Ormecon cultivates organic metals for displays, coatings and paints

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ZURICH, Switzerland, Dec. 17, 2002 — Just as organic fruit is good for your health, organic metals appear to be good for the environment. If some venture capitalists are right, these new materials will be good for the bottom line, too.

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One of the first companies to commercialize these special kinds of conductive polymers is Ormecon GmbH, which actually trademarked the name “organic metal.” The term refers to a conductive polymer. It’s a highly engineered nanostructured material made from organic building blocks (typical organics are carbon, nitrogen or hydrogen).

Ormecon’s products belong to the sector of small tech known as nanoparticles, which according to Business Communications Company Inc., a market research firm, has a global market growing at an average annual rate of 12.8 percent. It is expected to reach $900.1 million in 2005.

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The particles or crystals in its products are about 10 nanometers in size, created using a chemical process that Ormecon’s founder has been working on for more than 20 years. What’s different about these nanoparticles is that they are dispersed within various liquids. While other scientists were trying to dissolve the crystals in solvents, Bernhard Wessling figured out that they needed to be dispersed and made into ultrafine suspensions in liquids or polymers.

Ormecon’s products are used by a wide range of firms in a number of different industries, including printed circuit board manufacturers that use its coatings as an alternative to gold or tin finishes; shipbuilders that paint hulls with Ormecon’s anti-corrosion lacquers, and next-generation flat panel display vendors that are developing very cheap, high-resolution displays. Ormecon is also selling electromagnetic shielding coatings that manufacturers are painting onto mobile phones.

Although the firm is breaking even in “most quarters,” the company said, it decided to raise outside capital this year. The process took Wessling, Ormecon’s chief executive and founder, more than a year. “When you have something completely new, it is not easy to convince investors, especially these days,” Wessling said.

After a lot of sweat and effort on both sides of the due diligence table, the company finally closed a $7.5 million expansion capital round earlier last month, lead by SAM Private Equity.

Co-investors are the Canadian venture capital firm CDP Capital Technology Ventures, SAM Smart Energy and Future Capital AG in Frankfurt.

“Advanced materials is one of the hottest areas of nanotechnology, especially because they are often very close to real marketable applications,” said Christian Schmidt-Maag, whose investment firm, Capital Stage, has been “watching” Ormecon “for some time” but has not invested in the firm.

Ormecon will increase sales revenue this year by more than 50 percent over 2001, according to a news release by the investors. Future product lines could be coatings used in solar cells and electroluminescence applications.

Most of the revenues are earned in three application areas: anti-corrosion, electronic smog protection and printed circuit board solderable coatings. The latter sector is its biggest earner today. Korean makers of printed circuit boards are adopting its coatings for the final solderable surface finish.

The Ormecon coatings compete with industry standard approaches for finishing PCBs. One is tin dipping, which is a relatively low-tech process that is energy intensive and involves blowing excess molten solder from the PCB surface. It also contains lead, a material that regulatory agencies are clamping down on.

Ormecon’s technology is cleaner, cheaper and simpler to use. Gold surface finishing, the other method for coating PCBs, is superior to tin and works at very high circuit densities, but it is expensive. Compared to gold, Ormecon’s surface offers almost the same properties but at a third of the price, according to the firm.

Ormecon has agreements with Bayer and DuPont, as well as marketing deals with about 20 other industrial companies that are selling Ormecon’s products worldwide. It collaborates with Covion Organic Semiconductors GmbH, one of the key supplier of materials required to make OLED (organic light emitting diode) displays, which it sells to Cambridge Display Technology (CDT) and Philips, among others.

Stewart Hough, CDT’s vice president of business development, said that Covion is a key supplier of the materials needed to make OLEDs, but a number of organic polymers similar to Covion’s are emerging, made from different chemicals and via different processes.


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