Jan.28, 2013
Two leading professional 3D printer manufacturers, Stratasys and Objet completed its merger in December. After the merger the new company has more than 50% market share of the professional 3D printers and its sales volume has exceeded another giant 3D printer maker 3D Systems.
Elan Jaglom, founder of Objet and Chairman of the board of Stratasys, unveiled in an interview in Hong Kong, that the negotiation of a merger began already in 2003, but it didn't reach to any agreement. The reason was, both parties had invested big amount of resources in R&D and they were optimistic about the market. They all believed that they could have big sales on their own.
The two companies make 3D printers that rely on different technologies. In 1988, Scott Crump and his wife invented FDM (Fused Deposition Modeling) technology, they applied a patent and set up the company Stratasys. But for three years nobody showed any interests in this $130,000 3D printer. With a lot of sales efforts Stratasys closed 2011 with $156 million in total revenue and $22 million in net income. According to Stratasys' financial data, the compounded annual growth was 22 percent from 2009 to 2011 and the gross margin of 3D printers was up to 61.2 percent.
Objet was established in 1989, it sells PolyJet technology that uses a process similar to ink jet printing. Objet had $121 million in revenue and $15 million in net income in 2011.
Report shows sales of 3D printers will approach $5 billion in 2017, up from $1.7 billion in 2011. Both companies realized that a merger could be the only way to grow big.
Elan Jaglom says, the business of the two companies had only 10% overlap, the merger of Stratasys and Objet brings together two very complimentary technologies. Stratasys has more than 10 different kinds of FDM thermoplastic material (ABS) and a large number of patents, Objet owns more than 120 inkjet-based photopolymer materials. After the merger, their product line will be greatly expanded. The new Stratasys' market value reached to USD 3 billion after the merger.
"Stratasys has currently over 8,000 clients, but totally these clients has only purchased about 20,000 3D printers." said David Reis, CEO of Stratasys. "There are a lot bottlenecks that restrict the growth of 3D printing market". Reis says, 3D printing technology is not as mature as traditional 2D printer that you can simply press a button to get started. The choices of materials are limited, 3D printing accuracy need to be improved. The price of 3D printers and materials also need to decline.
Obviously the market is very small when he mentioned that only 42,000 units professional 3D printers are sold up to now. There are 5 million 3D CAD designers worldwide and the number is growing, according to Reis, the sales of professional 3D printer could reach to at least 1 million units.
(A skull model printed on a 3D printer)
China may become a major 3D printer market
As the world's largest manufacturing base, China will become one of the most important market for 3D printing. Elan Jaglom says. Currently its sales in China is lower than in Europe and US. But "we think highly of the market because this is the largest manufacturing base. There are a lot of opportunities in medical, construction, jewelry, education and government sections." The medical, dental, jewelry industry have become the fastest growing markets for 3D printing, and they will certainly become the potential target market for Stratasys.
Source: 21cbn
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Posted in 3D Printing Company
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