Hi Mr Cross,
Thanks for this opportunity.
If you don't mind, I would like to ask an estimate of Nanophase's selling price per MT for nano ZnO (30nm).
You might know that the biggest users of ZnO are rubber manufacturers and the use of nano ZnO in rubber has been a hot research area. Do you think that nano ZnO prices will go below USD30 per MT in the coming years? Reply
Blake – we don’t really track US versus European sales; we tend to track by market/customer. Most of our overseas sales (Europe/Asia) are through our market partners – BASF, BYK Chemie, and Rohm & Haas CMP Technologies.
Considering the recessionary pressure in the US, we are currently watching architectural coatings and consumer cosmetic products closely.
Reply
Mr. Cross:
Thank you for taking the time to answer some questions. It has been a very informative exchange of information and I hope that this forum will continue in the future. My question refers to the current economic slow down in the U.S. and global market. Can you provide general estimates as to percentage of revenue generated through U.S. sales vs. Global sales and speak to what products are most sensitive to these current conditions? Reply
Bruce – obviously, we are highly dependent on our market partner, Rohm & Haas, to develop this market and expand sales. This is not a market we could even consider entering without a market partner like R&H. Based on the latest information from R&H, we anticipate this market will continue to grow over the next 3-5 years in a material manner to Nanophase assuming the slurry development evolution occurs as currently planned.
Applications where we anticipate the most growth in the next 12-36 months, from the perspective of new business or customers, would likely be in applications for industrial coatings, architectural coatings, and, perhaps, CMP. We are pursuing several other applications, many of which are exciting, so this list could well change in the next six months.
Reply
Steve – it is our impression that the market opportunity is currently large enough and still growing due to the introduction of new semiconductor technology nodes, that a general industry slow-down should not have a material impact. Based on our last business meeting with R&H and the continuing joint technical effort in polishing slurry development, we believe there is growth opportunity. To the best of our knowledge, the market pull for the nanomaterial-based slurry with R&H is significant and appears to have opportunity to be used in other technology nodes. Reply
I thought that the polishing application would be a big revenue source for Nanophase, but to date, that hasn't seemed to happen. What kind of ramp up do you see for this market segment looking forward? Also, what application do you see that has the most potential for rapid growth? Reply
First, I think this public Q&A is a great way to gain some exposure with the investing public, kudos to you.
It's good to see R&H CMP Polishing moving forward. But in that regard, it has been in the news that there is abit of oversupply of memory chip products in the face of consumer slowness. I'm hoping R&H is in the rampup/rollout phase and wont be actually affected with stagnant growth as their market develops for advanced polishing regarding memory chips. Can you speak to this concern, how confident is R&H in the market pull for their & nanx's product?
Friend, I understand the frustration. Through our market partners and with our customers, we have encouraged marketing the ‘nano’ advantages. In the sunscreen market, major brands simply recognize that consumers tend to purchase on price versus performance as long as the consumer thinks the “SPF Rating” is acceptable. While that is naïve on the part of the consumer, that seems to be the way it is. Secondly, NGO’s like to attack nanotechnology, and anything else that may be new it seems to me, and major consumer brands simply do not want to do battle with these groups, who use innuendo fluently and get sympathetic media coverage. In sunscreens, it may surprise you, our nanoproducts seem to be endorsed and encouraged by some dermatologists and medical personnel who recognize the broad spectrum benefits of nano zinc oxide, in this case, versus the perhaps harmful effects of alternative organic materials.
Relative to architectural coatings, the NanoGuard trademark promotes the nanotechnology enabled performance of the coating. There have been marketing materials at most retail locations we have checked, so I am surprised at your experience. Check out the company website - it has a video showing advantages of the material.
Reply
At this moment, we have candidates in the interview process and anticipate completing the selection process in the near-term. As I noted above, we have qualified and quantified over 40 markets and down selected about 20. New sales personnel will be targeting potential new customers in these markets. Reply
Thank you for the questions; let me try to answer these in the same relative order.
First, we have an exclusive global relationship with Rohm & Haas for nanomaterials in semiconductor polishing. As you may know, R & H is also a significant stockholder in Nanophase. Within this umbrella, there are several activities underway. For obvious reasons, we are unable to comment on specific customers or activities.
With Rohm & Haas, we believe that we have an excellent corporate relationship. We have initiatives and discussions in a variety of areas where there may be synergism between nanomaterials and their products. Again, we are unable to comment on specifics.
Our water-based technology is ready now and is being sold commercially in large volume specifically to the architectural coating and polishing industries. Our dispersions are typically stable for at least 2 years. We believe that dispersions are likely the delivery vehicle of choice for nanomaterials and Nanophase is rather uniquely well positioned to deliver.
Reply
Frank – first, the conference call (and all of our conference calls) are available on our site, nanophase.com under Investor Relations; please review at your convenience.
Relative to the call, it turns out that there were some technical problems with the company that handles this for Nanophase. Several questioners could not get noticed and therefore the questions were not asked as part of the call. The analysts did call us later and we were able to answer their questions.
Relative to revenue growth, understand that we expect revenues from our market partners (BASF, BYK Chemie, and Rohm & Haas CMP Technologies) to continue to grow going forward. We also expect revenue from current customers to continue to grow. So, there is a base of revenue growth in place for the future.
Additionally, we have to continue to add new markets and new customers. To accomplish this, we have been reworking and honing our business development and sales strategy during the last half of 2006 and through 2007, and seeing increased success. Steps we have taken include:
• Restructuring and reskilling the sales and business development team: during 2007 we hired Kevin Wenta, as EVP of Sales and Marketing, and David Nelson as Vice President of Sales – both with excellent experience in chemical sales. This process continues; we are now searching and plan to add 1-2 additional Sales Directors. Moreover, Dr. Brotzman, who was focused solely on R&D, is now predominately in a technical sales and marketing role for the Company, supporting customer business development and sales where he is adding tremendous value.
• We have also worked hard to hone our five stage gate business development model and processes. If you are familiar with this model, essentially Stages 0 to about 2.5 are considered the discovery Stages and about 2.5 to 5 are develop and implement stages. We believe that to reach the 50+% annual revenue growth rates desired, we have to improve the discovery Stages; we seem to do well in the develop and implement Stages.
• To improve the discovery stages, we have taken several synergistic steps:
o First, we have increased our depth and level of understanding in target markets by consolidating and ranking about 44 market segments, but focusing on the top 20. Market segments include energy, building & construction, printed electronics, and automotive to list a few and provide a flavor of the effort. First with the top 20, and then the remainder, we are driving to the customer value proposition to understand the performance and cost required for specific applications.
o Secondly, we have refocused our application scientists and engineers solely on these target markets and our product development efforts are directed to demonstrating the value of nanomaterials in these specific markets. For example architectural coatings – we have installed equipment to test the benefit of nanomaterials in commercial formulations in a manner similar to architectural coating companies. We purchase commercially available architectural coating materials and use our developed applications knowledge to add our engineered nanomaterial solutions. We then apply the coatings to the appropriate substrate, test the samples to industry standards, and, finally, visually and quantitatively demonstrate the value of using Nanophase to leaders in the marketplace. This approach gets much better customer attention and mindshare, demonstrates the value of nanomateirals in their particular products, and significantly reduces the TTM.
o Thirdly, we are developing more opportunities in these targeted market segments – the sales team has been given goals designed to increase directly touching the end customer on a weekly basis. We have increased customer touch 2-3X. We have also increased our presence at application trade shows such as coatings, electronics, and similar target markets to improve and extend our market knowledge and emphasize the advantage of nanomaterials in specific market applications for enhanced performance.
o Fourth, we are taking a much more rigorous approach to qualifying and quantifying opportunities to select those opportunities in the target market that are most likely to succeed, provide the largest revenue opportunities, and appear to have the shortest TTM. Our improved process allows very close examination of each opportunity before it moves through a stage gate.
In summary, we have given a great deal of thought and market research to select market targets and increasingly focus our efforts and resources to optimize the potential for revenue growth. Again, our vision is to reach $50M and then $100M in sales; to do so, we have to increase annual revenue growth to 50%. We have restructured, reskilled, and honed our business development and sales effort and implemented or refined processes to achieve these goals. We are adding additional sales personnel to increase market and customer contacts.
Reply
Ralph – there is no basis to the speculation in the sense of us working with NanoSolar. We are familiar with the company and its technology. Relative to Nanophase, as solar applications evolve toward increased efficiency and performance, there may be an opportunity for nanomaterials. It is not a market that we envision developing in the very near future. Reply
loading ...
Interactive Q&A: Joe Cross, President and CEO of Nanophase Technologies [view article]
Hi Mr Cross,Thanks for this opportunity.
If you don't mind, I would like to ask an estimate of Nanophase's selling price per MT for nano ZnO (30nm).
You might know that the biggest users of ZnO are rubber manufacturers and the use of nano ZnO in rubber has been a hot research area. Do you think that nano ZnO prices will go below USD30 per MT in the coming years? Reply
Editors
General Discussion on NANX
Is this a buy or a sell? ReplyInteractive Q&A: Joe Cross, President and CEO of Nanophase Technologies [view article]
Nanophase is pursuing relationships with architectural coating companies for a variety of products; this is a Focus Market for us. ReplyInteractive Q&A: Joe Cross, President and CEO of Nanophase Technologies [view article]
Will you be pursuing relationships with paint manufacturers other than Behr? ReplyInteractive Q&A: Joe Cross, President and CEO of Nanophase Technologies [view article]
Blake – we don’t really track US versus European sales; we tend to track by market/customer. Most of our overseas sales (Europe/Asia) are through our market partners – BASF, BYK Chemie, and Rohm & Haas CMP Technologies.Considering the recessionary pressure in the US, we are currently watching architectural coatings and consumer cosmetic products closely.
Reply
Interactive Q&A: Joe Cross, President and CEO of Nanophase Technologies [view article]
Mr. Cross:Thank you for taking the time to answer some questions. It has been a very informative exchange of information and I hope that this forum will continue in the future. My question refers to the current economic slow down in the U.S. and global market. Can you provide general estimates as to percentage of revenue generated through U.S. sales vs. Global sales and speak to what products are most sensitive to these current conditions? Reply
Interactive Q&A: Joe Cross, President and CEO of Nanophase Technologies [view article]
Bruce – obviously, we are highly dependent on our market partner, Rohm & Haas, to develop this market and expand sales. This is not a market we could even consider entering without a market partner like R&H. Based on the latest information from R&H, we anticipate this market will continue to grow over the next 3-5 years in a material manner to Nanophase assuming the slurry development evolution occurs as currently planned.Applications where we anticipate the most growth in the next 12-36 months, from the perspective of new business or customers, would likely be in applications for industrial coatings, architectural coatings, and, perhaps, CMP. We are pursuing several other applications, many of which are exciting, so this list could well change in the next six months.
Reply
Interactive Q&A: Joe Cross, President and CEO of Nanophase Technologies [view article]
Steve – it is our impression that the market opportunity is currently large enough and still growing due to the introduction of new semiconductor technology nodes, that a general industry slow-down should not have a material impact. Based on our last business meeting with R&H and the continuing joint technical effort in polishing slurry development, we believe there is growth opportunity. To the best of our knowledge, the market pull for the nanomaterial-based slurry with R&H is significant and appears to have opportunity to be used in other technology nodes. ReplyInteractive Q&A: Joe Cross, President and CEO of Nanophase Technologies [view article]
I thought that the polishing application would be a big revenue source for Nanophase, but to date, that hasn't seemed to happen. What kind of ramp up do you see for this market segment looking forward? Also, what application do you see that has the most potential for rapid growth? ReplyInteractive Q&A: Joe Cross, President and CEO of Nanophase Technologies [view article]
Hello Joe,First, I think this public Q&A is a great way to gain some exposure with the investing public, kudos to you.
It's good to see R&H CMP Polishing moving forward. But in that regard, it has been in the news that there is abit of oversupply of memory chip products in the face of consumer slowness. I'm hoping R&H is in the rampup/rollout phase and wont be actually affected with stagnant growth as their market develops for advanced polishing regarding memory chips. Can you speak to this concern, how confident is R&H in the market pull for their & nanx's product?
Thanks. Reply
Interactive Q&A: Joe Cross, President and CEO of Nanophase Technologies [view article]
Friend, I understand the frustration. Through our market partners and with our customers, we have encouraged marketing the ‘nano’ advantages. In the sunscreen market, major brands simply recognize that consumers tend to purchase on price versus performance as long as the consumer thinks the “SPF Rating” is acceptable. While that is naïve on the part of the consumer, that seems to be the way it is. Secondly, NGO’s like to attack nanotechnology, and anything else that may be new it seems to me, and major consumer brands simply do not want to do battle with these groups, who use innuendo fluently and get sympathetic media coverage. In sunscreens, it may surprise you, our nanoproducts seem to be endorsed and encouraged by some dermatologists and medical personnel who recognize the broad spectrum benefits of nano zinc oxide, in this case, versus the perhaps harmful effects of alternative organic materials.Relative to architectural coatings, the NanoGuard trademark promotes the nanotechnology enabled performance of the coating. There have been marketing materials at most retail locations we have checked, so I am surprised at your experience. Check out the company website - it has a video showing advantages of the material.
Reply
Interactive Q&A: Joe Cross, President and CEO of Nanophase Technologies [view article]
At this moment, we have candidates in the interview process and anticipate completing the selection process in the near-term. As I noted above, we have qualified and quantified over 40 markets and down selected about 20. New sales personnel will be targeting potential new customers in these markets. ReplyInteractive Q&A: Joe Cross, President and CEO of Nanophase Technologies [view article]
Thank you for the questions; let me try to answer these in the same relative order.First, we have an exclusive global relationship with Rohm & Haas for nanomaterials in semiconductor polishing. As you may know, R & H is also a significant stockholder in Nanophase. Within this umbrella, there are several activities underway. For obvious reasons, we are unable to comment on specific customers or activities.
With Rohm & Haas, we believe that we have an excellent corporate relationship. We have initiatives and discussions in a variety of areas where there may be synergism between nanomaterials and their products. Again, we are unable to comment on specifics.
Our water-based technology is ready now and is being sold commercially in large volume specifically to the architectural coating and polishing industries. Our dispersions are typically stable for at least 2 years. We believe that dispersions are likely the delivery vehicle of choice for nanomaterials and Nanophase is rather uniquely well positioned to deliver.
Reply
Interactive Q&A: Joe Cross, President and CEO of Nanophase Technologies [view article]
Frank – first, the conference call (and all of our conference calls) are available on our site, nanophase.com under Investor Relations; please review at your convenience.Relative to the call, it turns out that there were some technical problems with the company that handles this for Nanophase. Several questioners could not get noticed and therefore the questions were not asked as part of the call. The analysts did call us later and we were able to answer their questions.
Relative to revenue growth, understand that we expect revenues from our market partners (BASF, BYK Chemie, and Rohm & Haas CMP Technologies) to continue to grow going forward. We also expect revenue from current customers to continue to grow. So, there is a base of revenue growth in place for the future.
Additionally, we have to continue to add new markets and new customers. To accomplish this, we have been reworking and honing our business development and sales strategy during the last half of 2006 and through 2007, and seeing increased success. Steps we have taken include:
• Restructuring and reskilling the sales and business development team: during 2007 we hired Kevin Wenta, as EVP of Sales and Marketing, and David Nelson as Vice President of Sales – both with excellent experience in chemical sales. This process continues; we are now searching and plan to add 1-2 additional Sales Directors. Moreover, Dr. Brotzman, who was focused solely on R&D, is now predominately in a technical sales and marketing role for the Company, supporting customer business development and sales where he is adding tremendous value.
• We have also worked hard to hone our five stage gate business development model and processes. If you are familiar with this model, essentially Stages 0 to about 2.5 are considered the discovery Stages and about 2.5 to 5 are develop and implement stages. We believe that to reach the 50+% annual revenue growth rates desired, we have to improve the discovery Stages; we seem to do well in the develop and implement Stages.
• To improve the discovery stages, we have taken several synergistic steps:
o First, we have increased our depth and level of understanding in target markets by consolidating and ranking about 44 market segments, but focusing on the top 20. Market segments include energy, building & construction, printed electronics, and automotive to list a few and provide a flavor of the effort. First with the top 20, and then the remainder, we are driving to the customer value proposition to understand the performance and cost required for specific applications.
o Secondly, we have refocused our application scientists and engineers solely on these target markets and our product development efforts are directed to demonstrating the value of nanomaterials in these specific markets. For example architectural coatings – we have installed equipment to test the benefit of nanomaterials in commercial formulations in a manner similar to architectural coating companies. We purchase commercially available architectural coating materials and use our developed applications knowledge to add our engineered nanomaterial solutions. We then apply the coatings to the appropriate substrate, test the samples to industry standards, and, finally, visually and quantitatively demonstrate the value of using Nanophase to leaders in the marketplace. This approach gets much better customer attention and mindshare, demonstrates the value of nanomateirals in their particular products, and significantly reduces the TTM.
o Thirdly, we are developing more opportunities in these targeted market segments – the sales team has been given goals designed to increase directly touching the end customer on a weekly basis. We have increased customer touch 2-3X. We have also increased our presence at application trade shows such as coatings, electronics, and similar target markets to improve and extend our market knowledge and emphasize the advantage of nanomaterials in specific market applications for enhanced performance.
o Fourth, we are taking a much more rigorous approach to qualifying and quantifying opportunities to select those opportunities in the target market that are most likely to succeed, provide the largest revenue opportunities, and appear to have the shortest TTM. Our improved process allows very close examination of each opportunity before it moves through a stage gate.
In summary, we have given a great deal of thought and market research to select market targets and increasingly focus our efforts and resources to optimize the potential for revenue growth. Again, our vision is to reach $50M and then $100M in sales; to do so, we have to increase annual revenue growth to 50%. We have restructured, reskilled, and honed our business development and sales effort and implemented or refined processes to achieve these goals. We are adding additional sales personnel to increase market and customer contacts.
Reply
Interactive Q&A: Joe Cross, President and CEO of Nanophase Technologies [view article]
Ralph – there is no basis to the speculation in the sense of us working with NanoSolar. We are familiar with the company and its technology. Relative to Nanophase, as solar applications evolve toward increased efficiency and performance, there may be an opportunity for nanomaterials. It is not a market that we envision developing in the very near future. Reply