Welcome back, everyone, to ABG Investor Days. My name is Henric Hintze, and I'm an equity research analyst here at ABG. With me now, I have the first company that I took up coverage of when I began working at ABG: Freemelt. Go ahead, Daniel.
Thank you, Henric. Okay, my name is Daniel. I'm the CEO for Freemelt. Freemelt, we were founded in 2017, seven engineers with extensive experience from the industry, all coming from another 3D printing company called Arcam that GE acquired in 2017. What we do, we develop 3D printers for metal components, and our objective and our goal is really to be leading in this area by 2030, so where we focus is really, of course, in areas where 3D printing adds value, and it adds value specifically when it comes to more complex materials, complex components, demanding applications like in defense, in med tech, and also in energy, and what really makes us different, because there's a lot of 3D printing companies, is that we have a modular system.
Really, this industry has been a lot of focus on prototype printing, and we really focus on serial, let's say, production, while the turnaround and the modular concept that we have is really beneficial. So far, we have sold 29 machines. The first machine was launched in 2019, and that is the one that you see on the bottom left here, the Freemelt ONE, which is about research, because 3D printing still, it's a lot about educating the market, really the industrial side, to really educate them about the opportunities of the value with 3D printing. Our key focus so far has been to the academia side, so really work with universities, research institutes, etc. But now we also start to move more into the industrial side.
Of the 29 machines, 26 of the machines is the Freemelt ONE that was sold, and three is with our first industrial machine called eMELT. Just to mention a few industrial, I mean, with Saab, Saab Dynamics, which is in defense. So here we do material development for Saab, for a specific application, for a specific material that we have not exposed. But I would say the two major breakthroughs that we have done as a company since the start is that we now signed two contracts with implant OEMs. So when it comes to the most mature industry that has adopted to 3D printing is within med tech and implants. And this is where the big volumes are. So we have two of them, two of the big ones. Unfortunately, I can't disclose the names of them.
We have done, as I said, extensive knowledge technically, and that's also of the four employees that we are at this moment, majority is in the technical side. We also have a very experienced board that is led by a chairman called Carl Palmstierna, who actually was the CEO for ABG some years back, also part of the global management of Goldman Sachs. We also attracted, I would say, the most experienced and competent professor in additive manufacturing, Dr. Johannes Schleifenbaum, who is responsible for Aachen University. And then also we have started over the past two years to try to add more strategic leadership, commercial experience to the company, which is my background. I spent 15 years at Sandvik, commercially responsible for their aftermarket business for mining. If you look into then additive manufacturing 3D printing, so what is it?
So it's, as you can hear in the name, you add something. So it's the opposite to cut something down from a big piece of steel. So layer by layer, and you can see it on the upper right side as well. This is actually the electron beam. It's not a couple of lasers. It's an electron beam moving four kilometers per second. And you push out a layer of powder, you melt it in a specific pattern. And this is the product that we're printing, a heat exchanger, as you can see below there as well. This is also a totally digital process. You start with a 3D drawing that you then build after, which means there are no design limitations as well. So this is also a different difference to traditional manufacturing, where you put together, let's say, different kinds of parts to get the functional part.
Here you can build the functional part in one go, so in one process. Then this is also a distributed manufacturing. And this means that you can actually put your machine where you have the need for the product, so the end product. And especially these days, in this geopolitical situation that you have, of course, there are safety risks of shipping products around the world. Too, you also reduce the environmental impact, of course. The only thing you need to ship is the powder. But also another big thing now regarding local manufacturing is due to the geopolitical situation when, for instance, the U.S. is making a big, big pull now to pull out from low-cost countries and to start to manufacture themselves in the U.S. And here, of course, you need competence. You need to set up factories.
As I said, this is a totally digital process, which means as long as you have connection to the machine, you can run the machine as well. So this will also help from a competence perspective in that sense. We focus on three materials, which are copper, tungsten, and titanium. And there is a reason for it. I mean, technology, it's not actually dependent on materials, but in these three, then we can really add some extra value. If you take copper, for instance, it's difficult to really get the full purity, especially if you work in industries and in components where you need connectivity. So like heat exchangers, for instance, we have a vacuum system, which means that you can actually remove the oxygen from the copper and really make it with full purity, which means that the connectivity also really increases.
The other part is, we have a hot process, so that's why we can also manufacture parts in tungsten, and this has been really a high focus and attention, especially for defense and energy, because tungsten is the material with the highest melting point, so you can't actually cast tungsten, and what we can do when we have vacuum and also this hot process is really to get the highest material properties, and if you go to defense or if you go to energy, they would like to have fully crack-free parts, which is not possible to manufacture with any other kind of technology. The biggest, let's say, adoption so far in manufacturing with additive is in implant business, and that's where you have titanium, and there we can also prove, I mean, this is a more simple material to work with. Even laser machines can print it as well.
But because of our modular system, as I mentioned before, that we have, which means that we don't work at the machine. All the other printers in the business, you stand there before the print and you do all the preparation. You then after the print do all the post-work at the printer as well, which means that you block the machine for production, which means that the cost for producing really goes up. On top of this, we have also an active cooling in our system, which also reduces the stop time of cooling in hours, which the competition must do. So all these things together really get down to the stop time. It really makes the availability for productivity to go up as well. And this is totally unique in this industry. I mentioned about the three sectors that we now focus on.
We work with others as well, but we're really trying to focus here. The demand is really high here. Defense, at this moment, it's huge investments globally in defense. And here, specifically, tungsten, but also copper. And in tungsten, we have a unique position at this moment. And it's typical applications with very high temperatures where tungsten is requested, like in rocket motors, for instance, to give you one example. We have a couple of ongoing customer engagements, both on the research side, but also a couple of U.S. defense companies that we cannot disclose. So we both do material process development and we sell machines. So that's the business model here. For energy, it's pretty much the same. Here it's tungsten, and it's also mainly driven by the geopolitical situation to be less dependent on oil and gas and so forth.
That's why fusion reactors is really a hot topic at the moment, and there's huge investments here, and same kind of thing here. We have a couple of ongoing customer engagements where customers have purchased our machines or where we help them, like in the U.K. Atomic Energy Authority, when we help them to develop processes to manufacture tungsten, for instance, and then last is med tech, which I mentioned. I think there's a production of roughly 4.3 million, let's say, implants, hip cups, and knees per year. Roughly 5% is manufactured by additive, so it's a huge opportunity as well, and the industry expected to be more than 20% by 2032. I just want to show you one real example. This is actually the product that you see here. It's actually a small product. So this is pure tungsten. It's fully dense tungsten.
The whole industry has actually changed in fusion from beryllium to beryllium in the past towards the plasma facing wall and now to use tungsten. This we print for one of the biggest fusion reactor projects in the world, and it's 40/ 40 millimeters, so it's very small, so you need 1.5 million of these ones to dress just one test reactor, and there are like 130 of these test reactors now happening or planned at this moment, so that's the first one, what you see here, the case study, so let's assume that this client has a need of those 1.5 million just for that test reactor. In the next three years, that would drive a need of more than 70 machines to produce it.
Today, we are the only ones that can produce it with that kind of productivity, with that kind of material property. The middle case, here it's a combination. Here we are in doing material development at the moment. It's a four-party case. We have two industrial companies, two big global industrial companies. We have a university and Freemelt. Together now, we are going to develop the process to manufacturing, in this case, then for aerospace and energy application, certain products. If those two customers would turn from traditional manufacturing to additive, it's a huge opportunity. It's more than 1,000 machines needed just to keep the annual volume that they need of those products. Then the last one is one of the implant companies we press released some weeks back, where we're in the proof of concept now when they're trying our technology.
And if that goes well, there is an opportunity of more than 100 machines as well. And you can see the good part for us here is that there's a big aftermarket business as well, recurring revenue. So when you sell the machine, then of course it needs to be maintained. And I think that's the important thing to understand with us as a company and with the industry as such as well. So far, it's been a lot of on the research side. You can see also 90% of sales has been on research. If you go to 2030, then it will be totally opposite. And to get there, we need to help customers to first adapt more to additive manufacturing.
And you can see we have a bit more than 20 industrial engagements now when we try to first convince them about additive and then secondly try to also then prove the value with eMELT or Freemelt's industrial product as well, eMELT. This is a bit of a legacy sales-wise and also installed base-wise as well. The first machine we put to the market in 2019 and have had a, let's say, a regular kind of sales annually on this. It's a very transactional business that we have had so far, again, a lot connected to universities, so long sales cycles, no aftermarket. This is why you see the hockey stick is now when we have our industrial machine now public. We have sold three. We have installed one. The first one to the U.S. will leave the factory in Q4 or at the latest in January 2025.
What's key for us now, next year in short term, in 2025, is to get into more of production type of orders, so more industrial orders. We have a proof of concept now with, at this stage, now two implant companies to make them successful so they also start to order production machines. We also have worked a lot with defense now. We expect some more volume commitments in defense next year as well, and then our machine, of course, we have had the technology in place for five years in the market, been tested. But with that said, now it's industrial clients. They have a totally different, let's say, demand on expectations. Why, of course, we need to make sure that the machine also meets the expectations and keep the technology readiness level as well.
And then by 2027, we should expect to see some sort of repeat orders on the first production orders in 2025 and start to scale up our production as well more as volumes are growing. If we succeed with this by 2030, we should have a leading position in implants specifically and in any kind of tungsten application that we're in, which we at this moment are the number one globally. So why should you invest in Freemelt? I mean, with seven years, we've been in the market, five years, we have proven the technology. We are a debt-free company. We have invested more than SEK 200 million so far in technology and in an organization that is ready to scale up as well.
The market now, I think the geopolitical situation, if you're really going to see big industrial changes, I mean, it's some sort of crisis that needs to be there. I think the geopolitical situation now is really giving tailwind for additive manufacturing compared to previous years. That's all I had. On any questions I'm happy to answer.
Yes, thanks a lot for that, Daniel. I do indeed have some questions. First of all, I'd like to have a bit of a closer look at the two implant manufacturer potential serial production customers here. They chose different approaches. One ordered a proof of concept study from you, one ordered an eMELT machine. Could you just tell us a bit more about these projects, why they took different approaches there and how they're going?
Sure.
I mean, first of all, both of these two customers are very experienced when it comes to additive. So they're already working with additive, different kinds of technologies. But actually, both of them are proof of concepts as well. But the first one was more keen because at this moment, we have a six-month delivery time to deliver a machine. And they wanted really to get going ASAP. So that's why they have started to rent one of our machines that we have in our lab in Gothenburg. The other one took a different kind of, which also means that we spend more time doing the proof of concept in-house as well. The other one, yeah, they have a dedicated team. Timing-wise, it was better suited for them to get the machine in April next year.
But all in all, I mean, both of them are very experienced when it comes to additive. So I think it would be good for us as well. They would put really clear demand and expectations, which we need as a company now as well.
All right. And looking at your two geographical markets, North America and Europe, the ones you're currently focusing on at least, could you tell us a bit about how the interest for additive manufacturing differs or doesn't differ between the markets?
I think in general, there's not such a big difference in how they see into the value of additive. But I think the approach that is totally different. The U.S. has a really coordinated program. They have a program called America Makes, for instance, which really is about to bring back a lot of the metal manufacturing back to the U.S.
I think it will go even faster now with Trump coming back. A lot of money that is invested in what they call advanced manufacturing centers in the U.S. In the U.S. as well, you pretty much must go through universities or the national labs. It's been so many companies that have burned their fingers on purchasing technology that has not really worked accordingly. Now you need to go through and pretty much qualify yourself through the universities or the national labs. That Department of Defense or Department of Energy is behind. In Europe, then it's more sector-driven. It's less coordination. It's more difficult to really gain the big kind of, let's say, momentum, I would say, in Europe.
Okay. You recently announced a new project on high-purity oxygen-free copper?
Could you tell us a bit more about that and how Freemelt's technology compares to traditional and other 3D printing technologies in this application?
Yes. So this is a Vinnova project. We do it together with Linköping University and Saab Dynamics. So what I can say is, of course, connected then to Saab's application. Linköping University, they have one of our machines. So they have a lot of experience when it comes to electron beam powder bed fusion. And as I mentioned before, one of the unique things with our technology is that you have a vacuum chamber. And specifically for copper, then to really get the purity, you expose, of course, I mean, the powder when you put it into the machine. And then when you have the vacuum, you can pretty much remove all the oxygen. So that's one of the key benefits.
Plus the part that we have a hot process as well then to really get the best kind of material properties.
All right, and then finally, you mentioned the target of SEK one billion in sales by 2030 that you set a while ago. How do you feel like the company is progressing towards this target at the moment?
I mean, sales-wise, it's a big jump from where we are today, but as I said, I mean, this is now when we're starting to get into the industrial side, that's where volume will come from, and that's also why it's really good now to see the first proof of concept customers as well. But I think if you look, maybe I can go back to this slide. I think this actually demonstrates well.
If you look into the matrix here with the 21 ongoing, let's say, engagement with potential industrial customers for serial production, in 2023, we had three of them. So it's really now, it's a huge improvement in 2024. I would say at this moment, I think it's looking good. But of course, then we need to make this successful as well. So not everyone here will go all the way to eMELT, of course. But so far so good, I would say.
All right. Very good. Thanks a lot for that, Daniel.
Thank you.