Our experienced research and development team, coupled with our partnership with universities in China, focuses on developing new technologies for NPCC products characterized by high quality and low cost. To increase the applications of our NPCC products, we develop new proprietary formulas that can be applied in many other industries.
We currently have more than 10 staff members on our research and development team, located in Tsingdao, Taian and Beijing. All of our research and development staff graduated from colleges or achieved an equivalent educational level. Among them, one holds a PhD degree, three hold master’s degrees and three hold bachelor’s degrees. Most of our research and development staff has worked in this field for more than four years. Mr. Xukui Chen, our Director of Research and Development, has engaged in NPCC product research for more than six years. He spearheaded the effort to develop proprietary technology for chemical modification in NPCC products, which enabled our successful entry into the tire, paint and PVC building material industries. This new technology can be used to modify the property of a specific NPCC product to fit a particular end product and in addition, improve the property of the end product. With this new technology, tires and PVC building materials of equal or better quality can be made at a lower cost.
Our research and development activities can be described as a three-stage process. First, we conduct small-scale tests after consultation with scholars at Tsinghua University and Tsingdao University of Science and Technology. During this stage, we apply surface coating agents to NPCC based on different pre-designed formulas for comparative studies. The modified NPCC is tested for mass, size, oil absorbance and other traits to determine if it displays the appropriate features. During the second stage, about two kilograms of NPCC products is produced with lab equipment using the formula selected in the first stage. The resulting NPCC product is then applied to an end product such as tire, paint and ink. The end product is then tested for a set of properties and other parameters to see if it meets expectations. If the formula is successful at the second stage, it will be further tested. During the third stage, about 300 kilograms of the NPCC product is manufactured at the NPCC facility using the formula that passed second-stage testing and will be sent to potential customers for an industrial-scale test. Our research and development staff is dispatched to our customers’ sites to assist with testing.
We are focused on further developing and improving our core manufacturing technologies so that we can expand our product lines and reduce overall costs. In 2005, we completed sample testing of our NPCC products for ink products with a Chinese manufacturer and for high-end newsprint and other paper products in cooperation with a Dutch paper manufacturer.
We have entered into joint development agreements with Tsinghua University and Tsingdao University of Science and Technology to develop new NPCC technologies. Under the agreement with Tsingdao University of Science and Technology, we have exclusive ownership to any technology developed. Under the agreement with Tsinghua University, we jointly own any technology developed but with an exclusive right to use such technology.
We established our research and development centers in large metropolitan areas located on the east coast of China, Beijing, Shanghai and Tsingdao, where there are a large number of colleges, strong technology bases and attractive living environments. The centers have approximately 34 employees devoted to our research and development efforts. They will also be used as a base for training research and technical personnel and developing proprietary technologies.
