At the beginning of 2023, I wrote that Sandvik’s approach to 3D printing was excellent. At the time, it seemed that Sandvik’s path into 3D printing was very well executed. The driving logic appeared to be that the company would acquire businesses that could leverage its core expertise in metals and hard-wearing materials to produce higher-value finished items. An ore firm was going to make defense parts using additive manufacturing and, in doing so, generate more profit through a vertically integrated business model. However, it turns out that Sandvik no longer believes in this strategy and is changing its approach. I still believe the original approach is valid, but the firm encountered some challenges along the way.

Sandvik has now announced a shift in its additive manufacturing strategy to focus on selling powder. It will also sell its e-business and “seek an exit of the minority stake in BEAMIT,” where the company previously held 30%. Sandvik will write down its stake in BEAMIT by SEK 140 million (around $13 million). Additionally, DWFritz has been sold to the private equity firm Balmoral Funds, while Sandvik will retain the Fritz ZeroTouch metrology tools.

Given Sandvik’s expertise in ore mining, ore processing, earth-moving equipment, hard-wearing materials, and parts manufacturing, its focus still seems to be on making Additive a success. You can interpret the company’s announcement in two ways: A) the company is exiting the mountain-to-helicopter-parts business entirely, or B) the firm is sticking to its mountain-to-parts business but shedding entanglements that were slowing it down. I don’t see this as a retrenchment or abandonment of the parts-making initiative, but I lean toward option B. To me, this looks like a strategic retreat, with the company likely to continue in a different form while broadly following the same overall idea.

Sandvik has been investing in 3D printing since around 2015. In 2019, the firm invested in BEAMIT, an Italian service bureau primarily focused on laser and e-beam powder bed technologies, which has developed numerous innovations over the years. BEAMIT has been a partner to major players such as Leonardo, Safran, and Thales. It was one of the few 3D printing service providers in Europe capable of being a credible partner for defense firms in producing end-use parts at scale, making it seem like a sure bet. BEAMIT then acquired Zare, as well as a post-processing firm called Pres-X. Sandvik continued to expand its powder production facilities, and everything appeared to be progressing in lockstep. Leonardo even formed an alliance with BEAMIT to produce aircraft parts, and everything seemed to be perfectly aligned.

I loved this strategy and was very bullish on the prospects of the alliance between BEAMIT and Sandvik. However, something seems to have gone wrong. The strategy still appears sound to me, but it seems like the partners had some kind of falling out. The mention of “seeking an exit of the minority stake in BEAMIT” seems ominous. You wouldn’t casually state that if there were any intention to work together again. In Additive, we typically collaborate with everyone, so this feels more like a breakup than a strategic realignment. If they could have offloaded the stake through a banker’s PowerPoint to interested buyers, they likely would have, but instead, they seem unable to dispose of it as easily as they did with the DWFritz business. It suggests either challenging times ahead for BEAMIT or that the company is choosing a more independent path due to differing visions for the future.

It’s a good time to be in the powder business, so this part of Sandvik should continue to do well. Although the company is relatively undersized in this space, and while its products are strong, they aren’t viewed as leading as much as those from other firms. This could signal a refocus on its powder segment. With the funding and excitement surrounding companies like Continuum, 6K, and Metal Powder Works, there may be opportunities for Sandvik to explore in situ production advancements. The firm could also expand its portfolio by developing powders that run faster on machines or that are more specialized.

Retaining the ZeroTouch systems indicates that Sandvik may no longer want to be a parts producer but instead aims to be a technology provider, facilitating part production and scaling in additive manufacturing and beyond. This could be a valuable approach. Alternatively, the firm might acquire a 3D printing service outright and push ahead independently—companies like AIM Sweden could be promising partners. Sandvik could also align with the growing AMEXI collective of firms.

Another potential path would involve specializing further in hard-wearing materials, possibly partnering with or investing in VBN Components, a Swedish firm with an impressive portfolio of durable 3D printing materials. In any case, Sandvik still has options, and its 3D printing journey is far from over, though its Italian chapter seems to have concluded.