Upon reflection and thoughts based upon my visit yesterday and the pictures of the new facility posted today, which are now accessible to all posters, let me give my personal assessment.
1) This site will never be a major manufacturing facility.
The ground level floorspace 40,000 sq ft. Of this, 16,000 sq ft is dedicated to office space (and another 16000 sq ft on the second story. Thus, only 24000 is dedicated to manufacturing and warehousing.
As you can see by the overhead crane installed new, the anticipated expansion, whenever it may be done would be about twice what is clearly shown on the pictures today which scan the length of the building. (Three pictures are essentially the same scan, just taken at different ends of the building.) Note the warehouse doors on the shot taken from the Eontec machines towards the Engel Machines. So a doubling of capacity is possible. (FYI: overhead cranes are installed in a new facility to provide for existing and potential future needs. The growth is a pre-planned factor and the crane availability for another row of machines suggests that. Certainly not the 50 machine or even 25 machine postential that many were projecting. So give up the wet dreams of Apple doing a major production run at this facility. Never going to happen. Get with reality.
The photographer, obviously limited the number of views to give the impression of a much larger facility available to manufacturing than the reality. Most of the other side is dedicated to laboratory and testing equipment.
I agree with Eagle that this facility is primarily an R and D facility geared toward prototyping, whether it be die casting of BMGs, die casting of magnesium, or injection molding of BMGs or even powder injection molding.
I found it interesting to note the changing orientation of the 2 Eontec machines and LQMT Engel machines from top to bottom, bottom to top, top to bottom and bottom to top as one progressed down the line.
This is obviously for operator convenience.
All in all, I do not regard this as a streamlined production line.
2) I do anticipate most heavy lifting of production to be in China and to China markets. Should the customers become American or European, we shall derive a certain margin from China based manufacturing, whether it be Eontec machine or LQMT Engel machine for sales generated to these markets.
3) Of course we will receive nothing from Eontec sales of Eontec machine produced product made in China and sold to China, Asia, South America and the restricted territories by contract. The exception would be for LQMT Engel product made in China for which a margin would be given to LQMT.
Thus, one really needs to think about royalties being the future revenue streams into LQMT coffers. And for those thinking that capitalization of LQMT will be based upon Gross Sales Amount from Eontec production, you had best thunk again, for our revenues will be based upon fractions of the billions that some have been projecting.
Big problem here with decimal point phantasizing.
By the way, the facility is not production ready as of yesterday.
Still moving in equipment. Everything is not hooked up yet.
Personally, I would look to seeing significant contracts in 2018 or beyond, outside of prototype production and small runs.
One question remaining unanswered to me is whether or not Lugee will manufacture his own feedstock at this facility (as opposed to purchasing from Materion). Anybody have that answer. I am sure one of the two I talked to could volunteer that information freely.
“I am astonished at the ease with which uninformed persons come to a settled,
a passionate opinion when they have so little grounds for judgment.”
- Wm. Golding
AI
