The Complete Solution

Efficient Formulations + Efficient Cure =

Profits


Fusion UV Systems, Inc

Lonnie Murphy and Susan Mitchell

February, 2005





















Introduction
Formulators who can present complete solutions to their customers will win over new business.
What do we mean by a complete solution? Efficient formulations coupled with efficient cure,
creates more profits for you and your customers. Fusion UV often works closely with formulators
in a symbiotic relationship to create and deliver a complete solution to the customer.

An efficient formulation
UV-curable inks, coatings and adhesives can be formulated in many different ways. In fact there
may be many, many different formulations that a customer can use to get the desired properties
and performance needed. But the formulator that can win over more business understands the
big picture from the customers perspective. From the customers perspective, he wants a coating
that not only meets the specification, but that also cures at the desired line speeds with the least
operating costs, including energy, spare parts and maintenance time.

Many formulators focus solely on making their formulation work with the cheapest raw materials
to maximize margins, not realizing their inexpensive formulation will cost their customers much
more down the road in increased operating costs. An efficient formulation is one that is peak
irradiance driven, meaning that it will cure at faster line speeds when exposed to a high peak
irradiance lamp.

A real example case
Lets go through a real example to show what we mean. The following calculations are based on
a real customer situation where the formulator and Fusion UV teamed together to create and
present the complete solution. The customer had an existing UV coating process operating one
12-hour shift, four days per week and wanted to increase production. The bottleneck in the
process was the UV curing of the topcoat. So the formulator created an efficient curing topcoat
that instead of requiring 10 rows of arc lamps like the existing topcoat, only required one row of
Fusion UV lamps. Line speeds increased from 85-110 ft/min. to 170-220 ft/min. This increased
line speed enabled the customer to increase production without having to add an additional shift,
a savings of $445,000. Average annual estimated cost savings by going to a single row,
high-powered Fusion UV cure system for the topcoat is:

Energy $27,000
Maintenance $13,000
Production $445,000

TOTAL $485,000

With one shift, this conversion to the efficient coating and one row of Fusion UV lamps had a 2-
year payback. If they add another shift, it pays back in just three months.

A second example
A second plant operated longer hours, 80 hours/week, and the formulator proposed both a new
topcoat and filler. Instead of requiring 50 rows of arc lamps at 160-170 ft/min., only 6 rows of
Fusion UV lamps were needed to run 170-220 ft/min. Average annual estimated cost
savings by going to a six row, high-powered Fusion UV cure system for the filler and
topcoat is:

Energy $152,381
Maintenance $104,916
Production $? Additional revenues

TOTAL $257,297+

Without accounting for the increased production revenues, this conversion to the efficient coating
and six rows of Fusion UV lamps had a 2.4-year payback.

Working together is the key
This formulator recognized the account had a formulation that worked, but not the complete
solution. By teaming with Fusion UV, they were able to deliver an efficient formulation, plus
efficient curing that resulted in profits for the customer. This formulator took advantage of
Fusions application lab for sample testing and we made joint sales calls, including the solution
presentation. As is often the case, Fusion UVs demo equipment was used to run on-line trials at
the customer with the new formulation to prove it to the customer. If you are interested in
putting together this kind of team approach, just give us a call it can be a win-win for
everybody!


System Cost Analysis - 1


A. Power Consumption

Facts given: $.06 per Kilowatt Hour
Arc lamp wattage factor at 300 wpi: .341
Hours on per week: 48 (4 x 12 hour shifts)
Power Consumption
Fusion UV Arc Lamp
Connected Load, KW 82 260
Energy Cost/HR $4.92 $15.60
Energy Cost/YR $12,280 $38,938

Cost Savings per year: $38,937 (ARC) - $12,280 (FUSION) = $26,657

B. Maintenance

Facts Assumed:
Fusion UV Warranties: 5-year system warranty
Fusion Bulb ($305 each): 6000 hour non-prorated warranty
Fusion Magnetrons ($650 each): 6000 hour warranty
ARC lamp average life: 1,000 hours
ARC lamp cost ($500)
Misc. Maintenance for ARC per year at $350

Maintenance Costs per year

Year Hours/year Fusion Parts Cost ARC Parts Cost Savings

1 2,496 $0 $14,000 $14,000

2 2,496 $0 $14,000 $14,000

3 2,496 $6,685 $14,000 $7,315

4 2,496 $0 $14,000 $14,000

5 2,496 $0 $14,000 $14,000

TOTAL COSTS FOR 5 YEARS $6,685 $70,000 $63,315

AVERAGE COST SAVINGS PER YEAR $12,663


C. Production Productivity Analysis


CURRENT PRODUCTION CAPABILITY:
Current production with current 10 Row ARC system= 85-110 feet per minute
One 12-hour shift 4 days a week.

POTENTIAL PRODUCTION CAPABILITY:
Production capability with 1 Row of a high powered Fusion system with new
topcoat=170-220 feet per minute.

Costs associated with adding an additional shift to current production.

Employees: 5 Cost is roughly $250,0000 per year
Energy Costs: UV system topcoat: $38,000
Energy Costs: All other UV systems: $47,000
Energy Costs: Other equipment and lighting: $50,000
Maintenance Costs UV: $30,000
Maintenance Costs other: $30,000

TOTAL COST PER YEAR TO ADD AN ADDITIONAL SHIFT: $445,000

Average yearly estimated cost savings by going to a single row high-powered
Fusion UV cure system for the topcoat.

A. Energy $27,000
B. Maintenance $13,000
C. Production $445,000

TOTAL $485,000

EQUIPMENT COSTS AND INSTALLATION ESTIMATES: $160,000

ESTIMATED PAYBACK IF ONLY ONE SHIFT: 48 MONTHS
ESTIMATED PAYBACK IF A SHIFT IS ADDED: 3 MONTHS



ADDITIONAL COST SAVINGS:
The following cost savings are real, but were not calculated and thus not included in the
analysis.

ENERGY COSTS:
Fusion system can be turned on to full power with no warm up time. Fusion
units can be turned on and off almost instantly and thus can be turned off
without warm up. This will save energy and reduce the hours and starts on a
system.
A reduction of 178KW will enable more production teams to add more
equipment without expensive electrical panel requirements.

MAINTENANCE COSTS:
Costs to clean, maintain and repair a single row of Fusion systems are
reduced based upon the reduced number of lamps and Fusions unique
method of cooling which reduces the need to clean reflectors.
The 5-year warranty on the Fusion system highlights the historical reliability
of the system.
Fusion 10 modules and lamp systems require very little storage space for
parts vs. needing added space for banks of 72 spare ARC lamps.


SPACE SAVING COSTS:
A single Fusion system row will take up less than 4 feet in the conveyor
direction while the 10 rows of ARC lamp takes up 20 feet plus. The added
space savings will allow for additional plant space as well as reduced costs
associated with belt costs and maintenance.

OTHER MISC. NON TANGIBLE COSTS:

About 60 KW extra of infrared energy is no longer dumped onto the product.
This heat was either stored in the product or dumped in the air. Either way
this made for more difficult handling of the product and increased discomfort
or air conditioning costs.


System Cost Analysis - 2


A. Power Consumption

Facts given: $.06 per Kilowatt Hour
Arc lamp wattage factor at 300 wpi: .341
Hours on per week: 80
Power Consumption
Fusion UV Arc Lamp
Connected Load, KW 389.5 1000
Energy Cost/HR $23.37 $60.00
Energy Cost/YR $97,219 $249,600

Cost Savings per year: $249,600 (ARC) - $97,219 (FUSION) = $152,380.80

B. Maintenance

Facts Assumed:
Fusion UV Warranties: 5-year system warranty
Fusion Bulb ($305 each): 8000 hour non-prorated warranty
Fusion Magnetrons ($650 each): 6000 hour warranty
Reflectors ($185 each): 12,000 hours estimated
ARC lamp average life: 1,000 hours
ARC lamp cost ($425)
Misc. Maintenance for ARC per year at $350

Maintenance Costs per year

Year Hours/year Fusion Parts Cost ARC Parts Cost Savings

1 4,160 $0 $120,000 $120,000

2 4,160 $34,380 $120,000 $85,620

3 4,160 $6,660 $120,000 $113,340

4 4,160 $34,380 $120,000 $85,620

5 4,160 $0 $120,000 $120,000

TOTAL COSTS FOR 5 YEARS $75,420 $600,000 $524,580

AVERAGE COST SAVINGS PER YEAR $104,916


C. Production Productivity Analysis

CURRENT PRODUCTION CAPABILITY:
Current production with current 50 Row ARC system= 160-170 feet per minute
80 hours / week.

POTENTIAL PRODUCTION CAPABILITY:
Production capability with 6 Row of a high powered Fusion system with a filler and
topcoat system =170-220 feet per minute. Potential 30% productivity increase.

Average yearly estimated cost savings by going to a six row high-powered
Fusion UV cure system for the filler and topcoat.

A. Energy $152,381
B. Maintenance $104,916
C.Production $? Additional revenues

TOTAL $257,297+

EQUIPMENT COSTS AND INSTALLATION ESTIMATES: $625,000

ESTIMATED PAYBACK: 2.4 YEARS or SOONER





ADDITIONAL COST SAVINGS:
The following cost savings are real, but were not calculated and thus not included in the
analysis.

ENERGY COSTS:
Fusion system can be turned on to full power with no warm up time. Fusion
units can be turned on and off almost instantly and thus can be turned off
without warm up. This will save energy and reduce the hours and starts on a
system.
A significant reduction of over 600KW will enable a significant reduction in
power and load on the plant. Possible credits may be earned for this
reduction.

MAINTENANCE COSTS:
Costs to clean, maintain and repair a single row of Fusion systems are
reduced based upon the reduced number of lamps and Fusions unique
method of cooling which reduces the need to clean reflectors.
The 5-year warranty on the Fusion system highlights the historical reliability
of the system.
Fusion 10 modules and lamp systems require very little storage space for
parts vs. needing added space for banks of 72 spare ARC lamps.


SPACE SAVING COSTS:
A double Fusion row will take up less than 8 feet in the conveyor direction
while the 10 rows of ARC lamp takes up 20 feet plus.