Arcam AB fka AMAVF

[Tom Joad]

Arconic powder competition doesn't seem to be of much concern to Magnus Rene. From the transcript of the earnings conference-

Viktor Bellak, SEB Equities - Analyst [12]

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Okay, thanks. And then, finally, looking at AP&C, there was a sequential drop of some 11% after growing quite nicely Q-on-Q before that. Have you seen any different trends in the market? Are we all seeing what I'll call -- it's entering the market, stuff like that, SLM, how they are attacking this? Do you see any different trends in the -- I was a bit surprised seeing a sequential drop.

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Magnus Rene, Arcam AB - CEO [13]

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We don't see any -- well, first of all, SLM are not on the titanium metal market. They are on the aluminum metal market where we are not, and Alcoa, it's correct that they have announced setting up a titanium manufacturing plant, but if anything I think that confirms that there is a growing market for this powder and it will take them a long time before they get up to capacity where we are, if ever.

See Arcam earnings conference

Alcoa hasn't released powder capacity numbers for the Arconic plant but here's a little on spending-

Alcoa opened a new plant at its research center near Pittsburgh where it will manufacture metal powders in proprietary grades of titanium, nickel, and aluminum, to be used for its 3D-printing operations in California, Georgia, Michigan, Pennsylvania, and Texas. The project was part of a $60-million program announced last fall to expand and develop capabilities for 3D-printing aerospace parts.

See Arconic plant

Compare the costs for AP&C's powder expansion-

The investment in a new facility was announced in May 2016. The investment is totally up to 31 MCAD and IQ will supply interest free loans up to 10 MCAD and grants up to 1.5 MCAD. The expansion of AP&C follows on significant growth in 2015 and 2016 and a surge in demand for AP&C’s high quality titanium powders for additive manufacturing. (31 million CAD is about 23.4 million USD) See AP&C New Powder Plant

From Arcam earnings conference we have mention of the capacity that about 23.4 million USD is buying-

And the new plant we are building has an initial capacity of 250 tons and a long-term maximum capacity of 750 tons, which brings our total capacity up to 1,250 tons in those two factories combined.

From page 6 of an Alcoa presentation they are estimating about 50% CAGR in powder. I'm assuming you can replace R with D = demand.

Alcoa Investor Day - Innovation

On page 8 of Arconic mission we see that Arconic's operations involve much more than powder so I'm doubting the powder plant investment will be the most of $60 million.

So, I'm concluding that Rene's statement, "... and Alcoa, it's correct that they have announced setting up a titanium manufacturing plant, but if anything I think that confirms that there is a growing market for this powder and it will take them a long time before they get up to capacity where we are, if ever" is correct. That Alcoa believes there will be 50% CAGR suggests that both AP&C and Arconic's powder division will be supported as growth companies, this although I realize there isn't enough information for any rigorous financial calculations here.