FRIUL FILIERE S.p.A. The new ultra light composite material named FFC TM (Foam Fiber Composite)

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2 FRIUL FILIERE S.p.A. The new ultra light composite material named FFC TM (Foam Fiber Composite)

3 Friul Filiere S.p.A. is glad to introduce the new technology, filed for patent, for the extrusion of profiles in composite material named FFC TM (registered trade mark), obtained from PVC charged with natural fibers and lightened with closed cells expansion.

Trade Mark & Patent 4 Friul Filiere S.p.A. has filed a patent request for the industrial invention that covers all the aspects regarding this new technology for the production of ultra light composite material named FFC TM : Formulation Plant Process Product Friul Filiere S.p.A. has registered this Trade Mark identifying the composite material result of the process.

5 Material data The material consists in thermoplastic material and natural fibers. In the example presented the composite contains: Rigid PVC : 50% to 70% Wood Flour : 30% to 50%in weight fibres dimension: 150 micron These raw materials properly formulated with stabilizers, lubricators and foaming agents are mixed to obtain an homogeneous compound ready to be extruded directly on extruding lines equipped with single screw or counter-rotating twin screw extruders.

6 Advantages SPECIFIC WEIGHT 0.65 g./cm 3 similar to wood LOWER COST comparing all the other materials ECONOMICAL AND SIMPLIFIED PRODUCTION PROCESS: it has a prerogative to be extruded directly from dry blend avoiding the granulating process and using the new single screw extruders Omega series 28 SIGNIFICANT COST REDUCTION OF THE FINISHED PRODUCT HIGH PRODUCTIVITY

7 Advantages WORKABLE AS WOOD: Drilling Screwing Milling Riveting

8 Advantages RECYCLABLE: re- grindable and re-usable in the extrusion of the same material or other PVC compounds SELF EXTINGUISHING PRODUCT DIMENSIONAL STABILITY DUMP RESISTANCE: water absorption is avoided since the PVC is water repellent and coats the wood fibers FLEXIBILITY: applicable on bended surfaces THERMAL INSULATION ACOUSTIC INSULATION

A technology applicable to several fields, from the building to the agriculture sector, with outstanding results. The final products achieved are highly competitive comparing to the materials nowadays used. 9

10 Alternative materials comparison With the purpose to explain the potential of the new technology, we compare FFC TM with other competitive products: MDF (Medium density fiberboard), STANDARD WOOD, WPC (Wood Plastic Composite), RIGID PVC, FOAM PVC as: Raw material cost and specific weight Processing or mechanization Finishing Indicative selling price

11 Comparative m 3 cost of different formulations MDF PVC WPC - PVC 1m 3 700 kg 1m 3 300 1kg 0,43 UPVC:1m 3 1500 kg 1m 3 1600 kg 1m 3 1800 1m 3 1040 1kg 1,2 1kg 0,65 XPVC: 1m 3 650 kg 1m 3 775 1kg 1,19 WOOD standard 1m 3 700 kg 1m 3 1400 1kg 2,0 WPC PE/ PP 1m 3 1200 kg 1m 3 650 kg 1m 3 1200 1m 3 578 1kg 1,0 1kg 0.89

12 Processing The processing cost will be conveniently estimated the same for all the materials, since some kind of processing, although different, is carried out in all the cases: FFC TM ; RIGID PVC, FOAM PVC, WPC- PVC and WPC-PE/PP must be mixed and extruded; STANDARD WOOD and MDF must be machined with tools starting from boards and panels;

Comparative processing costs 13 A) Mixing cost : Manpower 0,05 /kg Energy + water 0,10 /kg Plant depreciation 0,06 /kg TOTAL 0,21 /kg B) Extrusion cost : C) Machining cost : Manpower 0,10 /kg Moulding Energy + water 0,05 /kg Polishing Plant depreciation 0,06 /kg TOTAL 0,21 /kg TOTAL 0,2 /kg Dry blend PROCESSING TOTAL COST * A+B 0,42 /kg *FFC estimate based on 500 kg/h production using no. 5 extruding lines WPC-PVC Dry blend Processing Total Cost A+B 0,42 /kg WPC-PE/PP Granule Processing Total Cost B 0,21 /kg RIGID PVC Dry blend Processing Total Cost A+B 0,42 /kg FOAM PVC Dry blend Processing Total Cost A+B 0,42 /kg WOOD Boards Machining Total Cost C 0,20 /kg MDF Boards Machining Total Cost C 0,20 /kg

14 Superficial finishing FFC TM ; RIGID PVC: WPC-PVC WPC HDPE-PP FOAM PVC WOOD: MDF: finishing with HOT STAMPING, WRAPPING or PAINTING, LACQUERING are required. PAINTING, LACQUERING is required. finishing with HOT STAMPING; WRAPPING or PAINTING, LACQUERING are required.

15 PAPER SUPERFICIAL FINISHING Wrapping finishing: The same cost for FFC TM and for all the materials 0,320 (manpower included)

Case study 16

17 Comparison example: skirting profile Plastic materials: finished product area : 513 mm 2 Wood, MDF: uncut area 70x21mm : 1470 mm 2

Raw material comparative cost example: skirting profiles 18 (formulation cost) 334 gr/ml 578 /m 3 :650 kg0,89 /kg 334 gr/mlx0,89 /kg :1000 0,30 MDF (panel 70x21 mm) 70x21x0,71030 gr/ml 300 /m 3 :700 kg0,43 /kg 1030 gr/mlx0,43 /kg:10000,443 WOOD 70x21x0,71030 gr/ml 1400 /m 3 :700 kg2 /kg 1030 gr/mlx2 /kg:1000 2,06

Raw material comparative cost example: skirting profiles 19 (formulation cost) 334 gr/ml 578 /m 3 :650 kg0,89 /kg 334 gr/mlx0,89 /kg :1000 0,30 WPC-PVC 513x1.6 820 gr/ml 1040 /m 3 :1600 kg 0,65 /kg 820 gr/mlx0,65 /kg:10000,53 WPC-HDPE-PP 513x1.2 615 gr/ml 1200 /m 3 :1200 kg 1 /kg 615 gr/mlx1 /kg:1000 0,615

Raw material comparative cost example: skirting profiles 20 (formulation cost) 334 gr/ml 578 /m 3 :650 kg0,89 /kg 334 gr/mlx0,89 /kg :1000 0,30 RIGID PVC 513x1,5 770 gr/ml 1800 /m 3 :1500 kg1,2 /kg 770 gr/mlx1,2 /kg:10000,92 FOAM PVC 513x0,65 334 gr/ml 775 /m 3 : 650 kg 1,19 /kg 334 gr/mlx 1,19 /kg:1000 0,40

Processing costs example: skirting profiles 21 A) Mixing cost 0,21 /kg B) Extrusion cost 0,21 /kg C) Machining cost 0,2 /kg Total processing cost ( /kg) x profile weight (kg./ml) cost () A+B 0,42 /kg x 0,334 kg/ml 0,14 WPC-PVC A+B 0,42 /kg x 0,820 kg/ml 0,34 WPC-PE/PP B 0,21 /kg x 0,615 kg/ml 0,13 RIGID PVC A+B 0,42 /kg x 0,770 kg/ml 0,32 FOAM PVC A+B 0,42 /kg x 0,334 kg/ml 0,14 WOOD C 0,20 /kg x 1,030 kg/ml 0,21 MDF C 0,20 /kg x 1,030 kg/ml 0,21

Raw material comparative cost example: skirting profiles 22 Raw material cost Processing cost Profile cost Profile cost % 0,30 0,14 0,440 MDF 0,443 0,21 0,653 +48% WOOD 2,06 0,21 2,270 +416% RIGID PVC 0,92 0,32 1,240 +182% FOAM PVC 0,4 0,14 0,540 +23% WPC-PVC 0,53 0,34 0,870 +98% WPC-PE/PP 0,615 0,13 0,745 +69%

Production comparative cost example: finished skirting profiles 23 MDF a) Profile cost 0,440 0,653 b) Finishing 0,320 0,320 TOTAL a) + b) 0,760 0,973

Selling price estimate example: skirting profiles 24 MDF Manufacturing cost 0,760 0,973 Overhead cost (20%) 0,152 0,194 Profit margin (20%) 0,152 0,194 TOTAL 1,064 1,361

Selling prices: comparison example: skirting profiles 25 Raw material cost Processing cost Total profile cost Total profile cost with finishing Total indicative selling price Indicative selling price ( +0.320 ) (+20% +20%) % 0,30 0,14 0,440 0,760 1,06 MDF 0,443 0,21 0,653 0,973 1,36 +28% WOOD 2,06 0,21 2,270 2,590 3,63 +241% RIGID PVC 0,92 0,32 1,240 1,560 2,18 +105% FOAM PVC 0,40 0,14 0,540 0,860 1,20 +13% WPC-PVC 0,53 0,34 0,870 1,190 1,67 +57% WPC-PE/PP 0,615 0,13 0,745 1,065 1,49 +40%

Physical - mechanical characteristics comparison: 26 FFC MDF WOOD RIGID PVC WPC-PVC WPC PE/PP FOAM PVC NORMS % Wood 30 93 100 0 50 60 0 - Specific weight 0,65 0,7 0,7 1,5 1,6 1,2 0,65 AST MD 792 Absorption H2O% 0,28 5 3 0,05 0,15 0,1 0,28 AST MD 570 Elastic Modulus 2.000 8.000 40.000 2500 2.800 1.500 1.300 AST MD 790 Temperature Vicat 83 - - 83 83 95 80 AST MD 525 Superficial hardness SHORE A 100 100 100 100 100 100 100 AST MD 676 Inflammability Self extinguishing V0 inflam mable inflam mable Self extinguishi ng V0 Self extinguishi ng V0 inflam mable Self extinguishi ng V0 UL 94 V Thermal transmittance 0,13 W/(mK mk) 0,12 W/(mK) 0,15 W/(mK) 0,15 W/(mK) 0,12 W/(mK) 0,15 W/(mK) 0,17 W/(mK) AST MD 2326 Hot shrinkage % 0,2 0,05 0,05 2 0,5 0,5 1 AST MD 696 Thermal linear dilatation 10-3 mm/ C in test in test in test in test in test in test

27

FRIUL FILIERE S.p.A. Complete Know-how for the production of profiles in the new ultra light composite material named FFC TM (Foam Fiber Composite) 28

29 Friul Filiere S.p.A. supplies the turn key project from the raw material to the finished product: Formulation Turn key project complete with: 1. Drying system 2. Loading and Dosing system 3. Mixing system 4. Extruding lines and dies

30 Material data The material consists in thermoplastic material and natural fibers. In the example presented the composite contains: Rigid PVC : 50% to 70% Wood Flour : 30% to 50%in weight fibers dimension: 150 micron Finished product specific weight: 0.65 g./ cm 3

31 01. Drying System The Drying unit is studied to take away part of the moisture naturally included in natural fibers using a hot air insufflation with air recycle and Cyclone filter. Wood sand capacity: 200 kg/h Heating capability: 16 kw Wood sand transportation by air blower Fire system with photocell

32 02. Loading and Dosing system The Loading and Dosing system is studied to automatically transport and weight the materials (dry blend, wood sand, additives) from the dedicated silos to the mixing system, where the batches are prepared: Pneumatic under vacuum material transport Dedicated scales Final conveyor to the extruders

33 03. Mixing System The Mixing system consists in a Mixing unit and a Cooler, where the materials, weighted following FFC TM formulation, are mixed and cooled down: Production capacity: 5 batches/hour for 100 kg/batch

34 04. Extruding lines The extruding lines can be equipped with: Single screw extruders series Omega 28 or Counter rotating twin screw extruders Downstream series Omega S: S1; S2; S3 Dies and calibrating system

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38 Patent licence In all the cases, the listed costs must be added to the cost related to the acquisition of FFC TM Know-How as for licence agreement to be stipulated between the parties. Against the agreed sum, Friul Filiere S.p.A. sells the right to exploit economically the Patent, the Know-How and the Trade Mark as for contractual obligations. Friul Filiere S.p.A. will restrict this utilization in length of time and for a certain territory. After a case by case evaluation, depending on the type of use of the patent, Friul Filiere S.p.A. will require, as money consideration, a fixed lump sum, independently from the profits realized by the third party.