2017 european thermal diffusion coatings technology ... · hydrogen embrittlement: hydrogen...

2017 European Thermal Diffusion Coatings Technology Innovation Award

EUROPEAN THERMAL DIFFUSION COATINGS TECHNOLOGY INNOVATION AWARD

2017

BEST PRACTICES RESEARCH

© Frost & Sullivan 2017 2 “We Accelerate Growth”

Contents

Background and Company Performance ........................................................................ 3

Industry Challenges .............................................................................................. 3

Technology Leverage and Business Impact .............................................................. 4

Conclusion........................................................................................................... 7

Significance of Technology Innovation .......................................................................... 8

Understanding Technology Innovation .......................................................................... 8

Key Benchmarking Criteria .................................................................................... 9

Best Practices Award Analysis for Thermission AG .......................................................... 9

Decision Support Scorecard ................................................................................... 9

Technology Attributes ......................................................................................... 10

Future Business Value ......................................................................................... 10

Best Practices Recognition: 10 Steps to Researching, Identifying, and Recognizing Best Practices ................................................................................................................. 12

The Intersection between 360-Degree Research and Best Practices Awards ..................... 13

Research Methodology ........................................................................................ 13

About Frost & Sullivan .............................................................................................. 13



Background and Company Performance

Industry Challenges

According to NACE International, the global cost of corrosion was estimated at about $2.5

trillion in 2016. This high cost directly impacts the global economy as iron in all its forms,

including cast iron, steel, and rolled metal, is the most widely used structural material,

compared to wood, cement, and ceramics. Even as demand for iron and its various forms

continues to increase at a steady rate across geographies, stakeholders across the value

chain in each end-use industry are constantly looking for new methods to mitigate

corrosion. One approach to mitigating corrosion is the application of a sacrificial zinc metal

layer as a coating on the metal substrate because zinc acts as a barrier, thus preventing

corrosion.

While some low-cost zinc plating processes offer short-term corrosion protection for up to

5 years, industries are open to exploring new, higher-cost technologies with a corrosion

performance for up to 15 years so that cost neutrality can be achieved by extending

maintenance cycles. The following are the key challenges driving the need for an effective

alternative to traditional zinc coating processes.

Corrosion in Hybrid Construction: Lightweighting of components in industries such as

automotive and aerospace has become a top priority objective for all major

manufacturers. For instance, the vehicle body’s hybrid construction is made of composite

materials comprising electrochemical-based light metal alloys and low alloy steel. These

components face corrosion problems because of the difference in the electrochemical

potential of individual constituent metals. In addition, because magnesium and aluminum

alloys offer a good weight-to-strength ratio, they are the most preferred for

lightweighting; however, they are susceptible to corrosion at the joints.

Protection of Precision Components: Parts and components with a sealing function

come with stringent specifications on tolerance and secure sealing abilities. Any additional

protective coating layer can alter the dimensions of these components and degrade the

integrity of the seals. Alternately, precision components covered with expensive stainless

steel layers are uneconomical and, thus, not preferred. These factors have led to a high

demand for an effective technology that mitigates corrosion without altering the tolerance

for delicate parts.

Hydrogen Embrittlement: Hydrogen absorption in the steel structure’s crystal lattice is

a major concern in galvanizing processes. For instance, in the hot-dip galvanizing process,

prior to galvanizing, a solution with a 10 to 15% concentration of hydrochloric acid is used

at ambient temperatures to remove mill scale on the steel’s surface. During this step,

hydrogen is absorbed into the structure and alters the mechanical properties of the high-

strength steel, i.e., steel with tensile strength greater than 1,000 megapascal (MPa) and

Rockwell hardness of greater than 30 Rockwell C, resulting in the loss of tensile and

torsional ductility and increasing the chances of component failure.

Re-work to Finish: The occurrence of varying design specifications provided by the

component manufacturer is common when using hot-dip galvanizing or electro-plating



processes. For instance, while coating a threaded small-to-medium sized steel part, a hot-

dip galvanizing process may fill in the threads and cover the part’s fine details,

necessitating further re-work to strip the coating and regalvanize to achieve exact

specifications because the hot-dip galvanizing process has a heavy coating coverage with

a non-uniform coating thickness of above 100µm. A process is needed that can provide a

conformal coating with a uniform coating thickness.

High Temperature and High Energy: Traditional zinc thermal diffusion coating

processes, such as hot-dip galvanizing, sherardizing, and electroplating, are required to

maintain the process bath at a temperature between 870 and 1,030 degrees Celsius for up

to 8 hours. These requirements are a major concern for component manufacturers

because they involve high energy-related costs.

These challenges with conventional zinc metal plating processes have led to increasing

interest in identifying an effective alternative that is fine tuned for lightweight metal

alloys.

Technology Leverage and Business Impact

Based in Switzerland, Thermission AG is a technology developer in the thermal diffusion

coating process field and a manufacturer and supplier of coating equipment. Introduced in

2012, Thermission’s technology overcomes barriers in corrosion mitigation, specifically for

parts and components made from high-strength steel and other metal alloys containing

aluminum and magnesium. The patented technology offers a new range of possibilities by

lowering the temperature of the thermal diffusion process and by improving the material

properties of the substrate being coated.

The technology is based on a combination of zinc powder and additives that are

proprietary and chosen according to the composition of the metal substrate to be coated.

In a typical process, parts and components made of lightweight metal alloy containing

aluminum, titanium, magnesium, or copper are pre-treated to remove oxides and to

activate the surface. The coating application is performed at a temperature between 280

and 370 degree Celsius, when the zinc dust mixture is applied to form a zinc diffusion

layer.

Industry Impact

Innovation is at the core of Thermission’s business. With a clear vision to solve the

corrosion challenges that reduce asset lifetime, Thermission has emerged as a leader in

technology innovation by bringing a new thermal diffusion technology to the market that

provides highly differentiated and customized coating solutions to customers across

industries, including automotive, marine, and railways.

Thermission’s technology is differentiated from its competitors in three aspects. Firstly,

the process takes place at temperatures below the melting point of zinc, which widens the

scope of adoption for the thermal diffusion process. Secondly, there is no formation of

brittle zinc/metal intermediate phases, thereby eliminating the risk of flaking under

mechanical stresses. Thirdly, the process works on the internal properties of the metal

substrate and improves strength and ductility.



Thermission’s technical expertise is built upon a strong innovation framework that

identifies the evolving changes in material requirements in industries such as automotive.

Thermission offers end-to-end corrosion protection services to clients throughout the

intended life of metal components. For instance, with the need to eliminate preferential

corrosion in metal mixtures used in lightweight components for the automotive industry,

Thermission’s technology offers a competitive advantage for original equipment

manufacturers (OEMs) to differentiate their products in terms of increased safety, with

excellent resistance to acids, salts, and wear, even in the component’s edges. This high-

value product quality evaluation criterion enables OEMs to offer a unique value proposition

to their customers in terms of product lifetime and performance in harsh environments.

As a testament to its impact, Thermission has a strong footprint in the automotive

industry, with over 50 major customers in Europe and US developing customized coating

solutions for cars and trucks.

Product Impact

Even as new metal combinations are being tested for use across industries, manufacturers

are continuously evaluating new corrosion mitigation technologies to extend service life.

The cost versus performance of a new technology is a key factor impacting the choice of

adoption. For example, in the automotive industry, 80% of the metal and metal alloy

components are required to prove performance for 320 salt spray test hours. Existing

thermal diffusion coating technologies already meet this requirement at a cheaper cost.

However, premium brands in the automotive space expect their part suppliers to provide

certifications that show protection for more than 720 salt spray test hours. Thermission ’s

technology meets these requirements and exceeds expectations by delivering corrosion

protection for up to 1,400 salt spray test hours. This ability has a huge impact on the

automotive industry as maintenance costs can be significantly reduced, translating into a

positive consumer perception of the automotive brand.

In an industry such as automotive, where customers are willing to pay a premium of up to

30% on parts and components to ensure stability for up to 720 salt spray hours and even

more , Thermission is considered a leader in setting new performance standards for

endurance and durability of metal components.

Scalability

Thermission’s technology is developed as a platform coating process that seamlessly fits

into the specifications and requirements from across industries, including automotive,

marine, and railways. Offering a portfolio of three products and services, Thermission

leverages the competencies of its strong technical team, technology ownership, and direct

coating facilities to provide best in-class services for component manufacturers.

For coating single components in small batches, Thermission allows its customers to utilize

its own coating facilities in Switzerland and the United States to test new parts and realize

the benefits of Thermission’s technology for new applications where ferrous and non-

ferrous metals are being explored.



To offer customers an edge over their competitors, Thermission offers turn-key production

lines customized to coat large bulky components that can be integrated into the

production process at the customer’s site, enabling its customers to gain complete control

and flexibility to tune the coating process and reduce response times.

One of Thermission’s first commercial successes was in 2014 when KAMAZ, the largest

truck manufacturer in Russia, bought exclusive patent rights to Thermission’s technology

and entered into a joint venture with Thermission to set up coating lines for part

processing. In the meantime several car manufactures and big suppliers have licensed the

Thermission technology

Visionary Innovation

With its well-structured innovation strategy, Thermission is positioned to become the

leader in offering disruptive technologies for metal part processing. Even as new high-

strength, lightweight metal alloys are being explored as effective alternatives to steel,

Thermission is focusing its research on identifying material strength and durability

challenges faced when metals and non-metals are combined. Thermission’s Thermal

Diffusion process offers above-par corrosion protection and alters the metallurgy of the

interlayers during the process, which improves the ductility and elasticity of the substrate

being coated.

Additionally, Thermission is focusing on new applications and markets to expand its

technology’s reach. For example, anti-corrosion coatings currently used in marine vessels

require a re-coat every year; therefore, ship owners are pushed to invest heavily on

annual maintenance. In addition, repeated re-coats applied on vessel exteriors increase

the vessel’s weight, thereby resulting in an 8 to 10% increase in fuel consumption.

Thermission aims to address this top priority application need for the marine industry.

The adoption of Thermission’s thermal diffusion process allows ship building companies to

achieve desired corrosion protection and double the duration of maintenance cycles. The

prospect of improvements in normal steel’s ductility opens up an opportunity for ship

building companies to achieve desired material strength, even at 15 to 20% less

thickness, thereby contributing to the industry’s lightweighting objective.

These clear indicators place Thermission as a visionary innovator in industries such as

automotive, marine, and aerospace that are witnessing a significant shift towards the

adoption of new metal and non-metal alloys to reduce the weight, realize fuel savings, and

reduce the carbon footprint.

Application Diversity

Thermission’s technology expertise in zinc-based coatings for metal substrates, including

raw material choice, coating system design, and commissioning, is unmatched in the

European thermal diffusion industry. The new thermal diffusion process transcends the

boundaries and limitations of competing galvanizing processes, specifically for high

strength steel applications. The technology’s flexibility to coat a wide variety of base

metals, non-metals, and metal alloys positions it as an innovative coating technology

platform that can be customized to match end-use application needs.



Thermission’s highly skilled team of technical experts recommends modifications to the

process in terms of choice of coating material and design of optimum process conditions,

enabling customers to achieve their desired coating properties, such as coating thickness,

hardness, and density, that meet the highest quality standards of the target application.

For instance, Thermission has worked closely with several car munfacturers to develop

automotive vehicle body components with a hybrid metal. The patented vehicle

component is a non-ferrous metal hybrid construction with a zinc diffusion layer applied at

a temperature between 280 and 390 degree Celsius. This ability clearly allows Thermission

to contribute at every level of product development, from material choice to optimizing

thermal diffusion parameters, to achieve best-in-class corrosion protection in-line with

expectations from key stakeholders in end-use industries.

Technology Licensing

Thermission has made significant inroads in identifying high-value/low-risk opportunities

in terms of short-term revenue generation. With a streamlined approach to evaluating

technology licensing partners, Thermission has concentrated its efforts on increasing its

visibility, mainly in the automotive industry over the next 1 to 2 years, while the marine

and offshore industries will be of interest in the long term.

Thermission’s systems technology service delivers customized solutions to licensing

partners, with a complete transfer of technology know-how that allows partners to

formulate their own process quality monitoring mechanisms. In addition, Thermission’s

guaranteed full lifetime service support enhances customer trust and promotes long-term

business relationships.

Conclusion

As a leader in providing disruptive thermal diffusion process technologies, Thermission has

demonstrated a commitment to delivering its proprietary thermal diffusion technology as a

low-cost, energy-efficient, and eco-friendly process to meet end-user requirements in high

impact application industries, such as automotive, aircraft, and marine.

According to Frost & Sullivan’s research on best practices followed by coating process

technology developers, Thermission’s well-structured approach to identifying and

overcoming key technology barriers to deliver long-term corrosion protection for hybrid

lightweight construction is the benchmark in the thermal diffusion coatings industry that

enables customers to develop lightweight premium products with un-matched corrosion

protection.

With its strong overall performance, Thermission has earned Frost & Sullivan’s 2017

Technology Innovation Leadership Award.



Significance of Technology Innovation

Ultimately, growth in any organization depends upon finding new ways to excite the

market and upon maintaining a long-term commitment to innovation. At its core,

technology innovation, or any other type of innovation, can only be sustained with

leadership in three key areas: understanding demand, nurturing the brand, and

differentiating from the competition.

Understanding Technology Innovation

Technology innovation begins with a spark of creativity that is systematically pursued,

developed, and commercialized. That spark can result from a successful partnership, a

productive in-house innovation group, or a bright-minded individual. Regardless of the

source, the success of any new technology is ultimately determined by its innovativeness

and its impact on the business as a whole.



Key Benchmarking Criteria

For the Technology Innovation Award, Frost & Sullivan analysts independently evaluated

two key factors—Technology Attributes and Future Business Value—according to the

criteria identified below.

Technology Attributes

Criterion 1: Industry Impact

Criterion 2: Product Impact

Criterion 3: Scalability

Criterion 4: Visionary Innovation

Criterion 5: Application Diversity

Future Business Value

Criterion 1: Financial Performance

Criterion 2: Customer Acquisition

Criterion 3: Technology Licensing

Criterion 4: Brand Loyalty

Criterion 5: Human Capital

Best Practices Award Analysis for Thermission AG

Decision Support Scorecard

To support its evaluation of best practices across multiple business performance

categories, Frost & Sullivan employs a customized Decision Support Scorecard. This tool

allows our research and consulting teams to objectively analyze performance, according to

the key benchmarking criteria listed in the previous section, and to assign ratings on that

basis. The tool follows a 10-point scale that allows for nuances in performance evaluation.

Ratings guidelines are illustrated below.

RATINGS GUIDELINES

The Decision Support Scorecard is organized by Technology Attributes and Future

Business Value (i.e., these are the overarching categories for all 10 benchmarking criteria;

the definitions for each criterion are provided beneath the scorecard.). The research team

confirms the veracity of this weighted scorecard through sensitivity analysis, which

confirms that small changes to the ratings for a specific criterion do not lead to a

significant change in the overall relative rankings of the companies.



The results of this analysis are shown below. To remain unbiased and to protect the

interests of all organizations reviewed, we have chosen to refer to the other key

participants as Competitor 2 and Competitor 3.

Measurement of 1–10 (1 = poor; 10 = excellent)

Technology Innovation

Technology

Attributes

Future

Business Value Average Rating

Thermission AG 9.0 9.5 9.25

Competitor 2 8.5 8.5 8.5

Competitor 3 8.0 8.0 8.0


Criterion 1: Industry Impact

Requirement: Technology enables the pursuit of groundbreaking ideas, contributing to the

betterment of the entire industry.

Criterion 2: Product Impact

Requirement: Specific technology helps enhance features and functionalities of the entire

product line for the company.

Criterion 3: Scalability

Requirement: Technology is scalable, enabling new generations of products over time,

with increasing levels of quality and functionality.

Criterion 4: Visionary Innovation

Requirement: Specific new technology represents true innovation based on a deep

understanding of future needs and applications.

Criterion 5: Application Diversity

Requirement: New technology serves multiple products, multiple applications, and

multiple user environments.

Future Business Value

Criterion 1: Financial Performance

Requirement: Potential is high for strong financial performance in terms of revenues,

operating margins, and other relevant financial metrics.

Criterion 2: Customer Acquisition

Requirement: Specific technology enables acquisition of new customers, even as it

enhances value to current customers.

Criterion 3: Technology Licensing

Requirement: New technology displays great potential to be licensed across many sectors

and applications, thereby driving incremental revenue streams.



Criterion 4: Brand Loyalty

Requirement: New technology enhances the company’s brand, creating and/or nurturing

brand loyalty.

Criterion 5: Human Capital

Requirement: Customer impact is enhanced through the leverage of specific technology,

translating into positive impact on employee morale and retention.

Decision Support Matrix

Once all companies have been evaluated according to the Decision Support Scorecard,

analysts then position the candidates on the matrix shown below, enabling them to

visualize which companies are truly breakthrough and which ones are not yet operating at

best-in-class levels.

High

Low

Low High

Fu

ture B

usin

ess V

alu

e


Thermission AG Competitor 2

Competitor 3



Best Practices Recognition: 10 Steps to Researching,

Identifying, and Recognizing Best Practices

Frost & Sullivan analyst follows a 10-step process to evaluate Award candidates and

assess their fit with select best practice criteria. The reputation and integrity of the

Awards are based on close adherence to this process.

STEP OBJECTIVE KEY ACTIVITIES OUTPUT

1 Monitor, target, and screen

Identify Award recipient candidates from around the globe

Conduct in-depth industry research

Identify emerging sectors Scan multiple geographies

Pipeline of candidates who potentially meet all best-practice criteria

2 Perform 360-degree research

Perform comprehensive, 360-degree research on all candidates in the pipeline

Interview thought leaders and industry practitioners

Assess candidates’ fit with best-practice criteria

Rank all candidates

Matrix positioning of all candidates’ performance relative to one another

3

Invite thought leadership in best practices

Perform in-depth examination of all candidates

Confirm best-practice criteria Examine eligibility of all

candidates Identify any information gaps

Detailed profiles of all ranked candidates

4

Initiate research director review

Conduct an unbiased evaluation of all candidate profiles

Brainstorm ranking options Invite multiple perspectives

on candidates’ performance Update candidate profiles

Final prioritization of all eligible candidates and companion best-practice positioning paper

5

Assemble panel of industry experts

Present findings to an expert panel of industry thought leaders

Share findings Strengthen cases for

candidate eligibility Prioritize candidates

Refined list of prioritized Award candidates

6

Conduct

global industry review

Build consensus on Award candidates’ eligibility

Hold global team meeting to review all candidates

Pressure-test fit with criteria Confirm inclusion of all

eligible candidates

Final list of eligible Award candidates, representing

success stories worldwide

7 Perform quality check

Develop official Award consideration materials

Perform final performance benchmarking activities

Write nominations Perform quality review

High-quality, accurate, and creative presentation of nominees’ successes

8

Reconnect with panel of industry experts

Finalize the selection of the best-practice Award recipient

Review analysis with panel Build consensus Select recipient

Decision on which company performs best against all best-practice criteria

9 Communicate recognition

Inform Award recipient of Award recognition

Present Award to the CEO Inspire the organization for

continued success Celebrate the recipient’s

performance

Announcement of Award and plan for how recipient can use the Award to enhance the brand

10 Take strategic action

Upon licensing, company is able to share Award news with stakeholders and customers

Coordinate media outreach Design a marketing plan Assess Award’s role in future

strategic planning

Widespread awareness of recipient’s Award status among investors, media personnel, and employees



The Intersection between 360-Degree Research and Best Practices Awards

Research Methodology

Frost & Sullivan’s 360-degree research

methodology represents the analytical

rigor of our research process. It offers a

360-degree-view of industry challenges,

trends, and issues by integrating all 7 of

Frost & Sullivan's research methodologies.

Too often companies make important

growth decisions based on a narrow

understanding of their environment,

leading to errors of both omission and

commission. Successful growth strategies

are founded on a thorough understanding

of market, technical, economic, financial,

customer, best practices, and demographic

analyses. The integration of these research

disciplines into the 360-degree research

methodology provides an evaluation

platform for benchmarking industry

participants and for identifying those performing at best-in-class levels.

About Frost & Sullivan

Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth

and achieve best-in-class positions in growth, innovation and leadership. The company's

Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined

research and best practice models to drive the generation, evaluation and implementation

of powerful growth strategies. Frost & Sullivan leverages more than 50 years of

experience in partnering with Global 1000 companies, emerging businesses, and the

investment community from 45 offices on six continents. To join our Growth Partnership,

please visit http://www.frost.com.

360-DEGREE RESEARCH: SEEING ORDER IN

THE CHAOS

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2017 european thermal diffusion coatings technology ... · hydrogen embrittlement: hydrogen...

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