Will BASF Sell or Spin out its 3D Printing Unit?

RAPID

Share this Article

BASF recently announced impressive growth for its 3D Printing Solutions division, reporting a 39% increase for the period and a 51% rise in its materials business. Following a 43% year-over-year surge in European revenue in Q1, the company attributes its industry leadership to a high-quality materials portfolio, strategic partnerships, and a comprehensive approach. BASF aims to accelerate the adoption of 3D printing across various sectors and ramp up production, primarily through collaborative efforts.

BASF´s 3D Printing Solutions and the company’s Forward AM brand make the German chemical giant a dominant player in the filament market, while it is also expanding into powder and resin solutions. The company owns Sculpteo, a 3D printing service and has invested in Materialise, with whom it maintains a partnership. It has developed a lattice engine to simplify lattice design and is working on the adoption of bound metal material extrusion. Moreover, BASF offers consulting services to expedite industry adoption. While the company initially concentrated on acquiring volume and generating high-volume materials, its recent focus appears to be more application-oriented.

A triangle bracket made on Zortrax M300 Dual with BASF Ultrafuse 17-4 PH metal filament

Forward AM?

BASF is making noise in the 3D printing world, showcasing its materials for applications as diverse as bike saddles, molding, midsoles for adidas (of course), and metal components. This approach of partner-led application development seems to be the way forward. By integrating software, hands-on experience, industry insights, machine knowledge, and expertise in materials, you pave the way for end-use applications that could expand rapidly.

For 3D printing to truly disrupt established industries, it must offer a value proposition that far exceeds the costs associated with switching from traditional methods. This means it’s not just about matching existing solutions but vastly outperforming them across the entire value chain.

Take the example of 3D-printed hearing aids. These are relatively low-cost components in a more expensive assembly. The ease of scanning ear impressions for audiologists, coupled with the feasible effort for the hearing aid company to 3D print these custom components, aligns with previous manufacturing costs. The end result is that audiologists can better satisfy their patients, hearing aid companies can offer a more tailored and thus more valuable product, and customers receive a better-fitting hearing aid. If the costs and efforts are balanced across all parties involved, and the application is easily implementable and scalable, it could disrupt and reshape the entire industry in just a few years.

State of Play

Developing these kinds of applications is undoubtedly challenging, requiring a significant investment of effort and expertise. However, given the company’s current scale and ambitions, it appears to be the right direction. One of the most substantial applications in this space is maintenance, repair, and operations (MRO) along with spare parts. Notably, BASF spun out Replique, its 3D printing spare parts venture, in July.

When you consider this in light of the recent press release boasting impressive growth numbers, it raises the question of what BASF might be planning for its 3D printing business. Why go public with such strong performance metrics if not to set the stage for something bigger? It’s tempting to speculate that these announcements could be strategic moves, laying the groundwork for further expansion or even a significant pivot within the 3D printing industry.

The scale of BASF’s 3D printing business remains unknown, but for the sake of discussion, let’s consider hypothetical annual revenues ranging from $10 million to $100 million. Even if this business segment grows at a remarkable 39% annually for several years, the impact on BASF’s overall portfolio may be relatively minor. With a total revenue stream of €87.3 billion, and €18 billion specifically from its materials business, these 3D printing figures would represent just a drop in the bucket. Moreover, considering BASF’s general expenses amount to €1.5 billion, even substantial growth in its 3D printing business might not move the needle significantly for the corporation as a whole. Therefore, the recent announcements and growth numbers might be aimed at generating more than just revenue; they could be part of a broader strategic initiative or groundwork for future endeavors.

Not Forward Enough

In light of rising oil prices, climate change, and Russia’s conflict with Ukraine, geopolitics and environmental concerns may have a more significant impact on BASF than its additive manufacturing (AM) business, Forward AM. Although Forward AM may be an impressive venture, its scale is dwarfed by BASF, which is about six times larger than the entire 3D printing industry.

Due to Germany’s past reliance on Russia for natural gas, built on short-term contracts, the country now faces long-term disadvantages in energy costs. This situation adds a layer of uncertainty that could disrupt BASF’s share prices and strategic planning. The company’s colossal, integrated Ludwigshafen plant is a significant asset, but it could turn into a liability if BASF has to pay higher energy prices than its competitors in China, Belgium, or elsewhere.

Political pressures also push BASF toward greener operations. In fact, the company may have no other choice to stay competitive. For context, the Ludwigshafen facility alone consumes about one percent of Germany’s total energy. BASF’s overall energy use is on par with the electricity consumption of countries like Greece, Portugal, or Switzerland.

Green for Green´s Sake

BASF Forward AM Ultrafuse 316L

For BASF, the financial pathway increasingly appears to be green. The company’s large operational scale makes divesting its 3D printing unit a potentially opportune move. According to one estimate, BASF’s energy costs in Q1 of 2023 dropped by €700 million. The company also reduced its natural gas consumption by a third compared to the previous year. Meanwhile, it shouldered an additional $3.2 billion in energy costs in 2022. With a free cash flow of $3.3 billion and an EBIT of €6.9 billion, it’s safe to say these fluctuations in energy costs had a significant impact.

This urgency is highlighted by BASF’s moves to secure LNG contracts and invest in offshore wind farms. The company thrives when it can efficiently turn raw materials and waste into new, high-value products. For example, converting ammonia into a monomer that becomes a polymer may present a valuable energy-to-product stream, while another material process might be too energy-intensive to justify.

Looking at the potential headwinds and tailwinds for BASF over the next few years, the best-case scenarios would be reliable fusion power or an unforeseen event affecting Vladimir Putin. If its 3D printing unit, Forward AM, continues to grow, the impact on the company will likely be negligible. Strategies to maintain high oil prices and make production cuts will have a much greater influence on BASF’s bottom line. Therefore, any investment dollars should focus on renewables and optimizing overall process energy use.

While having a successful 3D printing business like Forward AM is undoubtedly positive, it won’t be BASF’s savior. To remain competitive, the company needs to invest in energy and process improvements that significantly reduce both energy consumption and costs.

Share this Article


Recent News

3D Printing Webinar and Event Roundup: June 16, 2024

3D Printing News Briefs, June 15, 2024: 3D Printed Research & Lamps & Guns & More



Categories

3D Design

3D Printed Art

3D Printed Food

3D Printed Guns


You May Also Like

BellaSeno’s Pioneering 3D Printing Facility for Medical Implants to Open in 2025

German 3D printing medical implant pioneer BellaSeno plans to launch a fully automated production facility in Australia by mid-2025 to make its resorbable soft tissue and bone reconstruction implants. By...

Daring AM: From 3D Printed Gun Files to Criminal Backstreets

3D printed guns are a growing trend that won’t go away, making their way into headlines with increasing frequency. While the number of 3D printed firearms isn’t nearly as high...

Handheld, Chip-Based 3D Printer Demonstrated in DARPA-Funded Project

In a study funded by organizations including the National Science Foundation (NSF) and the Defense Advanced Research Projects Agency (DARPA), researchers at Massachusetts Institute of Technology (MIT) and University of...

BigRep Launches High-Temperature 3D Printers via HAGE3D Acquisition

In the fall of 2023, large-format 3D printing leader BigRep announced its acquisition of Austria-based HAGE3D, which also makes large-platform, fused filament fabrication (FFF) systems. This enabled BigRep to offer...