MARKET PROJECTIONS FOR

NANOCELLULOSE-ENABLED PRODUCTS

Jo Anne Shatkin, E.M. (Ted) Bilek, John Cowie, and Theodore H. Wegner

SWST CONFERENCE

JACKSON LAKE LODGE, WYOMING JUNE 7-12, 2015

Compound Growth Forecast: 19%

“The nanocellulose market is estimated around $250 million in 2014, with the high share held by North America and Europe together. The global nano cellulose market by value is projected to grow at a CAGR of approximately 19% from 2014 to 2019. The high growth is forecasted to be in the North America and Europe due to rising advancements in the end industries such as paper and paper board, composites & packaging, biomedicine in the region. Europe is estimated to have the second highest growth from 2014 to 2019.” - RnR Market Research, 2015.

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Compound Growth Forecast: 19%

“The nanocellulose market is estimated around $250 million in 2014, with the high share held by North America and Europe together. The global nano cellulose market by value is projected to grow at a CAGR of approximately 19% from 2014 to 2019. The high growth is forecasted to be in the North America and Europe due to rising advancements in the end industries such as paper and paper board, composites & packaging, biomedicine in the region. Europe is estimated to have the second highest growth from 2014 to 2019.” - RnR Market Research, 2015.

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$4,650

• Shatkin, Jo Anne, Theodore H. Wegner, E.M. (Ted) Bilek, and John Cowie. 2014. “Market projections of cellulose nanomaterial-enabled products – Part 1: Applications.” TappiJournal. (May) 13(5): 9-16.http://www.treesearch.fs.fed.us/pubs/46174

• Cowie, John, E.M. (Ted) Bilek, Theodore H. Wegner, and Jo Anne Shatkin. 2014. “Market projections of cellulose nanomaterial-enabled products – Part 2: Volume estimates.” TappiJournal. (June) 13(6): 57-69.http://www.treesearch.fs.fed.us/pubs/46175

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Objectives

• Discuss Market Drivers for Nanocellulose

• Summarize the results of a study on potential markets for nanocellulose

– Categories of applications

– Methodology

– Volume estimates

• Recommend some future research directions

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Environmental Market Drivers

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Consumer/Retailer demand Regulatory

Lightweighting to improve fuel efficiency

Café standards

Energy EfficiencyStretch codes; building codes

Bio-based materialsShopping bag/water bottle bans/additive red-listing

Greener Consumer Products EU Directive –vehiclerecycling

Carbon Dioxide targets

Renewable/compostableLandfill bans/ recycling targets

Assumptions

• Recent research reports/expert network to identify target applications

• Current market sizes are maintained (no growth)

• Commercialization within the next 6-11 years

• Dry yield 40%

• Cost competitive with current alternatives

• Technical issues addressed

• No barrier to adoption7

HIGH VOLUME LOW VOLUME NOVEL and EMERGING APPLICATIONS

Cement Wallboard FacingSensors – medical, environmental, industrial

Automotive Body Insulation Reinforcement fiber - construction

Automotive Interior Paint-Architectural Water filtration

Packaging Coatings Paint-Special Purpose Air filtration

Paper CoatingsPaint -OEM Applications

Viscosity modifiers

Paper Filler Aerospace Structure Purification

Packaging Filler Aerospace Interiors Cosmetics

Replacement -Plastic PackagingAerogels for the Oiland Gas Industry

Excipients

Plastic Film Replacement Organic LED

Hygiene and Absorbent Products Flexible Electronics

Textiles for Clothing Photovoltaics

Recyclable Electronics

3D printing

Photonic Films

Targeted Applications

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Volume = M * NC content * MP

M = recent market size NC Content = % nanocelluloseMP = market penetration rate

Volume Estimates

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Example: Nanocellulose Demandfor Automotive Bodies

~1.57 T ~2.08 T

Cellulose nanomaterial demand =

Avg. weight/vehicle * Total vehicles

produced * Portion of weight that’s

steel * Portion of steel that could

potentially be replaced *

Nanocellulose market penetration *

Nanocellulose relative weight

proportion

[(1.57 tonnes + 2.08 tonnes)/2 x 15.8 million

vehicles * 1/3 steel/vehicle x 50% steel

replacement] x 1/2 x 0.65= 1.56 million tonnes cellulose nanomaterials

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Example: Textiles

CATEGORIES

•Clothing & Apparel - only

•Home Textiles

•Military Textiles

•Medical Textiles

•Sport Textiles

•Technical and Smart Textiles

•http://www.innovationintextiles.com/smart-textiles-and-nanotechnologies-

applications-technologies-and-markets/#sthash.sUAoIyBx.dpuf

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Example: Adding Nanocellulose to Cement

• Global cement market volume is 3.3 Billion tonnes per year

– Weight addition of 0.5% CNC (Cao et al. 2013) >> 16.5 million tonnes CNC

• This study – U.S. adoption for ultra-high performance structural cement market – pre-stressed and pre-treated only (5.7 M tonnes cement >> 21,000 tonnes CNC @75% market penetration)

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13

0%

20%

40%

60%

80%

100%

Estimated Market Penetration Rates - High Volume Applications

Low Estimate % Average Estimate % High Estimate %

High Volume Cellulose NanomaterialsU.S. Market Penetration Estimates

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Market and/or Application

Thousand Tonnes Per Year

Low Estimate Average Estimate High Estimate

Packaging Coatings 855 1,140 1,425

Replacement for Plastic Packaging

390 897 1,560

Plastic Film Replacement 364 727 1,091Hygiene and Absorbent Products

420 700 1,400

Automotive Body 240 320 800Textiles for Clothing 275 550 825Paper Filler 310 517 724Packaging Filler 310 517 724Paper Coatings 351 468 585Automotive Interior 81 108 135Cement 14 21 28

TOTALS 3,610 5,966 9,297

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0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

Annual U.S Tonnage Estimates for Nanocellulose

High Volume Applications

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0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

PackagingPaper

Wovens

Annual Tonnage Estimate by Forest Products Subsector

Film

Coatings

Fiber/plasticreplacement

Filler

High Volume Cellulose Nanomaterials - Potential Applications- World

[i] United Nations GDP Statistics:

http://unstats.un.org/unsd/snaama/dnltransfer.asp?fID=2

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Market and/or Application

Low Estimate Average Estimate High Estimate

Tonnes(Thousands)

Tonnes(Thousands)

Tonnes(Thousands)

Packaging Coatings 3,958 5,278 6,297

Replacement for Plastic Packaging

1,806 4,153 7,222

Plastic Film Replacement 1,683 3,366 5,049

Hygiene and Absorbent Products

1,944 3,241 6,481

Automotive Body 2,700 3,573 8,950

Textiles for Clothing 1,273 2,543 3,891

Paper Filler 1,437 2,394 3,352

Packaging Filler 1,437 2,394 3,352

Paper Coatings 1,437 2,394 3,352

Automotive Interior 420 587 700

Cement 0 4,130 8,250

TOTALS 18,283 32,829 56,481

[1] Global estimates based on GDP, except where noted in the text (Cement, automotive applications, and plastic packaging)

Low Volume Cellulose Nanomaterials -Potential Applications

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[1] Estimates extrapolated from GDP

Market and/or Application

United StatesAll estimates calculated from current market data

Global

Low Estimate Medium Estimate High Estimate Medium Estimate

%Tonnes

(Thousands) %Tonnes

(Thousands) %Tonnes

(Thousands) %Tonnes

(Thousands)

Wallboard Facing 25 5.5 50 11.0 75 16.5 50 51

Insulation 2 48 5 120 7 168 5 556

Aerospace Structure 10 0.6 30 1.7 50 2.9 30 8

Aerospace Interiors 50 5 75 7 100 10 75 32

Aerogels -Oil /Gas Industry 25 150 50 300 75 450 50 1,389

Architectural Paint 10 5 25 12 40 20 25 56

Special Purpose Paint 50 12 75 18 75 24 75 83

Paint for OEM Applications 50 6 75 12 100 18 75 56

TOTALS — 230 — 480 — 710 — 2,230[1] Global estimates are scaled up on the basis of Gross Domestic Product

Other Market Estimates

Report Volume (TPY) Timing

Future Markets, Inc. 1st Ed. (2012)

21 2017

Future Markets, 2nd Ed. (2012)

770 2017

Arbora Nano (2012) 145,000 NA

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Recent Analysis of Patent Applications for Wood-based Nanocelluloses

• 10% - Paper Coating

• 8% - Paper Furnish

• 22% - Composites

• 9% - Film

[Source Salmenkivi 2013]

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Alternative U.S. Acreage Estimates of Cellulose Needed*

Green Tons/ Acre

Acres per Year

Hectares

PLANTATION GROWN TREES 470 176,000 69,000

NATURAL FORESTS 92 906,000 352,000

FOREST RESTORATION “THINNINGS” 22 3,840,000 1,493,000

*Assuming 100% from virgin wood pulp

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Next Steps

• Estimate Novel Application Volumes

• Refine Estimates

– Competitive advantage

– Cost sensitivity

– Adoption rates

– Survey for applications

– Technical issues

– Time to market

• Jobs estimates

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Results depend on the validity of assumptions…

• "I think there is a world market for maybe five computers."- Thomas Watson, chairman of IBM, 1943

• "Computers in the future may weigh no more than 1.5 tons."- Popular Mechanics, 1949

• "But what...is it good for?"- Engineer at the Advanced Computing Systems Division of

IBM, 1968, commenting on the microchip

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