First Graphene builds momentum in footwear market

So it's not a question of if graphene works, it's how to do that on scale. So using footwear as an example, we've now developed the route to the the the route to the market.

Today we're joined by First Graphene Limited, ASX ticker FGR, a supplier of advanced graphene materials with its Pure graph range manufactured in Henderson, near Perth, and R&D capability in the UK.

FGR recently announced its first production order from US footwear company Flux Footwear, a move into the global sports shoe market. Joining us to talk about it is commercial manager Neil Armstrong. Neil, welcome.

Thanks, it's lovely to meet you.

Now, Neil, what has first Graphene secured with Flux footwear and why is it significant?

So Flux approached us coming on about 12 months ago now. They were looking for a replacement supplier to meet the demands of the graphene range, which they'd already launched into the market. So they already had some market presence, they already had a forecasted demand for for this product. Um and they were looking to secure a more reliable source of of the graphene feedstock. Um so they approached us with a specific

range of graphene properties. Um as back step graphene is in the is a isn't a well-defined material with a one unique set of properties. It is a family. So it is important that you address that. There are some graphenes that are good for some applications, some graphenes are good for others. So they approached us with some target properties and we were able to meet those through our process in in Western Australia.

And so that was a relatively straightforward project for us. Um they are we are quite experienced in the footwear market now. We are quite experienced in the materials that they use. So it was just a matter of finding a suitable intermediate compounder who could um use our graphene and produce it into a more user-friendly um kind of format for them to to implement into their production process.

And and so it was it was really a nice fit and it could happen quite quickly because we had that experience. Um so it was really just just ticking the boxes for them and switching them over to our material. So it's a great, great project.

And we all know that fitness and wellness is a major global trend with more people focused on training, gym and leisure footwear. So, how can your graph capitalize on that?

Absolutely. Um, you know, my wife would tell me I've got a problem with the amount of shoes that I go through or buy. So I can empathize with the with with this project. Um, you know, I think I I read somewhere was around about 212 billion. It was going to be forecast by 2035. And that's US dollars. Um, you know, if you quite conservative and say $200 for a pair of shoes, that's two billion, I mean, a billion pairs of shoes.

Um, you know, US. Um, you know, even a very relatively small fraction of that, you know, that's still a very large number of shoes. if you if you convert that dollar number to numbers of shoes. Now you say, well, okay, there's only a couple of grams of graphene in each shoe, but if you multiply a couple of grams by a number with a considerable amount of zeros behind it, that quickly blows out.

So it it is is not definitely uh I think it's important to look at it as as number of shoes rather than rather than dollar value and it is significant. You know, we deal with a lot of a lot of large volume applications and I think say footwear in particular, you can quickly focus on individual numbers and go, well, it's only a couple of grams, but when you multiply that, that does blow up quite quite quickly.

Um and certainly this is the area where there is increasing demand on on durability and performance and so it's ideal for graphene, you know, it harnesses those those high wear and high durability properties of the material. So it is it is quite significant.

Mhm. I even love that I um have a lot more sneakers than heels now like so many women, so. Um, flux already used graphene in its graphene pro range. So what what were the main drivers behind selecting Puregraph and what impact will it have as flux progressively replaces its existing graphene models.

Yeah that is a it is a very good question. Um, so Flux had the material in the market, like I said, they'd developed the product, they'd come to the market, they'd launched that uh that product. Now, there's a bit of a common problem that we address. Graphene is relatively straightforward to produce on small scales. Uh it's been that way for some time. You can do things like top-end sensors and electronics and you only need grams or micrograms for that application.

So certain graphene suppliers set up to, you know, accommodate that market. However, when we're talking the numbers associated like footwear, which we just touched on, or other areas like cement and concrete, or, you know, even mining applications and automotive applications, you need volume. Um and that's where first graphene we set out early on, you know, the the starting people who worked here, myself included and the guys who ran the the the company initially.

We all come from an oil and gas and a mining background. So scale was on mind when we produced the factory that we that we have operational. You know, that's set up here in Western Australia. We have a 100 ton per annum capacity. Um it's modular in design so we can quite rapidly upscale as well. and 100 ton of graphene is a is a lot when you're looking at the bulk density of the material.

Um so we set up to address that market. Uh and you know, Flux is not a unique kind of um occurrence where people are coming to us saying we've got a product we've launched to the market or we're close to launching a product to the market, and all of a sudden they have to address the supply issue. So it was a simple case of supply and demand really when you when you take a step back.

And you've already worked with Steel Blue in Australia and PT Elmas Specter Utama in Indonesia on safety and mining work boots. How do the demands of that footwear differ from athletic and leisure shoes and what carries over to customers like Flux?

Um there are a few points to to address with you know, the differences. Firstly, um safety footwear per volume has a lot more material in use. So so you know, there are more pound for pound there is more graphene used per pair of boots. Um however, a lot of safety footwear that is supplied by um the um the company that that works for. It is very rare unless you're a contractor, um you know where you're just supplying your own safety footwear.

you know, a big mining company will provide the footwear, you know, a large company provides it themselves. So there's not so much of a marketing demand. It's purely um performance driven, which there is a we see a significant push for that. Uh but it's not left to the individual to decide sometimes as to what they want to use. Whereas safety footwear, I mean, so sports sporting goods, obviously it's driven driven by performance. People want things that last longer, but there is a marketing element to it and it is a very competitive market.

There are much more sporting uh good brands out there than there are safety footwear and they're all fighting for the um, you know, to one up uh get you know performance- wise and so it really drives innovation a lot quicker or it can drive it a lot quicker. Um so it is it is quite unique. Um and it's a good opportunity to demonstrate the material performance in these areas and you know we can adapt that or apply that to other areas like automotive, aeronautics, mining.

It's the same materials. Um so it takes a bit of risk out of the market uh or concern for a new development that it's already being used elsewhere. There's that trust developed in the new material. So it is it is similar but different. Um but the same materials, so we can we can obviously apply that elsewhere.

Well, following on from that, the announcement notes that this first order isn't financially material on its own. So how does footwear fit alongside your other markets like cement and concrete, composites and coatings in terms of first graphene's commercialization strategy?

Absolutely. So, footwear, I think I, you know, touching on what I just mentioned, footwear, the materials that are used in footwear are identical to the materials used in mining. very similar to the materials used in in aeronautical applications, in automotive applications. Half of the I guess hurt the main hurdle for using graphene is how to do it on scale. Um you can do it quite easily in a lab, you know, there are there are hundreds of thousands if not millions of research papers out there demonstrating this.

So it's not a question of if graphene works, it's how to do that on scale. So using footwear as an example, we've now developed the route to the the the route to the market. Uh we now have the methodologies to do this. Uh and it's transferable. So we can take that same approach that we've used in footwear that has the drive for innovation, the competitiveness to push these materials into the market and then you can apply that into areas like mining, aeronautical, automotive, which are much more conservative

in how they select materials because there's more risk involved. If you can delete that risk through having material in the market and the presence already there, it helps accelerate those other areas. So it's it's it's using this as a good example to to extrapolate into other areas that are arguably much more larger in their demand. Um so it is smaller, but like I said, it is it is by no means insignificant if it if it starts to grow and you start to look at the numbers of footwear.

Um, so I I guess it's, yeah, it's it's it's it's using it as an example to bridge into arguably larger markets.

And lastly, Flux is your third footwear client. So what does the pipeline look like from here and what are the next milestones we should watch out for?

So that's correct. now Flux are our third. Um but what this shows is a good acceleration of the the adoption. Um, you know, our first client was was still and it took almost three years to get the from concept to a commercial product and then there were the the Pmas in in Indonesia, that was accelerated to, you know, roughly over a year and now this this happened in in a span of roughly six months before we, you know, had the material ready to go.

So it shows that momentum, once you've done it once, you can apply that that knowledge to the next iteration of the development. And like I said before, that now is transferable into other areas, you know, other areas where we are already working, such as mining and automotive. Um but that knowledge is transferable. So we can start to use this as a case study and a use case to justify pushing um project in those areas and it gives people a sense of confidence.

You know, a new material, Graphene has been around for 20 years now, but it is a relatively new material on scale. And you have to build that confidence, you have to build that trust. Um a new material comes with risk because it is unknown. Um so if it is in the market, in other areas, it's been there for four or five years now on scale, it starts to build that that that um that belief and and trust that it is can be used in other areas.

Neil, thank you for the update.

No worries. Thanks for the chat.