Haydale Graphene Industries (LON:HAYD) chief executive Ray Gibbs peppers our interview with what he refers to as the f-word.
Don’t think for one minute this was an expletive-laden conversation.
No, far from it. In Gibbs’ lexicon, the f-word is ‘functionalise’, a verb that describes the process of getting a substance to perform special tasks.
For what Haydale has perfected is a method of harnessing some of the potential of the new super-material graphene. In other words functionalising it; making it fit for purpose.
It does this by properly dispersing graphene.
In its strictest sense, graphene is a single layer of carbon atoms that are so small that three sheets are only one-millimetre thick.
It has some exceptional electrical, mechanical and strength capabilities as well as being impervious to gases.
Billions of pounds are being spent by the likes of Samsung, Sony and LG to harness the full potential of the material, which was discovered in 2004 by Nobel prize-winners Andre Geim and Konstantin Novoselov.
Haydale’s emphasis is not on this ultra-thin material, but on the applications of graphene nano-platelets a few graphene layers thick that could be revolutionary in their own right in the spheres of composite materials, batteries and inks.
Haydale’s dry plasma process can remove impurities and add appropriate chemical groups onto the material which Gibbs describes as a sort of ‘Velcro hook’.
Haydale has the ability to use a range of gases for this such as oxygen, nitrogen and fluorine.
This functionalisation process enables dispersion of the graphene evenly throughout the given medium into which it is mixed.
“Graphene is carbon based and really likes to be on its own, so mixing it to get that dispersion and realise the outstanding properties is hard to do,” says Gibbs.
“So in functionalising Graphenes properly it can make the material stronger, stiffer or more conductive, depending on the requirements.”
It is a cost-effective method when scaled up and is environmentally friendly.
These factors and the ability to tailor the properties of the graphene precisely to meet a certain need, mark out Haydale’s solution as a real breakthrough.
Other methods of making graphene nano-particles fit for purpose require acid, which means “punching holes through the structure”, Gibbs says. It is not a particularly reliable process and of course has the potential to be quite dangerous.
While the big electronics firms are looking to create thinner TVs and faster and smarter smartphones, Haydale’s target markets of composite materials, batteries and printing, while less glamorous, could be huge.
The push towards commercialising the business starts in the second half of this year.
Grants from organisations such as the Technology Strategy Board and Horizon 20/20, which are focusing their financial firepower on graphene, might help eliminate some of the costs associated with development.
Meanwhile, industry collaborations could fast-track certain developments, funded by a larger cash rich partner.
The group has in-house manufacturing capacity and also runs its own online “graphene” supermarket.
Ultimately Haydale hopes to licence out the technology, and there may even be the opportunity to hive off parts of the business.
“A bit like a cargo container we can land it [the technology] with a partner. The ship then sails off to the next port,” says Gibbs.
“The exit road, if we are as successful as we want to be, will be someone in the chemical world.
“They will see that the opportunity is completely de-risked and offers a range of opportunities. I can think of three or four major businesses we would appeal to.”
Initially, though, “it is all about demand pull for our technology”, says the Haydale chief executive.
In layman’s terms, this means getting industry interested and then excited about graphene and its potential to revolutionise their industries, while working with them to create the right product.
“I am a great believer that once one aspect of graphene is put into an industrial process it will take off,” says Gibbs.
“In the graphene space I’m sure nobody is making money, but then if you look at carbon fibre companies 15 years ago that was absolutely the case; now look at that industry.”
Haydale’s introduction to the market was far from auspicious, with the stock down around 40% from April’s float price.
But rather than reflecting an underlying problem with the business, the slump was precipitated by investors in a pre-IPO round at 93p a share cashing out.
The listing raised £6.6mn, which should see the group through to break-even in 2017 as well as giving Haydale the financial muscle to invest in the development of the business.
The company’s broker Cantor Fitzgerald is bullish on the stock, the model and the management, although its price target is a realistic 160p a share – which points to around 28% upside from the current share price.
“If successfully developed, adopted and the intellectual property protected, Haydale should be in a strong, early mover position as an enabler of many of the proposed graphene applications,” concludes analyst Andy Chambers.