Last week at the Lux Executive Summit in Boston, we caught up with Mike Knox, CEO of leading graphene nanoplatelet (GNP) developer XG Sciences registration required). XG has enjoyed a slew of partnership announcements as of late – Hanwha Chemical in December 2010, Posco in June 2011, and Cabot (Client registration required) in November 2011 – which will no doubt play a significant role in its expansion and commercialization efforts. Mike said the company is currently moving into a new East Lansing, MI, facility, which he expects to come online by July 1 of this year, increase production capacity to 80 tons per year, and reduce costs to $40-$50 per kilogram. He added that this expansion will not change XG Sciences’ business model or target applications, as the company still aims to sell GNP dry bulk powder, dispersions, and masterbatches into composite and energy storage markets.
With fellow GNP supplier Angstron Materials (Client registration required) already on the books to increase capacity from 25 tons per year to 100-300 tons per year for 2012, XG’s expansion efforts threaten to push the market for GNPs into an oversupply situation, much like its carbon cousin multi-walled nanotubes (MWNTs). (See the report “Carbon Fiber and Beyond: The $26 Billion World of Advanced Composites.” Client registration required). Such a scenario and concomitant cost reduction may benefit industrial users. But leading MWNT suppliers like Bayer MaterialScience (Client registration required) can attest to the fact that oversupply is an anathema for a developer’s ability to become profitable. The reason is because low capacity utilization hinders the ability to recoup capital equipment investment expenses.
Even so, XG’s proficiency in leveraging its portfolio of strategic partners to increase commercial traction will be critical to its long-term success. Interested investors should stay tuned and submit feed questions, as we will soon be reaching out to XG for an updated briefing.