Could AL3 help AUKUS sub deal meet deadlines?
US navy shipyards are straining to deliver subs on time.
And recent headlines about the prospects of supply chain delays affecting the AUKUS submarine deal, could place additional focus on the companies that are involved in supplying the US Navy:
(Source)
Our Investment, AML3D (ASX: AL3) has a contract with US Navy in place to 3D print large parts for the organisation.
As AL3’s market reach grows, we’re Invested to see the company’s approach to manufacturing quickly pushed out beyond its client in the US Navy, to the organisation’s large supply chain of contractors and subcontractors, with AL3 leading the charge.
Two weeks ago AL3 sealed a new $1.1M sale of its ARCEMY 3D printing system to a parts manufacturer supporting the US Navy:
(Source)
This builds nicely upon a previous leasing agreement with the same company from May of this year. (Source)
As we mentioned in our latest AL3 note, we take the small gap between leasing agreement and sale as validation of AL3s tech, and a testament to AL3’s growing sales capacities:
AL3 announces $1.1M sale to US Navy supplier - US traction growing
This should prove important, especially in the context of the AUKUS submarine deal which is pushing the US Navy’s shipyards to the limit:
“US shipyards, racing to catch up with a fivefold increase in production… are already running years behind schedule even without the additional demand.” (Source)
With a new facility in Ohio scheduled to open in just a few short months, we’re expecting the facility to dramatically increase AL3’s reach in its core target market in the US, as well as providing a platform for additional sales to new clients in different industries.
How does today’s news impact our AL3 Investment Memo?
What is the macro theme?
Additive Manufacturing, a form of 3D printing, is now a key pillar of the US strategy to build resilience into its manufacturing supply chain.
Additive manufacturing is a new way in which we believe complex industry product parts will be built as the countries move to localise strategic supply chains.
Compared to traditional casting and forging, additive manufacturing is harder, better, faster, stronger.
Source: 27 June 2024 AL3 Investment Memo
We see the AUKUS submarine headlines as significantly increasing the strength of the macro theme behind AL3, as the US Navy is a major customer of AL3. With supply chain bottlenecks forming, we want AL3 to help the US Navy resolve these bottlenecks with its innovative technology.
What’s next for AL3?
🔄More sales to US Navy pushing out to wider US defence industrial base (ongoing)
🔄Opening of Ohio facility (next 3 months)
🔄Expansion into new industries with new clients (such as Oil & Gas, aerospace)
Read more about AL3 in our first note on the company:
