Two Companies Poised to Dominate Market for New Catalyst Technologies

Nanostellar and SDCmaterials – two companies developing catalyst technologies to replace expensive platinum group metals – are set to dominate the industry, according to a market analysis.

The high and often volatile prices of platinum group metals (PGMs) have drawn many inventors and entrepreneurs to create technologies that reduce the need for PGMs in catalysts for the automotive, hydrocarbon processing and fuel cell industries.

Lux Research ranked the field of emerging catalyst developers to determine which is best prepared to capitalize on the opportunity to help catalysts better withstand harsh conditions, extend their active lifetimes, accelerate their rates of reaction, or improve overall performance.

Silicon Valley-based Nanostellar and Arizona-based SDCmaterials are the two strongest developers in the automotive catalyst space, according to Lux. Both firms boast strong technical solutions as well as solid partnerships – BASF and Volvo for SDCmaterials and several undisclosed European automakers for Nanostellar.

"There’s enormous value waiting for future leaders, particularly in automotive applications, where the combination of tightening emission standards and growing car ownership in the developing world will lead to soaring PGM demand," says Ross Kozarsky, a Lux Analyst and the report’s lead author.

Lux also identified Headwaters Technology Innovation as a company with "High Potential", but notes that development may be stalled. The company has lost momentum and missed a few milestones, but the firm can still claim commercial deployment of two catalyst products: a palladium catalyst that allows for simplified production of hydrogen peroxide (H2O2), and an oil refining catalyst that increases gasoline yield during catalytic reforming.

However, Headwaters recent lack of significant developments and a parent company whose revenues have nearly been cut in half over the past three years all raise concerns that the company may soon see an even sharper drop in standing.

Catalytic Solutions, a company that once dominated the field, may see trouble ahead, too. While its revenues are five times higher than any other company ranked in the report, they’ve dropped from $50.5 million in 2009 to $48.1 million in 2010. Net losses also slightly increased and they will likely need to raise additional funds, Lux says.

Its catalyst division also recently lost an automaker customer after its core technology failed to meet a required performance standard.

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