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BUSINESS RESEARCH

Manufacturing Site Repurposing Options What does the future hold in store… & What is the Value Proposition?. Repurposing of Manufacturing Site. BUSINESS RESEARCH. Current Manufacturing Site Strategies. Company X Launches website xxxcoating.com Picks up film production from OM Companies

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BUSINESS RESEARCH

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  1. Manufacturing Site Repurposing OptionsWhat does the future hold in store… & What is the Value Proposition?

  2. Repurposing of Manufacturing Site BUSINESS RESEARCH

  3. Current Manufacturing Site Strategies • Company X • Launches website xxxcoating.com • Picks up film production from OM Companies • Aggressively going after other film products • Recently installed a number of capital upgrades & attending conferences/new website • Sees growth out into the future past conventional films and planning for it… • Company Y • Aggressively competes and wins graphics products • Redesigns some current film offerings to compete in the future – aggressively competes in Indian film market

  4. Current Manufacturing Site Strategies • Conferences/Coating Machine Manufacturing • AIMCAL /CEMA conferences held on a yearly basis held both in Europe and US (well over 100 exhibitors & many seminars) • A number of companies still exist for making coating machines including bead and curtain coaters • Our Company • Have some small contracts with outside companies for pilot services • Have a history of outside companies contacting us for services • Has very limited web presence and mainly for pilot capabilities • Have done prior repurposing studies and found some outside business opportunities

  5. Marketplace Data around Coating • Coating Market Research Reports: • Global Market for Thin Film Materials to Reach $14.9 Billion in 2016 (Electronics.ca Research Network): • Global Markets, Technologies and Materials for Thin and Ultrathin Films -- Focus on Electronics (Reportlinker.com ): “The global market for thin film technologies (including equipment, materials and services) is currently valued at more than $50 billion and continues to grow.”

  6. Manufacturing Capabilities Manufacturing capability – wider than we think: • The current manufacturing structure has been driven by the requirement of extremely uniform and robust photographic films: • The current manufacturing site can coat a much wider array of products than just conventional AgX films • At lower flows; moderate speeds – can coat close to water viscosity • At moderate flows/speeds coating is capable for a wide array of viscosities • Could use a wide array of various polymers and solvents • Can use to coat a variety of surfaces (coat smooth and rough substrates) and can use multiple slot dye configurations • Much of the research looking at manufacturing site capabilities was done in the 80’s through 90’s • Pilot capability to demonstrate still exists to assess these alternate systems

  7. Manufacturing Capabilities Comparing different coating systems – thickness operating range: Many coating technologies overlap each other in terms of capabilities

  8. Patent/Development Activity in Manufacturing Field (since 2000) • There have been over 50 patents issued around coating in the last 10 years: • Much technical activity in the area, coating typeis a “buzz” word at coating conferences…

  9. Repurposing of Manufacturing Site Value proposition options

  10. Entire Film Flow Options Transition to Manage to Film Film & Tollcoating Functional Staging for Future Decline Aqueous ML Sale Coater 2014 - 2015 2015 - 2017 2015 + 2015 + Degree of Difficulty / Resources Value Proposition OptionsFilm Flow Options

  11. Current Approach – Manage to Volume Decline • PROS: • Minimum cost • CONS: • Film manufacturing discontinuance… • Lose uniform aqueous multilayer coating capability forever

  12. Film & Tollcoating Tollcoating Tollcoating OM Extend Life of Film Functional Materials Materals First Strategy – Film & Toll Manufacturing • PROS: • Extends the life of film • Keep cash flow positive for a longer period of time • Maintains manufacturing capability of functional materials • CONS: • Little tollcoating opportunities that make significant money • Manufacturing optimized for film – need to update facility & maintain resources

  13. Transition to Functional Aqueous ML Coater Aid in Film & Some Commercialization Tollcoating Path for Functional Operations Printing Products Functional Printing Manufacturing Capital Upgrades Uniform & Additive Functional Printing Manufacturing Second Strategy – Aqueous Functional Printing Manufacturing • PROS: • Extends the life of manufacturing site • Could provide a method for both commercialization and manufacturing of future products • Could provide a multitude of coating options if capital is available • CONS: • Not part of current vision • No active esearchon uniform aqueous materials • Significant effort to get to a low variable cost, flexible manufacturing facility

  14. Company Future Vision • To be a provider of higher margin specialized materials that have the following characteristics: • High resolution • Range of patterns • Utilize material property/formulation expertise

  15. Staging Continue Film for Future Operations & Sale Initiate Tollcoating Streamline & Increase Flexibility of site Establish partnerships Establish portfolio of future products or revenue Last Strategy – Manufacturing Site-> Sale to Outside Investor • PROS: • Generates cash for Company • Removes assets from company that are not part of the future vision • Keeps jobs and tenants at site • CONS: • Would require significant resources & budget for establishing a potential future product portfolio & improving site for future sale • High risk but high payback • May already be too late to explore & execute

  16. Repurposing of Manufacturing Site What does THE CURRENT MANUFACTURING INFRASTRUCTURE bring to the table?

  17. Sustain and Grow Approach –Lean Development Approach • New Products - Time to market, cost and quality – key factors • Control of the development chain critical to success of new products • Toyota, Microsoft, Harley Davidson and Kodak film – key examples • Separates start-ups from true successful businesses

  18. Sustain & Grow – Value Proposition • Pilot and manufacturing value proposition: Path to commercialization and manufacturing(i.e. Product Development flow)

  19. Repurposing of Manufacturing Site How does MANUFACTURING SITE fit into POTENTIAL FUTURE PRODUCTS?

  20. Functional Printing Market/Applications From: http://www.marketsandmarkets.com/AnalystBriefing/functional-printing-market.asp

  21. Aqueous Coating Applications in Functional Printing • Coatings – protective coatings such a polymeric resins, overcoats to adjust gloss, lubrication (release agents) etc • Conductive materials

  22. Aqueous Coating Applications in Functional Printing • Display – holographic films, 3D imaging • EMI – technology to reduce electromagnetic interference • Transistors – technology for circuit board backplanes – coupled with organic transistors

  23. Aqueous Coating Applications in Functional Printing • Fruit & vegetable containers with antimicrobial and slip coatings • Smart walls, High Tech Building Materials (aircraft, space, military)

  24. Aqueous Coating Applications in Functional Printing • Fabrics and wall related materials • Coatings with medications andregenfilm • Coatings coupled with sensors

  25. Repurposing of Manufacturing Site EFFECTIVE USE OF CURRENT MANUFACTURING FLOW

  26. EFFECTIVE USE OF CURRENT MANUFACTURING FLOW

  27. Value Proposition -> Staging of Manufacturing Flow • Photographic film = first functional printing product! • Functional printing materials could use the same product flow…. • Why not repurpose flow into consumable material flow (usable for film or functional printing materials)? • Use existing development, manufacturing, supply chain and market channels to move into functional printing arena without reinventing the wheel • Partnership with other companies, universities etc to gain access to technology and new products

  28. Repurposing of Manufacturing Site Conclusions & RECOMMENDATIONS

  29. Conclusions • Current path will lead to discontinuance usage of the existing photographic film manufacturing site and infrastructure • Outlined a number of options to extend the life of the facility and reuse the existing infrastructure • A moderate market exists for toll manufacturing and maintaining current photographic film products • Largest opportunity but highest risk would be to pursue future products while using existing products & toll manufacturing to cover costs – this would also require capital expenditures • Last option would be to marginally improvefacility and attempt to sell to perspectivebuyer.

  30. Recommendations • Present and discuss options and research with senior management • Attain management support to do further studies looking at the business and technology potentials of the various options • Work with marketing and sales to identify potential toll manufacturing opportunities • Assess future staffing reduction impacts on potential strategies • Outline plan for path forward

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