On Demand Prepreg

Agenda History of Prepreg Prepreg markets today Prepreg from a Suppliers perspective Prepreg from a User’s perspective Why “On Demand Prepreg” is now possible Key issues to consider Conclusion

History of Prepreg First Prepreg machine developed in 1969 to support carbon tape for NASA lunar lander Resin systems were difficult to use, mix, catalyze, process consistently, control tack, etc. Prepreg processing machines employed by end users for their own materials Materials suppliers started providing prepregs (e.g. Narmco, Fiberite, Ciba) New resins, materials and refined processes developed Into early 2000 most Prepreg came from large, established “Prepreg manufacturers” In last 10 years newer, specialty Prepreg companies established that provide smaller batches, custom formulations. (i.e., Aldila, Renegade, Patz, Park)

Prepreg Markets Today Resin formulators are increasing in number and scope, offering complete tested systems with documented performance There have been over 35 companies in China alone who are entering carbon fiber manufacturing Today most Prepreg comes from dedicated materials suppliers (e.g. Toray, Hexcel, Gurit, Cytec) or are manufactured and consumed with in large production companies Smaller quantity consumers and custom material users pay higher prices and wait longer for their materials

Prepreg from a Suppliers Perspective What Suppliers Want: Large production runs Standard material types Standard resin types and formulations Standard material configurations – resin content, roll lengths, poly backing Long lead times Higher profits

Prepreg from a User’s Perspective What Users Want: Short production runs Customized resin systems Adapted material properties based on use, time of year, etc. Short lead times Lower costs Changing or custom configurations Flexibility Own or leverage Intellectual Property (IP)

Why “On Demand Prepreg” is now Possible Convergence of four factors: 1)Advancements in Resin system formulations making them easier to use 2)Growth of resin formulators and availability of custom resins systems 3)Processing knowledge more available 4)Automation systems have now matured so they can monitor, control, record and repeat key process parameters

Benefits of making your own Prepreg 1.Ability to produce low-temperature-curing prepregs physically close to end use 2.Avoid limitations of major Prepreggers product range 3.Avoid being pushed to bottom of list behind larger customers 4.Quick-turnaround R&D tool 5.Lead-time improvements 6.Waste reduction

Benefits of making your own Prepreg (cont.) 7.Ability to match physical properties to requirements 8.Reduction/elimination of refrigerated storage 9.Competitive advantage and protection of critical IP 10. Improved Time-to-Market 11. Unique Product offerings 12.Cost reduction

Key issues to Consider Amount of Prepreg required Widths and types of Prepreg required Material specifications and Qualifications Expertise in company on Prepreg production

Full costing example Prepreg Cost & Output Calculator for CDI 1370mm Off-line Filming Package Fiber areal weight150gsm hours/day16 Sqm/hour320.0 days/week5 Sqm/day5,121 weeks/year30 Sqm/year768,096 Fibre price input USD$/kg$25.00 Direct Costs USD$/SQM$3.03 Resin content by wt. (%)35 Indirect costs USD$/SQM$0.23 Materials USD$/SQM$6.70 Labor rate (fully-loaded) USD$/hr.$65.00 Depreciation (accelerated, years)5 MANUFACTURING COST / SQM$9.96 Current Purchase cost USD$/sqm$20.00 Potential savings per year USD$$7,710,206 Based on initial capital cost of Complete Prepreg Workcell: Net Present Value of Project*:$13,080, Internal Rate of Return:93% (*NPV assumptions: 10% opportunity cost of capital, 5-year term with IRS MACRS depreciation schedule, 35% corporate tax rate)

Conclusion Making Prepreg on-demand is now a viable option Automation and advancements in resin chemistry make this possible for “non-experts” Custom resin formulations can be purchased or mixed on-site There are numerous benefits to be realized, with cost not always the driving reason Time-to-market, speed of innovation, ability to customize and flexibility are tomorrow’s competitive advantages

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