Sparc Technologies Reports 60% Corrosion Resistance Boost in Graphene-Enhanced Coatings

About Sparc Technologies Limited

Sparc Technologies Limited (ASX: SPN) is an Adelaide-based specialist in graphene additive materials, photocatalytic green hydrogen technology, and sodium-ion battery components, with a commercial focus on sustainable industrial applications under its ecosparc® brand and related innovations. As at close of trading on 25 August 2025, its shares were priced at around AUD 0.14.

Market and Product Development

Sparc Technologies Limited has disclosed laboratory results demonstrating corrosion protection improvements of up to 60 per cent in graphene-enhanced water-based epoxy coatings compared with leading commercial references. Neutral salt spray testing was conducted over 480, 960 and 1,680 hours to ASTM D1654-08 standards, yielding performance increases of 60 per cent, 39 per cent and 58 per cent for water-based acrylic epoxy, and 34 per cent, 31 per cent and 41 per cent for Bis-A/F epoxy formulations.

These advances expand Sparc’s addressable market from solvent-based to water-based epoxy coatings, positioning the company in two structurally growing categories. The global water-based epoxy market, valued at US$1.6 billion in 2022, is forecast to reach US$2.9 billion by 2029 at a compound annual growth rate (CAGR) of 8.9 per cent. In parallel, the anticorrosion coatings market is expected to grow from US$30.5 billion in 2022 to US$43 billion by 2029, reflecting a CAGR of 5.1 per cent. For context, anticorrosion coatings represent approximately 28 per cent of the global protective coatings industry, underscoring the scale of Sparc’s target segments.

Given tightening regulations on volatile organic compounds (VOCs) across Europe, North America and Asia, demand for water-based alternatives is expanding faster than traditional coatings markets. With performance improvements now quantified at up to 60 per cent, Sparc is addressing the key barrier to broader adoption — durability relative to solvent-based products — and in doing so is positioning itself to capture share in a sector forecast to add US$1.3 billion in new demand by the end of the decade.

Commercialisation Pathway and Revenue Potential

Sparc’s ecosparc® additive line has been under development for six years and is now supported by a dedicated commercial production facility commissioned in 2023. The company has disclosed active engagement with five of the world’s eight largest protective coatings manufacturers, in addition to direct specification trials with large infrastructure owners in oil and gas, mining and defence. These engagements represent significant near-term commercial catalysts, particularly as multiple field trials are scheduled through 2025, with management targeting commercial adoption in FY26.

The company’s target addressable market for ecosparc® alone is estimated at approximately US$1.0 billion per annum by 2030. This calculation is based on 25 per cent penetration of suitable protective and marine coatings, with additive pricing equivalent to 12 per cent of coating sales values. Even a conservative 5 per cent capture of this addressable market would represent annual revenues of roughly US$50 million, which is material in the context of Sparc’s current microcap scale on the ASX. At 10 per cent penetration, revenues could exceed US$100 million annually, placing Sparc into a revenue category typically associated with mid-cap industrial technology firms.

In parallel, the development of a graphene additive suitable for water-based coatings creates a complementary product line. If adoption mirrors solvent-based uptake projections, investors can assign incremental optionality valued against the US$2.9 billion water-based epoxy market. Assuming ecosparc® achieves even low single-digit penetration in that segment, annual revenues of US$25–50 million could be achievable within five years of launch, effectively doubling Sparc’s revenue ceiling relative to solvent-based applications alone.

Financial Position and Strategic Assets

Sparc’s investment case is reinforced by its early establishment of production capability. The ecosparc® facility provides capacity to scale additive output without material new capital expenditure, a point of differentiation compared with early-stage advanced materials companies which often face capital intensity hurdles. By reducing dependency on contract manufacturing, Sparc controls both cost base and supply chain integrity, supporting margin stability upon commercialisation.

Although Sparc has not yet reported meaningful revenues from ecosparc®, the broader coatings industry context highlights the potential economic impact. Corrosion-related costs globally are estimated at 3 to 4 per cent of GDP, equating to more than US$3 trillion annually. Reducing infrastructure maintenance cycles even by 10 per cent through improved coatings translates into billions in potential industry cost savings. Investors are likely to value ecosparc® not only as a margin enhancer for coatings companies but also as a cost deflator for asset owners, supporting premium pricing potential for Sparc’s additives.

Diversification into hydrogen technology via the joint venture with Fortescue Ltd and the University of Adelaide further strengthens Sparc’s profile. The photocatalytic water-splitting (PWS) process under development could reduce reliance on electrolysers and deliver cost advantages in green hydrogen production. While this technology remains pre-commercial, it provides Sparc with exposure to another multi-billion-dollar global growth industry. Investors can therefore view Sparc as having dual optionality: coatings as the near-to-mid-term cash generator and hydrogen as a potential long-term re-rating catalyst.

Investor Perspective and Market Implications

From an investment perspective, Sparc’s announcement materially enhances the visibility of its commercialisation pathway. The clear demonstration of quantitative performance uplift — up to 60 per cent improvement in anticorrosion metrics — is critical for both industrial buyers and equity investors seeking evidence of product viability. The fact that multiple graphene grades and low dosage rates yielded consistent improvements strengthens the scalability case, as dosage directly affects cost efficiency and gross margin potential.

The global protective coatings industry is dominated by a handful of multinationals such as AkzoNobel, Sherwin-Williams and PPG, all of which have multi-billion-dollar revenues and large-scale procurement requirements. Sparc’s engagement with five of the top eight players indicates genuine industry validation, which is a key leading indicator for commercial adoption. Investors will likely benchmark Sparc’s valuation potential against advanced materials peers, where early commercial traction often drives rapid re-ratings. For example, advanced materials firms achieving US$50–100 million in annualised revenues frequently trade at enterprise value-to-sales multiples between 4x and 8x, suggesting Sparc’s medium-term valuation ceiling could range between A$300 million and A$1 billion, depending on execution.

Sparc’s share price has historically traded with volatility due to the binary nature of its R&D outcomes. However, the 2025 results position the company at an inflection point. With commercial adoption targeted for FY26, investors will be monitoring the next 12–18 months for contract conversions, revenue recognition, and margin disclosures. The commissioning of production capability in 2023 mitigates one of the largest risks typically associated with commercialisation. If early revenues are secured and scalability validated, the market may begin to price in ecosparc®’s potential to generate double-digit millions in revenue within three years.

Sparc therefore represents an early-stage but increasingly de-risked investment in the global coatings sector, with optional upside from its hydrogen joint venture. The combination of regulatory-driven demand, quantifiable cost savings for asset owners, and high-margin additive economics provides a platform for material valuation expansion if execution milestones are met.