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Late October UTR announced a Joint Development Agreement (JDA) with US-based chemical company The Chemours Company (Chemours) for the further development and production of anode material based on UTR’s Titanium Oxide nanotube technology, to be used in Lithium ion batteries.Chemours is a top-3 global player in Titanium OxideChemours (NYSE:CC) is a spin-off from DuPont and is specialized in performance chemicals, including Titanium Oxide (TiO2), currently used as anode material in Lithium ion batteries. The company has a TiO2 manufacturing capacity of 1.25M metric tons annually and is expected to achieve revenues of US$ 6.1BN and EBITDA of US$ 1.4BN in 2017. Together with Tronox and Cristal, Chemours makes up the global top-3 of TiO2 manufacturers, giving UTR an excellent inroad into the global Lithium ion battery market.Investment to scale up production of test materialsUTR and Chemours will work together to expedite the development of UTR’s TiO2 nanotube technology and both companies will share newly developed Intellectual Property (IP). Additionally, the JV partners will also work towards optimizing the manufacturing process for efficiency and costs.Chemours and UTR will scale up the production of sample material, which is used by prospective customers to test UTR’s TiO2 nanotube technology. Several companies, including Swiss Lithium ion battery manufacturer LaClanché, are currently testing small amounts of sample material, but UTR aims to scale up test production to at least 10 tons per year in the medium term to speed up customers’ materials qualification.Option to build commercial manufacturing facilityThe JDA also provides an option for the JV to build a commercial-scale manufacturing facility for TiO2 nanotube material. We expect a minimum of 2,000 tons of material may be required annually by the global Lithium ion battery market. In addition to potential license revenues, such a commercial-scale manufacturing facility would give UTR a direct path to revenues from TiO2 nanotube sales. It would also substantially limit UTR’s future capital requirements to establish a solely-owned manufacturing facility, which we believe could run into the tens of millions of dollars.UTR has struck gold with this partnershipIn our view, the JDA with Chemours will enable UTR to substantially expedite development, manufacturing and commercialization of its TiO2 nanotube technology. We anticipate the company will be able to derive future license fees and recurring royalty payments from this partnership as well as a revenue share from potential joint manufacturing with Chemours.In other words, we believe UTR has struck gold with this Chemours partnership and should see strong industry interest in its technology on the back of it.Acquisition of electrolyte IP rounds out UTR’s IP portfolioUTR also recently announced the acquisition of IP around electrolytes from Coorstek Specialty Chemicals (Coorstek) in the United States. Coorstek is a privately-owned manufacturer of technical ceramics for a range of industries, including the energy sector.The IP bought by UTR centers around electrolyte salt that transports ions between anode and cathode. Many of today’s Lithium ion batteries use lithium hexafluorophosphate (LiPF6) as an electrolyte. However, LiPF6 is unstable at higher temperatures and flammable.UTR has acquired IP for the electrolyte salt Lithium bisfluorosulfonylimide (LiFSI). The use of LiFSI as an additive improves battery cycle life, charge/discharge performance due to improved conductivity compared to LiPF6, low-temperature performance and cell bulging caused at high temperatures.Combined with the company’s existing IP, UTR now owns Lithium ion battery IP for anodes, cathodes and the electrolyte. We believe this rounds out the company’s IP portfolio and positions it very well for commercial discussions around licensing to battery manufacturers, chemical companies and end-users of Lithium ion battery technology, such as (electric) car manufacturers.
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