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Argonne National LabPresentation 3

Yong Ding

Nuttavutt Intarode

Ibrahim Iskin

Thien Tran

06/12/2009

Outline

1. Company Background

2. Gap Review and Solutions

3. Market Overview

4. Target Market

5. Cost of Production

6. Financial Analysis

7. Potential Applications

8. License Negotiation

9. Commercialization Plan worksheet

10.Project Team Formation

11.Product Development Roadmap

12.Work Breakdown Structure

13.Gantt Chart

Company Background

CementMortar

Concrete

SCG Paper

SCG Chemical

SCG Investment

Siam Cement GroupSiam Cement Group

SCG Building Material

SCG Distribution

SCG Cement

Main Products

Gaps

Technology

•Lack of study and application new technologies with conventional building materials.

• Need high efficient , low skill-needed, strong enough and providing comfortable indoor environment’s building solution at optimized cost.

Organization

• Lack of knowledge and experience in Grancrete technologies.

•Lack of expertise people in the Grancrete development and application.

•Lack of special equipment and machines for manufacturing.

•Competitive cost and high margin.

Personal

• Require safety standard for application.

• Efficiency of commercialized product

• Reasonable price & Value to money

• Awareness of environmental conservation in society

Gap Review

Gap solutions I

Get Grancrete technology license from Argonne National Laboratory Promised technology, no R&D risk A differentiated product Provide a low cost housing solution for rural area Currently it is a niche market, expect growing rapidly

Send a team to Argonne National Laboratory for learning the production process and application process Guaranty gaining the knowledge and experience in Grancrete

technology Speed the commercialization

Purchase the special equipments and machines for manufacturing Speed the commercialization and reduce risk

Gap solutions II

Provide solution to user Purchase equipments for application, and sale or rent to builders Provide training to builders for efficiently applying the Crancrete

material in different type building

Charge premiums, but keep a reasonable price comparing to its value Balance the competitive cost and high margin

Collaborate with Government agency for material and building standard Readiness for large scale application Eliminate the public safety concern

Gap solutions III

Partnerships with US and local nonprofit environmentalist organization and government agency to introduce the Grancrete building solution to rural area for green building project Convince US government to license Grancrete technology to

developing countries for affordable and green building project Train the farmers to build the Grancrete house by themselves,

reduce the cost Educate potential customers in awareness of the new building

solution’s benefit and cost

Partnerships with local bank to provide small loans for farmers to build farmer house using Crancrete. Create demand Increase community quality

Market Overview

UN estimates new 740 million homes are needed in developing countries. That requires 100,000 new homes a day in 20 years (1).

Half of them live in areas susceptible to earthquakes, floods, and hurricanes.

In Asia alone, about 1/3 of population. i.e. 1 billion people, live in rural areas that needs better shelters.

(1) www.grancrete.com

Target Market

2010 2011 2012 2019 2020

2000

3000

4000

12000

15000

Tons

1. Knock-down house

2. Repairing works

3. Special wall-floor works

Cost of Production

Investment in new equipment: $18000

Raw materials: 10$/unit

Labor, Marketing & admin: $28000/year

Patent royalty fee:

Upfront $10000

Running 2%/sales

Financial Analysis

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Sales ($) 1760000 2640000 3696000 4620000 6776000 8712000 10648000 12144000 13156000 14784000 15840000

Production (ton) 2000 3000 4000 5000 7000 9000 11000 12000 13000 14000 15000

Production (bags) 88000 132000 176000 220000 308000 396000 484000 528000 572000 616000 660000

Unit Price ($/bag) 20 20 21 21 22 22 22 23 23 24 24

Number of houses built 1000 1500 2000 2500 3500 4500 5500 6000 6500 7000 7500

Costs 971200 1403600 1867800 2329668 3256515 4179334 5102564 5577444 6043140 6521703 6989425

Upfront Investment 18000

Cost of materials 880000 1320000 1760000 2200000 3080000 3960000 4840000 5280000 5720000 6160000 6600000

Labor, Admin, Marketing (increased at 10%/year) 28000 30800 33880 37268 40994.8 45094.28 49603.71 54564.08 60020.49 66022.54 72624.79

Licensing fee

upfront 10000

running 35200 52800 73920 92400 135520 174240 212960 242880 263120 295680 316800

Net profit 788800 1236400 1828200 2290332 3519485 4532666 5545436 6566556 7112860 8262297 8850575

NPV (discount rate 15%) $18,039,745

Potential Applications

1. Non-Shrinkage floor

2. High Strength floor

3. Repairing surface road

4. Industry floor

5. Rapid repairing wall-floor

Non-shrinkage cement

High Strength cement

Rapid fast setting cement

License Negotiation

Commercialization Plan worksheet :

Required by Argonne Laboratory from all its prospective licensees before licensing its intellectual property.

Enables the Laboratory and the prospective licensee to determine and characterize the business fit between their interests.

Provides the Lab input on its calculation of value of the intellectual property to both Parties.

Commercialization Plan worksheet

Commercialization Plan worksheet

1) General Company Information:– Name, Place of Incorportion, Age, etc.

2) Product Licensing and Sales Information– Exclusive or non-exclusive– Manufacturing location.– Potential applications, estimated sales,…

3) Equity Licensing Information.– Cash Flows, debt structure, exit strategy, etc.

Royalty offer:– Upfront fee: $10000– Running rate : 2% / revenue

Export Control regulation:– ITAR : International Traffic in Arms Regulations.– ITAR regulations dictate that information and material

pertaining to defense and military related technologies (for items listed on the US Munitions List) may only be shared with US Persons unless authorization from the Department of State is received or a special exemption is used

Project Team Formation

1 2

34

1.Engineering & Project Planning Division2.Marketing Division3.R&D Company4.Mortar Company

Cross-functional Team for TT

Product Development Roadmap

Technology

Markets

Products

2010 20202013

Repairing works

House appliances

Grancrete material

Low cost

houses

Knock downhouses in rural areas

Schools, churches

Concrete repairs

Streets, curbs, gutter

Foundation, floor repair

Roofing, Water-proofing

Driveways

Pools, ponds, decoratives

Countertops

Showers, tubs

Arts, crafts

2016

Work Breakdown Structure

Market and Technology Assessment Financial Analysis Acquiring formula from Argonne Natl. Lab. Get license from Thai Industrial Ministry Prototype product Developing production process of the Grancrete technology Facility Plan Machinery Purchase Suppliers Production plan Procurement plan Marketing and distribution plan Training program

•Collaborate with interested parties such as environmentalist, government, bank, builder, building developer and local community to build an ecosystem

•Collaborate with interested parties such as environmentalist, government, bank, builder, building developer and local community to build an ecosystem

Gantt Chart

Gantt Chart

1 month 0 months2 weeks 1 month 4 months

Q&A