Last year, Montreal company PyroGenesis, a developer and manufacturer of advanced plasma processes, announced its intention to create a new business specifically dedicated to additive manufacturing. PyroGenesis is the inventor of Plasma Atomization, a process that creates dense, spherical, small metal powder grains that flow as smoothly as water. In 2001, the company began using its technology to produce powders for the biomedical industry, and in 2015, it announced its intention to enter the additive manufacturing market, followed a year later by the announcement that it would be creating a spin-off company dedicated to 3D printing.
That new company is now becoming a reality. In October of 2016, PyroGenesis filed a patent for an improved powder production process, and completed assembly of its first powder production system in March of this year. It received its first and second powder orders in April and June, respectively, and this week announced that it has created a new division with the name PyroGenesis Additive.
“The creation of PyroGenesis Additive is definitely the first step in spinning off our AM capabilities, which we announced over a year ago, into a standalone entity,” said P. Peter Pascali, President and CEO of PyroGenesis. “We are dedicated to a spin-off for a number of reasons, all of which speak to increasing shareholder value.”
The creation of the spin-off was delayed somewhat, for one main reason: GE’s acquisition of Arcam toward the end of last year. The $700 million acquisition shook up the metal additive manufacturing market in a number of ways, but had a particular impact on PyroGenesis, whose old proprietary technology was used by Arcam’s powder production subsidiary, AP&C.
“Of particular note, through Arcam, AP&C became the dominant supplier of speciality powders to the AM Industry. GE’s acquisition of Arcam, and by extension of AP&C, has effectively disrupted the supply chain of speciality powders in the AM Industry which has caused end users of such powders to re-examine their access to them, all while PyroGenesis is re-entering the market as a supplier of such powders,” Pascali said. “It would not have been prudent for us to carry on with a spin-off merely because we announced such intentions a few months earlier, without fully analyzing the ramifications of the changing landscape.”
He feels, however, that the delays have only created more value for investors when PyroGenesis Additive is fully spun off.
“We will have a working system, with dedicated employees contributing solely to the spin-off, thereby reducing risk and creating more value for PyroGenesis’ shareholders,” he said. “Additionally, since GE’s acquisition of Arcam, there has been significant interest in PyroGenesis’ powder production capabilities and as such, we believe there is a high probability that we will have visibility on, if not signed, contracts for long term powder supply by the time we spin-off PyroGenesis Additive.”
The company is still committed to a full spin-off in 2017. The plan was to assemble and commission the powder production system and have a first powder run by the end of the first quarter of 2017, which went ahead as scheduled. Over the course of April through July, the company would ramp up production to full capacity, with an initial goal of becoming a lead supplier of pure titanium and Ti-6Al-4V powders in particular – additional powders would be developed on a case-by-case basis. The first and second powder orders came as a surprise, and encouraged the company in the knowledge that their product is already in demand.
In addition to titanium powders, PyroGenesis is also producing Inconel material and plans to be able to offer a tungsten-free product by the end of the year. According to Pascali, the company “could not be happier” with the rate at which production is going. In terms of customer interest, things are going better than expected, so PyroGenesis is adjusting to accommodate for the early interest, expanding its capacity faster than originally planned and ordering three new production systems.
“Separately, this early interest has caused us to think of adding in-house analytical capabilities and automated sieving processes earlier than planned,” added Pascali. “All this bodes well for the underlying business as both speak to quicker turnaround time and more reliable post production processing…The decision to re-enter into powder production was the right one. The changes and consolidation in the marketplace over the past year have only underscored this decision. We are the inventors of Plasma Atomization, a process that arguably has helped bring AM to where it is today, and so we can say with confidence, that we are back. We are back to producing, but more so, improving the process that has become the gold standard in the AM Industry.”
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