First Graphene Ltd (ASX:FGR, OTCQB:FGPHF) aims to deliver a significant multiple increase in sales in 2022 under its re-focused commercial strategy.
The company is seeing strong demand from new market segments and is gaining good traction across several opportunities with a number of results expected in the coming quarter.
It ended its second quarter of the 2022 financial year with an improvement in revenue compared to the previous December quarter.
This modest growth completes a very strong first half of sales for the 2022 financial year, with a 94% growth in revenue compared to the first half of the 2021 financial year.
With its commercial sales team now established, clear market segments and focused go-to-market strategies in place, First Graphene is well-positioned to continue its growth story.
“Our target markets have been determined by areas we know benefit from graphene, have a sensible implementation path and drive significant demand in PureGRAPH,” the company said.
Its research & development will be focused on opportunities that will include a ‘green tech’ factor.
Market maker strategy
Following a comprehensive review of its go-to-market strategy, First Graphene has commenced implementing an aggressive “market maker” strategy – a step-change approach in the graphene industry focused on proving the benefits of graphene-enhanced products across several different industries.
This involves identifying partners for active downstream collaboration, investing and taking ownership of solutions to develop and commercialise products.
Results are already being realised with opportunities progressing into trial phases with paid sales.
The new approach is designed to supplement and supercharge the work done through First Graphene’s Tier One partnership with the Graphene Engineering Innovation Centre (GEIC) in Manchester and other research partners, including Warwick, Wollongong, Manchester and Adelaide universities.
Other collaborations
First Graphene has also entered into a collaboration agreement with high-density polyethylene (HDPE) sheet extrusion specialist DSP Sdn Bhd, focusing on the development of PureGRAPH®-enhanced HDPE sheet and welding wire to provide increased durability, abrasion resistance and fire retardancy of fabricated HDPE components.
To facilitate the development work, First Graphene is working closely with UK-based compounder Hubron International Ltd, a specialist masterbatch formulator, on the development of a new masterbatch tailored specifically for the HDPE grade used in the sheet extrusion process.
Following evaluation, the resulting PureGRAPH®-enhanced HDPE sheet/welding wire will be launched as a new product line and marketed by both DSP and First Graphene.
Why graphene?
Rubbers and elastomers show major improvements in tensile strength, elongation, abrasion resistance and tear strength with the addition of graphene.
Independent studies found graphene can make selected products up to 30% stronger and more resistant to wear.
Graphene is the thinnest material ever isolated, despite this, it is up to 300 times stronger than steel and the most conductive material in the world.
By adding just 0.01% of graphene into concrete - responsible for around 8% of the world's carbon dioxide emissions, reduces its carbon footprint by around 30%.
Its graphene has a unique chemical fingerprint which makes it easy to use and disperse in a multitude of solvents, polymer resins, elastomers and water-based formulations.
Coatings market
A commercial agreement with nanotechnology developer Protectology Ltd has resulted in the launch of a range of PureGRAPH®-enhanced conductive coatings, opening the way to the lucrative European coatings market.
The agreement is to grow its range of PureGRAPH®-enhanced coatings, which are marketed under the PROGRAPH® brand, and increase market share.
Coatings and inks account for a $151 billion global market and the addition of a suitable graphene formulation is proven to enhance resistance against water, corrosion, abrasion and fire, while imparting increased flexibility and strength to the product.
Protectology is a UK-based specialist manufacturer of protective coatings for applications across multiple sectors include automotive and multi-media surface protection.
Cement and concrete industries
While successful incorporation of graphene into cement and concrete production offers significant mechanical performance improvements, First Graphene is focusing its work with industry partners on realising major reductions in carbon dioxide emissions.
Cement production, and in particular clinker calcification, is responsible for up to 8% of global CO2 emissions, with 900 kilograms of CO2 produced for every tonne of cement manufactured.
Globally, the cement and concrete sectors are expected to account for a $774 billion market by 2027, with more than 4.2 billion tonnes of cement produced in 2020 alone.
PureGRAPH®-enhanced cement additives have been found to reduce emissions in cement production by between 16% and 22%, providing the industry with a substantial boost in achieving a targeted 40% reduction in carbon emissions by 2030.
The company is working with a range of global cement manufacturers to develop PureGRAPH®-enhanced cement additives and grinding aids for use in cement production.
It is also working with industry partners to develop a range of concrete admixtures to facilitate graphene incorporation into concrete production processes.
Cement patent filing
First Graphene has filed a patent specification with the UK Intellectual Property Office for its PureGRAPH®-enhanced grinding aids and admixtures.
The filing describes a novel method for scaling up the production of graphene suspensions for use in cement additives and concrete admixtures.
Fosroc collaboration
First Graphene has a collaboration agreement with global construction chemicals manufacturer Fosroc International Ltd for the development of PureGRAPH® graphene-enhanced cement additives or grinding aids.
PureGRAPH®-enhanced cement additives will assist cement manufacturers to gain superior strength and improved physical properties, while improving grinding efficiency in the grinding phase of cement production.
First Graphene’s patented technology will assist enhancing the green credentials of cement products.
Wollongong research update
Early results from a research program underway by the University of Wollongong show First Graphene’s PureGRAPH® enhances the properties of mortar.
Initial findings confirm the addition of small amounts of graphene enhances the compressive strength of concrete and mortar systems.
They have also confirmed PureGRAPH® graphene products reduce the permeability of mortar and concrete systems whilst also improving resistance to sulphate-induced corrosion.
The research shows promising signs for application in concrete infrastructure such as wastewater collection and treatment, and coastal ports.
Innovate UK EDGE funding
The company has been awarded funding from Innovate UK EDGE to progress development work on its supercapacitor graphene hybrid materials with a Research and Technology Organisation (RTO) based in the UK.
The £15,000 funding from Innovate UK will be matched with around A$100,000 in-kind funding from First Graphene’s internal resources to advance the technology, an important milestone towards the commercialisation of the supercapacitor technology.
Ongoing development has enabled First Graphene to establish a commercialisation roadmap and build relationships with development partners for further optimisation of supercapacitor devices, opening the way to a high-tech market predicted to reach revenues of US$720 million by 2025.
Game Changers grant
First Graphene has also secured funding for a 12-week development project to investigate the feasibility of enhancing long rubber gloves, or gauntlets, used in the nuclear-decommissioning industry.
The project, conducted through Sellafield Limited’s Game Changers Program, aims to develop needlestick and puncture-resistant gauntlets for operators at the UK’s Sellafield nuclear site.
Initial development work showed the addition of PureGRAPH® in certain rubber systems could increase tear strength and puncture resistance.
First Graphene sees potential to expand applications for improved mechanical performance into the broader protective glove market, which had a global value of US$12.37 billion in 2019 and is projected to reach $35.2 billion by 2027.
Kainos (LSE:KNOS) patents
In October 2021, First Graphene completed the acquisition of patents from UK-based Kainos (LSE:KNOS) Innovation Ltd, consisting two patent families filed in multiple global regions.
Patents have already been fully granted by the US Patent Office for both families.
Outlook for third-quarter and beyond
Some of these include:
➢ HDPE trials: Laboratory testing with DSP to develop an optimised masterbatch showed significant benefits over standard HDPE products and production-scale trials are pending. Lab results showed a 28% increase in flexural strength and a 43% increase in flexural modulus;
➢ HDPE antistatic/fire retardant mining components: Initial testing has shown positive results and a specialised masterbatch has been developed for the next phase of testing;
➢ PET packaging application: Promising results were returned in laboratory-scale testing, will now move to larger-scale evaluation to determine masterbatch feasibility;
➢ Thermally conductive polymer compounds: Specific renewable energy applications are in the scale-up and supply chain sourcing phase with advanced widespread trials expected to commence soon;
➢ Cement and concrete industrial partners: Several partners are moving to schedule larger-scale trials for grinding aids and admixtures with a view to releasing products to market within six-nine months;
➢ Waterproof and wear resistance coating for textiles: The company and its partners are moving towards large scale trials for a range of textile applications; and
➢ Continued commercial success with early adopting customers combined with new opportunities outlined above, gives First Graphene reason to expect a strong second half, which is on target to achieve an increase in sales over the 2021 financial year.