A Practical Look at Types of Corrosion and What Went Wrong Cliff Cracauer World Sales Meeting 2009

Outline Types of Corrosion Examined –Atmospheric  Makes up majority of claims –Microbiologically Induced Corrosion (MIC) Causes of Corrosion –Who, What, When, Where & Why Troubleshooting when a claim occurs Examples

Atmospheric Corrosion Necessary Elements –Presence of electrolyte –Humidity Fe is >60% RH –Others depend on: Hygroscopic Nature Atmospheric Pollutants

Troubleshooting Corrosion Don’t Panic –Everyone WILL eventually have a rust or corrosion issue »Emotional Issue: “The sky is falling” » * Looking for a scapegoat

Troubleshooting Corrosion Don’t Panic –Everyone WILL eventually have a rust or corrosion issue Use the Integrated Solutions Approach » * Identify extent of corrosion » * Look for potential causes

The Four Quadrants - Which category did your customer fall within Uses VCI HAS a Rust Issue Uses VCI Does NOT have Problem Does NOT Use VCI HAS a Rust Issue Does NOT Use VCI Does NOT Have Problem

Who is having corrosion?

New Customers Use “the four quadrants” –Switching from another brand to Cortec? Pre-existing problem –Was the application correct to begin with? –Was there an existing corrosion problem that was not noticed? –The product change CAUSED the problem Wrong Application Awareness – Customer not aware of the problem Sabotage – Allegiance to previous supplier

Established Customers Long standing customers susceptible: –Change in personnel –Cutting Corners –Product Reduction Down gauging Lower Concentration or thickness –Other extenuating circumstances e.g. Receiving party not taking care upon receipt

What, Where, When & How What caused the corrosion problem? Where did the corrosion initiate? When was the corrosion problem identified? How to move forward?

Categorize the Application Identify what is new, or what has changed –New Application –New Customer –New Facility –New Material –New Process –New Raw Material Supplier –Change of Season –New Shipping Route, or company

Troubleshooting Corrosion Visit the customer –Allows you to identify Who is responsible The extent of the problem –Difficult to see from a picture Emotion & Attitude of the customer Other factors involved Coordinate someone to visit the sight of the corrosion problem

Troubleshooting Corrosion While visiting the customer –Look for the unusual Smells Textures Purchasing habits (prior to visiting) Different people using the product Coordinate someone to visit the sight of the corrosion problem

Process Troubleshooting Packaging Problem –What does the corrosion look like? –Is it uniform throughout the package? –Is it isolated to one area of the package? Top of package Center of package –Is there moisture in the package?

Process Troubleshooting Chemical Application –What does the corrosion look like? –Is it happening immediately (flash rust)? Quality Control –Identify how they measure the product pH Refractomer Temperature –Check the quality log

What We Need Cortec Product used: –Batch number –Process flow chart What happens before & after product use –Sample of material from batch, or process –Pictures –Contact Data Contact Cortec Immediately – Don’t Wait –Make a joint call –Deploy someone to the end customer

Examples of Troubleshooting

Example: Insufficient Protection Heavy Corrosion Evidence of Condensation Multi-metal corrosion Don’t automatically blame competitor’s product!

Example: Contamination

VpCI 368 Applied to surfaces –Visually examined –Identified unusual occurrences 368 not clinging to vertical surfaces Pooling present Possible causes: –Contamination –Surface temperature too high

Example: Insufficient Protection

Existing, long standing customer –VpCI 322 fogged inside engine compartment No visual indication of application problem Reviewed purchase history –Using 1/10 of the appropriate amount –Resulted from personnel changes

Example: Contamination & Physical Damage

Problem: Probes enter tanks and chip away coating Solution: –Add a finish coat (MCI 2026) that significantly increased impact resistance by 200% –Increase overall coating thickness for additional protection

Contamination Cleaning Process –VpCI 422 –VpCI 416 –VpCI 377 Carryover Decreased pH in 377

Example: Work In Process Corrosion

Example: In Process Corrosion “Corrosion” upon receipt (right) Finished Gear (left) Shipment to Brazil

Example: In Process Corrosion Corrosion identified at end customer in Brazil Considered quality issue at packager Solution: –Reviewed packaging No noticeable issues –Looked at parts with corrosion –Viewed earlier process Likely cause was handling & processing issue Quality log not properly maintained

Example: Damage in Transit

Example: Existing Corrosion Chiller shipped to India Bleeding through paint Audited Entire process

Example: Existing Corrosion Corrosion ID by customer in India Previous Process: –Leak test –Wash –Paint Pre-treat –Paint Painting over rust No inhibitor in paint

Example: Existing Corrosion Added VCI to wash Used PKG during shipping –Band-aid approach Working on paint

Troubleshooting Corrosion Don’t “pass the buck” –Take ownership Provide a solution Become the corrosion expert –Benefits: Secure existing business Develop new business Eliminate Competition

Troubleshooting Corrosion Be Proactive –For existing customers: Perform regular corrosion audits Sell Integrated Solution Don’t assume everything is ok Seek opportunities Leverage relationship Increase SKUs

Conclusions Corrosion is inevitable –Ever customer will eventually have a problem –How you respond will determine success Utilize Integrated Solutions approach –Process –People –Product