Duraflux TM

Nanofiltration Membrane

Sara Rolfe
Business Development
Eltron Research & Development Inc.
303-530-0263 x115
business@eltronresearch.com
CONTENTS

Executive Summary
Background
Nanofiltration Overview
DurafluxTM Advantage
Applications
DurafluxTM Products
Unfair Advantages
Intellectual Property
Government Funding
Commercialization Strategy
Business Model
Team
Eltron R&D Inc
New Venture
Partners & Advisors
Market
Snapshot
Issues, Opportunities, Trends
Value Proposition
Industry Participants
Market Size
Competitors
Technology & Product Development
Financial Projections
Future Opportunities

Eltron Research & Development Inc. 2

EXECUTIVE SUMMARY
Eltron Research & Development Inc, a 30 year old private lab, has invented and
demonstrated a nanofiltration technology capable of operating under harsh
environments and surviving periodic cleaning cycles. This technology will:
i. displace other more expensive and less effective water treatment
technologies,
ii. displace lower performing nanofiltration membranes in the installed base
and
iii. expand membrane based filtration into previously unavailable applications
such as produced water from hydrocarbon extraction ($50B market).

The proposed path to market is to create a new venture to complete membrane

optimization, to scale-up the manufacturing process and to enter the marketplace
with a commercial offering. The new venture will require a management team and
the resources to execute the business plan. This document is NOT a business plan
but rather Eltrons perspective of the commercialization opportunity.

The DurafluxTM nanofiltration membrane technology provides robust water

softening and desalination filter products that will survive harsh operating
conditions (high temperature, frequent system upsets, organic solvents, strong
oxidizers, frequent cleaning) while providing the highest water production of any
comparable filter membrane product.

The intellectual property embodied in the DurafluxTM nanofiltration membrane

technology is partially protected by patent coverage. Additional coverage is
provided by trade secrets which are not discernable through reverse engineering.

The existing market for nanofiltration is approximately $300 million and growing
fast but only represents a fraction of this opportunity. The DurafluxTM nanofiltration
membrane will take market share from the $3B reverse osmosis market and the
$50B produced water market.

Over $1 million (mostly SBIR) has been spent to date developing the technology. An
additional $3 million will be required to reach market entry in 18 months. The first
two years of revenue will see $5M+ in sales from smaller, distributed or mobile,
water treatment systems. Once proven on the smaller scale, significantly increased
revenues will come from large scale municipal or industrial installations resulting in
profitability by year four. An additional $5M investment will be required to reach
this point. An exit opportunity would be expected in year five.

Eltron Research & Development Inc. 3

BACKGROUND
Nanofiltration
The burst of filtration and filtration-related activity that followed the development
of the phase-inversion process for the manufacture of polymeric membranes, in the
early 1960s, led to the establishment of three membrane separation processes:
microfiltration, ultrafiltration(UF) and reverse osmosis(RO). Each is capable of
removing smaller and smaller particles or molecules. A gap was left between UF
and RO. Membrane development during the 1970s and 1980s, led to a loose RO
membrane process, which was given the name nanofiltration (NF).

The key difference between nanofiltration and reverse osmosis is that the latter
retains monovalent salts (such as sodium chloride), whereas nanofiltration allows
them to pass but retains divalent salts such as sodium sulphate and multivalent ions
such as calcium. This difference also enables NF membranes to operate at greatly
reduced operating pressures with greatly increased flow rates as compared to
Reverse Osmosis.

Nanofiltration is a low to moderately high pressure (typically 50 - 450 psig) process

in which monovalent ions will pass freely through the membrane but highly charged,
multivalent salts and low molecular weight organics will be rejected to a much
greater degree. Typical NF applications include water softening, desalination of
dyestuffs, acid and caustic recovery and color removal.

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The progress of much of the filtration business is being driven by demands for finer
and finer cutpoints. Nanofiltration is seeing remarkable growth largely because of
its unique ability to separate and fractionate ionic and relatively low molecular
weight organic species.

The membranes are key to the performance of nanofiltration systems. They are
produced in plate and frame form, spiral wound, tubular, capillary and hollow fibre
formats, from a range of materials, including cellulose derivatives and synthetic
polymers, from inorganic materials, ceramics and from organic/inorganic hybrids.

Recent developments of membranes for NF have greatly extended their capabilities

in very high or low pH environments, and in their application to non-aqueous
liquids. The plastic media are highly cross-linked, to give long-term stability and a
practical lifetime in more aggressive environments. NF membranes tend to have a
slightly charged surface, with a negative charge at neutral pH. This surface charge
plays an important role in the transportation mechanism and separation properties
of the membrane.

As with any other membrane process, nanofiltration is susceptible to fouling, and so

nanofiltration systems must be designed to minimize its likelihood with proper
pretreatment, with the right membrane material, with adequate cross-flow
velocities to scour the membrane surface clear of accumulated slime, and by use of
rotating or vibrating membrane holders.

DurafluxTM Advantage
DurafluxTM performance advantages include high stability under elevated
temperatures, oxidizers, pressure fluctuations, transition metals and organic
solvents. These advantages are expected to make this nanofiltration technology

Eltron Research & Development Inc. 5

ideal for treating highly contaminated water, hot water processing, and separations
in hydrocarbon solvent streams. Also, this technology will be uniquely applicable in
distributed systems where system fluctuations and upsets are expected.

The membrane will sell for a slight premium but will provide the following cost
savings:
dramatically reduced operating costs due to lower power (pumping)
requirements
smaller plant footprint due to increased flux
reduced pretreatment requirements due to increased stability
longer lifetime due to increased stability and tolerance to cleaning cycles

Additionally, DurafluxTM membranes offer a manufacturing advantage relative to

conventional spiral-wound and hollow fiber reverse osmosis (RO) and
nanofiltration (NF) technology. DurafluxTM membrane are produced by a direct
polymer deposition onto a solid substrate which is then loaded into its pressure
housing without winding, adding flow spacers, laminating, gluing, taping, or potting
steps. This conventional membrane casting process line is avoided. DurafluxTM
membranes can be produced with minimal production equipment enabling a faster
time to market on the small scale. Full-scale membranes could be made for field
trials and small customer orders very soon after the development work has reached
its critical milestones.

APPLICATIONS
Nanofiltration membranes are primarily used in the treatment of fresh, process and
waste waters. They are currently in service for the following applications:
Water softening of fresh water
Pulp and paper process water
Brackish water
Desalination pretreatment
Wastewater treatment and reclamation
Grey and black water treatment

Food industry applications are quite numerous. In the dairy sector, NF is used to
concentrate whey, and permeates from other whey treatments, and in the recycle of
clean-in-place solutions. In the processing of sugar, dextrose syrup and thin sugar
juice are concentrated by NF, while ion exchange brines are demineralised. NF is
used for degumming of solutions in the edible oil processing sector, for continuous
cheese production, and in the production of alternative sweeteners.

There are more applications in the whole chemical sector (including petrochemicals
and pharmaceuticals) than in the rest of industry put together. While many of these
applications are at the concept or pilot stage NF is already a valuable contributor to
the totality of the chemicals industry. The production of salt from natural brines
uses NF as a purification process. Most chemical processes produce quite vicious
wastes, from which valuable chemicals can be recovered by processes including NF.

Eltron Research & Development Inc. 6

The high value of many of the products of the pharmaceutical and biotechnical
sectors allows the use of NF in their purification processes.

NF membranes are also used for the removal of natural organic matter from water,
especially tastes, odours and colours, and in the removal of trace herbicides from
large water flows. They can also be used for the removal of residual quantities of
disinfectants in drinking water.

As mentioned previously, DurafluxTM membranes differentiate themselves in their

ability to survive harsh conditions. It is therefore anticipated that a strong value
proposition will be found in the following applications:
Produced Water Treatment (membrane based systems have previously been
too fragile for this enormous market opportunity)
Pulp and paper water reuse
Mining processes
Geothermal water conditioning
Tar sands production, water recycle
Refinery applications, water and hydrocarbon separations
Textile dye removal
Nuclear power plant operations (outside pressure boundary)

It is important to note that nanofiltration is not restricted to the treatment of

aqueous suspensions. Indeed one of the largest NF plants was installed at a
petroleum refinery for the dewaxing of oils. Many organic system separation
processes are highly energy intensive and by contrast, NF can be an energy saving
alternative (over distillation, for example).

A thorough study of the potential applications is needed.

DurafluxTM PRODUCTS
Membranes
The DurafluxTM technology has been demonstrated on multiple supports including
industry standard polymer flat sheets which can be used in spiral wound modules
and solid tubular substrates as well.

The initial product offering with the greatest differentiation and advantages in the
market is anticipated to be the solid tubular form factor. Qualitative product
specifications are as follows (more quantitative data provided in Technology &
Product Development section below):
2 to 10x water flux over conventional NF
Higher thermal stability than conventional NF (80 C versus 50 C)
Improved stability to transition metals and oxidizers
Extended shelf life (> 2 years dry)
Longer service lifetime
Resistant to mechanical erosion
Compatible with steam cleaning or chemical solvent cleaning

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The target product is a membrane module comprising a commercially available
ceramic UF substrate with the DurafluxTM polymeric membrane coating. Known UF
ceramic membranes that may be used as a Duraflux substrate include offerings by
Media & Process, TAMI Industries, Corning and the following examples:

Veolia/HPD CeraMem Pall Corporation Membralox Jiangsu Jiuwu Hitech Co., LTD

Small Filtration Systems

The DurafluxTM Membrane module will be deployable into systems that currently
support the substrate UF membrane. Such an installation will require some design
and control system modifications. It is anticipated that the first installations will be
small, distributed, mobile systems. The following image represents a typical
portable membrane filtration skid:

Example of a portable membrane filtration skid.

Large Systems
Once mature and proven, DurafluxTM membranes will be the work horse in large
scale projects such as water treatment plants.

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 Example of a water treatment plant employing NF membranes.

UNFAIR ADVANTAGES
Intellectual Property
The process by which the DurafluxTM membrane is fabricated involves over 35
different parameters, variables and non-intuitive tricks most of which cannot be
discerned by analyzing the product. This provides a very defensible intellectual
property position. Eltron has applied a protection strategy involving partial patent
coverage complemented by a significant collection of trade secrets.

Government Funding
Eltron has developed this nanofiltration technology on government funding from
the Department of Defense (Army) and The Department of Energy. To date, over
$1,000,000 has been spent developing this technology. Another funding
opportunity available through DOEs SBIR Phase II program is currently providing
an additional $750,000 for technology development which started in late 2010.

COMMERCIALIZATION STRATEGY
As mentioned previously, Eltrons commercialization strategy with the DurafluxTM
membrane technology is to create a new venture. Eltron will retain an equity stake
in the new venture and be entitled to licensing fees and royalties as negotiated with
the new entitys stakeholders.

Business Model
It is proposed that the new venture be a product company supplying DurafluxTM
membrane modules to distributors of filtration systems and project developers of
large filtration facilities. The success of this model will depend upon:
i) the economics of revenues passing through the distributors and
ii) such partners willingness to adopt and sell DurafluxTM membranes.

Membrane Sales
The following companies sell membrane modules for other manufacturers and
would be likely suppliers of DurafluxTM membrane modules.

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COMMERCIAL MEMBRANE DISTRIBUTORS
M.L. Ball Co.,Inc Atlantic RO Products Global Filter Corporation America RO Systems
Norcross, GA Southport, NC Cedar Rapids, IA Richmond, KY
Pacific RO Products Pure Aqua Inc. Applied Membranes, Inc. Membranes for Less
San Diego, CA Santa Ana, CA Vista, CA Omaha, NB

Small & Large Filtration System Sales

As discussed above, it is probable that initial sales and a significant portion of all
sales will come through small, distributed or portable filtration systems. Many
companies sell small systems employing membrane modules manufactured by other
suppliers. Three examples:
Applied Membranes Inc.
- http://www.appliedmembranes.com/mobile_water_treatment_syste
ms.htm
RO Consumables
- http://www.roconsumables.com
Anderson Water Systems Inc. (subsidiary of Degremont Technologies) sells
skids with various manufacturers membranes
- http://www.degremont-
technologies.com/IMG/pdf/Nanofiltration_US_Anderson.pdf
Siemens sells skids with Dows FilmTec nanofiltration membranes
- http://www.water.siemens.com/SiteCollectionDocuments/Product_L
ines/Industrial_Process_Water/Brochures/PWS-M84N-DS-0308.pdf

There may be a valuable opportunity for the new venture to produce and sell its
own skid mounted systems in competition with these companies. This should be
investigated further. While greater revenues may be realized this way, it will
require significantly different skill sets and resources. In addition to membrane
excellence, the new venture would need to provide: Process System Design, Systems
Fabrication, Project Management, Installation Support, Document Preparation,
Validation/Qualification, Risk Analysis, Operator Training, Spare Parts, Service
Contracts and After-Market Service. At this time it is assumed that such
competencies may be added later but will not be required business functions at
start-up.

MARKET
Snapshot
The market for membrane-based water filtration and separations is comprised of
microfiltration, ultrafiltration, nanofiltration and reverse osmosis. Similar variants
include membrane distillation, pervaporation and forward osmosis. These
membrane technologies cover the filtration spectrum from particulate removal to
seawater desalination and solvent separations.
The largest market is desalination served by RO membranes which is a $3B
market having a demonstrated annual growth in excess of 10% (membranes and

Eltron Research & Development Inc. 10

equipment). Nanofiltration is the smallest segment of the four at $300 million but
growing the fastest.

Issues, Opportunities, Trends

Reduce Power Consumption
Many new membrane products target higher water production to reduce pumping
costs, capital costs and energy consumption by allowing membranes to operate at
lower pressures. There are theoretical and practical limits for the minimum
pressure required to drive reverse osmosis desalination determined by the
osmotic pressure of the salt-containing feed water. Seawater desalination
membrane technology is well on its way to approaching these limits.

RO and NF membranes for purifying water containing lower salt concentrations or

for separations in industrial processes have more flexibility in making
improvements in selectivity and performance characteristics in niche markets.

Increase Recovery and Reduce Brine Reject Stream

The amount of water that can be recovered from a feed stream containing dissolved
solids (salts) is determined by the solubility limit of the dissolved solid(s) being
concentrated in the reject stream. The higher the water recovery the smaller the
volume of brine concentrate to dispose of, which can be a significant cost for land-
based filter plants where discharge to the ocean or water treatment plant is not an
option.

Pretreatment and antiscaling additives are used to increase the potential water
recovery. Pretreatment methods can include precipitation and UF removal of low-
solubility salts.

Increase Membrane Durability, Longevity

Disruptions or excursions in normal filter plant operations can result in membrane
damage and shortened membrane life. Failure mechanisms include chemical
instability of substrate, pH instability of selective layer, oxidation by chlorine,
membrane delamination, abrupt pressure changes and pressure cycling, seal failure
at elevated temperatures, irreversible membrane fouling, damage from dehydration.
Desalination membranes can encounter all of the above failure mechanisms,
therefore there are standard practices that are followed for membrane installation
commissioning and operation. If these protocols are not followed or there are
uncontrolled excursions during operation membrane damage or failure can occur.

Some conventional RO/NF membranes have been designed to achieve higher

operating temperatures and greater pH stability, but options are relatively limited.
There are several development programs under way to develop ceramic-based NF,
but products are not yet on the market.

Existing products (flat sheet RO) have extensive manufacturing and installation
infrastructure investments behind them. A significantly different product will have

Eltron Research & Development Inc. 11

to present a lot of value, growth potential, can be a drop-in replacement or serve
new customers/applications.

High temperature membrane processing

Spiral-wound membrane modules are limited in their operating temperature range
due to softening and delamination or failure of tapes, glues and seals used in their
construction. High pressure seawater desalination membranes operate below 30
C. Low pressure RO and NF can operate up to 55-65 C with only one product rated
for up to 80 C (dairy & beverage applications). A small amount of feedback we have
heard from a limited number of users indicates that these products do not perform
that well at their upper temperature limits and have a shortened lifetime.

Ceramic UF membranes and sintered metal filters are used for hot filtration of
particles and large molecules (proteins, polymers), but desalination capabilities are
not yet available on the market.

Decrease filter plant pretreatment requirements

RO and NF Membranes generally require extensive pretreatment of water to remove
components that will damage the membranes. This includes suspended solids,
cationic surfactants, chlorine and other strong oxidizers, organic solvents. Reducing
the pretreatment requirements would decrease operating costs and consumables as
long as membrane maintenance did not increase more than the cost savings or
membrane lifetime shortened.

Decrease manufacturing costs of RO/NF membranes

RO and NF membrane manufacturing has historically made desalination membranes
very expensive. As the technology matures large-scale manufacturing facilities and
increasingly automated fabrication and assembly lines have improved the
economies of scale to produce spiral-wound filter modules.

Recycling or repair of damaged filters

This has been a pipe dream for desalination membranes. Recycling may be
possible with ceramic-supported composite membranes and represents a potential
Green marketing feature. A membrane exchange program could be a unique
market offering.

Increase Membrane Processing in industrial applications

Durability, compatibility, selectivity issues must be addressed for each application,
niche markets.

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 Value Proposition
The following table provides a breakdown of the DurafluxTM value proposition for three different representative applications.

APPLICATION COMPARED TO ADVANTAGE BENEFIT NOTES

Brackish Desalination RO Membranes Energy consumption (pumping costs) Reduces O&M cost by 23% 50% reduction in power costs provides 23% reduction in O&M costs
Chlorine tolerance Reduces O&M costs by 1% Less membrane replacements
Survives cleaning cycles Reduces O&M costs by 3% Less performance degradation and less membrane replacements
Reduced pretreatment requirements ? Not yet quantifiable.
Reduced concentrate disposal costs Reduces O&M costs by 0.34% Reduced salt rejection corresponds to lower concentrate volume by
Reduced capital costs Reduces CapEx by 25% Higher flow rates will require 1/3 as many membrane modules at 25% cost premium
NET BENEFIT: 26% Reduced Annual Plant Cost (27% Reduction in Operating & Maintenance Costs + 25% Reduction in Capital Expenses)
NF Membranes Reduced energy consumption (pumping costs) Reduces O&M cost by 7% Average power savings over other NF products is estimated to be 16%
Chlorine tolerance Reduces O&M costs by 1% Less membrane replacements
Survives cleaning cycles Reduces O&M costs by 3% Less performance degradation and less membrane replacements
Improved tolerance to suspended solids Reduces O&M costs by 1% Less performance degradation
NET BENEFIT: 7.2% Reduced Annual Plant Cost
Produced Water Ion Exchange Removes more stuff See block flow diagram for
Higher service temperatures reduction in process complexity
Less pretreatment benefits. Economic benefit has
not been quantified.
RO Membranes Energy consumption (pumping costs) Reduces O&M cost by 23% 50% reduction in power costs provides 23% reduction in O&M costs
Solvent tolerance (naturally ocurring organics) Reduces O&M costs by 1% Less membrane replacements
Survives cleaning cycles Reduces O&M costs by 3% Less performance degradation and less membrane replacements
Higher service temperatures Reduces CapEx by 5% Eliminates the cooling impoundment expense.
Improved performance for interrupted operations Reduces O&M costs by 1% Less membrane replacements (interrupted operations tend to destroy membranes).
Reduced concentrate disposal costs Reduces O&M costs by 0.34% Higher service temps can achieve higher water recovery rates
NET BENEFIT: 19% Reduced Annual Plant Cost (28% Reduction in Operating & Maintenance Costs + 5% Reduction in Capital Expenses)
Dairy and Food NF Membranes Energy consumption (pumping costs) Reduces O&M cost by 7% Average power savings over other NF products is estimated to be 16%
Hot processing and/or hot water sterilization Reduces O&M costs by 1% Less membrane replacements (current products suffer from thermal instability)
Survives cleaning cycles Reduces O&M costs by 4% Less performance degradation and less membrane replacements
Improved performance for interrupted operations Reduces O&M costs by 1% Less membrane replacements (interrupted operations tend to destroy membranes).
Chlorine tolerance Reduces O&M costs by 1% This industry is likely to flush membranes with tap water containig residual chlorine
NET BENEFIT: 8.4% Reduced Annual Plant Cost (14% Reduction in Operating & Maintenance Costs)
NOTE: Typical plant costs are split 40% CapEx and 60% OpEx.
Example Process Improvement
Comparing the DurafluxTM membrane to non-membrane technologies will require
additional analysis. As referred to in the previous table, the following block flow
diagram shows an example of process improvements for the treatment of produced
water. The process employing the DurafluxTM membrane is represented in the
Improved Process which has two less steps than the Conventional Process.

Industry Participants
Membrane manufacturers with products NOT DIRECTLY competing with Duraflux
(polymeric, flat sheet, spiral-wound, hollow fiber for RO & NF applications)
DOW-Filmtec Sepro
Koch Membrane Systems Sparex
Hydranautics/Nitto Denko Pall Corp.
GE-Osmonics Synder
Toray Osmosis Technologies
TriSep Parker Advanced Filtration
 Porex Filtration
There are a number of smaller startup companies producing unique membrane
products for RO, NF and FO.

Ceramic based NF Technologies DIRECTLY competing with Duraflux

(all are in the development stage):
Novasep (all ceramic NF monolith)
Other small European startups (all ceramic NF monolith)
Veolia/HDP/Ceramem (NF)

Market Size
The market size for water filtration membranes is approximately $2.5 billion and
expected to more than double over the next five years. Nanofiltration membranes
capture less than 10% of that market but are the fastest growing segment. The
following reports are available (at a cost) for more complete market summaries.

Fredonia Group Report on Membrane Separation Technologies, 2008

US demand to grow 8.2% annually through 2012. Demand for membrane materials is expected to increase 8.2
percent per year to $4.3 billion in 2012. Growth will be driven by ongoing interest in process fluids with higher purity
levels in a variety of markets, as well as the introduction of increasingly strict environmental regulations concerning the
quality of water and wastewater streams. These factors are leading to the rising penetration of membranes into markets
such as water and wastewater treatment, and food and beverage processing, as industry requirements surpass levels
that can be achieved with conventional filtration equipment alone. Additionally, a growing number of industries are using
membranes to reduce water use and waste disposal expenditures, and to improve water re-use and material recovery.
Value growth will be aided by the increasing use of value-added, high performance membranes, and a gradual shift
toward higher value materials.

Nonpolymeric membranes to outpace polymeric types. Polymeric membrane materials will continue to dominate the
market as they have lower initial costs and greater product flexibility than nonpolymeric materials. However, polymer-
based membranes are subject to an increasing level of competition from nonpolymer membranes because of
performance limitations, including poor performance in extreme temperatures, intolerance to a number of chemicals and
a tendency toward biological fouling and clogging. Demand for nonpolymeric materials, including ceramic, metal and
composite types, is expected to record double-digit growth through 2012, due to their better performance in extreme
temperatures and greater pH ranges, as well as generally lower maintenance costs since they are better able to
withstand the high pressure backwash and/or chemicals involved in cleaning the membrane.

Full Report Available at: http://www.fredoniagroup.com/brochure/23xx/2307smwe.pdf

Global Markets Direct Report on Water Treatment Membranes, November 2009

Membrane Market for Water and Wastewater Treatment Forecasts and Analysis to 2015

Global Markets Direct estimates that the membrane treatment market for industrial water and wastewater is expected to
grow at a Compound Annual Growth Rate (CAGR) of 13% from $2.3 billion in 2008 through 2015 to reach $5.5 billion.
Increasing volume production and technological improvements have reduced capital cost of membrane systems and
operating cost to the point that membrane treatment is now seen as a viable alternative in many water and wastewater
applications. Declining costs are stimulating the membrane treatment growth in the industrial sector.

Full Report Available At: http://www.mindbranch.com/prod-toc/Global-Membrane-Water-R3480-14509/

Eltron Research & Development Inc. 15

 BBC Report on Nanofiltration, September 2007 (Report ID:NAN045A)

Nanofiltration is a pressure-driven, membrane-based separation process whose characteristics fall between those of
ultrafiltration and reverse osmosis.

The growing interest in the utilization of nanofiltration membranes primarily stems from their unique physical properties,
making them particularly well suited for specific applications, as a low-cost alternative (both in terms of unit price and
operating costs) to reverse osmosis.

HIGHLIGHTS
The global market for nanofiltration membranes increased from $89.1 million in 2006 to an estimated $97.5
million by the end of 2007. It should reach $310.5 million by 2012, a compound annual growth rate (CAGR) of
26.1%.
The water treatment sector is projected to account for 72.7% of total revenues in 2007, worth an estimated
$70.9 million in 2007 and expected to reach $238.2 million by 2012, a CAGR of 27.4%.
Continued growth in regulations aimed at protecting the environment will positively affect the future expansion
of the nanofiltration membranes market.

Full Report Available at: http://www.bccresearch.com/report/NAN045A.html

Frost & Sullivan Report on Nanofiltration, December 2008

Nanofiltration - An Overview of Technology Development Status and Trends

Technological Developments in Membrane Materials Boost Innovation in the Nanofiltration Market

Contrary to the popular opinion that membrane filtration of aqueous solutions is a thoroughly researched area with little
scope for innovative technological achievements, there have been a spate of exciting changes in the relatively new
nanofiltration market. Nanofiltration will encourage significant technical innovations, thereby increasing market share in
the coming years. Nanofiltration of aqueous solution is primarily affected by the increasing demand for water, notes the
analyst of this research. Water scarcity necessitates greater focus on domestic water processing or desalination of
brackish water. Additionally, there is a high demand for industrially processable water, which promotes installation of
systems for water recovery. Nanofiltration is also being increasingly deployed for the separation of organic solutions at
moderate conditions and relatively low cost.

Full Report Available at: http://www.researchandmarkets.com/reports/1053760

Eltron Research & Development Inc. 16

COMPETITORS
Among the industry participants previously listed, the following companies and
current market offerings are considered the most competitive.

Hydranautics
ESNA1-LF-4040/ESNA1-LF. Significantly reduces operating costs and provides
optimum hardness rejection for softening applications, available in 4-inch and 8-
inch diameter configurations.
ESNA1-LF2. Designed to provide high rejection of natural organic materials and
moderate rejection of total hardness, while running below 100 psi, offering energy
and cost savings.

TriSep
TriSep offers two different nanofiltration (NF) membrane chemistries, the TS80
and the XN45. Both are based on proprietary and patented technology developed by
DuPont. The unique chemistries of these membranes allow them to have lower
organic fouling.

Dow - FilmTec
FILMTEC NF90 Elements: Removal of TOC, nitrates, pesticides, herbicides, hardness,
iron, salts.
FILMTEC NF270 Elements: Removal of color, TOC, medium to low calcium passage,
high salt passage.
FILMTEC NF200 Elements: Removal of TOC, atrazine, medium calcium passage,
medium to high salt passage.
FILMTEC NF Elements: Purification of non-water process streams and concentration
of valuable substances.

Koch Membrane Systems

KMS offers its SelRO line of solvent-stable and pH-stable NF membranes as well as
the SR and TFC or TFC-S NF membranes.

While greater analysis of these competitive products is needed, Eltron believes the
DurafluxTM performance advantages (high stability under elevated temperatures,
oxidizers, pressure fluctuations, transition metals and organic solvents) provide a
step change improvement over all of them.

TECHNOLOGY & PRODUCT DEVELOPMENT

The following table summarizes performance achieved on polymeric thin film
membranes which would not have the high temperature, organic solvent and
pressure cycle tolerances of the ceramic supported product.

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Current work has been directed at reproducing this target performance on ceramic
supports which would have those additional valuable characteristics proposed for
the DurafluxTM product line. As of year-end 2009, DurafluxTM Membranes on
ceramic supports have achieved proof of concept and have been demonstrated in a
bench scale apparatus as shown below.

The near term technical roadmap includes four primary steps:

- Finish Chemistry
- System & Process Engineering
- Demonstrate Pilot Field Test
- Develop Manufacturing Process

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 The following graphic depicts the remaining development path.

Optimize Bench Scale Performance Validate Pilot Scale Sales )

3 6 9 12 15 18
MONTHS

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