A Discussion With Herb Reedman

Herbert Reedman, Jr., Member of the Board

CEO William S. Robinson recently named Herbert Reedman, Jr. as a member of the Integral Technologies Board of Directors. Although he has been on a very fast pace since joining Integral, Herb consented to be interviewed for the Company Corner.

Doug: A hearty welcome to Integral Technologies and Company Corner, Herb. What interested you in Integral and ElectriPlast™?

Herb: Thanks, Doug. Clearly it was the disruptive technology. Conductive plastics were at one time thought to be an impossibility. The ElectriPlast™ technology is groundbreaking and will impact a wide spectrum of industries from consumer electronics and life sciences to transportation. I love the technology and the space. We have an opportunity to do some really big things.

Doug: What potential do you see for ElectriPlast™?

Herb: To say I'm excited is an understatement. The markets for ElectriPlast™ are staggering. Ask yourself what industry doesn't want to lighten their products for the consumer's benefit. We certainly understand the relationship between weight and fuel consumption as it relates to transportation; lighter vehicles mean increased efficiency, greater distances between fueling or charging, and compliance with government mandates for greenhouse gases and CAFE laws. Today, vehicle fuel efficiency shapes consumers preferences and ultimately influences sales so automotive and transportation is huge for us. Lap tops, military gear, aviation, medical equipment, I could go on and on; from aerospace to consumer electronics lightweighting is underway and ElectriPlast™ can play a unique role in achieving reductions.

Doug: How much of your time will you be dedicating to Integral?

Herb: I believe Integral represents a tremendous opportunity. To be able to introduce a new technology with such far reaching implications is very exciting. Steering a company from the research and development phase through commercialization and beyond takes a great deal of planning and coordination so there is much to do. I am completely committed; the Integral team has my full and undivided attention for the foreseeable future.

Doug: Where will you be directing your efforts first?

Herb: Sales without question; and the systems, processes, people and products necessary to support our sales and marketing plans going forward. We have received inquiries from some of the leading companies in almost every industry imaginable; I will be concentrating on our current and future book of business.

Doug: What are some of the challenges you see ahead for ElectriPlast™?

Herb: Many of the greatest challenges are behind us. Integral has spent 7 years and $18 million dollars developing, testing and proving this technology. Research of any kind can be a slow and arduous process. You have successes and failures along the way but ultimately what keeps you moving forward is a great team, great core technology and vision to see beyond the obstacles in the road. I am amazed at what the Integral team has achieved to date. What remains is the commercialization of ElectriPlast™, exploiting the vast opportunities for our technology and transforming Integral into a success driven sales organization. It is a fundamental and foundational transformation which like R&D takes a great deal of planning.

Doug: How do you think you can help Integral overcome these challenges?

Herb: Through planning, processes, people and execution. We have great minds inside Integral who have done an incredible job at moving the technology ahead. My focus has always been on building great sales and marketing organizations, that is my mindset, it's what I know. We have the technology, the product is proven, the demand is there; we know what we have to do.

Doug: So what are you talking about in the last mile, so to speak?

Herb: First and foremost shoring up the current book of business and putting processes in place to ensure forward momentum in the sales channels. We have inquiries from every corner of industry, it's quite impressive; I want to get my arms around them and install disciplined systems to manage the relationships and maximize those opportunities. Then, it's literally putting the remaining pieces of the puzzle together and building out an organization focused on sales.

Doug: You obviously have extensive roots and connections within the automotive industry; will you also be focusing your sales efforts in other areas?

Herb: As I said, my focus is on the commercialization of ElectriPlast™ and transitioning Integral into a world class sales organization. We will be directing our sales efforts across multiple segments as the interest for the ElectriPlast™ line of conductive plastics is broad-based. We have received numerous inquiries from consumer electronics makers, the military, automotive suppliers and OEM's, the cellular sector so, yes, from automotive to aerospace, ElectriPlast™ will be there.

Doug: Why is the automotive sector so important to ElectriPlast™?

Herb: All the targeted segments are important and represent tremendous opportunity for the adoption of ElectriPlast™. However, the issue of vehicle lightweighting has been high on the agenda of the automotive industry for several reasons. One, vehicle contenting is at an all-time high. Navigation systems, front cameras, rear cameras, heated seats, remote garage openers, video screens, infotainment systems, power accessories, these all add weight to the vehicle. There is a direct correlation to weight and fuel efficiency; more weight, lower mileage, less range and higher cost of operation. With gas near record highs there is tremendous pressure on the manufacturers to deliver higher, more fuel efficient vehicles.
The second reason the automotive sector is unique are government mandates and the imposition of increasingly stringent greenhouse gas regulations. The CAFE requirements legislated by the government call for increasingly difficult benchmarks in miles per gallon and indications are, they will only get more severe. There is talk of a 62 MPG CAFE regulation by the year 2030. If manufacturers are to comply they must develop alternative technologies including aggressive lightweighting programs. This is one instance where mandates work to the advantage of ElectriPlast™.
The third reason, the adoption of hybrid technologies, electric vehicles and stop-start technologies have created increased demand for shielding materials, many of which are massive in size. The larger the part, the more ElectriPlast™ is needed to cast it. So the shielding demand is high and quantities of sale are high. So too is the effect of weight on the alternative fuel vehicle. The more weight, the shorter the distance you can travel between charges which increases "range anxiety" among consumers. ElectriPlast™ offers the automotive sector a unique solution for lightweighting with reductions of 40-60% over copper and aluminum. To me the automotive sector represents the perfect scenario for ElectriPlast™.

Doug: When would you expect your first sale of ElectriPlast™?

Herb: I don't want to make predictions; our process to a sale is not completed overnight, the sales cycle becomes technical and takes time. But let me say this: We are in varying stages of talks with some of industries largest suppliers, OEM's, chemical companies and electronics makers. Some of the discussions are what I would term, very mature, others are early-exploratory and others yet are mid-cycle. Some of these companies have invested hundreds of thousands of their own research dollars to prove our technology. What is common throughout these discussions is the ardent interest from these firms to leverage our technology and their willingness to explore all possible uses within their product lines for ElectriPlast™. We are in a good place right now and that gives me reason to be optimistic.

Doug: You mention the sales cycle becomes technical and takes time; would you expand on that?

Herb: Sure, early adopters go through various stages in the course of discovery and implementation of new technologies. Typically these might include awareness, acceptance, exploration, and testing phases while leading up to the specific application. It takes time to introduce your brand and create awareness. Once you have generated awareness and conveyed the benefit of your technology an industry must accept that they have a need. The value in technology is how it can be applied to your specific industry and your particular product line in order to achieve a competitive advantage. To determine the best possible use the company must explore various applications and determine how best to integrate the new technology. When a use or application is discovered, testing begins which hopefully results in positive data and ultimately, a sale. There are no short cuts with new technology, until your technology is tested, accepted and standardized you must expect the process will look much as I described. This is not a consumer product, it is a raw material used by industry. The ElectriPlast line now consists of nine different blends all with unique properties designed to meet and fulfill strict requirements across multiple industries covering thousands of applications which will reside in a myriad of environments. Testing and adoption takes time; however, as we begin to prove out, and the market begins to accept those findings, as they are now, good things follow.

Doug: Will you be repositioning yourself or your firm as a result of your commitment to Integral?

Herb: Yes, dramatically, myself and our firm. When we began this journey with Integral we realized the scope of work would require a fulltime commitment and our undivided attention. This meant realigning our firms' priorities and business ventures and directing 100% of our attention to Integral. Over the ensuing months we will transition our facility into the national headquarters for Integrals sales and marketing operations. The Philadelphia center will be functional and operating by the middle of the third quarter.

Doug: Herb, you have briefly touched on your team, could you expand on your team and what their involvement will be?

Herb: I have tried to surround myself with talented people and my core team has been instrumental in helping to develop our plans for moving Integral forward. Although I have some preliminary thoughts on their long-term involvement there is still work to do in determining where they will most benefit Integral. But yes, my core team has been with me every inch of the way and will continue to help guide our decisions. We may have some announcements there over the course of the next few weeks.

Doug: What other surprises are in store for Integral?

Herb: Well I don't know that I would categorize them as surprises but we have ambitious plans on the marketing front all designed to promote our brand and the sales of ElectriPlast. We are still formulating these strategies but I can tell you we are working on image and brand concepts to better position Integral and ElectriPlast™, so brand identity is definitely on the board. There will be a new corporate website launched in the next few weeks which we are calling gen2. This will be an interim site fully optimized to take advantage of social media, search engines and blogging activities. This will be followed with a gen3 site built off of the gen2 platform but will be inspired by the repositioned Integral/ElectriPlast brand elements. We have a fully executable media plan which includes a digital marketing strategy. We will be expanding Integral's social media presence and market reach. There are strategies being developed which include highly-targeted marketing and brand awareness campaigns, so there are a lot of exciting things coming to Integral over the next few quarters.

Doug: How would you describe your business acumen?

Herb: We all have our specialties, I see myself as an integrator bringing talent together, positioning people for the greatest chance of success, developing and promoting communication and ensuring knowledge exchange within the Integral team. I am a firm believer in the adoption and execution of best-practices; I am all about quality control and customer relationships; I am a driver of processes, expect results and, I measure EVERYTHING! I will say that patience is not one of my strongest traits. Much of our process mapping has been spent identifying the various stages of the sales cycle and developing protocols along the way for generating forward momentum to continuously elevate and expedite the process.

Doug: Thanks for your time, Herb. We look forward to many exciting things now that you are a member of the Integral Board of Directors.

Herb: Just one more comment Doug if I may; I am a firm believer in communication, I love this format and the informal venue the Company Corner provides. Once I get beyond the discovery curve I would like to do more of this. I want to provide substantive updates to the shareholders on issues I believe are important to them as owners. So, with your permission I would like to invite myself back for regular exchanges with you.

Doug: That's a promise Herb, and thank you again.

Herb: My pleasure Doug.


Doug Bathauer
Director of Corporate Communications
Integral Technologies
812-455-5767