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July 29, 2002 — Carbon Nanotechnologies Inc. (CNI) seems to have it all — a Nobel laureate as its co-founder, a veteran management team and highly qualified staff, $15 million in angel funding and a working pilot plant.
What the two-year-old producer of carbon nanotubes lacks is a commercial product and a market, Chief Executive Bob Gower said when comparing CNI to his turnaround of Lyondell Petrochemical Co. in the 1980s.
“Lyondell was run poorly,” Gower said. “Here we are trying to start from absolute ground zero and trying to build up.”
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CNI specializes in single-wall carbon nanotubes using a patented process developed by Rice University chemist Richard Smalley. Smalley won the Nobel Prize in 1996 for co-discovering buckminsterfullerenes, spherical relatives of carbon nanotubes.
Nanotubes are all-carbon cylinders that are up to 100 times stronger than steel at a fraction of its weight, thermally and electrically conductive, or in some cases semiconductors, chemically inert and biocompatible. That makes them good candidates for stronger, lightweight materials, nanoelectronics and computing devices, sensors and mechanisms for drug delivery. Several companies are exploring their use in cathodes because they emit electrons from their tips.
Customers will require commercial quantities of high-quality tubes at affordable prices, a need CNI expects to meet in about three years. But the larger challenge is integrating them into products, nanotube producers and analysts say.
“This is not going to happen overnight,” said Sam Brauer, an analyst with Business Communications Co. Inc. Brauer published a report on the nanotube industry in 2000 and will release an update this year. “It’s a new material with lots of problems. … That doesn’t mean don’t work with it. It is not a waste of time or money. These things (nanotubes) will be useful.”
CNI is positioning itself to dominate the market once that happens by building its business and production capabilities simultaneously. Gower recruited experienced colleagues from past associations to fill key positions such as chief financial officer and chief engineer. Co-founders Ken Smith, Smalley’s longtime associate at Rice, and Daniel Colbert, who was part of Smalley’s research team, guide business development and intellectual property efforts at CNI.
Smalley remains at Rice but plays a significant role in the scientific development of the company. He and others contributed to CNI’s portfolio of about 70 patents, many of them techniques for getting tubes into products.
“CNI has the advantage of the people, the very best talent,” said Phaedon Avouris, a researcher at IBM who designed demonstration carbon nanotube-based transistors and other computing applications.
Aligning with potential customers such as IBM is a linchpin in CNI’s strategy. CNI provided more than 250 clients with nanotube samples and is in discussions with Sumitomo Corp. to build its customer base in Japan, Gower said. Besides supplying tubes, CNI wants to develop partnerships that allow clients to use its expertise and intellectual property. Ideally CNI wants to arrange joint ventures that give CNI a share of the end-stream revenues.
For now, CNI sells its nanotubes at cost or sometimes for gratis in joint development agreements. “We really want to develop the market,” Gower said.
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Company file: Carbon Nanotechnologies Inc.
(last updated July 29, 2002)
Company
Carbon Nanotechnologies Inc.
Headquarters
16200 Park Row
Houston, Texas 77084
History
CNI was founded in 2000 by Richard Smalley and other Rice University researchers. The company holds the exclusive license for Rice’s technology surrounding carbon nanotube production.
Industry
Nanomaterials
Small tech-related products and services
Single-wall carbon nanotubes and intellectual property for incorporating nanotubes into other materials and products.
Employees
25
Investment history
In May 2001, CNI garnered $15 million in angel funding from investors Gordon Cain and William McMinn.
Selected strategic partners and customers
Barriers to market
While nearly everyone in the industry agrees that nanotubes are intriguing materials with highly useful properties, clear markets for the technology have not been established. With no current high-volume needs, CNI cannot yet scale up to commercial product quantities.
Competitors Materials and Electrochemical Research Corp., Molecular Nanosystems and Nanoledge are among the CNI competitors that have demonstrated their capability of manufacturing single-wall nanotubes.
Several others developing processes for multiwall nanotubes include:
Contact
URL: www.cnanotech.com
Phone: 281-492-5707
Fax: 281-492-5810
Selected relevant patents
Recent news
CNI names senior vice president
Texas keeps its small tech machine well-oiled
CNI licenses nanotube technique to DuPont
— Research by Gretchen McNeely