Responding to R & D Challenges

in a Changin
ng Industry

Dr Tom Farleyy
Managing Director
Innoval Technology Ltd
Presentation Overview

„ Innoval Technology - Overv

view

„ Industry Changes - Impact on R&D and Technical

Expertise

„ Technical Challenges

„ Responding to The Challeng

ges

14th World Aluminium Conference 10-12 May 2009, Dubai

Presentation Overview

„ Innoval Technology - Overv

view

„ Industry Changes - Impact on R&D and Technical

Expertise

„ Technical Challenges

„ Responding to The Challeng

ges

14th World Aluminium Conference 10-12 May 2009, Dubai

Innoval Technology – Our Background

„ Innoval Technology is an independent company providing a unique resource of expertise

to the downstream aluminium industry
¾ Formed in 2003 as a result of closure of one of Alcan’s Global Technical Centres

„ We are a group of 26 aluminium experts – ou

ur strength is the breadth of our aluminium
knowledge
¾ Rolling
g and extrusion p
process expertise
p
¾ Metallurgy product expertise
¾ Surfaces expertise

„ Our engineers have an abundance of produc

ct and process experience
¾ Most have been supporting the industry for
f over 20 years
¾ Many have held Senior Management pos
sitions in global aluminium companies
companies.

14th World Aluminium Conference 10-12 May 2009, Dubai

Innoval Technology – What We Do

„ Product development to improve customer satisfaction

¾ become a preferred supplier
¾ increase or protect market share

„ Process improvement to reduce operating co

osts
¾ increase asset utilisation
¾ reduce energy consumption

„ Strategic Support
¾ Technical Due Diligence on existing plan
nts
¾ Pre-Feasibility Studies and Greenfield plant design
¾ Plant investment and upgrade support

14th World Aluminium Conference 10-12 May 2009, Dubai

Presentation Overview

„ Innoval Technology - Overv

view

„ Industry Changes - Impact on R&D and Technical

Expertise

„ Technical Challenges

„ Responding to The Challeng

ges

14th World Aluminium Conference 10-12 May 2009, Dubai

 Global Growth Rates (Pre-Downturn) Global Pool of Experienced
Aluminium Consultants

Lower Growth Rate Regions:

Where higher costs
• Focus on cost reduction and
process efficiency
Russia
• Accelerated by recession
• Increased focus on specialised Eastt EU
and value-added products
China
MEENA
India

Hi h G
Higher Growth
th Rate
R t Regions:
R i
GDP
Generally lower costs
Growth (’07) Brazil
• New capacity
• Striving for world-class
performance and quality

14th World Aluminium Conference 10-12 May 2009, Dubai

Merger, Acquisition, Divestments and Closures - Example

Novelis Acquisition
Aditya Birla /
Hindalco
Innoval

Spin-off
p Rio Tinto
Rio Tinto
Alusuisse Alcan
Rio Tinto acquisition
Spin - off / Sale ?

merger Alcan Alcan

Alcan acquisition
Packaging?
Alcan
Pechiney Eng. Products?

2002 2003 2004 2005 2006 2007 2008 2009

BHP?
R & D Impact
p Closure of major corporate Centres at Banbury (UK)
& Novelis N
Neuhausen (Switzerland)

14th World Aluminium Conference 10-12 May 2009, Dubai

Example: Rolling Plant Closures in United Kingdom

Global Pool of Experienced

Aluminium Consultants

Specialist
p i li t Lithographic
Lith hi
Specialist Aerospace

Aluminium Rolling Plant

Closure

14th World Aluminium Conference 10-12 May 2009, Dubai

Impact of Changes on R&D and Technical Ex
xpertise

„ Loss of experienced staff with world-class prroduct and process knowledge from a mature
western industry
¾ BUT R&D still required for critical industrry challenges

„ Creation of a pool of independent aluminium

m industry consultants
¾ Growth of R&D outsourcing model

„ New industry in emerging regions needs R&D

¾ Benefit from Knowledge Transfer to achieve world class product standards
¾ Will develop own in-house R&D
– Requires good source of local engineering graduates
– … this
hi will
ill take
k time
i
¾ Need access to expertise to design new plants and support investments

14th World Aluminium Conference 10-12 May 2009, Dubai

Presentation Overview

„ Innoval Technology - Overv

view

„ Industry Changes - Impact on R&D and Technical

Expertise

„ Technical Challenges

„ Responding to The Challeng

ges

14th World Aluminium Conference 10-12 May 2009, Dubai

Key Aluminium Industry Challenges

Drivers Examples
„ More exacting customer requirements and „ Achieving world class quality (gauge, flatness,
specifications
ifi ti t t
texture, surface,
f mech
h properties,
ti etc.)
t )

„ Increased Asset Utilisation (recovery,

„ Cost reduction
productivity)
„ Reduced Energy Consumption (smelting and
rolling)

„ Aerospace – retain market share

„ Competition from other materials (substitution)
„ Automotive – reduce Aluminium costs
„ Packaging – retain market share

„ Increase use of recycled aluminium

„ Increasing focus on sustainability
„ Reduced process energy and water
consumption (smelting and rolling)
„ Reduced
R d d process emissions
i i (CO2 from
f
smelting)
„ Reduced landfill

14th World Aluminium Conference 10-12 May 2009, Dubai

 Pierce Great Arrow,Jagua
1907 r XK, 2006
(Cast Aluminium(All
BodyAluminiu
Paneum
ls) Construction)

Exam
mple:
p
Increasing the use of
Al
Aluminium
i i in
in Automotive
A t ti

14th World Aluminium Conference 10-12 May 2009, Dubai

Automotive

„ The history of the use of aluminium sheet an

nd extrusions in automotive structures goes
back many decades

„ Favourable strength-to-weight ratio vs steel has

h long been recognized
¾ associated reduction in weight and CO2 emissions
e

„ One of the major drawbacks to greater substtitution of steel with aluminium is the greater
cost of aluminium compared with steel

„ As a consequence much R&D is focused on reducing the cost differential

¾ One option is to increase use of recycled
d Aluminum
¾ ~75% of ~800 million tonnes of Aluminium produced since 1880 is stored in use
– The challenge is to utilise this source

14th World Aluminium Conference 10-12 May 2009, Dubai

The Impact of Weight Reduction on Automottive CO2 Emissions
300

250
Pe
etrol Diesel
Lexus LS600h

200
g/km

Lexus RX400h
Lexus GS450h
CO2 g

Petrol Hybrid
Primeira 607
150
Primeira 407

Focus
Modus
LRX concept
Citroen C1 Citroen C2 Prius Civic
100 Diesel Hybrid
y
Insight VW Golf TDi Di
Peugeot 308 HD
Ford P2000

Audi 1.2 TDi

50
500 1000 1
1500 2000 2500
Curb Weight (kg)

14th World Aluminium Conference 10-12 May 2009, Dubai

Audi A2 1.2 TDi AIV (80g/km)

„ First 4 door “3 litre per km” car (2.99 litres/km)

¾ 80 g/km CO2
„ Axle mounting frame, control arms and spring struts, brak
ke calipers on the front disc brakes and the brake drums at
the rear are aluminium
„ Lightweight forged aluminium wheels
„ Weighs 825 kg (135 kg lighter than 1.4 TDi)
„ The three cylinder aluminium 1.2 litre TDi engines is one of the lightest passenger-car diesel engines at 100 kg
„ Produced at 20 cars/day (~29,000 produced)

14th World Aluminium Conference 10-12 May 2009, Dubai

Automotive Example – A New Manufacturing
g Technology

„ Benefits of Cladding Aluminium

¾ Functional surface layer Functional Surface layer
y
¾ Strength or low cost core (e.g. recycled)
¾ No need to compromise properties
Core

„ Recent new technology – Novelis Fusion™

14th World Aluminium Conference 10-12 May 2009, Dubai

Automotive Example – A New Enabling Tech
hnology

„ Development of improved joining technologie

es
¾ aimed at reducing the cost of aluminium intensive automotive structures

„ Resistance spot welding (RSW) of aluminium

m
¾ Competes with cost of joining steel
¾ Suitable for high-volume robotic manufac
cturing
¾ Improved recycling (no rivets)

„ Technology breakthrough – Electrode Buffing

14th World Aluminium Conference 10-12 May 2009, Dubai

 First Aluminium
Airbusm
A Aeroplane, 1909
A380

Exam
mple:
P t ti the
Protecting th Market
M k t Sh
Share
of Aluminiun in Aerospace

14th World Aluminium Conference 10-12 May 2009, Dubai

Aerospace

„ Material usage changes in 10 years (Boeing 777 vs 787)

7
777 787

80

70

60
% usage

50
Significant drop
40

30 Significant rise
20

10

0
aluminium titanium steel composites misc.
m
material

14th World Aluminium Conference 10-12 May 2009, Dubai

Aerospace

„ The new generation of wide body passengerr aircraft from Boeing and Airbus will be 20%
more fuel efficient than today’s similar sized aircraft.
¾ 8% from improved engine systems (RR / GE)
¾ 12% from the use of advanced materials s

„ Boeing 787 ‘Dreamliner’

¾ ~50%
50% of the primary structure
structure, including fuselage and wing manufactured from carbon
fibre-reinforced plastic (CFRP).
¾ For the fuselage structure alone this will replace ~1,500 aluminium sheets and 40,000
– 50,000
50 000 fasteners
fasteners.

„ Airbus 380
¾ Retains the ‘aluminium aircraft’ with apprroximately 61% of the A380 structure made
from aluminium alloys.

14th World Aluminium Conference 10-12 May 2009, Dubai

Aerospace – Challenges

„ Aluminium must be competitive witth other advanced materials

¾ Carbon Fibre Reinforced Plastics (CFRP)
¾ Glass Fibre Reinforced Plastics (GFRP)
¾ Titanium

„ Development of next generation off Al-Li alloys

„ Alcoa are leading development of new

n Aluminium-GLARE composite
material that is nearly
y immune to fa
atigue
g ((CentrAl))
¾ Increases range of applications of GLARE
G to include wing structures

14th World Aluminium Conference 10-12 May 2009, Dubai

 Example: More Exacting Customer Requirem
ments and Specification

Coca-Cola’s First All Aluminium Can,, 1967 Coca-Cola Aluminium Can,, 2009
(weight 21g) (weight 12g)

14th World Aluminium Conference 10-12 May 2009, Dubai

Can Body Stock - Thickness Reduction and Tighter
T Control

„ Extremely tight specification for aluminium sh

heet
thickness
¾ Correct thickness tolerance can only be
achieved with state of the art thickness
control systems ...
¾ … AND the know
know-how
how to get the most fro
om
these systems
¾ Unlikely to be achieved at start-up
„ Failure to meet specification will lead to can plant coilil llength
th
jams and can strength issues
~10,000 m

Profile
(crown)
~0.5%
Al strip 250 +/- 5 microns

Strip wid
dth ~ 1.8 m

14th World Aluminium Conference 10-12 May 2009, Dubai

Can Body Stock – The Challenge of “Earing””

Ears
„ “Earing”
¾ Anisotropic mechanical properties cause
ed by
crystallographic texture

„ Sheet with “earing” that is out of specification

n will
¾ Risk jamming and stoppage of the can plant
line
¾ Result in volume of can being too small

„ Western
W t companies
i have
h ““earing”
i ” under
d con
ntrol
t l

„ It remains a challenge for new industry in

emerging regions

can after re-draw and wall ironing

with severe earing

14th World Aluminium Conference 10-12 May 2009, Dubai

Sustainability Challenges

Examples of Alcoa Targets (2020

( framework)
„ Increasing the use off recycled Alu
uminium
50% recycled Al content in fa
abricated products by 2020
„ Reducing energy consumption
Reduce energy intensity by 1
10% by 2010 (vs 2000)
„ Reducing process water consump
ption
60% reduction
d ti iin process wa
ater
t byb 2009 ((vs 2000)
„ Reducing emissions incl. greenho
ouse gases
25% reduction in greenhouse gas emissions by 2010 (vs 1990)
„ Reducing landfill waste
75% reduction in landfill wasste by 2010 (vs 2000)

14th World Aluminium Conference 10-12 May 2009, Dubai

Presentation Overview

„ Innoval Technology - Overv

view

„ Industry Changes - Impact on R&D and Technical

Expertise

„ Technical Challenges

„ Responding to The Challeng

ges

14th World Aluminium Conference 10-12 May 2009, Dubai

Responding to the Challenges

„ The aluminium industry must continue to com

mbat the threat from other competitive
materials and maintain aluminium’s sustaina able credentials
¾ develop
d l new and d iimproved
d alloys
ll ffor spe
ecific
ifi applications
li ti
¾ develop new and improved process tech hnologies

„ The aluminium industry has driven new prod

duct development and developed new markets
¾ Automotive, Aerospace, Packaging, etc.
¾ the emerging industry must join this challenge
¾ the pool of expertise can be used to help
p with these challenges

„ Best results can be obtained through development strategic partnerships

¾ with suppliers and customers
– Technology suppliers
¾ a global response between manufacturers – to combat common threats

14th World Aluminium Conference 10-12 May 2009, Dubai

Responding to the Challenges

„ Different regions need different types of R&D

D
¾ established western industry needs support to
o reduce costs and in new product innovation
¾ emerging regions need support in achieving world-class
w product and process performance
¾ both need R&D to maximise returns

„ The Aluminium Industry in emerging regions

s needs to have an effective technology
resource in place

¾ highly trained and experienced workforce cap

pable of producing high-tech products and processes
efficiently
– Source of good graduates
– Focussed University departments

¾ a dynamic R&D programme – responding to the

t challenges

„ BUT in-house R&D is expensive

¾ Perhaps up to 0.8% of Sales

14th World Aluminium Conference 10-12 May 2009, Dubai

Responding to the Challenges - The Outsourrce R&D Model

„ Utilise the pool of independent expertise thatt now exists

„ Specialist independent R&D companies have

e extensive industry expertise and the broad
range of skills needed and can supplement in-house capability

„ Innoval’s approach …

¾ We work as part of your in-house team to

o supplement your capabilities

¾ Our cost can be switched “on”

on and “off”
off

¾ IP developed is owned by the client

¾ We adopt the same model for any specia

alised services that we need and pass on that
cost saving to our client

14th World Aluminium Conference 10-12 May 2009, Dubai

Summary

„ Aluminium Industry Changes

¾ Growth of aluminium in emerging regions
¾ Cost reduction within mature western industry
y
¾ Acquisitions, mergers, divestments and closures
¾ Reducing
g Western R&D .. but creating pool of independent
gap p expertise
p

„ R&D Challenges
g are driven by
y
¾ More exacting customer requirements and sp
pecifications
¾ Cost reduction
¾ Competition from other materials
¾ Increasing focus on sustainability

„ Responding to the Challenges

¾ Need to develop R&D capability in emerging regions
r to build on past achievements and to create
knowledge
¾ Need to work jointly on threats to the aluminiu
um industry
¾ An Outsourced Model of R&D can help to sup pport the industry

14th World Aluminium Conference 10-12 May 2009, Dubai

Thank you for y
your
our attention …
 Innoval Tech
hnology Ltd

An independe ent technology

supplier to the Alu
uminium industry