BUSINESS PLAN

COMMERCIALIZATION OF ADUF MEMBRANE:

ADSORPTIVE ULTRAFILTRATION MIXED MATRIX
MEMBRANE FOR HEAVY METALS REMOVAL

Submitted to
Universiti Teknologi Mara
International Invention, Innovation and Design Johor 2017
(IIID 201)
EXECUTIVE SUMMARY
AdUF membrane is an innovative ultrafiltration (UF) mixed matrix membranes (MMM) for
heavy metals removal application produced by Advanced Membrane Technology Research
Centre (AMTEC) of Universiti Teknologi Malaysia (UTM). This adsorptive MMM can
effectively removes heavy metals ions such as lead, chromium and arsenic from contaminated
water by its dual-synergistic functions as a hybrid absorbent as well as membrane for
ultrafiltration process. It is product of advanced technology and novel knowledge of
membrane technology for water treatment application.

The Background
Heavy metals contamination in water are the main threats to human health. International body
such as World Health Organization (WHO) have been extensively studying and regularly
reviewing the effect of these metals to human body. Studies has suggested that these metals in
contaminated water are apparently has strong relationship with chronic diseases. For
example, ion lead consumed in drinking water can distract the process of haemoglobin,
nervous system, reproductive system and immune system in human body. With the concern
and criticality of having clear water surges among the community, various treatments have
been applied in removing these metal ions. Such treatments require an engagement of high
performance membrane as well as an effective separation process.

Figure 1: Common metals contained in water.

The Problem
Adsorption and ultrafiltration (UF) membrane technology are among of the best and cost
effective techniques available in the water treatment industry. The commercial adsorbent,
Hydrous Ferry Oxides (HFO) has been widely used for its fairly good adsorption capacity on
top of its availability and low cost. However, nano-size HFO cannot be efficiently in
adsorption process used due to its instability. In ultrafiltration membrane technology, some of
UF membranes are hydrophobic which can lower the permeation of water molecules. With
large pore size, the small size contaminants may not efficiently removes and thus impede the
separation of metal ions. These limitations then have become the key development for this
AdUF membrane product.

The Opportunity
By combining both techniques; adsorption and ultrafiltration, fabrication of adsorptive mixed
matrix membranes will overcome the aforementioned hindrance in removing metal ions. This
AdUF membrane product is a promising event in delivering a high performance of membrane
through a novel knowledge. It comprises of porous UF membranes which act as a host for the
nano-scales adsorbents while HFO NPs act as additives that improve the properties of the
membranes. This dual-functions membrane with improved properties will potentially turn
into a competitive and sustainable product in the water treatment industry.

The Market
With the growth of heavy metals related industries in Malaysia, the demands of systematic
water treatment will increase prior of their production release into water streams. AdUF
membrane will serve as a multi-purpose product that could be used to treat various
contaminants including small size contaminants in a single-step procedure. The production
process is economically cost effective considering the materials are widely available and can
be mass produced by simple precipitation technique. It can stand as a good product that is
comparable to the commercialized nanofiltration or reverse osmosis membranes in term of
cheaper cost and higher performance. Its environmentally friendly process due to the absent
of any harmful chemical in the process will become a pioneer towards green technology for
water purification and treatment process.
A. COMPANY OVERVIEW
Advanced Membrane Technology Research Centre (AMTEC) formerly, Membrane Research
Unit (MRU), Universiti Teknologi Malaysia (UTM), is a research center for advanced
membrane technology and new membrane applications. The mission and vision of AMTEC is
to be a leader in membrane technology and applications especially in the Asia Pacific region
and globally through innovation and creative technologies. The center produces postgraduate
students in addition to training engineers, scientists and technicians from Malaysia and
abroad in membrane technology to enhance the nation human capital and productivity.
AMTEC incorporate a business venture laboratory that is involved in the design, fabrication
and commercialization of customized membrane module and membrane system for local and
overseas applications. AMTEC is a platform for multidisciplinary research and development
in the areas of science, engineering, industrial design, and commercialization in UTM and the
Asian region.

Vision
To become a hub of membrane based technology for nation human capital development and
wealth creation.

Mission
To establish AMTEC as a world renown centre of excellence in Research & Development
& Commercialization.
Management
Companys Name AdUF Membrane Tech Sdn Bhd
Director Prof. Dr. Ahmad Fauzi Ismail
Team Leader Dr Norhaniza binti Yusof
Team Member : Dr. Lau Woei Jye
: Dr. Juhana Jaafar
: Dr. Wan Norharyati Wan Salleh
: Dr. Farhana Aziz
: Ms. Norfadhilatuladha Abdullah
: Mr. Sohaimi Abdullah
Research Alliance : Frontier Materials Research Alliance (FMRA)
Potential Project : International collaborator (Philos Co. Ltd)
Collaborator : National collaborator (Sawipac Sdn Bhd)
B. PRODUCT DESCRIPTION
As part of companys endeavours in embracing new membrane technology, AdUF membrane
possesses a very own unique features that challenge both adsorption and ultrafilration
membrane technology in the water treatment industry. It comes with lower cost and modest
separation process in compared with commercialized nanofiltration or reverse osmosis
membranes by incorporating the nano materials (HFO) with simple and practical physical
mixing and phase inversion technique. Post treatment for the contaminated water is not
necessary considering its effective simultaneous separation and adsorption of contaminants.
On top of that, this product is able to address the permeability and fouling issues existed
among the commercialized membranes with its smaller pore size, improved permeability and
adsorptive features.

Product Features
1. Dual-functions adsorptive mixed matrix membranes.
2. Improved water permeability.
3. High durability.
4. Ability to remove heavy metals and other potential contaminants: adsorption or
membrane filtration.

Product Competitiveness
1. Ability to efficiently remove heavy metals (eg: lead, chromium, arsenic)
2. Novel dual functions adsorptive membrane (skip post treatment, low cost)
3. Ease of fabrication technique.
4. Cost effective nanomaterials polymer membrane materials.
5. Environmental friendly. (no presence of harmful substance)

Technology Innovation
1. Embedding HFO in UF membranes resulted to AdUFs with adsorptive features where the
hybrid MMMs can be used for adsorption or membrane filtration process.
2. In comparison to micellar enhanced UF (MEUF), AdUFs provide safer options as no
secondary pollutants/sludge are produced.
3. HFO is a promising adsorbent to adsorb heavy metals and other contaminants.

Impact to Community
1. Increase awareness of the hazardous impacts of contaminated water and the importance of
water treatment.
2. Provide more information about adsorptive membranes and their application.
3. Improve quality of drinking/tap water.
4. Clean and green manufacturing process.
C. MARKET ANALYSIS SUMMARY

Market Trend
In tandem with countrys industrial development, the potential of contamination releases into
water stream is expected to arise. Most of the industries discharge their produced water into
the water stream prior to the waste water treatment with allowable concentration of
contaminants contained as per standard parameters. Although the water stream such as rivers
and lakes will interact with ground water, the quality of water cannot be modified. There is no
compromise in obtaining decent quality of water as study has shown the direct relationship
between metal ion contaminants in water with human health. Since the drinking water come
from both surface water and ground water, an extensive water treatments with removal of
heavy metal ions from the contaminated water are essential in order to obtain a good quality
and safe drinking water.

Figure 2 shows the population of Malaysia from 1951 to 2016. Over the years, the population
in Malaysia has remain increasing and by 2016, the number of population is already reaches
30.6 million people. The number is estimated to increase exponentially with rate of 1.5%
yearly which is equivalent to 455,694 people. With such big number, the increases in demand
for water consumption is expected alongside with high awareness in consuming clear water
among the community. Simultaneously, the concerns on improving the drinking water with
limited clean water sources will also keep growing. History has proven that Malaysia is very
committed in improving drinking water sources for the past two decades as shown in Figure
3. According to WHO/UNICEF Joint Monitoring program (JMP) for water supply and
sanitation, the number of population in urban and rural regions of Malaysia in consuming
improved drinking water sources increases from year 1990 to 2015. JMP defines this
improved drinking water by nature of its construction or through active intervention such as
physical separation and membrane technology. In 2011, Malaysia has become the second
highest contribution of revenues for membrane filtrations after Singapore as reported by Frost
& Sullivan as shown in Figure 4. Such commitments made by Malaysia in improving
drinking water are expected to positively grow for years ahead due to rapid growth in
industrial activities as well as improvement on industrial wastewater discharge regulations
and enforcement.
Figure 2: Population of Malaysia from 1951 2016. (UNESCO Institute for Statistics, 2016)

Figure 3: Malaysias commitment to improve drinking water quality. (UNICEF/WHO, 2016)

Figure 4: Malaysias contribution in membrane solutions for ASEAN market. (Frost &
Sullivan, 2011)
For membrane technology in water treatment application, the demands trend is expected to
keep rising particularly in the industrial wastewater technologies. As listed in International
Trade Administration (ITA) Environmental Technologies Top Markets Report 2016,
membrane filtration has been listed as one of the key technologies in demand for industrial
wastewater treatment. The growth of heavy metal related sector has induced the demand for
membrane technology in industrial wastewater treatments as Malaysia is committed in
maintaining high effluent standards for the heavy metal industry. In order to meet those
standards, membrane filtration is expected to deliver better performance among of other
competitors in membrane technology market. Frost & Sullivan in 2012 has reported that the
efficiency of membrane in water treatment is the main requirement for the demands on top of
good pricing, high innovation and incorporation of green approach in the treatments. By
considering these factors, the features of AdUF membrane has full-filled the demands
requirement in order to play a pivotal role in the provision and supply of clean waters, and in
wastewater treatment among of the commercial UF membranes in the future market. The
global market forecast for UF membrane technology used in water treatment is estimated to
reach 3.6 billion USD (BCC 2015) in 2017 based on high demands for improved drinking
water.

Market Size
As this innovative product provides both ultrafiltration and adsorption features for the
removal of metal ions from water mixture, the market for this product is not limited to
domestic water treatment but also for commercial and industrial water treatment. It can
acquire a very high potential reception for international level. The dual-functions with low
cost and green separation process will attract the industrial players predominantly from the
regions with limited access for clean water. According to Frost & Sullivan 2012, it is
expected that the market value of the membrane-based water and wastewater treatment will
continue to grow from USD 19.0 billion in 2012 to USD 39.2 billion in 2019 worldwide. The
market for membrane filtration (MF) in Asia-Pacific is expected to reach USD 927 million in
2018 from USD 524 million in 2013 (BCC research). With this upcoming trend, more
investments in membrane technology are expected and therefore the potential of this product
going internationally is increasing.
Market Competitors
Membrane material provider in Malaysia is yet to establish to date. Most of the local
companies that available in membrane business are responsible for assembling and
manufacturing the membrane product system. Toray Membrane, DuPont and Applied
Membrane, USA are among of the existing international competitors that provide membrane
technology system to the industrial players. They are mainly the manufacturers producing
commercial membrane specialized for water treatment. Due to their long establishment and
expertise, their membrane products deliver design solutions that can be applied in a range of
industries. However, with the development of this new product, it may offer a new
perspective of membrane technology as it was the results of novel knowledge in which will
be able to compete among of the competitors.

Market Players
With arising of industrial production releases of heavy metals contaminants into water
streams, the industrial players are certainly in need for an exceptional water treatment. Thus,
the key players for the production of this product are residential communities, providers for
water treatment system to the community such as tap water treatment industries as well as
local water suppliers and control bodies. To name a few, some of the potential industrial
partners are Aquatec, ChemTreat, Syarikat Air Johor(SAJ), Aliran Resouces Air Berhad
(AIRB), Titan Strategic Sendirian Berhad (TS) and Konzen Malaysia.

Potential Market Player

Philos Co. Ltd (Philos) and Sawipac Sdn Bhd (Sawipac) are the two project collaborators that
have been identified as the potential market players for this product. Philos is one of the
largest providers of membrane technology system for various industrial sectors. With more
than 20 years of experience in membrane and water filtration industry, it has established
fully-equipped factory and membrane production line in which enhancing more efficient and
accurate research and development process. Sawipac is local company that involves in
providing membrane filtration solutions for industrial biogas treatment, crude palm oil
processing and waste water treatment. They are committed in delivering advanced and green
energy related technologies for waste water treatment. Since the target market for this product
is not limited to domestic water applications only, Sawipac can potentially develop this
product for industrial and commercial water treatment applications.
E.COMMERCIALIZATION PLAN
The key element in AdUFs initial commercialization strategy is to develop a complete
membrane system for a larger scale. Currently, this product is proven to be an exceptional
ultrafiltration (UF) membrane for removing metal ions. With high durability for long hour
operation for one flat sheet of MMM, further development of the membrane module design is
planned in prior to the next stage of commercialization, which is the joint venture between
the company with industrial players. Unique approaches are going to be implemented in this
partnership through the join technology and knowledge advancement. The following
strategies will be executed for this new product:

Stage of Commercialization
1. Current commercialization stage for AdUF membrane is proof of concept.
2. Through novel knowledge, this product is proven to have high ability and reliability to
remove metal ion contaminants in water. Since the production process is economically
cost effective and environmental friendly, it has high reproducibility for mass scale
production.

Product Strategy
Continuing to improve product quality: identifying product performance and cost barriers
and develop strategies to overcome them.
Creating more product benefits awareness: develop public information programs.
Continuing to reduce cost: increase collaborative research and development of materials,
and product standardization to ensure cost reduction trend.

Marketing Strategy
On-site technology demonstration in order to exhibit the product advantage.
Smart-partnership through joint technology development with potential industrial players
or client.
Technology pitching to potential industrial players.
Contract research.

Sales Strategy
Initial market to residential community areas.
 Target market to domestic providers for water treatment system.
Target market to local industrial business.
Expand market to international scale.

Milestone
Task Target Date
Attain funding to improve and test the product at larger scale. End 2016
Development by the partnership companies of a prototype, to be January May 2017
developed by a professional.
Final safety testing of the complete and working prototype with June August 2017
regulatory oversight.
Phase one marketing will include promotional materials as well as September 2017
onsite demonstration.
Domestic market penetration. Production starts. January 2018
Global market penetration. January 2022
D. FINANCIAL INFORMATION
As improved drinking water consumption arises, membrane business in drinking water
treatment is expected to continue to grow upward with Malaysias commitment in spending
in membrane technology. Due to the incomplete membrane module and the product is yet in
its prototype form, several assumptions have been made in order to allow flexibility to cover
any unforeseen expenses in obtaining the cash flows and profitable of this product.

Funding
1. Collateral fund from UTM and international collaborator (Philos Co. Ltd) as well as
national collaborator (Sawipac Sdn Bhd) is estimated at RM 10,000.
2. Capital loan is included which is estimated at RM 10,000 with 5 years tenure loan.
3. Initial investment is expected to attain at RM 25,000.

Technology/Asset
1. Currently the conventional technology is adapted in fabricating this product. For large
scale production, the latest technology is going to be used.

Products
1. MMM product will use commercial UF module in which for this case is a hollow spiral
wound module. Thus, the size of MMM sheet will be assumed same with commercial UF
membrane sheet. 1 unit of module is equivalent to 5m2 filtration contact area.
2. Expenses for working and testing prototype as well as promotional materials will be
included in the non-operating non-expenses in Year 1. Prototype design will be
outsourced to an experienced manufacturer.

Market
1. The initial target market for this product for domestic scale. Thus, it is assumed that the
product application is for residence and small industrial areas.
2. The business is expected to begin growing exponentially with rate of 1.5% from small
quantity of 500 to 52869 in 2021 with ongoing marketing strategies.

Expenses
1. In order to include all operational cost such as utilities and rental fees, a fixed operating
cost of RM 15,000 yearly is included.
2. Depreciation of the asset/technologies is assumed fixed at RM2,000 yearly and begun in
2018 (first year production of product).

Income Statement
Items 2017 2018 2019 2020 2021
Capital Loan 10,000 0 0 0 0
Capital fund 10,000 0 0 0 0
Investment 25,000

No of Sales 0 500 1,270 3,710 12,729

Price per Unit 550 550 550 550 550
Total Sales 0 275,000 698,519 2,040,565 7,000,978
Revenue 0 275,000 698,519 2,040,565 7,000,978

Operation Cost 0 190,000 482,613 1,409,845 4,837,039

Fixed Operating Cost 0 15,000 15,000 15,000 15,000
Income Before Tax 0 70,000 200,906 615,720 2,148,939

Assets/Technology 20,000 0 0 0 0
Testing 2,000 0 0 0 0
Prototype 5,000 0 0 0 0
Marketing 2,000 2,000 2,000 2,000 2,000
Staff 0 50,000 50,000 50,000 50,000
Audit Fee 5,000 0 0 0 0
Interest (15%) 1,500 1,500 1,500 1,500 1,500
Capital Allowance 2,000 2,000 2,000 2,000 2,000
Royalty to UTM
(7.5%) 0 20,625 52,389 153,042 525,073
GST Incurred (6%) 0 16,500 41,911 122,434 420,059
Total Expenses 37,500 92,625 149,800 330,976 1,000,632
Depreciation 0 2,000 2,000 2,000 2,000
Income After Tax (37,500) (24,625) 49,106 282,744 1,146,307

Net Cash Flow (59,517) (24,625) 49,106 282,744 1,146,307

Cumulative Cash
Flow (59,517) (84,142) (35,036) 247,708 1,394,014

IRR = 104%
 Figure 5: Cash flow profile for AdUF membrane for 5 years of production.

Gain and Loss

For the project life of 5 years, the internal rate of return (IRR) on investment in this product
can be achieved at 104%. The profit and loss projection shown in Figure 5 reflects that the
return of investment can be almost achieved after 2 years of production. It is expected to give
more profits as the demand for AdUF membrane application in water treatment is predicted to
increase with the unique marketing approaches and ongoing promotional strategy.