Washington State Department of Commerce

The Composite Industry in Washington

Commerce Research ServicesOctober 2011

Research questions

•What are carbon fiber composites, and why are they important?

• What does the supply chain look like in Washington?

•How does Washington compare to other domestic and international regions with carbon fiber activity?

Project methodology

• Phase One:

o Descriptive, qualitative and quantitative research

o A “snapshot” of the carbon fiber supply chain statewide

• Phase Two:

o Determine key comparators and inputs that support industry development

o Compare Washington’s industry to other regions

What are carbon fiber composite materials?

Carbon fiber composites are the “new aluminum”

•Aerospace, transportation, marine, wind energy, and recreation industries are committed to replacing aluminum with carbon fiber composites

•Variable tensile strength and durability make composites highly customizable and useful in a variety of applications, including consumer products and biomedical devices

Why is the carbon fiber industry important?

Prospect of dramatic growth in the coming years

Global composites market expected to reach $27.4 billion by 20161

•Low-cost labor countries will not dominate the industry; the quality of the finished product is most important

•Jobs created will be high-value with many external multipliers

Why is the carbon fiber industry important?

Why is the composites industry important?

Governor aims to make Washington the “Silicon Valley of Composites”

• Position state as global leader in automobile, energy, and consumer composites

• Diversify carbon fiber expertise gained through aerospace and Boeing’s 787 project

Carbon fiber leaders in Washington

Washington’s carbon fiber supply chainThe Dept. of Commerce has identified over 80 carbon fiber supply chain locations in Washington3

• 53 composite supply-chain companies headquartered in state

• 13 foreign companies with in-state operations at 17 locations

• 1 major precursor manufacturer: SGL Group

• 31 composite manufacturers at 70 locations, including:o Hexcel, Saint-Gobain, Toray, Triumph

• 50+ composite fabrication companies at 70 locations, including:o AIM Aerospace, C&D Zodiac, Fokker Aerostructures

Washington’s carbon fiber supply chain

• 25 input manufacturers and 31 input distributors at 65 locations:o American Autoclave Company, Aronson-Campbell Industrial

Supply, Composites One, Janicki, Heatcon

• 24 supply-chain locations employ fewer than 50 workers

Primary industries served:

• 40 locations involved in aerospace composites

• 20 locations focus on defense

• 15 locations serve the automotive, energy, and recreation industries

Washington’s carbon fiber supply chain

Agriculture

Medical

Consumer

Tooling

Industrial

Energy

Marine

Recreation

Automotive

Defense

Aerospace

0% 5% 10% 15% 20% 25% 30% 35% 40%

Industries Served as Percentage of In-State Operations

Washington’s carbon fiber supply chain: Revenue data

Initial revenue estimates4

• Aggregate gross business revenue increased by over 11% from 2009 to 2010

o 2009 revenue: $2.98 billion

o 2010 revenue: $3.32 billion

o 72 of 80 locations included in estimates

o Estimates do not include Boeing or SGL

Washington’s carbon fiber supply chain: Revenue data

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20100

1

2

3

4

5

$999,950,492

$3,317,087,303

Washington Composite Companies Aggregate Gross Business Revenue in Billions of Dollars

2000-20104

Washington’s carbon fiber supply chain: Employment data

Initial employment estimates5

• Employment decreased by almost 7% from 2009 to 2010

o 2009 employment: 8,494

o 2010 employment: 7,940

o 69 companies out of 84 UBIs included in estimates

o Estimates do not include Boeing and SGL; SGL’s Moses Lake facility will employ more than 200 workers at full capacity

How are composites manufactured?

Generally, carbon fiber manufacturing includes five stages:

1. Precursor preparation

2. Spinning/stabilizing fibers and producing yarn

3. Weaving fabric

4. Pre-impregnating the fabric (prepreg)

5. Fabrication and the composite part: autoclave molding, vacuum bag molding (resin infusion), press molding or pultrusion

How are composites manufactured?The precursorRaw material is made into long, thin strands under .01mm in diameter

• Derived from polyacrylonitrile (PAN), cellulose, petroleum or tar pitch, phenolics, and rayon

• 39,280 tons produced globally in 2010

• Global demand will increase to 89,000 tons in 2015 and 134,000 tons in 2019

• Wind energy industry demand will almost quadruple to nearly 38,000 tons in 20156

How are composites manufactured?The precursor

Precursor processing is the most energy-intensive component of the carbon fiber supply chain:

• Energy accounts for one-third of the manufacturing cost for low-grade fiber and increases with high-grade fiber

• Total production costs can reach $7.88 per pound of high-grade fiber6

Process uses heat:

• Oxidative stabilization heats fibers to 572° F

• Carbonization process heats fibers to 1300°to 1600° F

• Final processing can use heat as high as 4500° F7

How are composites manufactured?The yarn

Several thousand strands are twisted together to form yarn

• Used in prepregs, filament winding, pultrusion, weaving, and braiding

• Rated by linear density (weight by unit length) or number of filaments per yard count

• Some carbon fiber yarns can tolerate over 750,000 PSI (pounds per square inch) before failure

How are composites manufactured?Weaving and the prepreg fabric

Yarn is woven into fabric and combined (impregnated) with resins and additives to form prepreg fabric

• Carbon fiber can be combined with glass fibers, Kevlar,™ nylon, and polyester

• Prepreg is ready to fabricate

• Due to heat sensitivity, prepregs based on thermoset require refrigerated transportation and storage facilities

How are composites manufactured?The composite part

Prepreg is molded into shape to form composite parts

Prepreg fabric can be fabricated in a variety of ways, including (but not limited to):

• Autoclave molding

• Resin infusion

• Press molding

• Pultrusion

How are composites manufactured?Autoclave moldingUsed to manufacture large parts requiring strong material with minimal air bubbles (voids)

1. Layers of prepreg fabric are placed into molds

2. Molds are vacuum bagged and placed in an autoclave

3. Elevated pressure and temperature in autoclave cures composite material8

How are composites manufactured?Resin infusion

Used to fabricate large or irregular parts

Design modifications can be made quickly and economically

1. Prepreg fabric is placed into two-sided molds

2. Molds are placed in a vinyl or polyurethane bag and resins are injected

3. Vacuum is applied to shape material and eliminate voids

How are composites manufactured?Press molding

High-volume production of flat or moderately curved parts

1. Carbon fibers are injected with resins, and formed into shape with a heated press

2. Composite part is cooled

How are composites manufactured?Pultrusion

Used to fabricate tubes and rods

Most efficient fabrication process; almost entirely automated

80-90% of the cost is materials

High quality and low scrap

1. Yarn is pulled through thermosetting resins and fillers

2. Material is pulled through a shaped die, cured, and cut to desired length9

What does the supply chain look like?

The supply chain can be thought of as “buckets”

1. Raw materials manufacturers, processors, and distributors

2. Inputs / machinery manufacturers and distributors

3. Composites and prepreg manufacturers and distributors

4. Composites fabricators and parts manufacturers

5. Research institutions, workforce training, and trade associations

6. Original equipment manufacturers (OEMs)

7. End users

8. Waste disposal and recycling

Recycling Facilities

Operational:

Recycled Carbon Fibre Ltd., Coseley, UKMitsui Kinzoku, Omuta City, Japan

Potential:

Adherent Technologies, Albuquerque, NWFirebird Advanced Materials, Raleigh, NC

Materials Innovation Technologies, Lake City, SC

Recycling R&D:

Aircraft Fleet Recycling Association,Boeing, Hexcel, Mitsubishi, Toho Tenax, Toray

Precursor Processing – The Basics

1. Spinning: Acrylonitrile powder is mixed with another plastic like methyl acrylate and the plastic is spun into fibers

2. Stabilizing: Fibers are chemically altered to be more thermally stable

3. Carbonizing: Fibers are exposed to high heat, without oxygen, to expel non-carbon atoms

4. Treating: Surface is slightly oxidized to improve bonding qualities

5. Sizing: Fibers are coated to protect from damage during winding or weaving

Composite Fabrication:

These companies make specific parts for end-users or OEMs, though they do not manufacture prepreg composite fabrics or original equipment

Methods for fabrication:Autoclave molding, vacuum bag molding, press molding, thermal expansion, and pultrusion

Composites Manufacturer:

Combine processed raw materials with proprietary additives to make prepreg composite fabrics

*Some composite manufacturers also fabricate parts, though not all fabrication companies manufacture their own prepreg composites

OEMs:

OEMs manufacture original equipment using composite materials.

Some OEMs manufacture their own prepreg, and many fabricate their own parts. Some OEMs use contracted companies specializing in composite fabrication to manufacture their parts.

OEMs using composites span nearly every industry: aerospace, agriculture, automotive, consumer goods, defense, energy, industrial applications, marine, medicine, recreation, and more!

End-Users:

These are the people, companies, and institutions that use carbon fiber-based products every day. They include airlines, doctors, nurses, teachers, golfers, tennis players, hikers, kayakers, chefs, police officers, artists and musicians, governments, computer users, bus drivers…everybody!

ACMA- American Composite Manufacturers Association

http://www.acmanet.org/

Raw Materials Examples

Acrylonitrile plastic powders

Methyl acrylate

Methyl methacrylate

Nitric acid

Sodium hypocholorite

Coating materials: epoxy, nylon, polyester, urethane

Key Machinery and Supplies for Composites:

Autoclaves

Chemicals: Silicones, resins, adhesives

Tooling and fabrication equipment: robotics, cutting devices, vacuum devices, molds and mold release agents, mechanical presses

Finishing products: paints, pigments, sanding products

Supply chain vertical integration

Heatcon Composite SystemsTukwila

• Heat blankets, autoclaves, curing systems, and tool kits for composite

manufacturing and repair

• Adhesives, resins, prepregs, primers, and release agents for

composite repair

• Composite repair training courses offered globally

HexcelBurlington and Kent

• One of the world’s leading composites manufacturers

• Prepregs, reinforcements, molding compounds, honeycomb, tooling materials, adhesives, and carbon

fiber

• Serves commercial aerospace, space and defense, wind energy, and

industrial applications

Boeing – multiple locations

Christensen Shipyards - Vancouver

Insitu - Bingen

James Betts Enterprises - Anacortes

Nolimitz Windsurfing – White Salmon

RainSong Graphite Guitars - Woodinville

Westport Shipyards – Westport

Janicki Industries, Inc.Sedro-Woolley

• Designs and builds precision tooling for aerospace, marine, wind energy and

transportation industries

• Provides state-of-the-art engineering services, project management, and

composite fabrication

• R&D lab explores new composite fabrication materials and techniques

ElectroimpactMukilteo

• Manufacturer of factory automation and tooling solutions for aerospace

• Designs automated fiber placement systems, post

riveting systems, automatic drilling machinery, and

assorted jigs and robotics

SGL GroupMoses Lake, Vancouver

• Leading producer of carbon fiber precursor

• Located in WA due to skilled labor and hydroelectric power

• Polyacrylonitrile (PAN) produced with Mitsubishi Rayon in Otake, Japan

• PAN material turned processed into carbon fiber in Moses Lake

• Carbon fibers processed in Landshut, Germany for use in the assembly of

BMW’s Megacity vehicle

University of Washington: Automobili Lamborghini Advanced Composite Structures

Laboratory, Center for Advanced Materials in Transport Aircraft Structures

Clover Park Technical College

Edmonds Community College

Everett Community College

National Resource Center for Materials Technology Education

Olympic College

Peninsula College

Western Washington University

Washington State University: School of Mechanical and Materials Engineering

Key comparators:Washington’s competitive advantages

• Education and workforce: Workforce development supported by an extensive network of universities, community colleges, and technical colleges offering materials technology programs. Large regional institutions researching materials technology.

• Energy: Nation’s leading hydroelectric power producer. Lowest industrial electricity prices in the nation: $0.022 - $0.042 per kilowatt hour depending on location.10, 11

• Industry presence: Aerospace, biomedicine, and marine industry clusters

• Infrastructure: Extensive air, water, railway, and road infrastructure

Education: Washington’s assets12

StateHigher

Education Institutions

Population w/HS Diploma

Population w/Bachelor’s

Degree

Population w/Graduate

Degree

Washington 78 89.3% 30.3% 10.8%

Alabama 72 81.9% 22.0% 7.7%

Michigan 106 88.1% 24.7% 9.4%

North Carolina 133 83.0% 25.6% 8.6%

Utah 38 90.2% 28.7% 9.1%

United States 66 (Median) 84.5% 27.5% 10.1%

Education: Washington’s assetsUS NEWS TOP MATERIALS SCIENCE GRADUATE PROGRAMS13

Rank School Score1. Massachusetts Institute of Technology 4.8

2. (Tie) Northwestern University 4.6

University of Illinois– Urbana-Champaign 4.6

4. (Tie) University of California– Berkeley 4.5

University of California– Santa Barbara 4.5

Rankings Among Comparator States

9. University of Michigan– Ann Arbor 4.2

22. North Carolina State University 3.3

26. University of Washington 3.2

42. Michigan Technological University 2.7

46. Michigan State University 2.6

52. (Tie) University of Utah 2.5

Washington State University 2.5

Education: Washington’s assets

PUBLIC UNIVERSITIES

University of Washington• BS: Aeronautical and Astronautical Engineering, Industrial Engineering• MS: Aeronautics and Astronautics, Aerospace, Industrial Engineering• PhD: Materials Science & Engineering, Industrial Engineering, Mechanical

Engineering• Automobili Lamborghini Advanced Composites Structures Laboratory

Washington State University• BS: Materials Science & Engineering, Mechanical Engineering• MS: Materials Science & Engineering, Mechanical Engineering• PhD: Materials Science & Engineering, Engineering Science, Molecular Bioscience

Western Washington University• BS: Plastics Engineering Technology, Manufacturing Engineering Technology

Education: Washington’s assets

PUBLIC COMMUNITY & TECHNICAL COLLEGES

Clover Park Technical College• Certificates: Aerospace Composite Technician, Machinist Apprentice• AAT-T: Manufacturing Technologies• AAS-T: Material Science – Composites, Nondestructive Testing

Edmonds Community College• Certificates: Materials Science Technology• AAS-T: Materials Science Technology• ATA: Manufacturing & Materials Technology

Everett Community College• ATA: Advanced Manufacturing — Composites, Aviation Maintenance

Education: Washington’s assets

PUBLIC COMMUNITY & TECHNICAL COLLEGES

Olympic College• Certificate: Manufacturing Technology• AS: Materials Science Engineering, Aeronautical Engineering, Industrial Engineering

Peninsula College• Certificate: Composite Structures• AAS-T: Composite Structures

Energy – How Washington Compares14

StateAverage Retail Price of Industrial Electricity to

Ultimate End-User, 2011

Average Retail Price of Industrial Natural Gas,

2011

Washington 3.85 ¢ / kWh $9.40 / 1,000 ft2

Alabama 5.85 ¢ $5.55

Michigan 7.35 ¢ $8.61

North Carolina 5.63 ¢ $7.19

Utah 4.68 ¢ $5.46

United States 6.58 ¢ $5.08

International Snapshot: China’s challenges

The Chinese carbon fiber industry is developing slowly and faces significant obstacles to growth and expansion

• Since the 1960’s, U.S. and European export controls prevented sharing carbon fiber technology with China due to national security and defense concerns.

• Lack of independent intellectual property rights makes it difficult for Chinese companies to import technology. Developing technology from “scratch” is costly.

• Most Chinese companies produce low-quality carbon fiber and cannot produce an equivalent to Toray’s lowest-grade T300 modulus.15

International Snapshot: China’s challenges

Domest

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arket D

emand

Domest

ic Pro

ductio

n

Avera

ge Manufa

cture

r Pro

ductio

n0

2,000

4,000

6,000

8,000

10,000 9,000

1,000100

China: Estimated Carbon Fiber Production and Demand in Tons, 201015, 16

Approximate import depen-dency ratio: 84 – 89%

International Snapshot: Why Japan is competitive

The Japanese carbon fiber industry is well-established, export-centric, and poised for continued growth. The country is home to world leaders Mitsubishi Rayon Co., Toho Tenax, and Toray Industries

• Japanese manufacturers shipped 16,028 tons of carbon fiber in 2010, a 66.2%

increase from 2009.

• Three Japanese companies – Mitsubishi Rayon, Toho Tenax, and Toray Industries –

account for 50.8% of global carbon fiber production.

• Japan’s carbon fiber export ratio has expanded continuously during the last two

decades, from 57.2% in 1991 to 78.6% in 2010.

• The industry is supported by the Japan Carbon Fiber Manufacturers Association, which

is exploring new commercialization opportunities and promoting life-cycle assessment

methods for reducing the industry’s environmental impact.17

International Snapshot: Why Japan is competitive

Japan: Annual Carbon Fiber Shipments, in Tons17

Sources1. Lucintel. 2011. Growth opportunities in global composites industry 2011-2016. February. Available

online: http://www.lucintel.com/reports_details.aspx?RepId=RPT1007

2. Sloan, Jeff. 2011. Carbon fiber market: cautious optimism. High-Performance Composites. 1 March.

3. Washington State Department of Commerce: Research Services carbon fiber supply chain database.

4. Washington State Department of Revenue

5. Washington State Employment Security Department

6. Boswell, Clay. 2011. Carbon fiber picks up speed. ICIS Chemical Business. 30 May.

7. Warren, Dave and Cliff Eberle. US Department of Energy. 2009. Precursor and fiber evaluation.

8. Daniel, Isaac M. 2006. Autoclave molding process. Northwestern University School of Engineering.

Available online: http://www.composites.northwestern.edu/research/processing/autoclave.htm

9. http://www.pultrusions.org

10. U.S. Energy Information Administration. 2011. Form EIA-826, monthly electric sales and revenue

report with state distributions report.

11. Grant County Public Utility District. 2011. Rate schedule no. 15 – large industrial service. Available

online: http://gcpud.org/customerService/rateSchedules/Rate%20Sch%2015.pdf

Sources1. U.S. Census Bureau

2. U.S. News. 2008. Materials: best engineering schools.

3. U.S. Energy Information Administration. Available online:

http://www.eia.gov/cneaf/electricity/epm/table5_6_a.html

4. ReportLinker. 6 Sept. 2010. Trend Analysis on Global Carbon Fiber Market.

5. Market Research News. 2011. Global and China carbon fiber industry report, 2009-2010. Available

online:

http://www.salisonline.org/market-research/global-and-china-carbon-fiber-industry-report-2009-2010/

6. Japan Carbon Fiber Manufacturers Association. 2011. Activities of the statistics working group (year

2010). Available online: http://www.carbonfiber.gr.jp/english/index.html