Nanoco Group Plc (NNOCF)

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Nanoco strives to join up the ‘quantum dots’

By Peter Marsh
Michael Edelman©Jon Super

While showing a visitor around his company’s premises, Michael Edelman pauses in front of a piece of equipment that lies hidden behind a black roller blind.

“I’m sorry, but we don’t like to let anyone from outside the company see this,” he says. As chief executive of Nanoco, one of the UK’s most promising high-tech manufacturers, he is keen to protect the company’s secrets – however small.

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The hardware in question is chemical apparatus for turning out small quantities of “quantum dots” – tiny pieces of fluorescent material that emit light when stimulated by an electric current.

These particles are made in dimensions of a few nanometres, equivalent to the thickness of 50 atoms. They have excited interest due to their potential applications in such fields as lighting, display screens and solar cells – so much so that they sell for about $2m per kilogramme.

Nanoco is among three companies worldwide that have demonstrated they can produce quantum dots in relatively large quantities and, although the others – Nanosys and QD Vision – are based in the US, Nanoco set up its pilot plant in Runcorn, Cheshire.

All three companies are at an early stage and have combined annual revenues estimated at no higher than about $30m. On Monday, Nanoco’s results showed it its revenues in the year to July 31 rose 12 per cent to £2.95m, while its pre-tax loss rose 35 per cent to £4.35m and cash fell 10 per cent to £15.47m.

But the rivalry between the three – and the work being done on nano materials by research groups in Asia and elsewhere – explains Nanoco’s need for secrecy over its production process.

It is also why Mr Edelman – an American who studied for his first degree in chemistry and classical literature at Tufts University in the US, and later came to the UK for a PhD – refuses to disclose any details of the chemical formulas for the materials.

Nanoco bases its technology on scientific concepts worked out Manchester University and London’s Imperial College. It has raised £25m from a range of investors since its was set up in 2001, and floated on Aim in 2009.

It currently makes its products at the rate of about 25kg a year. However, Mr Edelman is working on a plan to build a new £10m plant adjacent to the company’s current premises, which could increase annual production to 400kg.

Gazing out of a window to the vacant building plot, Mr Edelman says: “My vision is to turn Nanoco into a sizeable business. I like the idea of running a manufacturing company and employing people.”

Mr Edelman also believes his company has one crucial lead over its US rivals. He says it does not use cadmium in any of its production processes, while Nanosys and QD Vision do use the heavy metal – the presence of which in the environment, even in small quantities, can potentially be harmful to human health.

“When a lot of regulatory authorities are trying to reduce the use of cadmium, the fact that we don’t need it [in our production process] gives us an important edge,” says the 48-year-old scientist, who has been in charge of Nanoco since 2004.

Nanosys’ chief executive, Jason Hartlove, says his company’s use of cadmium leads to “performance advantages” for its materials. In addition, he points out that Nanosys’s use of cadmium complies with legal requirements in all the countries where the company operates.

Jason Carlson, chief executive of QD Vision, declined to comment on any aspect of his company’s business.

In keeping with the secrecy that surrounds all three companies, Mr Edelman will not discuss the names of any of the companies with which Nanoco is collaborating on research agreements, or to which it is selling products for trials.

However, people familiar with the matter say some of the businesses may include large makers of display screens, including Sharp of Japan and LG and Samsung of South Korea, as well as lighting manufacturers such as Philips of the Netherlands.

Over the next year or so, Mr Edelman plans to extend Nanoco’s range of global partners, to give the company more opportunity to develop its technology and push up sales.

His ambition is simple. “My plan, in due course, is to turn this company into a leading British success story,” he says.

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