar formulation or approach as evident by the number of patents cited in the literature. Many variables can serve as the basis for a patent including production process, compatibilizers, applications, and so on. The result is that many patents are subject to interpretation.

Keen but uncertain interest in nanocomposites exists among polymer and compound suppliers, clay and nanotube producers, academia, and privately and publicly-funded research programs around the world for many reasons. The basic concepts laid out over 10 years ago with nylon are viewed to have universal applicability to all polymer systems. This has led producers from every segment of the polymers industry-rubber to plastics, flexible to rigid, commodity to specialty-to consider how nanocomposite technology can be applied to their given resin system. It now appears that not all polymers are equally well-suited for nanocomposite development.

Polymer producers and compounders are seeking to expand the markets for their specific polymer or at least improve the performance and/or cost profile within their specific polymer type. Nanocomposite technology is viewed by many polymer producers to offer some interesting physical property improvements to the base polymer. Independent technical compounders view nanocomposite technology as another differentiated product that is not easily produced by all compounders, and are looking to carve out an early market lead.

Nanoclay and nanotube producers have stepped up their efforts to commercialize their nanofillers as the polymer industry is now embracing the technology. These additive supplier companies are looking to capitalize on technology developed internally or licensed by their organizations.

The race among polymer producers to characterize, refine, and commercialize nanocomposites is partially driven by being first to market to achieve advantages independent of scale. Established firms may have market and cost advantages not replicable by potential entrants no matter what their size and attained economies of scale, based on [1] proprietary product technology, [2] favorable access to raw materials, [3] government subsidies, and [4] learning or experience curve efficiencies. Consequently, companies first to market have a distinct competitive advantage over subsequent entrants.

Product know-how is a key factor for success in nanocomposites. Enabling technology will be kept proprietary through patent filing or secrecy. Polymer producers and compounders are trying to create this early advantage through completely home-grown efforts as well as relying on the focus and experience of some of the nanofiller suppliers.

Early adapters of nanocomposite technology may be able to lock up the most favorable source(s) of nanofillers by working closely with suppliers. This could translate into advantaged or secure supply of key raw materials, or favored pricing given current demand levels for the raw material(s). Joint filings for patent protection can be expected to be made, as intercompany collaboration is furthered.

The barriers to entry into the nanocomposites field vary depending upon whether one is viewing the technology and manufacturing aspects of the business or the marketplace. The two most critical obstacles related to successful commercialization are access to and availability of formulation and process technology and the level of market/application development activity.

Access to nanocomposite formulation and process technology is absolutely critical to any successful participation in this segment of the industry. Much of this has been discussed earlier with respect to patent position. Compatibilization between the nanofiller and the base polymer is another underlying critical success factor that must be highlighted. Successful nanocomposites will develop from those companies that can properly characterize the individual constituent raw materials, understand the level of compatibility required between the clay/tube and polymer, and produce a consistent nanocomposite repeatedly.

Although some producers of nanocomposite polymers have entered the commercial marketplace with their products, none has established a dominant market position. Product differentiation is not a barrier to entry in the nanocomposites industry. Most of the individual company activity has been conducted by Nanocor in its efforts to develop a leading position (first as a nanocomposite producer, more recently as a supplier of nanoclays to a nanocomposite producer). Companies have not created a portfolio of nanocomposite products. Rather, most companies are still in early stage evaluation or development of nanocomposite varieties of a particular polymer that they make or compound. This represents an opportunity for new entrants into the market, as no single supplier has established brand identification and customer loyalties.

Nanocomposite technology is being developed for applications in packaging, automotive components, appliances, electrical/electronic parts, and building & construction products. According to Lou Rossi, analyst at Principia Partners, "Although current demand is very limited, nanocomposites promise to develop into a billion lb market over the next decade. The compounds will substitute for other plastics in many applications, and will open up new markets where plastics have yet to effectively compete in both disposable packaging and durable applications."

The driving forces behind the developmental of these materials and the potential market for nanocomposites is the subject of a new study titled NANOCOMPOSITES: POLYMER TECHNOLOGY FOR THE NEXT CENTURY, 1999 which has been just been released by Principia Partners, the Exton, PA market research and consulting firm. Principia Partners is an international business consulting firm serving the plastics, packaging, metals, and related chemicals industries. For more information, please visit Principia Partners' web site at www.principiaconsulting.com.

SOURCE: Principia Partners

Media contact:
Principia Partners
Lou Rossi
610/458-3738
LRossi@PrincipiaConsulting.com