AL3 Opens US Facility, With War Chest to Scale
Today, our 3D printing Investment AML3D (ASX: AL3) announced its new US facility is now fully operational.
Located in Stow, Ohio, we see this geographic expansion for AL3 as positioning AM3 to capitalise on the major anticipated increase in US Defense spending on additive manufacturing (3D printing), particularly for naval applications.
The US-based manufacturing capability also opens doors to new lucrative ITAR contract opportunities.
The current facility features one industrial 3D printing system, but will expand to include a second in January 2025.
What’s more, plans are in place to double capacity at the facility following an excellent, chunky raise of $30M in November which we think gives AL3 a great runway to rapidly scale.
Especially for new US customers, like the Tennessee Valley Authority - a major US utility which ordered one of AL3’s ARCEMY 3D printing units.
The US facility is currently working on this initial A$2.27 million order from the Tennessee Valley Authority.
Read more about AL3’s latest sale in our most recent AL3 note:
AL3 makes large sale, enters new market: US utilities
Today’s announcement also noted that expansion plans are now underway in the UK and Europe and extra capacity is freeing up in Australia, so we think we can look forward to further newsflow across these geographies as well.
All up, we think the US facility opening is a major positive development, and the prospect of an expansion into the UK/Europe opens up the potential for AL3 to become a global 3D printing powerhouse.
How does this impact our AL3 Investment Memo?
We see this news as a major step forward for AL3, particularly in light of its strong connections with US customers - in particular, the US Navy. With a new facility open to service this customer and new US customers closer to the point of need, AL3 is following through on its US focus, one of the key reasons we Invested in June of this year:
Strong US focus as AM Forward Program rolls out
In 2023 AL3 commenced its US focused strategy. The US spends more on its defence than the next 9 countries combined and as such is easily the most lucrative defence market jurisdiction to operate in. In 2022, the US has also launched the AM Forward Program to support 3D Printing across the industrial manufacturing sector. We think that the US is the right place for AL3 to grow its business.
Source: 27 June 2024 AL3 Investment Memo
What’s next for AL3?
More sales out of the US
Now for AL3 it’s all about the US scale up.
AL3 has previously mentioned it will be doubling the capacity of its US facility AND is only days away from having the facility ready for operations.
We are hoping that the US facility coming online brings with it big new contracts to fulfil (and hopefully big $ revenue amounts attached to those deals).
We are also hoping to see some of those lucrative ITAR contracts that AL3 have mentioned get converted into sales.
(Source)
UK/European expansion on the cards?
AL3 has also previously flagged the opportunity of expanding into the UK.
The majority of AL3’s sales are out of the US, so expansion into a new market is completely new upside from a revenues perspective.
We are looking forward to newsflow from the company’s push into the UK/European market.
