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AML3D targets US Defence expansion after pivotal year

Specialist metal technology business AML3D (ASX: AL3) ended the past year in style as its new manufacturing hub in the town of Stow, Ohio became fully operational in early December.

This development marked a milestone for the Adelaide-based outfit as its ‘Scale up’ growth strategy continued to build momentum, including the key pillar of expanding the group’s presence in America.

AML3D now has the tools to lift the manufacturing capacity of its specialist metal products, in line with demand from the lucrative US Defence sector,

Tailwinds in US Defence

Since launching its growth strategy in 2023, AML3D delivered A$16 million of US contract wins ahead of a projected increase in spending on additive manufacturing within the US Defence sector.

More specifically, the company has been fast-tracking its go-to-market strategy to capitalise on reshoring and supply chain resilience initiatives in America, such as the award of a US$951 million contract by the US Department of Defence to Blue Forge Alliance.

Blue Forge Alliance is an American nonprofit, neutral integrator tasked with the strengthening and sustainment of the US Navy’s Submarine Industrial Base, including scaling additive manufacturing capacity.

In September last year, AML3D entered into a Manufacturing License Agreement with Blue Forge Alliance which substantially expanded its capability to manufacture parts for the US Navy. In turn, the company received guidance to anticipate growth in US demand for its specialist manufacturing technology over time.

In preparation, AML3D successfully rounded off a A$30 million equity raise in November last year, designed to fund its penetration of tier-1 American clients headed by the US Department of Defence.

As a result, the Stow manufacturing hub became fully operational at the tail end of last year and is now executing an initial A$2.27 million order from the Tennessee Valley Authority – the largest public utility in the US.

This inaugural order supports AML3D’s plans to invest an additional A$12 million on the installation of up to two more ARCEMY 3D printing systems, which could also help facilitate the company’s expansion into the wider US Energy and Defence Aerospace sectors, should demand rise.

Further US manufacturing opportunities

According to management, the Stow manufacturing hub may also put the company in good stead to capitalise on the Trump administration’s expected policies designed to support US-based manufacturing.

American-based manufacturing is a pre-requisite for accessing lucrative contracts restricted by the US International Traffic in Arms Regulations (ITAR) and other US-only controlled information Defence contracts.

AML3D has already attained Manufacturing License Agreements to support the US Navy and Boeing – the world’s largest aerospace company and leading manufacturer of commercial jetliners. These include compliance with US Government regulations that support access to ITAR contracts.

Last year, AML3D achieved ‘AS9100D:2016 Quality Systems Accreditation’ for its proprietary manufacturing technology known as WAM. This certification is required to produce flight components and structures for the aerospace industry, with AML3D becoming one of only two wire-arc additive manufacturing companies in the world to hold this accreditation.

European and UK growth potential

Following its capital raise late last year, AML3D’s robust balance sheet creates avenues for other growth initiatives including the proposed establishment of a new European-based ‘Technology Centre’. Here, one ARCEMY system could act as a production and demonstration hub for the UK and European markets.

The planned European base is expected to arm the group with even stronger leverage to the still evolving AUKUS trilateral defence agreement between Australia, the UK, and the US.

Opportunities in support of the AUKUS supply chain are already becoming evident in early 2025, with AML3D recently delivering an order for 3D printed copper-nickel components for the US Navy’s Virginia-Class nuclear submarine program.

Notably, the company delivered the submarine components in less than five weeks, compared to an average of 17-months production period through traditional manufacturing.

Domestic progress

On the domestic front, AML3D also notched up several successes in 2024.

Amongst others, the company broadened its presence in the Australian Defence sector with aerospace and marine contract wins, whilst also nailing down an order to convert a robotic welding system into a modern ARCEMY system for Australian Defence supplier, Century Engineering.

Separately, the group also locked in a $2.24 million grant from the South Australian government to accelerate the development of its next generation, proprietary metal 3D printing technology through its ‘ARCEMY Increase Deposition Rates’ project.