The Caesarea offices of NanoPowders look like a cross between a locksmith’s shop and a pharmaceutical plant. The equipment scattered around, which includes devices that make visible things invisible to the naked eye, indicates the presence of science, as do the 12 employees, who represent a moving average of around 40. Other equipment, however, appears to be designed for repairing ceilings.
NanoPowders produces metallic nano-metric powders. Metallurgist and company chief scientist Ernst Khasin, who invented and owns the original technology, immigrated to Israel from Russia and set up an incubator venture called Ultrafine Technologies. Abraham Greenboim, a US Jewish private investor, decided in 1997 to take the company out of the incubator and gave it the name NanoPowders. He was executive director for the next three years, until current CEO Eynat Matzner took over.
Matzner, who has a PhD in chemistry, an MBA and has served in various positions in Tambour, says, “There are many ceramic nano-metric powders in industry now. They are used for coating floors, bathroom surfaces, and similar things. As far as we are aware, however, we are the first in the world with a commercial process for manufacturing metallic nano-powders.”
The company has raised $4 million to date from Greenboim, Millennium Materials Technologies, and private investors, and is currently raising several million dollars from Israeli and foreign funds. Despite the belief that nano-technology companies must spend millions of dollars on equipment, NanoPowders makes do with $500,000 worth of equipment. If need be, they use the equipment at one of the universities for a fee.
The chicken-egg dilemma is also evident in NanoPowders’ story. As long as there are no applications, but only components that include metallic nano-metric powder, there is no demand for the powder. If there are no powders, no one thinks about applications in which such powders can be included. Matzner: “The truth is that this dilemma has begun to ease in the past 12-18 months. There are now already applications that can be produced and manufactured.”
In order to produce metallic nano-metric powder, keeping in mind that the process is based on decomposing the raw metal in the form of bars into smaller components and turning them into powder. The metal is decomposed in a chemical reaction. A process is then used to make the metal atoms denser, creating a thin layer. The problem is that this process must be halted at a certain stage to prevent the powder from becoming too crude. An industry rule of thumb says that every time the diameter of the powder particles is halved, the amount of material becomes one eighth as much. One ton of metal produces 300 kg of powder when the size of the particle is one micron. When the particle size is reduced to 0.5 micron (500 nano-meters), the amount of powder becomes 50 kg. At 0.25 micron (250 nano-meters), we get 10 kg, at 0.125 micron (125 nano-meters), we get six kg, and at 60 nano-meters, we wind up with only 0.7 kg. It is easy to see why one kg of palladium powder will cost you $15,000.
In contrast with current processes, which use a liquid mixture, NanoPowders produces an alloy of the desired metal, say gold, with another metal, for example aluminum. The next stage is decomposing the alloy into its components. Since the alloy is composed of two solids, not a solid saturated in a liquid, the atoms move more slowly, and therefore are not crowded together in a crude powder.
The company claims it can produce hundreds of kilograms of various metals per month: silver, platinum, palladium, and gold, and their compounds. The metallic powders have three characteristics: they conduct electricity like their solid counterparts, they are small and easy to mold (since they are powders), and, most dramatically, their nano-metric dimensions are transparent to light.
Nano-metric powders have almost unlimited applications. Since they distribute heat more efficiently than thicker powders, they can be used to view chips, thus dispensing with the fan stationed next to every chip. The fuel cell era will require electrodes with a large surface area, which will require electrically conductive coatings, such as the nano-metric powders. The medical systems that will one day navigate the human body will require a defensive coating against the stomach acids or other destructive liquids. The powder can be combined with plastic products to make the plastic conduct electricity. There are many other applications.
A conversation about the size of the market once again leads to the conclusion that the numbers are very fluid. On the one hand, Matzner’s forecast estimates the market for nano-metric powders at a minimum of $500 million in 2005 (a minimum, because the calculation does not include two of the five markets in which the company can operate). On the other hand, a $200 million estimate from 1996 for only one of the five markets in 2000 has already been upset – the market actually grew to $600 million.
In contrast with the original plan, the company does not plan to manufacture and sell the powders, but wants to cooperate with potential customers, with whom the applications will be developed. The business model is to supply the powder to well-defined projects, and develop it for those projects, rather than telling the customer, “Take the powder and do whatever you want with it.” Each project is initially estimated at several hundred thousand dollars over two years, but several projects are taking place simultaneously.
The first agreement has already been signed, and two more are on the way. In case you were wondering, the coveted exit will come when one of these joint projects attracts the attention of the cooperation partner, who will prefer to acquire the know-how, instead of continuing to pay for cooperation. “If someone wants to buy 100 kg of powder, we won’t say no,” Matzner says, “but that’s not our main line of business.”
Published by Israel's Business Arena on 21 March 2002