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Amaero International (3DA) gears up to build a "world-class" titanium alloy powder manufacturing plant in VIC

The facility will cost $8 million and take 18 months to complete

Importantly, the plant will enable 3DA to produce aerospace-grade titanium at roughly half the cost of the global benchmark

Amaero has signed a MOU with a metal powder supply company for a distribution deal and received letters of support from the defence industry

Shares are trading 3.5 per cent higher at 59 cents apiece at 1:41 pm AEST

Amaero International (3DA) is gearing up to build a "world-class" titanium alloy powder manufacturing plant in Victoria. Based in Australia, the metal additive manufacturer specialises in 3D printing for the defence, aerospace and tooling industries. Carrying an $8 million price tag and 18-month construction period, 3DA expects the new facility will be the most advanced of its kind in the world. Significantly, using a proprietary specification, the venture will enable the production of aerospace-grade titanium at roughly half the cost of the global benchmark. In this way, 3DA expects the resulting high-quality, lower-cost product will provide the company a distinct advantage in securing long-term offtake agreements. Further, under payment terms negotiated with equipment suppliers, the project's cash requirement will only commit $2.3 million for the remainder of the calendar year. Once fully operational, Amaero estimates the plant will deliver annual revenues of around $30 million.

Amaero International CEO Barrie Finnin commented on the planned facility. "Producing titanium alloy powder in Australia will provide a stable, secure and cost-effective supply, allowing defence and other sectors to continue to advance their 3D manufacturing capabilities," he said. "This project directly supports Amaero in delivering ongoing, significant, high margin revenues via a stable commodities market."

Meanwhile, 3DA has signed a memorandum of understanding with a metal powder supply company and is negotiating a collaborative distribution deal. The company has also received letters of support from two of the world's five largest defence companies. 3DA said these letters indicated strong potential demand for Ti64 powder from a competitive Australian source of specific commercial and military applications. The company is optimistic the venture will position 3DA as a reliable source of strategically important titanium alloy powder in Australia and globally.

Following the announcement, shares were trading 3.5 per cent higher at 59 cents each at 1:41 pm AEST.

The Market Herald - Amaero International (ASX:3DA) to build “world-class” titanium powder plant in VIC (Published: 6 July 2021)