First Graphene Limited (ASX:FGR) Executive Director and CFO, Peter Youd, talks about the company's 1H20 results, progress with key customer trials and work at the Graphene Engineering & Innovation Centre (GEIC) in Manchester, UK.
Ortenzia Borre: Hello. I'm Ortenzia Borre for the Finance News Network, and joining me over the phone from First Graphene (ASX:FGR) is Executive Director and Chief Financial Officer Peter Youd. Peter, welcome back.
Peter Youd: Always a pleasure to speak with you, Ortenzia.
Ortenzia Borre: First Graphene produces graphene to improve performance of a range of products. How's progress?
Peter Youd: FGR continues to make considerable progress in the improvement of polyurethane rubber and thermoplastic polyurethane materials. The mechanical improvements include enhanced tensile strength and tear resistance, together with superior levels of abrasion resistance. We focused on these materials as it provides an early opportunity to sell tonnage volumes of our PureGRAPH range of graphene additives. And, as previously advised, we already have sales in the mining industry and the safety footwear markets.
Ortenzia Borre: Now to your first-half results for the year, what were the highlights?
Peter Youd: Well, they were identified in the director's report. The signing of a 3,000kg supply agreement with newGen and production of the world's first graphene-enhanced safety boot were two highlights. These were positive results in real-world applications, and they highlight FGR's position as the world's leading supplier of premium graphene products, which are available in tonnage quantities. At the GEIC in Manchester, we continue to make effective use of our presence as a Tier One partner where we routinely host customer visits. We've also negotiated a worldwide exclusive licence with the university for high-capacitance materials which are suitable for super-capacitor applications. Furthermore, we increased sales revenue in the half and finished the half with a strong balance sheet.
Ortenzia Borre: And Peter, First Graphene supplies a product called PureGRAPH. Can you remind us about its characteristics and where it's finding applications?
Peter Youd: Well, to characteristics, PureGRAPH has three nominal platelet sizes, being 5, 10, and 20 micron, and with between three to seven layers. The products are characterised by their large platelet size, a high aspect ratio, and low defect levels. The high aspect ratio is what provides the mechanical strength we witness in our customer applications. A detailed product sheet is available on our website, and we continue to publish data that underlines the outstanding quality of our graphene products. The powders are readily dispersed in a range of solvent and polymer material, and the batch-to-batch consistency is ensured through our leading-edge quality control testing.
With regards to applications, as I said previously, we've paid attention to those markets in which tonnage volumes of graphene would be required. So, this has included hotcast PU wear linings for the mining market, TPUs for both the mining and safety boot markets. In these areas, we've seen improvements of 40 per cent in tear strength, and anywhere between 100 to 500 per cent in abrasion resistance in items such as pipe spool applications. We are now starting to work on the incorporation of graphene into traditional rubber formulations.
Ortenzia Borre: And Peter, could you comment on the addressable market?
Peter Youd: With the Graphene Council, it's estimated 40% of the industrial applications for graphene will be in composites. And the composite market itself is poised for significant growth, as composites are increasingly being used in the transportation sector. So, things such as rail, auto, aerospace and marine. And this is for light-weighting to reduce the use of metals for both reduction in weight and to avoid corrosion issues. Thermoplastics or TPUs represent the majority of the polymers produced today. And in Europe, that accounts for greater than 80% of the polymer production. And this is one of the markets on which we are focused. Other markets include graphene in super-capacitors, which the Graphene Council counts or has forecast as a significant growth area. Our licence agreement with the University of Manchester enables us to manufacture exciting new materials for this energy storage market.
Ortenzia Borre: Could you provide an update on the science taking place to extend the use of graphene?
Peter Youd: Yeah. The development of high-capacitance materials for super-capacitor applications under an exclusive licence with the University of Manchester is progressing well. We have a UK-supported post-doctoral researcher in the post, and he has successfully transferred the chemical process to the FGR laboratory at the GEIC. A further progress report on this project will be provided during Q1 in 2020, when early stage kilograms scale-up of the novel materials will be completed. And at 2D Fluidics, we're developing a more benign approach to the synthesis of graphene oxide. The objectives of the 2D Fluidics approach is to manufacture a well-defined graphene oxide material without the excessive quantities of acidic waste which is produced by the existing Hummers method. The target applications for these GO materials include water filtration and energy storage.
Ortenzia Borre: Last question, Peter. Is there anything else you'd like to add?
Peter Youd: Yeah. Graphene's a nascent industry and FGR is at the forefront of its development. We remain the only entity with regulatory approval to sell graphene in the UK, Europe and Australia. As a result, we have a first-mover benefit in developing a sales pipeline. Our sales book is developing well and will continue to grow as further applications are developed. FGR is the only manufacturer of high-performing, high-quality graphene nano-platelets available at industrial scale. And we can supply volume quantities of graphene today and have the capability to scale up our manufacturing output to support large users and OEMs, who will require a consistent and reliable supplier of graphene in the years ahead. As can be seen in our quarterly reports, our engagement with customers continues to grow, which is a positive outcome that shareholders would expect.
Ortenzia Borre: Peter Youd, thank you for the update.
Peter Youd: Always a pleasure, Ortenzia.