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Argonne National LabPresentation 3
Yong Ding
Nuttavutt Intarode
Ibrahim Iskin
Thien Tran
06/12/2009
Outline
1. Company Background
2. Gap Review and Solutions
3. Market Overview
4. Target Market
5. Cost of Production
6. Financial Analysis
7. Potential Applications
8. License Negotiation
9. Commercialization Plan worksheet
10.Project Team Formation
11.Product Development Roadmap
12.Work Breakdown Structure
13.Gantt Chart
Company Background
CementMortar
Concrete
SCG Paper
SCG Chemical
SCG Investment
Siam Cement GroupSiam Cement Group
SCG Building Material
SCG Distribution
SCG Cement
Main Products
Gaps
Technology
•Lack of study and application new technologies with conventional building materials.
• Need high efficient , low skill-needed, strong enough and providing comfortable indoor environment’s building solution at optimized cost.
Organization
• Lack of knowledge and experience in Grancrete technologies.
•Lack of expertise people in the Grancrete development and application.
•Lack of special equipment and machines for manufacturing.
•Competitive cost and high margin.
Personal
• Require safety standard for application.
• Efficiency of commercialized product
• Reasonable price & Value to money
• Awareness of environmental conservation in society
Gap Review
Gap solutions I
Get Grancrete technology license from Argonne National Laboratory Promised technology, no R&D risk A differentiated product Provide a low cost housing solution for rural area Currently it is a niche market, expect growing rapidly
Send a team to Argonne National Laboratory for learning the production process and application process Guaranty gaining the knowledge and experience in Grancrete
technology Speed the commercialization
Purchase the special equipments and machines for manufacturing Speed the commercialization and reduce risk
Gap solutions II
Provide solution to user Purchase equipments for application, and sale or rent to builders Provide training to builders for efficiently applying the Crancrete
material in different type building
Charge premiums, but keep a reasonable price comparing to its value Balance the competitive cost and high margin
Collaborate with Government agency for material and building standard Readiness for large scale application Eliminate the public safety concern
Gap solutions III
Partnerships with US and local nonprofit environmentalist organization and government agency to introduce the Grancrete building solution to rural area for green building project Convince US government to license Grancrete technology to
developing countries for affordable and green building project Train the farmers to build the Grancrete house by themselves,
reduce the cost Educate potential customers in awareness of the new building
solution’s benefit and cost
Partnerships with local bank to provide small loans for farmers to build farmer house using Crancrete. Create demand Increase community quality
Market Overview
UN estimates new 740 million homes are needed in developing countries. That requires 100,000 new homes a day in 20 years (1).
Half of them live in areas susceptible to earthquakes, floods, and hurricanes.
In Asia alone, about 1/3 of population. i.e. 1 billion people, live in rural areas that needs better shelters.
(1) www.grancrete.com
Target Market
2010 2011 2012 2019 2020
2000
3000
4000
12000
15000
Tons
1. Knock-down house
2. Repairing works
3. Special wall-floor works
Cost of Production
Investment in new equipment: $18000
Raw materials: 10$/unit
Labor, Marketing & admin: $28000/year
Patent royalty fee:
Upfront $10000
Running 2%/sales
Financial Analysis
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Sales ($) 1760000 2640000 3696000 4620000 6776000 8712000 10648000 12144000 13156000 14784000 15840000
Production (ton) 2000 3000 4000 5000 7000 9000 11000 12000 13000 14000 15000
Production (bags) 88000 132000 176000 220000 308000 396000 484000 528000 572000 616000 660000
Unit Price ($/bag) 20 20 21 21 22 22 22 23 23 24 24
Number of houses built 1000 1500 2000 2500 3500 4500 5500 6000 6500 7000 7500
Costs 971200 1403600 1867800 2329668 3256515 4179334 5102564 5577444 6043140 6521703 6989425
Upfront Investment 18000
Cost of materials 880000 1320000 1760000 2200000 3080000 3960000 4840000 5280000 5720000 6160000 6600000
Labor, Admin, Marketing (increased at 10%/year) 28000 30800 33880 37268 40994.8 45094.28 49603.71 54564.08 60020.49 66022.54 72624.79
Licensing fee
upfront 10000
running 35200 52800 73920 92400 135520 174240 212960 242880 263120 295680 316800
Net profit 788800 1236400 1828200 2290332 3519485 4532666 5545436 6566556 7112860 8262297 8850575
NPV (discount rate 15%) $18,039,745
Potential Applications
1. Non-Shrinkage floor
2. High Strength floor
3. Repairing surface road
4. Industry floor
5. Rapid repairing wall-floor
Non-shrinkage cement
High Strength cement
Rapid fast setting cement
License Negotiation
Commercialization Plan worksheet :
Required by Argonne Laboratory from all its prospective licensees before licensing its intellectual property.
Enables the Laboratory and the prospective licensee to determine and characterize the business fit between their interests.
Provides the Lab input on its calculation of value of the intellectual property to both Parties.
Commercialization Plan worksheet
Commercialization Plan worksheet
1) General Company Information:– Name, Place of Incorportion, Age, etc.
2) Product Licensing and Sales Information– Exclusive or non-exclusive– Manufacturing location.– Potential applications, estimated sales,…
3) Equity Licensing Information.– Cash Flows, debt structure, exit strategy, etc.
Royalty offer:– Upfront fee: $10000– Running rate : 2% / revenue
Export Control regulation:– ITAR : International Traffic in Arms Regulations.– ITAR regulations dictate that information and material
pertaining to defense and military related technologies (for items listed on the US Munitions List) may only be shared with US Persons unless authorization from the Department of State is received or a special exemption is used
Project Team Formation
1 2
34
1.Engineering & Project Planning Division2.Marketing Division3.R&D Company4.Mortar Company
Cross-functional Team for TT
Product Development Roadmap
Technology
Markets
Products
2010 20202013
Repairing works
House appliances
Grancrete material
Low cost
houses
Knock downhouses in rural areas
Schools, churches
Concrete repairs
Streets, curbs, gutter
Foundation, floor repair
Roofing, Water-proofing
Driveways
Pools, ponds, decoratives
Countertops
Showers, tubs
Arts, crafts
2016
Work Breakdown Structure
Market and Technology Assessment Financial Analysis Acquiring formula from Argonne Natl. Lab. Get license from Thai Industrial Ministry Prototype product Developing production process of the Grancrete technology Facility Plan Machinery Purchase Suppliers Production plan Procurement plan Marketing and distribution plan Training program
•Collaborate with interested parties such as environmentalist, government, bank, builder, building developer and local community to build an ecosystem
•Collaborate with interested parties such as environmentalist, government, bank, builder, building developer and local community to build an ecosystem
Gantt Chart
Gantt Chart
1 month 0 months2 weeks 1 month 4 months
Q&A