AMS Spring 2023

What Does BASF’s Investment in Materialise Mean for the 3D Printing Industry?


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Earlier on today BASF invested $25 million into Materialise. We speculated that perhaps BASF wanted to conquer the eyewear market because the potential of this market is so vast. We won’t sure what this investment means for both firms for many years. What is sure is that this partnership will have far-reaching consequences for 3D Printing. Every board of every large chemicals company now has to plot a counter move or face headwinds at a later date.

Even though global chemical company BASF has been pretty deeply involved with 3D printing for a few years now, this commitment really ramped up one year ago, when it announced a newly increased focus on the 3D printing industry, along with a new, AM-dedicated business – BASF 3D Printing Solutions GmbH. From the onset, BASF said its new business, which is a wholly-owned subsidiary of BASF New Business GmbH, would be focusing on 3D printing materials, services, components, and system solutions.

While the company works hard to keep introducing new materials on its own, as it has an extensive portfolio of materials ready to be developed for 3D printing, BASF also knows that it can’t go it alone. Partnerships and collaborations with other 3D printing mainstays are an important aspect of gaining knowledge and time in this ever-evolving and expanding the industry. So BASF has continued to acquire and strategically team up with other companies over the past year. The company is now working on 3D printed innovations as human skin and tissue, a super-strong prosthetic socket, the Ultrafuse series of filaments  and now, quite possibly, customized eyewear.

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This latest comes after today’s bombshell announcement that BASF has invested $25 million in 3D printing leader Materialise, which has been in the industry for nearly three decades. So if we weren’t sure before, we are now – BASF is wholly committed to becoming an industry leader in its own right.

“Our two companies’ business areas complement each other very well and our cooperation will put us in an even better position to find and develop new business opportunities,” Volker Hammes, Managing Director of BASF 3D Printing Solutions, said about the investment. “With its 3D printer facilities in Leuven and innovative software solutions, Materialise has an outstanding infrastructure. Together, we can exploit our strengths even better to advance the 3D printing sector through the development of new products and technologies together with our partners and our customers.”

Materialise and BASF will work together through an open business model to improve upon 3D printing software – the speciality of Materialise – and materials, which is obviously what BASF brings to the table. In addition, this will enable BASF to further optimize its materials in tandem with Materialise. The day before the investment was made public, Materialise announced a proposed public offering of 3.0 million of its American Depositary Shares.

So. What does this big news mean for the rest of the industry? Should we be preparing for a flood of other 3D printing polymer companies to merge with, or even acquire or be acquired by, other businesses in the industry? Maybe.

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Polymer companies that have long focused solely on their materials offerings will likely take a cue from their counterparts who have also been including applications work in their portfolios, else they risk being left behind in the dust.

It could also mean an increase in high-quality 3D printing materials for industries and applications that Materialise already has its proverbial fingers in, such as aerospace, automotive, healthcare, and even art and entertainment. What will the reaction of and in our broader industry be?

It seems that on the whole, this investment will be a net benefit to the industry. A lone mouse does not exist, neither does a lone polymer company. Subsequently, we can expect renewed investment from polymer companies. They should see a dwindling supply of established M&A candidates for them to peruse. Good news, thanks to the nice people from Ludwigshafen everyone just got a higher valuation. Service bureaus have now discovered a new business model. Rather than making parts which is a complex undertaking and requires hard work you can partner with a polymer giant to make money. The marginal cost of working more closely with one than the other is very low in some cases. For established 3D Printing materials vendors such as Arkema and Evonik, the costs of doing business just went up. Rather than sell materials at fat margins a competitor is now paying other people to use their material. A situation a bit like if one taxi driver were paid to use Exxon gas while the others paid Shell dearly. We’re all being taken for a ride but some of us more so than others.

Perhaps companies across 3D printing will now realise that our greatest potential in the future may be to change how everything is made; but for now, changing how one thing is made or how one business unit hits its revenue targets is enough. BASF engulfs our industry, its revenue sextupling ours. Will this mean that a string of service bureaus will be bought by polymer companies? Bycatch in the nets of billion-dollar trawlers. It would give them much needed parts expertise and the idea of moving towards parts and solutions, not just commodity chemistries must be exciting for them. Even if they don’t, it will be a quick way for them to learn. What about OEMs? While some jump ahead, others leap backwards. These 3D printer builders could be a tempting alternative also, “Look, boss, its like Nespresso for plastic.” 3D printing software companies are thin on the ground but may be amenable to an exit at the right price. Would it make sense for a polymer company to acquire a 3D modelling or CAD firm? Skip everyone, own the customer as she designs the thing then facilitate the manufacturing of that thing. If a staid molecule farmer did that it would make the MCExcel slaves heads spin. Would it be smart? It would be bold, that’s for sure. But, are we but plankton for the polymer wales or are there more that see us as prey?

What of the car and aviation companies. Could they also jockey for position by investing or partnering? They probably benefit more from growth and competition in the ecosystem but in some cases may feel the need to press the trigger. What of the limited availability of viable long fiber carbon fibre or another composite with Impossible Objects and MarkForged way ahead with no one following? In a private space race our industry seems a bit of a rounding error. It may make sense for a space company to acquire both a service firm and an OEM. Or the fact that there are perhaps only 15 viable metal printing companies and around a dozen high-temperature material 3D printing firms in general? Who does that effect? We’re small but we can’t count on everyone being as aggressive as that staid ship of the line from the Rhine. One firm with an evacuation plan that consists of a map of central Europe could swallow us all. Now for a short time before the age of the nanobot and nanotube, we’re like Helen of Troy. From “chips to ships” we have a role to play, We may find ourselves not captains of our destinies but rather prey.

Joris Peels contributed to this piece.

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