Periodic Reporting for period 1 - STONE WOOD (Silicon Treatment ON Exterior Wood)
Reporting period: 2016-06-01 to 2016-09-30
Wood is a versatile material which is widely used to manufacture goods for architecture and marine applications due to its lightness, resistance and workability. However, wood suffers degradation due to biological and physical agents such as sunlight or humidity when exposed to the exteriors. For these reasons protective wood products are applied to preserve its beauty and functionality against biological, physical and chemical attacks. Nonetheless, despite the use of coatings, 10% of wood used in outdoor products, such as decks, bridges, etc. needs to be replaced every year due to deterioration .
Sioo Wood Protection AB, Sioo, will commercialize a new generation of silicon-based waterborne wood treating systems, which increases up to ten times the lifespan of wood surfaces (10 years for decking, 15 years for cladding) compared with traditional wood protectors, and therefore represents significant savings, of up to 65% for our customers. Moreover, Sioo:x is health and environmentally friendly, as it is totally biocide and VOCs-free, and it will easily fit in any market as it is highly customizable. In addition, it can be applied without heating, and over moist/wet wood.
Sioo Wood Protection AB, Sioo, will commercialize a new generation of silicon-based waterborne wood treating systems, which increases up to ten times the lifespan of wood surfaces (10 years for decking, 15 years for cladding) compared with traditional wood protectors, and therefore represents significant savings, of up to 65% for our customers. Moreover, Sioo:x is health and environmentally friendly, as it is totally biocide and VOCs-free, and it will easily fit in any market as it is highly customizable. In addition, it can be applied without heating, and over moist/wet wood.
In order to confirm the feasibility of our project we have carried out a 4-month study consisting on:
- Technical Viability Plan: we tested some modifications to our formula regarding the petrification time reduction and applicability over other wood species such as larch and thermally treated wood. We have identified the most important tree species of our target markets and define the modifications that we need to perform to our product. We found out that we need to test other ageing agents to reduce the petrification time by altering the pH and Si/K-ratio. We have also identified the needed certificates and labels to successfully commercialize our product.
- Business Plan Our Business plan demonstrated that our target market, wood producers and consumers market (Professionals and DIY market), is relevant. The global sawn wood production reached 447 million m3 in 2013 of which our first target market, North America and Europe, accounted for 120 and 100 million m3 respectively. In addition, in the consumers market the DIY segment represented €375 billion of which € 245 billion corresponded to North America, which further demonstrates its interest as target market. The realistic financial analysis has shown that with Sioo:x enhanced technology we can easily reach a 1.3 % penetration in the market, permitting us to increase our turnover by 2023 up to € 75 million. To achieve so, we have drafted a business plan including all sort of communication and dissemination activities.
- Freedom to Operate Analysis: our analysis showed that no threats arise from the current protected technologies and that we can continue our STONEWood project and further protect our technology by expanding our patents.
- Technical Viability Plan: we tested some modifications to our formula regarding the petrification time reduction and applicability over other wood species such as larch and thermally treated wood. We have identified the most important tree species of our target markets and define the modifications that we need to perform to our product. We found out that we need to test other ageing agents to reduce the petrification time by altering the pH and Si/K-ratio. We have also identified the needed certificates and labels to successfully commercialize our product.
- Business Plan Our Business plan demonstrated that our target market, wood producers and consumers market (Professionals and DIY market), is relevant. The global sawn wood production reached 447 million m3 in 2013 of which our first target market, North America and Europe, accounted for 120 and 100 million m3 respectively. In addition, in the consumers market the DIY segment represented €375 billion of which € 245 billion corresponded to North America, which further demonstrates its interest as target market. The realistic financial analysis has shown that with Sioo:x enhanced technology we can easily reach a 1.3 % penetration in the market, permitting us to increase our turnover by 2023 up to € 75 million. To achieve so, we have drafted a business plan including all sort of communication and dissemination activities.
- Freedom to Operate Analysis: our analysis showed that no threats arise from the current protected technologies and that we can continue our STONEWood project and further protect our technology by expanding our patents.
STONEWood aims to revolutionize the market, as it is a new product which not only covers applications currently covered by several different products (coatings, preservatives and biocides), but presents additional advantages: encapsulation of biocides for industrial market, a longer lifespan wood treating system, a low cost product with premium-like characteristics for mass market, etc.
Taking into account the expected turnover for 2023, i.e. € 94 million, this would imply more than 3000% increase with respect to our 2015 turnover. In this way, considering the total investment, € 3.85 million, the Return on Investment, ROI, defined as (Total Profit-Total Investment)/Total Investment) is 4.9 and the payback would be reached by May 2021, with a Breakeven of 4,800 m3 of our new products. STONEWood will also boost our staff since new 145 job positions will be created, representing an increase of around 1000% by 2023.
Taking into account the expected turnover for 2023, i.e. € 94 million, this would imply more than 3000% increase with respect to our 2015 turnover. In this way, considering the total investment, € 3.85 million, the Return on Investment, ROI, defined as (Total Profit-Total Investment)/Total Investment) is 4.9 and the payback would be reached by May 2021, with a Breakeven of 4,800 m3 of our new products. STONEWood will also boost our staff since new 145 job positions will be created, representing an increase of around 1000% by 2023.