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Split-zone Oxidation - The Bridge to
5,000+ tonne Automotive & Industrial
Carbon Fiber lines
Business Case Review
JEC Paris
March 9, 2016

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AGENDA
1. Why Split-zone oxidation?
2. What is Split-zone’s savings potential?
3. How can Split-zone facilitate 5000+ tonne automotive and industrial
carbon fiber lines?
4. How can I prove Split-zone performance for myself?

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• Why Split-zone?
Conventional oxidation is a prime candidate for innovation
It’s a costly process step
• The large number of Oxidation ovens (typically 3or 4) in a carbonization line represent one
of the largest capital equipment investments
• Their large factory footprint increases the facility and facility infrastructure costs
• Oxidation ovens uses lots of energy
There’s plenty of room for improvement
• Oxidation is the longest process cycle, by far, of the three thermal steps
• There is potential to reduce current oxidation cycle times closer to the theoretic cycle time
• There is a great need to reduce oxidation Cost of Operation

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Automotive Carbonization line with Conventional Oxidation

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•
Why Split-zone?
Conventional oxidation is a prime candidate for innovation
What’s needed is needle-moving innovation that can both
reduce the oxidation total cycle time and can reduce the number
of Oxidation ovens

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-CONVENTIONAL-
Oxidation
-UNDEVELOPED-
Technology Island
-IDEAL-
Large scale, short cycle
time, low cost of operation
Emissions Contamination
Scalability
- NEEDLE-MOVING -
improvement in
Oxidation Cycle time
Cycle Time
Energy UsageRobustness
Oxidation Innovation Roadmap
Oxidation Innovation Roadmap
High Capex
Footprint
Availability

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-CONVENTIONAL-
Oxidation
-UNDEVELOPED-
Technology Island
-IDEAL-
Large scale, short cycle
time, low cost of operation
Emissions Contamination
Scalability
LOWER Cost of Operation is the
desired result
- NEEDLE-MOVING -
innovation in
Oxidation Cycle time
Cycle Time
Energy UsageRobustness
Oxidation Innovation Roadmap
Oxidation Innovation Roadmap
High Capex
Footprint
Availability

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Despatch’s Proven Track Record of Oxidation Oven
Technology Innovation
1970’s
• Entered CF oxidation oven market with opposing cross
flow ovens
1980’s
• Built 1st Center-to-Ends flow oxidation for Courtaulds
• Patented CTE oxidation (1982)
1990’s
• Built 1st Center-to-Ends flow
oxidation oven
2000’s
• Established CTE oxidation as the preferred technology
• Progressively scaled “craft build” from 1.0 to 3.0m+
2010 – 2013
• Global Expansion (6 wins in 6 months)
• Delivered integrated pilot & research CF lines
• Launched high capacity automotive oxidation ovens
2013 – 2015
• Implemented standardization & DFM on Legacy product
• Developed and Launched Split-Zone Oxidation

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Illinois Tool Works – A Strong Corporate Parent
Industrial Machinery Industry
RANK2014
Illinois Tool Works 1
Parker-Hannifin
Dover Corporation
Flowserve Company
2
3
4
SPX Corporation 5
Illinois Tool Works
REVENUE RANK
2012 $13.9B 149
2013 $14.1B 155
2014 $14.5B 171

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Oxidation Innovation Roadmap
-CONVENTIONAL-
Oxidation
-UNDEVELOPED-
Technology Island
-IDEAL-
Large scale, short
cycle time, low cost
of operation
Emissions Contamination
Scalability
OBJECTIVE - Lower the cost of Operation up to 50%
by accelerating the rate of oxidation by
10% - 25%
- NEEDLE-MOVING –
10% - 25%
improvement in
oxidation cycle time
Robustness
Availability

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Despatch Product Development Plan

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Split-Zone simplicity = Needle-moving Innovation
Double the number of independent temperature set points in each oven, enabling a faster
oxidation process cycle
Despatch Product Development Plan
Lower temperature
in lower half
Higher temperature
in upper half

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Split-Zone simplicity = Needle-moving Innovation
Double the number of independent temperature set points in each oven, enabling a faster
oxidation process cycle
Despatch Product Development Plan
Higher temperature in
upper half can
increase the rate of
oxidation

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Split-zone Differential Temperature Characterization
FIRST LOOK

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SET-UP: Simulated fully-loaded 3m tow band using Fiberglass Cloth

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Split-Zone simplicity = Needle-moving Innovation
NOTE: DESPATCH CENTER TO ENDS AIRFLOW IS FROM CENTER SUPPLY NOZZLES TO RETURNS ON BOTH ENDS
OF THE OVEN

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Split Zone Differential Temperature Performance Results
Blended Profile at 10C° Set point Differential
Observations
• Differential temperature
meet s or exceed 10C°
between upper &lower half
• Blended Profile
• Blended profile in a fully
loaded oven is confined to
2-3 middle passes, only,
with remaining passes close
to respective set point
temperatures
Transition Zone
Transition Zone
190°C Set point
200°C Set point 200°C Set point
190°C Set point

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Split Zone Differential Temperature Performance Results
Blended Profile at 10C° Set point Differential
Conclusion
• Split-zone PERFORMS
AS INTENDED by
creating two distinct
temperature zones,
capable of 10C° or
more of separation,
with a minimal blended
zone
Transition Zone
Transition Zone
190°C Set point
200°C Set point 200°C Set point
190°C Set point

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Split-Zone simplicity = Needle-moving Innovation
LOWER HALF
STABLE TEMP ZONE
UPPER HALF
STABLE TEMP ZONE
BLENDED ZONE

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Split-Zone Cost of Operation Business Case
Despatch Cost of Operation Business Case

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What is Split-zone’s Cost of Operation Savings potential?
3m Carbonization Line Comparison between Conventional and Split-zone Oxidation
• Total Heated Length
– 3 Legacy Ovens with 69 total passes@12.17m/pass (840m total heated length)
– 2 Split-zone Ovens with 42 total passes@ 15m/pass (630m total heated length)
• Utility Costs
– Legacy with electric heating @ utility cost of $0.105/kwh
– Split-zone with gas heating @ utility cost of 0.034/kwh equivalent
• Line Speed
– Equivalent line speed of approximately 10m/min
Despatch Cost of Operation Business Case

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Oxidation Utility cost comparison
Despatch Cost of Operation Business Case
Disclaimer: stated
costs are estimates,
only; changes to
assumptions, such as
annual capacity, # of
zones, or operating
temp can effect actual
energy costs per ton
0% Cycle Time Improvement 25% Cycle Time Improvement
3.0m Legacy $843
3.0m Split Zone $437 $321
$-
$100
$200
$300
$400
$500
$600
$700
$800
$900
EnergyCosts
UTILITY Operating Costs per Ton

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Oxidation Cost of Operation comparison
Despatch Cost of Operation Business Case
0% Cycle Time Improvement 25% Cycle Time Improvement
3.0m Legacy $1,398
3.0m Split Zone $1,114 $734
$-
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
Depreciation+UtilityCosts
Cost of Operation per Ton Disclaimer: stated
costs are estimates,
only; changes to
assumptions, such as
annual capacity, # of
zones, or operating
temp can effect actual
energy costs per ton
Up to a
47%
reduction

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The Bridge Potential of Split-zone to facilitate large capacity
automotive carbonization lines
Current Situation
• An estimated cost for fully functional* factory floor space for an industrial carbon
fiber line is $200 - $250/ft2 ($2,152 - $2,690/m2)
– *includes overhead and underground electrical and mechanical
• The time to complete and commission a new CF plant can be 2 years, or longer
Assessment
In a series-production vehicle lightweighting application requiring many thousands of
tonnes/a of carbon fiber, the number of plants, and lines, required are not
economical at today’s nameplate capacity
Despatch Bridge Potential

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The Bridge Potential of Split-Zone to facilitate large capacity
automotive carbonization lines
Despatch Bridge Potential
FOR YOUR CONSIDERATION - Split-zone’s fewer and larger oxidation ovens can enable an increase in
nameplate production capacity by up to 2 times within the same fixed factory footprint AND at a far
lower cost of operation that helps to make automotive carbon fiber economical

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Proving Split-Zone Performance and Cost of Operation Validation
Despatch Qualification and Validation
ACTIVITY BENEFIT
Demonstrate split-zone temperature
differential under simulated production
conditions
Enables Customers to model their oxidation
process profile/cycle time reduction using split
zone profile data
Conduct precursor validation trials
under simulated production conditions
Validate cycle time reduction potential and
oxidation towband uniformity running up to 24
large tow across L,M,R sides of 3m oven
Update Cost of Operation and
Productivity Models
Determine optimum length and number of ovens;
establish the cost of operation savings for
5,000+ tonne nameplate capacity

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Customer Validation Trials
coming June, 2016
Contact
steve.oman@despatch.com
for reservations and information