Ove Arup and Partners: Technical review of Vecor pilot manufacturing equipment and processes

Introduction In November 2010, prestigious engineering firm Ove Arup and Partners completed a review of the industrial scale manufacturing processes and equipment developed by Vecor Limited for the manufacture of ceramic tiles using 70-80% fly ash. The following information is extracted directly from the Arup report. The full text of the Arup report is available for interested investors and partners upon request. The Report Arup visited Vecor at Vecors Italian development sites, observing the full Vecor manufacturing process, including: preparing the raw material, pressing, drying and firing the fly ash ceramic tiles. Arup produced a comprehensive 28 page report on Vecor technologies, including a technical, environmental lifescycle and business case analysis. The report acknowledges that Vecors products are not restricted by their innovative process or material make up and should be able to compete directly with conventional tile products, including competing in standard sizes, thicknesses and decorations. Arup further concluded that Vecor has a very good chance of succeeding in the manufacture of first quality tiles, in compliance with European Standards.
100 90 80 70
60 50 40 Vecor tiles

30 20 10 0 Water Thermal energy Virgin materials Electrical energy

Clay tiles

Resource Efficiency Vecor is looking to exploit the emerging agenda around environmental sustainability. The Vecor tile carries a significantly lower water, energy, carbon, and land use impact when compared with conventional ceramic tile production. Further, due to production being based on waste fly ash utilisation, the Vecor tile can have up to 80% recycled content and demonstrate considerable resource benefit by reducing the extraction of primary input materials. Together the material strategy which Vecor is pursuing combined with understanding of the environmental footprint of its activities through using tools like LCA, should mean the business is well positioned to capitalise on the opportunities the environmental agenda will create.

82% 40% 70% 28% Environmental savings drive 20-25% lower manufacturing costs.

Risk Management In practice, because fly ash can contain a very broad range of elements, some of which in the right concentration may prove hazardous, it is appropriate to establish systems that will prevent damage and provide environmental care. Vecor recognises these risks and have been working to develop products that will meet environmental performance requirements where they exist, and to understand the screening and monitoring processes that will be necessary for full scale industrial production. The steps Vecor are taking are balanced and well considered, and provide a robust response to managing environmental risk. Competitive Strategy One of the key contributors to Vecors competitive edge is the potential for relatively high barriers-to-entry for competitors, based on a multi-staged and multi-layered IP structure incorporating material mixes and production technologies that are currently thought not to exist elsewhere in ceramic tile manufacture. This, combined with the large potential of the market, make the Vecor proposition very interesting. Conclusion Arup concluded that the Vecor business proposition is a strong, positive message of how to turn a waste product into commercial gain in a win-win-win scenario: power stations gain by having (part of) their waste managed; manufacturers and clients gain by having a more environmentally beneficial product at a time of heightened interest in resource efficiency, and enhanced margins; Vecor gains by providing a unique proposition to these parties with apparently high barriers to entry coupled with first-mover advantage in the market place, along with on-going research and development to expand and broaden product range and application.