3D Systems Makes Big Move into the Service Bureau Business

DN Staff

October 1, 2009

2 Min Read
3D Systems Makes Big Move into the Service Bureau Business

3D Systems, the company that virtually created the rapidprototyping industry in the 1980s, announced a dramatic shift in businessstrategy today.

The company will now emphasize production of parts forovernight delivery, partly as a result of the year-old slump in orders forrapid prototyping machinery. Its new business is called 3Dproparts, which 3DSystems described as "the world's largest rapid prototyping and manufacturingparts service."

In a conference call, CEO Abe Reichental told Design News that year-to-date orders forSLA equipment are down about 25 percentcompared to the same period last year. "We've been climbing out of that ditchvery slowly," he said.

The business for parts, filled by companies called serviceproviders, is the biggest revenue opportunity area in the business, he said.

To jump-start entry into the service business, 3D announcedthe acquisition of Acu-Cast Technologies, a service provider based in Lawrenceburg, TN.In addition to tooling and urethane casting departments, Acu-Cast has severalrapid prototyping assets:

·      Six 3D Systems iPro stereolithography centers,

·      Two 3D Systems 5000 stereolithography machines,

·      One  3DSystems 3500 stereolithography  machine,

·      Six  3DSystems 250/50 Stereolithography solid-state systems, and

·      One 3D Systems ThermoJet Solid Object Printer.

What Acu-Cast doesn't have is equipment from competingproducers of rapid prototyping equipment, such as the fused deposition modelerssold by Stratasys that makes parts from thermoplastics. Reichental told Design News that 3D Systems "will lookvery closely" at the acquisition of competing technologies in order to become afull capabilities service provider.

One problem could be the potential that service bureaucustomers of 3D Systems would view them as a competitor in the crowded marketto sell parts. Even some large plastics processors have announced plans to sellRP parts over the Internet.

Reichental said customers were briefed on the company'splans as the acquisition process was under way. He said "they get it" andreacted positively. He offered the potential for other service bureaus,particularly small ones, to join a sales network with 3D Systems.

Even R&D will be affected. "We will definitely adjustour R&D goals," said Reichental. Emphasis will shift to technology thatsupports its service bureau business, such as more materials and moreprocesses.

"We are also asking ourselves what kind of large-volumeproduction capacity can we develop for our use in house so we can develop alevel of differentiation for our customers," Reichental said. The commentrefers to a growing trend to use technologies originally developed for rapidprototyping for low-volume production requirements. The primary advantage isthe elimination of tooling costs.

Reichental briefed investors on the news yesterday morning,and the company's stock nudged slightly higher afterward and then dropped. 3Dsystems stock has traded in a very wide range in the last 12 months, from a lowof $3.76 per share in March to a high of $14.57 a year ago. Stock was tradingaround $9.15 late in the session. 3D Systems narrowed its net loss in the firstsix months of 2009, compared to the same period in 2008.

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