Additive manufacturers are feeling the pinch of the COVID-19 drag on the market and lockdowns, but there could be a silver lining.

Businesses have had to adjust to meet newly imposed government regulations around social distancing. But additive manufacturers have not yet shut up shop and in the long run they think they could benefit.

In recent days there has been public discourse about what the world will look like when the crisis is over and one expected outcome is more lean and localised supply chains for manufacturing.

But while it is easy to think of capex-light manufacturing, such as clothing and textiles, capex-intensive operations such as additive manufacturing falls under this umbrella too.

Amaero International (ASX:3DA) is one small cap in this sector. It listed late last year having begun life in 2013 as a spin-off from Monash University.

Stockhead spoke to CEO Barrie Finnin about how life has changed for his firm.

 

You said this morning your firm was in a ‘working in isolation model’. What does this mean for an additive manufacturing company?

“It’s an interesting question – we’re in a new set of circumstances.

“We sent a message to staff three weeks ago saying if they can work at all then they should. If they can satisfy me they can go into the manufacturing facility there are procedures where no two staff are meant to be in reasonable social distance.

“We have appropriate safety equipment and full respirators – which would protect people from coronavirus.

“We have three facilities, one in Melbourne, one in Adelaide, one in Los Angeles. The Los Angeles facility was initially caught up in the lockdown scenario but we’ve been identified as being part of critical infrastructure.

“We can continue to be with staff practicing social distancing but remaining in sight.

“There are circumstances where we need to have more than one person around. For instance, when we’re operating powders, the staff are not allowed to be alone, there has to be a second in sight. It’s been a different world and we’ve had to put these in place to respond.”

 

Does the company anticipate that it could benefit from potential government stimulus or support in Australia and the US?

“There’s some stronger arguments around manufacturing and sovereignty and that’s influencing government policy.

“In the present circumstances when people are just not moving around, being able to acquire manufactured goods locally is a big advantage. So [COVID-19] is probably enabling repatriation of manufacturing and it’s seen by the Australian and US government.

“There’s a number of reasons for that. It has a shorter product delivery cycle and it’s been called on to help with responses to shortages in medical supplies.

“Because we can turn around and produce something in days and not weeks and months. This is probably the tidal wave. Having required tools is a benefit.”

 

You listed in December and have suffered the fate of the broader market. Do you still think it is worth having to deal with daily worries about the share price?

“Well I’m glad we listed in December and not in March.

“It’s critically important in order to enable agility in a financial environment like this you have access to capital.

The ASX changes are positive in that regard. They changed the threshold for capital you can raise before going through a halt in the market. It’s quite substantial and it’s important at a time like this to free up capital.

“Government assistance programs are trying to help to keep the sector moving along.

“One of them involves us hanging onto a payroll tax to a certain cap. In the US they’ve launched the PayCheck preservation program.

“We’re looking at all of these. Yes we’re in a strong position but we don’t know how long we’ll be in it so we want maximise the resources we have.”

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