What’s happening with the Amaero (ASX:3DA) share price today?

Amaero plans to build a world-class titanium plant in Australia. Here’s the rundown.

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The Amaero International Ltd (ASX: 3DA) share price had a strong start to the week, up 5.26% to 60 cents in early trade today. The Amaero share price then lost all its gains and was back right where it started, trading flat at its opening price of 57 cents before rebounding again to 58 cents, up 1.7%.

Today’s share price movement came after the company announced plans to build a world-class titanium powder plant in Australia.

Amaero is a specialist in metal additive manufacturing, otherwise known as 3D printing, to produce components out of various metal alloys. The company aims to supply sectors including defence, aerospace and tooling.

Let’s take a closer look at today’s announcement.

What did Amaero announce?

The Amaero share price bounced higher this morning after the company announced plans to construct a customised and proprietary titanium alloy powder manufacturing plant in Victoria.

In its release, Amaero said the $8 million facility was expected to be the world’s most advanced titanium alloy powder manufacturing facility in the world.

It will produce aerospace-grade titanium “to the highest standards at approximately half the cost of the nearest competition”, according to the company.

Amaero says this will provide the company with a “distinct advantage” when it comes to securing long-term offtake agreements with clients.

Once fully operational, the plant is expected to generate revenues of approximately $30 million per annum.

What did management say?

Amaero CEO Barrie Finnin hailed the plans, saying:

Producing titanium alloy powder in Australia will provide a stable, secure and cost-effective supply, allowing defence and other sectors to continue to advance their 3D manufacturing capabilities. This project directly supports Amaero in delivering ongoing, significant, high margin revenues via a stable commodities market.

Finnin also commented on the traction and support behind the new plant, revealing:

Amaero has signed a Memorandum of Understanding with a metal powder supply company that has established market channels for metal powder sales and we are now in the process of negotiating a collaborative distribution agreement.

In addition, we have already received letters of support for this project from two of the five largest defence companies globally indicating strong potential demand for Ti64 powder from a competitive Australian source for specific commercial and military applications.

Amaero share price snapshot

Amaero shares listed on the ASX on 6 December 2019 at an initial public offering (IPO) offer price of 20 cents per share.

The company secured manufacturing agreements for high profile companies including Boeing back in December 2020 and collaborated with Rio Tinto Limited (ASX: RIO) to commercialise its high-operating-temperature aluminium alloy.

Despite the company’s positive achievements, the Amaero share price is tracking just 0.85% higher year-to-date.

Should you invest $1,000 in Amaero right now?

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Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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