Hybrid Coating Technologies Newsletter 2nd Qtr 2017 Issue No. 1 Photos below of the team at HCT and our recent attendance at the highly productive European Coatings Show.
Letter from the CEO "Due to the request of many of our shareholders for more information about the development and progress of our company, we have decided to publish a quarterly newsletter. We hope this information will supplement the news releases we issue on a regular basis and give interested parties deeper insight into the company s operations and the future of our industry. In this first newsletter we present a brief summary of the progress made at this year s European Coating Show in Nuremberg, Germany and share the most recent developments by European regulatory bodies in restricting the use of isocyanates. In addition, I am very excited about the progress we are making in selling final coating formulations in the US through our distributor,
Industrial Finishes & Systems. We have provided a link to a few photos of some of Industrial Finishes most recent applications. Lastly, I want to encourage all of our investors and other interested parties to continue to ask questions and give us your feedback of what you would like to see in our newsletters. " Sincerely, Joseph Kristul President & CEO 2017 European Coatings Show Report, Nuremberg, Germany Every two years the European Coatings Show (ECS) is held in Nuremberg, Germany. The show is primarily attended by coatings raw material suppliers, manufacturers, distributors and toll producers. HCT attended this year s ECS on April 4th 6th. This is the third time HCT has attended the ECS, which is the largest coatings show in the world. At each show, HCT has received a lot of interest from many new prospective clients, primarily for its coatings products, but also for its foam products. This year was no different. Over 200 new clients came to HCT s booth to learn more about its unique zero isocyanate coatings and foam technologies. The majority of the new clients were from West and Eastern Europe, Southeast Asia and North America. HCT is now working to respond to many of these new clients requests for samples. The company is also moving forward with multiple companies it met at ECS to carry out new development work. Proposed Restriction of Diisocyanates in European Union A restriction in the European Union has been proposed on Diisocyanates, which widely serve as monomers in polyurethane products for seals, adhesives and coatings in the coatings industry. Workers may be exposed to them when formulating and handling uncured reaction mixtures.
Many diisocyanates are classified as skin and respiratory sensitisers and are thought to be the trigger for a high number of cases of occupational asthma reported across all EU Member States. One member of the group methylene diphenyl diisocyanate (MDI) and its isomers is already subject to a restriction when used as a component of consumer products In 2014, the Federal Institute for Occupational Safety and Health (Deutsche Bundesanstalt für Arbeitsschutz und Arbeitsmedizin BAuA) conducted a Risk Management Option Analysis (RMOA) to examine the need for action and the options surrounding the use of diisocyanates. It concluded that action is needed at European level to limit the risks to workers. For various reasons, an authorization process was deemed to be unsuitable. For instance, due to a lack of suitable alternatives, there would be many situations when authorization would be granted, even if safe use could not be guaranteed Contents of the Restriction Proposal - The new proposal restricts the use of diisocyanates as substances on their own, as a constituent in other substances or in mixtures for industrial and professional uses and prevents them from being placed on the market for this purpose. This is not a total ban, but rather is linked to the fulfillment of certain criteria, which ultimately entails stricter handling and is intended to ensure that there are no risks to health through exposure. Those who place products containing diisocyanate on the market would, where appropriate, have to prove in accordance with Annex 12 of the restriction proposal that there is very little potential for exposure in the intended use. Next steps at EU level - The submission of any restriction proposal triggers a formal process at EU level. ECHA has already initiated a 6-months public consultation process. Here, stakeholders are invited to comment on the proposal from scientific and socio-economic perspectives. The deadline for commenting is 1 June 2017.
Finally, the European Commission will present a draft regulation, which will be agreed in committee with the participation of the Member States. It will be several years before a corresponding restriction comes into effect. However, companies should monitor the process of restriction closely, assess the impact on their own activities and products, and, where appropriate, make use of the options provided for commenting. Communications Workers of America Several thousand CWA (Communications Workers of America) telecommunications and automotive manufacturing members work with and are exposed to isocyanate products. In the telecommunications industry, this work involves the use of polyurethane products used as (foam) plugs to weatherproof and seal telephone cable splices and, in the automotive manufacturing industry, polyurethane products are used in the manufacturing of plastics and related materials. Health Effects - Although all of the isocyanate products are hazardous, Toluene Diisocyanate (TDI) is considered the most toxic. The National Institute for Occupational Safety and Health (NIOSH) has identified TDI as a (animal) carcinogen. Litigation Against SPF (Spray Polyurethane Foam) - Currently, there are between eight and eleven SPF cases pending nationwide in the US. The plaintiffs claim fraud, negligence, negligent supervision (of applicators), strict liability, breach of express and implied warranty, and breach of consumer protection statutes and allege, in their complaints that SPF can only be safely applied in near laboratory-like conditions to properly cure. Even then, there is a risk of isocyanate exposure. Regulations - On June 20, 2013, the Occupational Safety and Health Administration (OSHA) announced a new National Emphasis Program (NEP) to identify and reduce or eliminate the dangerous health effects from occupational exposure to isocyanates through both enforcement and outreach.
The Safer Consumer Product's second proposed Priority Product regulation is going to notice! The comment period for Spray Polyurethane Foam Systems with Unreacted Methylene Diphenyl Diisocyanates as a Priority Product opened in March 24, 2017 and ended on May 16, 2017. $90 Billion Lawsuit Against Chemical Manufacturers In September of 2016 the US government, represented by Kasowitz, Benson, Torres & Friedman LLP, launched a $90 billion dollar False Claims Act (FCA) lawsuit against BASF Corporation, Bayer Material Science LLC, Dow Chemical Company and Huntsman International LLC. These companies have been accused of selling billions of dollars worth of harmful isocyanate chemicals but intentionally concealing their dangers to consumers and the U.S. Environmental Protection Agency (EPA) over the past several decades. In the suit, the law firm said that the defendants manufacture and sell isocyanate chemicals such as methylene diphenyl diisocyanate (MDI), polymeric MDI (PMDI) and toluene diisocyanate (TDI). HCT Technology Listed on Frost & Sullivan A description of HCT s nonisocyanate technology was included in the recent global market report on the Applications of Polyurethane-based Coatings by the well-known Frost & Sullivan research firm. A link to the report can be found here: Frost & Sullivan