By Stuart Condie
SYDNEY--Efforts by the White House to onshore manufacturing jobs and incentivize U.S. emissions reductions are giving a lift to 3D-printing companies, many of which had previously looked to Asia for international growth.
These small companies are enjoying a surge in revenue and raising capital as defense and energy customers, supported by Inflation Reduction Act subsidies, turn to 3D-printing technology as a buffer against supply chain uncertainty and geopolitical tensions.
Known as additive manufacturing, 3D printing is the process of creating things by building them up from scratch in layers. Its proponents say it is less wasteful and more adaptable than traditional manufacturing, which involves whittling down larger pieces of raw material to reach the final product.
It also allows the creation of items, such as some machinery parts, that would otherwise be too complex, slow or expensive to make domestically. Last year, the U.S. Navy's lead buyer for attack submarines told a House armed services subcommittee hearing that additive manufacturing is essential for both construction and maintenance.
Australia's AML3D was focused on the Singapore market when it listed in 2020, targeting the city state's marine sector. Two years ago, it received an unsolicited approach from U.S. defense officials asking if its technology-which specializes in a type of printing that allows the creation of large-scale, complex parts-could help with manufacturing.
It has since signed a raft of defense-related contracts. The most recent, for the sale of a printing system to U.S. Navy component supplier Laser Welding Solutions, was worth about US$730,000, more than it generated annually in its last set of full-year results.
"The company literally went on a tenfold increase in revenue within the space of about 12 months," AML3D Chief Executive Sean Ebert said.
AML3D has secured about US$9 million of U.S. defense sub-contracts since early 2023, supported from its facility in southern Australia. Demand is so strong that the company recently signed a 64-month lease on a site in Ohio to set up a U.S. headquarters and manufacturing facility, focused on supporting the U.S. Navy's submarine industrial base. It is currently hiring welding, software and robotics engineers for the facility.
AML3D, which this year banked about US$4.6 million in an upsized capital raise, expects its U.S. hub to drive a significant increase in defense contract wins and to support expansion into local marine, oil and gas, and aerospace sectors. It will also allow the company to bid for more contracts restricted to U.S.-based manufacturers.
"When you're dealing with defense parts, you can't be on the surface level. You actually have to be at quite a deep level in terms of how you operate, how you comply with their protocols and how you deal with manufacturing what are really quite sensitive parts," Ebert said.
Another Australia-based 3D-printing company, Spee3D, has seen the proportion of its revenue coming from the U.S. increase from about a third to about two thirds over the past two years. Spee3D, which is focused on defense work but has also worked with industrial companies including energy explorer Santos, opened its first small U.S. manufacturing facility in June at the University of New Hampshire.
"Let's say 12 to 18 months to get ourselves established. I envisage we will move up to about 10 times that size within about a two-year period," Chief Executive Byron Kennedy said.
ASX-listed Titomic said its U.S. pipeline had grown significantly over the past couple of years, securing orders from Boeing and defense supplier Triton Systems in its 2023 fiscal year. It said that U.S. legislation could incentivize U.S. companies to invest in its cold-spray additive-manufacturing systems to improve efficiency and to reduce dependency on foreign suppliers.
Additive manufacturers in other countries are also looking to the U.S. for growth. In the past two months, U.K.-listed Renishaw has been recognized as a U.S. government provider and joined the U.S.-based Additive Manufacturing Coalition, which lobbies policymakers on behalf of members that also include Spee3D.
Germany's 3YourMind, which landed its first U.S. defense contract in 2019, is midway through a two-year US$2.5 million project with the U.S. Marine Corps., identifying parts suitable for 3D printing. Additive manufacturing cuts the wait for even simple parts that can run to months or sometimes years, said Alexandre Donnadieu, 3YourMind's chief commercial officer.
"This effort by the U.S. is acting as a swell that raises the profile of AM companies worldwide," Donnadieu said.
Investors are starting to pay attention. Titomic's stock has more than quadrupled in value since the start of the year, while shares in AML3D hit a three-year high this month, surging so quickly that the market operator asked the company if there was any undisclosed news driving interest. The stock has since cooled but is still up more than 80% so far in 2024.
Write to Stuart Condie at stuart.condie@wsj.com
(END) Dow Jones Newswires
July 30, 2024 19:57 ET (23:57 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
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