Evonik Industries AG (EVK) Earnings Call Transcript & Summary

The views, opinions and technical analysis presented during this webinar are those of Evonik Corporation and are not solely those of UL. The appearance of this content on UL sites does not constitute an endorsement by UL or its affiliates. Today's webinar is ANCAMIDE 2853 and 2865 Flexible, Powerful and Resilient. You may even find it unbreakable, and is presented by Evonik. Your presenter today is Dr. Shiying Zheng, Applied Technology Director for Civil Engineering for Crosslinkers at Evonik Corporation. My name is [ Derek Bacher ] with UL, and I'll be moderating today's webinar. Please submit your questions by typing them in the question box located on your screen. We're recording today's event, and we'll send you a link my e-mail and we'll also post it to ulprospector.com. Now I'd like to hand it over to Dr. Shiying. Are you ready to begin?

Yes. Hi. Good morning or good evening, good afternoon, wherever region you are in. Thank you for joining this webinar. Today, I'm presenting Evonik's newly developed flexible and tougher epoxy curing agent, ANCAMIDE 2853 and 2865. So the agenda for today's presentation: First, I'll give you some background and quick introduction; followed by market trends and drivers and how ANCAMIDE 2853 and 2865 address unmet market needs. You'll see that bulk of the presentation will focus on our test results and data. And I'll give a regulatory status of these 2 products and their EHS profile and followed by a quick summary. So we are talking about flexible system. So why do we need flexible system, how are they used and where are they used? So flexible systems, not just epoxy, although let's remain our focus today. So flexible system has systems have very diverse application. So here, let me give a few examples. Some of these like -- we have seen like every day, but you might not pay attention to. For example, like a concrete protection. So where coatings are subject to moderate to heavy duty service and also involve like movement and stress. And this -- like for concrete protection, the flexibility requirement, it's pretty wide range. So anywhere from 30% to over 100-odd percent elongation. So a few of the examples, at least for concrete protection, waterproof membrane, crack bridging and join cement, you can see like a lot them require pretty good elongation of over 100%. And for metal protection, tent lining in industrial or flexible coatings are just 1 of the 2 like examples and flexible systems can also be used as adhesive for adhesive applications. So what are the typical technologies, like a flexible technology and what are the requirements? So in this table, list or properties of these flexible systems, you can see that it involves like handling property like EHS profile, like regulations and handling and a lot of focus on performance such as QSP, low temperature cure and obviously more important is the flexibility, what kind of flexibility does the system offer and how hard surface -- the coating become? For our handling property, like are the system moisture sensitive, can they be applied in thick coatings in one pass. And for concrete protection, obvious is like concrete adhesion is very important, that involve like dry or painted concretes. So if we look at the most typical flexible systems, you can see like for 2K, flexible, ethane and 2K flexible polyurethane both in more of like isocyanate. So some isocyanate obviously handling of isocyanate require special precaution and so its listed as red. And then we look at our performance for cure speed, both are polyurethane doesn't cure as fast as polyurea and the most important features of urethanes and urea like they can have outstanding flexibility. Other properties like the moisture, the moisture tolerance, it's not as good and you cannot apply thick coating in one pass. And because of the presence of isocyanate so can only be used to like a dry concrete. So these are very good flexible systems. What about like 2K epoxy tick on the box is to if designed properly to me -- always like a requirement, however, typical like standard epoxy, the crack speed is very poor. So usually like under 10%. So if we can design an epoxy system that with our flexibility, then will tick on the box and then meet all our requirements. So how can we enhance our flexibility in a 2K epoxy system? And see that because it's 2K so obviously, you can work with both doing modification to both A side and B side system. So for our B side curing agent side, to modify a standard epoxy to make it more flexible, one of the common approach is to processize with Nonylphenol. Nonylphenol does improve flexibility. However, like a low temperature, the flexibility sometimes can be diminished and tensile strength will also reduce. So one of the caveats -- negative caveat about Nonylphenol is that it's a substance of high concern, obviously, if we don't need to use Nonylphenol, we should avoid it. So that's from the curing agent side, the B side, what about the A side? On the resin side, epoxy function as polyurethane, it's a very common modifier used to enhance flexibility. So with this type of modify, you can increase the flexibility to increase elongation and maintain our high strength and modules. But these modifiers usually like are higher in this case or can pull some or handling challenges. Another approach to modify our A side, resin side, is to use reactive at low level to improve elongation. However, the downside of this is like it can reduce our strength. So the common reactive DA can be either monofunctional or difunctional. So mono-functional will be like a non-alkaline chain or reactive or like a di-functional reactive. So another modifier for the resin side, it's our launching acrylate, such as a [indiscernible] acrylate. So that's like both A side and B side. So in addition to that, like processes, like common processes, such as benzyl alcohol used in epoxy system can help to reduce viscosity like improved handling property. So processes like benzyl alcohol maintain our flexibility but reduce their strength. So in the table, I summarized like what I just described for like both A side and B side and see that wherever that red means like a reduction in the upper -- the break or arrow pointing up to increase. So you can see that this approach is perfect to increase our flexibility of our epoxy system. So from -- these are mostly like additive approach whereby modify this whereby modify that. So from a chemistry point of view, like what can -- what makes a polymer flexible and tough? Using polyurethane and ethane example, on the top picture, the chemical structures are showing 2 polyurethane chains. You can see there's a hydrogen bonding formation between chains. So the hydrogen bonding in polyurethane system acts as noncovenant cross-linking point, that increase the strength. And we know that polyurethanes has very unique structure of hard and soft segments. So hard segment with all of the proper design, you can see the hard segment increased our strength and then soft segment, if using our flexible polyols, can help with our flexibility in addition to the hydrogen bonding, that one make a polyurethane -- like polymer -- like flexible and tough. So the same principle can be applied to an epoxy system. So how about like we design a curing agent with the same principle? So here, I'm showing polyamide structure. So you can see that in the blue circle, those molecule can form hydrogen bonding between like 2 chains and then with the main like chain, if we incorporate some flexibility, so we could achieve similar property to like polyurethane are flexible and are tough. So with this, before I dive into our next slide, why we designed like it and develop new material? I wouldn't like to take a survey to see like among -- like the typical applications for like using epoxy system. What are the audience, what you guys are doing like using epoxy, not just flexible systems. So Derek, can you bring up the first poll, please? Well, that's great. I see most of the poll coming in. So definitely, a lot of our audience are working on our construction. So actually, that's aligned with what the focus today. So that focus of our -- like the driver, so why we are developing new materials? So obviously, we get like understand our market trends and drivers and also get like the voice of customer. So all our new product development are focused on market -- are driven by market trends and drivers. So in -- for the epoxy system, I'm focusing on -- so we've focused on like we call 3 Es. Enhanced performance, efficiency and eco user -- EHS and ecofriendly. So under each category, so obviously, it's the properties were performance attribute and their performance attributes under each categories for the purpose of today's webinar, we focus on high flexibility and lower temperature flexibility, but obviously, efficiency is very important. Faster return to service, that system can cure at low temperature and EHS and eco-friendly like in all substance of high concern use with renewable resource raw materials and -- aiming for sustainability. So with these drivers in mind, we identify our unmet needs -- like as through a voice of our customer to have a flexible and tough epoxy that can cure fast and with a very good EHS profile. So the requirements are less in this table on the left, so fast return to service, that's under our efficiency I show in previous slide. And then the following 4 categories like high elongation, high flexibility, high strength, low temperature flexibility, that's all improved performance and enhanced EHS profile. So this is the needs like customers are asking for a product like that. So what are the available technologies out there? Are there any technology or products actually meeting this requirement? So we surveyed our best product out in the market. You can see that commercial products from A to E, none of them tick all the boxes. Each one that has some kind of deficiency as -- so that was the objective for our product development is to develop a product that meets this requirement. So -- and as I showed in previous like in back line introductions slide like how can we design an epoxy system that also are strong and are flexible? So with that design like in mind and we were able to develop 2 new products that address the unmet market needs in our epoxy system. So the ANCAMIDE 2853 and 2865. So 2853, the product has like a different attribute. Both are flexible, but you can see like the scale at the bottom, 2853 has very high elongation. It has higher viscosity, while I'll show in the next slide a darker color and 2865 has 90% less elongation, but still like a very good elongation, 90% elongation, lower viscosity and lighter color. Both of these products contain Nonylphenol and contains our biocontent, 40% for 2853 and 20% for or 2865. And then use level for each product is different, but both products have very good tensile strength. So dive deeper into the performance and handling property of these 2 products. So both are Nonylphenol-free. So as I mentioned in previous slide that 2853 has higher viscosity, close to 3,000, versus 2865 viscosity it's 100, 500. So the upper portion of the table is showing handling property and the lower portion showing more like some of the performance. So you can see that both products can be used with a range of our mix ratio, so PHR for 2853, it's 100 to 130, and 2865, 85 to 95. So for the testing PHR, like test data at the bottom of the table, for 2853, it was 130 PHR and 2865 we use 90 PHR. So we can see the mix ratio -- the mix viscosity for 2865. Obvious, it's higher, versus the lower viscosity of 2865 on the right. Both have very good -- shortly harness and very good working time. 2853 has 50% of -- 50 minutes of working time and -- which is excellent and 2865, 30 minutes of working time, both cure like in 5 to 6 hours. So both materials are flexible and tough. So we look at like since they are very flexible, we look at thermal property of these 2, like imagine glass transition temperature and DSC. After a 7-day cure, both systems show glass transition temperature, about 2 degree Celsius and both systems like have very good cure under ambient and low temperature, over 90% even at 10 degree Celsius. So on the bottom portion of the table, it's showing very good elongation. So high tensile strength, flexible system, either it's very flexible and doesn't have very good strength or strong -- good strength, doesn't have flexibility. So these 2 products actually combine flexibility and toughness over 2,000 tensile strength. And you can see that elongation of 2853 is very high. It's over 150% and both have low temperature flexibility in addition, you can see that our test strength is very high for both system and 2865 has higher test strength than 2853. So as I mentioned in previous slide that both systems use a range of PHR. So another feature of these 2 systems is that you can adjust the strength and flexibility by changing our mix ratio, the PHR. So these 2 tables, the top table, is showing the results for 2853 and the bottom for 2865. So PHR for 2853, between 100% and 130%, you can see that using higher PHR, more 2853, you can get much higher elongation. But our strength is not as good, but still outstanding, it's over 2,000 or 2,000 PSI. And test strength -- so the tensile strength decreased with higher PHR, but then elongation increase. And so the test strength is also the same strength as the tensile strength, higher PHR, less test strength but then lower PHR or higher test strength. And the same trend is observed for the 2865 system. So one thing I forgot to mention that, for both systems, the beauty is like you don't need to use any modifier. Both would provide these like excellent elongation just with our standard liquid epoxy resin like epoxy A2A or [indiscernible] with 9:10 ratio with 10% of the reactive [indiscernible] so it's like basically, you can adjust the strength and flexibility by adjusting use level. So the next question you might ask, well, if we use higher PHR versus lower PHR. How does that impact our working time? So we can see here that the working time actually is very comparable across different mix ratio. So on this table on the left, it's the 2853, and on the right it's 2865. You can see that different PHR the gel time is within like a couple of minutes for 2853 and for 2865. Basically, they are very similar. And mix viscosity it's ballpark, the same. And the bottom chart shows the mix viscosity of both system using different PHR, you can see that viscosity, it's like very close to each other. So -- so before I dive into like our next section, like I'm presenting to you like 2 systems. I would like to take another poll just to see like what are the important attributes like performance attributes for your application? So Derek, if you could bring up the second poll would be great. Thank you. Great. I see like most of the audience are focused on the flexibility and EHS, it's also important, okay. That's great. Thank you for the poll. So since these are flexible materials. So what's interesting and obvious question is like if you pull like -- material recover, do they stay stretchy? Or do they recover to original shape? So we did the tensile recovery study here. So the picture are just showing a specimen for both systems. On the left, it's 2853, on the right is 2865. Original means that before it's been pulled and then this ASTMB638 test. So -- and then we pull to 50% and then 80%. Because once you pull this it kind of recover back, so we didn't get -- you have to be like once you release from the instrument, it actually stretch back. But we can definitely see that after we pull, that the specimen become longer, so 50% become longer and then 80% become even longer and the same for 2865 specimen. 2865, you don't see as much, so we wait a bit longer to take the picture to actually recover back. But then if we -- that pull sample recover at 60 degrees C oven for an hour and then ambient for 2 hours, they all go back to the original shape, the size. So they do like stretch, recover back. So to show this study actually like more quantitative data. So this slide presents our tensile recovery on the top and then temperature effect at the bottom. So the top table shows a 50% pull and 80% pull, like I showed a picture in the previous slide. And to explain the data a little bit, the present tensile strength recover. So basically, the original means that we just pulled once and then we get like our tensile strength and elongation. And then this table, 50% pulled -- let it recover, and then we pull again. You can see like 50% pull basically like we didn't see too much, only like about 5%-ish decrease after 50% pull. But then 80% pull, we still see like a very good 80% recovery. The same is observed for our 2865 system. So they do recover. And temperature like heating effect elongation and strength. So we heal the specimen at 50 and 70 C for like 2 hours. You can see this -- the temperature at least up to like 70, you don't see much impact on our strength and elongation. So it's the same that our picture worth thousand words. So I didn't show a video here, but I just want to show you like how this material actually recover and kind of what -- how the flexibility kind of display. So -- on the left of this picture, we have like 2 strip, original it's just like a flat on the table and then basically we make this twist like a press and twist and then release this like paper clip and then let it recover. So for the darker one, it's 2853. So 2853 take about 7 minutes to recover, to go flat on surfaces. It don't stretch -- you let it sit and they will go back to original shape. And then 2865 takes about 20 minutes. So these are flat on the table. And we're also like hang this on the wall. So you put this up like in 1 minute, -- the darker color 2853 definitely like drooped quite a bit versus 2865. It's a much stiffer -- and then in the bottom 2853, after 6 minutes, definitely like droop lot more and than 2865 droop more but not significant. So another question for like a flexible system is like do they maintain like flexibility over time? So we check the flexibility. On the left side is a 2-year old sample of 2853. You can still do the press and twist, and we didn't -- haven't run like tensile, but they look like nothing has, at least flexibility-wise, this hasn't changed. On the right, is a younger set of sample of 2853, and then we make these casting like thicker. So on the left, these strips like an 8-inch thick and on the right of 2865 those are quarter-inch thick -- 0.5 inch thick. You can see that still just by literally maintain flexibility. So how far like -- where are these 2 products available globally? So regulatory status wise, both products are available in majority of the countries except in Europe. So these 2 products are not on reach, but available in most of other countries. And you can see the EHS profile just typical main tearing agents across in -- the one inside doesn't have the health hazard. So in summary that I showed this like before, the standard chart before, that standard epoxy ticks most of the box, except the flexibility. Now with the newly developed 2853 and 2865, you can see that both fulfill the unmet market needs now, tick all the boxes. And finally, to summarize the main feature of this 2853 and 2865 very high elongation with fast harness development and excellent tensile and tear strength, maintaining a low temperature flexibility. It doesn't contain any substance of high concern and contains our bio content. And with additional other features you can read on the screen. And at this point, I would like to end our webinar and take any questions you guys might have.

Wonderful. Just as a reminder to the audience on the bottom right-hand corner of your screen is the Questions tab. If you'll open that up, you can ask your questions there. And we'll get to as many as we can with the remaining time that we have. We do have a few questions that have come in. One of the first ones we have here, are these products currently commercially available?

Yes, they are. So they are. We have both product in stock, yes.

And are they made in the U.S.?

Yes, they are made in continental U.S. in the lower 48 states.

And we've had a couple of questions about getting a physical example or a sample. Is that available?

Yes. Like samples are available. So you can contact us and then we can send you a sample free of charge. You just need to state like what kind of application you want to use these products.

We have a question here about heating up the specimens. Will their flexibility be maintained if heated up?

Yes. So that's in our slide. Let me see what's slide. Next -- so we look at the temperature, we only go up to like 70-degree Celsius and maintain our flexibility and strength, yes.

And then will Evonik go for the REIT registration?

That depends on demand. So it's chicken and egg. If there's a strong demand in Europe, yes, we would. So that remains to be seen, yes.

What is the shelf life for the raw materials?

Both products have typical like 2 years, 24-month shelf life storing at ambient temperature in closed container.

Do you have TDSs ready to share?

Yes. So at the end of the webinar, there will be like a landing page, like that will show and then we can send a -- if you search ANCAMIDE 2853 and 2865 in Google, they will pop up like our page, Evonik product page, and then we can download the TDS from there. And chances, yes, they are available and then easily accessible.

And what about the corrosion performance? How do these curing resins perform with the corrosion performance?

So that's and egg yolk we actually haven't tested yet. So obviously, like that would be next part, is just looking at corrosion performance of these 2 products. So we haven't tested that yet.

Are these products -- are they pure polyamides or [ amidomines ]? I think -- I said that right.

These 2 products we call like polyamide. So epoxy curing agent, it's not like it -- it's formulated polyamide. So they are polyamide. But obviously, we have other components there to help to achieve the target performance.

Where does the bio content come from?

That's from raw materials. So we have raw materials to make the polyamine actually come from natural resource.

What is the difference in flexibility between both products between 77 degrees, I think -- is that Fahrenheit? 77 F and negative 10 F?

So actually, we have not test. So we did -- I did show like passing low temperature flexibility test. So we have -- we didn't have the facility to test low temperature or flexibility. So the ambient on the temperature, obviously, we get elongation and tensile strength, but low temperature, we only do like the bending test. So we put them in freezer and then take it out of freezer and then just bend and see if it like crack. So that was the test we have so far.

What type of bio oil fatty acid are used in these grades?

So they have multiple like source of oil used to make polyamide, but then obviously, this question may -- it's a good question, so I'll prefer to get in touch with the person who asked your question after the webinar, we can discuss in more detail.

Are these used as protective coatings for metal enclosures?

Not yet. So right now, like the focus for the application for us is mostly just for concrete protection and also like we are looking into application in adhesive first. But we haven't looked into metal protection yet because that involve like a complete different set of tests.

Are these products commercially available in India?

Let me go back to -- I believe -- I believe so. But let me just go back, let me go back to the slide. That's not listed yet. So let me double check and get back to you. So get in touch after the webinar. All the questions that didn't get answered or once like after the webinar, I'll reach out to the person asking the question and then -- to give you an answer on that. Because obviously, I see a lot of questions, we won't be able to answer all the questions.

Right. Yes. Well, I think we have time for maybe one more. What's the primary difference between 2853 and 2865 and why would you choose one over the other?

Okay. So let me go to this slide -- I mean I just want to show the slide, when I talk. So in this slide, basically showing like the difference between the 2. So it really depends -- so 2853, it's much higher elongation, it's higher viscosity, darker color versus 2865. So depends on your particular application and requirement, you will choose one over the other.

All right. Perfect. Well, thank you, everyone, for attending today's webinar. Just as a reminder, we will send you a link to the recording of today's webinar so you can watch it at any time and share it with others at your company. We will also follow up to the questions that were asked. We just didn't have time to get to today. But now you'll be reiterated to Evonik's website for more information. Thank you for attending, and have a great day.

Well, thank you all for attending, and thank you for all the good questions and the poll. Thank you very much, and have a good day, everyone.