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Company Profile
Business Description
Founded in 1996, Catalytic Solutions,
Inc. ("CSI" or the "Company") manufactures and delivers
a break-through proprietary technology that significantly improves the
performance and reduces the cost of catalytic converters. CSI has developed
a unique catalytic coating and an innovative manufacturing process to
apply its coating to a substrate that forms the functional element of
a catalytic converter. Catalytic converters are the pervasive means of
meeting increasingly stringent emissions standards around the world for
vehicles, energy production facilities and other applications. Traditional
catalytic coating technologies have not appropriately addressed the performance
requirements created by these emissions standards at acceptable cost levels.
CSI's unique and proprietary Mixed Phase Catalyst ("MPC®")
technology is fundamentally different from other approaches, and enables
CSI to produce catalyst formulations with superior catalytic performance,
a high degree of durability and cost-effectiveness for a wide range of
environmental markets. CSI currently sells its products to the world's
leading provider of aftermarket catalytic converters, and major automotive
original equipment manufacturers ("OEMs") have selected CSI's
products for high-volume platforms over products offered by its leading
competitors due to the superior performance and cost characteristics of
its catalytic coatings.
A catalyst is a substance that facilitates a chemical reaction without
being consumed in the reaction itself. Catalyst-based emissions systems
are used in a variety of industries to convert pollutants, fumes and odors
into innocuous compounds. Today, the largest application for catalyst-based
emissions systems is the reduction of hydrocarbons, nitrogen oxides and
carbon monoxide emissions from gasoline and diesel vehicles. Catalysts
are also used to control emissions in power generation plants, manufacturing
operations and other industrial applications. Environmental regulations
worldwide have mandated continually decreasing levels of allowable emissions
from vehicles, power generation plants and other sources, driving demand
for continually increasing numbers of catalysts and higher performance
catalysts.
Opportunity
CSI's patented MPC® technology was developed
in response to the need for a more cost-effective solution for automotive
catalytic converters as emission standards around the world continue to
tighten. Traditional automotive catalytic coating technologies currently
utilize high loadings of platinum group metals ("PGMs") - platinum,
palladium and rhodium - to satisfy performance requirements mandated by
governmental regulations, resulting in high costs to the automotive OEMs.
Therefore, there is a significant market opportunity for a catalytic coatings
supplier that can provide catalytic performance comparable to that of
traditional products with substantially lower PGM loadings. CSI's MPC®
technology offers performance equal to or exceeding that of competing
catalytic coatings with a significant reduction in PGM loadings. In addition,
increasingly stringent emission standards for diesel engines and gas turbines
are also driving demand for superior catalytic solutions in the diesel
and energy markets.
Automotive
Since 2000, 100% of new cars sold in the U.S.
and approximately 85% of all new cars sold worldwide have been equipped
with a catalytic converter as the principal means of meeting emissions
standards. The regulations controlling auto emissions in countries throughout
the world have become increasingly restrictive and will continue to tighten
in the future, with new emissions standards already set to take effect
in 2004 and 2005 in the U.S. and Europe, respectively.
Automotive catalytic converters depend on large quantities of PGMs to
perform the catalysis. These metals are rare and very expensive, and are
the largest cost component of a catalytic converter. Current catalytic
technology requires a substantial increase in the loadings of these costly
PGMs in order to meet forthcoming emissions standards. As a result, automotive
emissions control systems are expensive and becoming more so, and the
auto industry has been under intense pressure to find a cost-effective
emissions control solution. In addition, automobile manufacturers in Europe
and other markets are looking for greatly improved performance at a fixed
moderate PGM level.
Diesel
U.S. and European Union legislation requires
70% - 90% reductions in nitrogen oxide ("NOx") emissions from
diesel vehicles over the next six to eight years and reductions in particulate
matter as early as 2005. Catalysts using traditional technology will require
high loadings of PGMs to comply with these standards, and diesel auto-makers
are very concerned about the high price of these units.
Energy
CSI is targeting the large market for the reduction
of NOx emissions from power generation facilities. These emissions have
been a major focus of environmental regulations worldwide, particularly
in response to the threats of acid rain and global warming. CSI is currently
on new catalyst technology that will achieve low NOx levels, allow for
higher temperature operation of the plant and a smaller footprint at reduced
cost compared to existing technologies.
Competitive Advantages
CSI believes that its technology and products
represent a fundamentally different emissions control solution, which
delivers the following key benefits:
Superior Catalytic Performance
CSI's MPC® technology enables it to produce
catalytic coatings capable of significantly better catalytic performance
than previously available. CSI has achieved this demonstrated performance
advantage by creating a catalyst using unique nanostructures with superior
stability under prolonged exposure to high temperatures. This nanostructure
technology enables the oxide catalysts in CSI's compounds to resist sintering,
or fusing, thereby maintaining a high catalytic surface area. As a result,
in automotive applications, for example, CSI's catalyst formulations are
able to maintain high levels of performance over time using substantially
lower PGMs than products available previously.
Significant Cost Advantage
In the automotive market in particular, where
PGM costs represent a large portion of manufacturers' costs, a significant
benefit of CSI's MPC® technology is that it offers performance equal
to or exceeding that of competing catalytic coatings with a 50% - 80%
reduction in PGM loadings.
Wide Range of Applications
Our MPC® technology is a design approach,
as opposed to a single chemical formulation. We have developed our technology
from its inception as a platform, which can be tailored for a range of
different industrial applications. Specifically, our coating formulations
can be tailored in two distinct ways. First, the oxide compounds used
in our formulations can be adapted for specific applications by adding
to them, or doping them with, a wide range of chemical elements, a process
known as tuning. By contrast, the catalyst offerings of our competitors
can be tuned only by adjusting the three PGMs. Second, we are able to
vary the mixtures of our compounds to create customized solutions for
specific applications. These two independent design mechanisms allow for
customization and optimization for different vehicle platforms within
the auto industry and for completely different applications such as SCR
NOx control for gas turbines.
Proven Durability
Our coated substrates have undergone substantial
lab and field testing by our existing and prospective customers and have
demonstrated their durability and reliability in a wide range of applications.
In addition, our coated substrates have satisfied numerous certifications
and match or exceed the durability of conventional coated substrates.
Compatibility with Existing Manufacturing Infrastructure and Operating
Specifications. Catalytic converters using our coated substrates are compatible
with existing automotive manufacturing processes as well as specific vehicle
operating specifications. There is no need for our customers to change
their manufacturing operations, or how their products or processes operate,
in order to utilize our technology.
