During the Phase 1 of the SME Instrument Rubber Products has completed the activities set out in the work packages, and achieved a clear understanding on how to move forward with business development and up-scale the use of NGR® technology on a global level. Following activities have been completed:
1. A detailed market analysis. It helped to clearly define the target market for NGR® technology and resulting products, estimate its size, map potential customers in the region and the products they produce, identify their needs for rubber that could be substituted with NGR® products. Main findings:
- Increased demand for rubber goods and lack of an optimal substitute for natural and synthetic rubber benefits the market entry of NGR® technology.
- Given the innovative characteristics, the NGR products create a category of their own – a breakthrough alternative to natural and synthetic rubber.
- By partially substituting natural and synthetic rubber with NGR products, companies will become more competitive in the rubber industry (regardless of the position in the value chain).
2. Product tailoring to fit market needs and launch of a pilot program. Based on the select potential clients’ needs, Rubber Products team in collaboration with IMPIB institute in Poland and other partners, has worked on product development. The Phase 1 pilot program was based on the results of preliminary product tailoring, and it began with delivering new type of NGR® products to select clients in order to test and validate if the new NGR® products can easily be integrated into the current production process.
As a result, the use of NGR - M and NGR - C products has been tested in automotive industry, tire production, renewal of worn-out tires and production of various rubber elements, such as pipes. Positive test results showed that by substituting natural and synthetic rubber with NGR®, producers can significantly reduce their cost of materials and the side benefit is that waste tires and other rubber goods are not ending up as waste product. However, based on the initial talks and trials with 30 potential clients, it has been identified that it is difficult for them to integrate NGR® - C and NGR® - M directly into their production processes. Through additional R&D activities and market tests, it was found that the best alternative to NGR® -C and NGR® -M is Next Generation Rubber Blocks (NGR® -B). Following, Rubber Products team has analysed the capacity of the production plant in Riga, and has developed a plan on how to build the required capacity for production of NGR® -B and also ensure competitive manufacturing.
3. Elaboration of the Business Plan. Rubber Products team, with the help of external experts, developed and added depth to the overall business model and built the financial prognosis for further implementation of the project.
In order to scale up the use of NGR technology, Rubber Products should unfold simultaneously three distinctive business lines that are interrelated and interdependent. The first business line, sales of NGR products, will be tested in the market first, in order to validate the new physical features of the improved product created by Rubber Products. This will ensure successful commercialization of the second, and most critical, business line – licensing of NGR technology. The R&D business line encompasses the first two business lines as it provides R&D services to companies who have purchased either the NGR products or the license for NGR technology.
