I had the chance to speak with Additive Industries’ new CEO, Ian Howe.
The wide-ranging conversation focused primarily on Additive Industries’ path moving forward, as they shift from startup mode towards a much larger future.
Howe is an additive manufacturing leader with considerable experience. Having come most recently from eight years at Oerlikon, he previously spent 17 years at Höganäs, the Swedish provider of metal AM powder and producer of a powerful metal 3D printer. Evidently Howe was one of the folks that got Höganäs on the path to becoming a 3D printer manufacturer.
Howe explained the philosophy around his choice of roles:
“I’m interested in being part of growth stories in the industrial market, specifically about technology and materials.”
But why join Additive Industries? He explained:
“Previously, I saw huge gaps in what was real in additive manufacturing. The reason to come to Additive Industries was the leaps and strides made by the company, in productivity and achievable cost per part printed, in print quality, an ability to deliver and their customer list. OEMs putting their faith into a small Dutch innovative startup; they must have something unique, credible and serious.”
Now his focus is to take the promising startup to a “scale up”. To do so he’s already built a five-year business plan that’s not only ambitious, but “realistic”, as Howe describes it.
Howe did not disclose the business plan specifically, but did say this:
“There is a huge untapped market potential. Consider that the metal AM market is about US$4B today, and the OEM equipment market for metal AM is 1500-2000 systems per year. Very large frames account for approximately 300-400 machines per year. With our unique technology, products and service offerings we will certainly command a significant market share in 5 years.”
But how to get there? Howe has a clear strategy:
“We need to quote for at least a third of those systems, and if we’re not, then the market doesn’t know about us yet.”
His plan is to continue to build a commercial team to capture that market, and this is underway already with a new chief commercial officer, and new staff in both Europe and North America. The company continues to add more business developers.
But it’s not all sales and marketing. Howe made it clear that they will continue investing in innovation, process and application development. They will continue investing in their innovation roadmap to drive productivity leadership, develop larger machines and develop materials, settings, and validated solutions to align with customer needs.
Which industries could be that market? Howe explained:
“We will focus on aerospace, industrial, automotive, energy and high tech markets. Others we will treat opportunistically, and evaluate as required market & customer needs arise.”
Our conversation drifted into pandemic effects on the industry and specifically Additive Industries. Howe believes the semiconductor business benefited, as well as the healthcare sector, but the “rest were struggling”.
He said this created a huge challenge for Additive Industries:
“Many OEMs delayed purchasing decisions, as no customers were confident on future quarters. For example, one aerospace company would probably have purchased three systems this year, but instead purchased only one, deferring the others to next year. This affects sales results, and shifted our forecasts.
The chip shortage caused problems in the automotive sector, and they delayed purchases due to profit warnings. That meant delayed business for us.”
But what about the Additive Industries staff? For a time they worked at home, like most companies. Howe explained:
“Mentally it was a huge challenge for the team, as people missed the social connection, that glue that holds people together. But people are happy to be back in the office now. We created guidance on how to be in the office, and that has had a huge positive impact.
Like most companies, a connection with clients and prospects was challenging during the worst of the pandemic. Howe said:
“The big thing we missed is the customer interaction. In Europe it is coming back to normal, but North America is still very challenging with many large companies still in home office, with inter continental travel still restrictive, which is half of our market.
We worked as best we could virtually, but in the end it doesn’t compensate for personal interactions and collaborations. It’s time to get back to see the world.”
Of course, I was curious about what hardware is to come next from Additive Industries, but Howe wasn’t giving up many details. He said:
“The biggest opportunity to grow even faster is about productivity gains and cost efficiency on a cost per part basis. We have strong demands for continuous improvements in productivity leadership and reduced costs per printed part, and we took a strategic decision to continue focusing on developing the next generation MetalFAB and we will launch the next generation MetalFAB G2 at Formnext.”
But what about a larger system? Could that be in the works? Howe said this is still firmly on our innovation roadmap, however priority was given to innovations focused on productivity leadership, as that was what customers demanded.
“A very large frame system is in preparation but the launch is delayed after strategic decisions to focus innovation resources on productivity leadership. Today our focus is on making the existing system more efficient.”
Why the focus on efficiency? Howe believes the current metal AM market is about US$4B per year, but there is an untapped US$100B or more, and that will be unlocked as the cost of printing parts is reduced year on year via driving operational efficiency.
Howe believes the future will come from value creation provided by AM technology, lightweighting of parts, providing digital solutions for long life cycle legacy part management, providing solutions for fast time to market for new components, something entirely suitable for Additive Industries’ products. In particular, he suspects the aviation, energy, automotive, industrial and high tech industries are huge, untapped markets.
Howe is quite proud of what Additive Industries has achieved, saying that a recent study with a leading AM consultancy firm re-confirmed their average benchmark on five target applications showed their equipment is still 20% faster than current competition.
I asked Howe about the company’s expansion into several markets over the past few years and wondered if this was to increase. He responded:
“Our strategy is to strengthen existing global centers first. We have to achieve critical mass.
Europe is strong, but we need to continue strengthening the USA and APAC.”
As for how business will proceed in the immediate future, Howe explained:
“Industry projections show metal AM growing at 25% CAGR over the next five years. We see that! There’s a big buildup in our pipeline. The first part of 2021 was still slow because of customers’ investment delays in capital expenditures. Additionally we are in a business requiring personal / consultative selling and we were not able to visit customers. But now it’s picking up. The pipeline into next year is looking strong.”
