Good morning, everyone. This is Jim Sims with IBC Advanced Alloys. Thank you for joining us this morning, and welcome to this investor update webcast. I'm Director of Investor and Public Relations with IBC. Before we begin the webcast, just a few reminders. Slides from today's presentation and the audio of this call are being broadcast live over the web. A recording of this broadcast is being made, and a replay will be available on the IBC website later today, and we are at www.ibcadvancedalloys.com.
After our formal presentation, the company will take questions from webcast participants. Now, during today's presentation, we'll be making forward-looking statements, and viewers are cautioned not to place undue reliance on such forward-looking information and statements. Additional information identifying risks and uncertainties is contained in IBC's public filings, available on SEDAR.com and on our company website.
Joining us today is Mark Smith, Chief Executive Officer and Chairman of the Board of IBC. Mark, thanks for joining us. Please go ahead.
Thanks, Jim, and welcome everyone to today's webcast. Let's go ahead and get to the first slide. As many of you probably saw, we announced last week that the board of directors has decided to close our Wilmington, Massachusetts, plant, where we make beryllium aluminum alloy products. The primary driver for this decision was insufficient long-term demand for cast beryllium aluminum alloy products.
As we announced a few months ago, we indicated that if we were not able to secure sufficient sales contracts beyond those we currently have, we would sell the facility or close it down. Given that we do not have sufficient contracts to justify continuing our operations there, we made the decision to shut the facility down. We will complete work on the current contracts, and we anticipate a cessation of operations sometime this summer. We see significant benefits to this restructuring.
In particular, we anticipate closing this plant to expand free cash flow at IBC, strengthen our gross margins, and position us on a better path to sustained profitability. Copper Alloys has been a profitable division for the past 3.5 years, or 14 straight quarters.
As you can see from the chart on the left, once Copper completed its plant consolidation and expansion and modernization of our vertically integrated facility in 2022, revenue and Adjusted EBITDA have grown substantially, thanks in part to our increased capabilities, greater operating efficiencies, and lower costs of production. Our expanded plant is shown here on the right. As a result of our investment in this expansion, Copper gross margin and gross profit have both risen sharply since that time.
The Copper Alloy division makes a variety of specialty Copper and Copper alloy products for hundreds of customers across multiple industry sectors, including those shown here. This next slide shows just a few of the division's customers. Notably, we make specialty products for two of America's largest space launch manufacturers, SpaceX and Blue Origin.
For anyone who has followed global Copper markets, you know that demand for Copper continues to rise sharply. In one sector alone, the clean energy tech, demand for Copper is expected to double between 2020 and 2030, with demand from EV batteries increasing over 700%. The price of Copper has, not surprisingly, surged in the past year. As the chart on the right shows, Copper prices have increased more than 25% in the past 6 months alone.
In general, IBC passes through to our customers the cost of Copper used in these products, so while higher Copper prices increase our material costs, we generally recoup those costs through higher prices charged for our products. With that, Jim, I'm happy to take any questions our audience may have.
Thanks, Mark. Let's open it up to questions. For those of you who'd like to pose a question, you can either put that in the meeting chat for us to pose, or you can text your question directly to me. I'm at 303-503-6203. Again, that's 303-503-6203, or you can email your question to me at jim.sims, S-I-M-S, @ibcadvancedalloys.com. Mark, our first question is from Steve, who asks: "Copper has been profitable, but what do you see for the current growth perspectives for the division?
You know, Copper has continued to grow their revenue, and because they do have gross margins, they're generating cash. Their average revenue growth has probably been in the neighborhood of about 20% a year.
Now, I don't know how long we can keep that up before we reach, you know, capacity limits at our facility, but Copper has really demonstrated that with the right investment in that division, we can get those sustained revenue growth and gross margin increases very well.
And they've demonstrated it for two solid years since the expansion, and we have no reason to think that that will decrease at all. So we're very excited about really allowing Copper to keep the cash-... that they're generating and invest it back into the Copper Division and allowing them to grow.
Here is a question for Harriet, who asks, well, she meant, "The EM Division was primarily designed to service the defense sector. Does Copper have any defense customers?
Absolutely. And a lot of the products that Copper uses does go into the aerospace industry, including the Department of Defense and the Air Force. They also have some products that work extremely well in marine environments, and so we look forward to producing and serving the United States Navy as well. So yes, there are defense products.
There's also commercial products, and it's a nice balance between all these different sectors within the Copper Division so that it's in a way a risk mitigation device for us because there are so many multiple customers in multiple sectors, that if one sector is going up or down, the other sectors tend to make up for it. So it's a very good balanced business model going forward.
Okay, thanks. Here's a question from Steve. It's a different Steve. This Steve is asking, "Do you have an estimate of the closed down costs for the Beryllium Division?
We are putting those costs together. We don't think that it's going to be a significant cost to close, actually close the facility down, but we are putting those costs together. We were looking at a potential sale of that division up until very recently, and so we were really kind of hoping that that would be the case, because your closure costs in that situation are obviously much more attractive.
But we don't think that it will, you know, cost that much to actually close the facility down. We've got some equipment there that we can sell. We've got feedstock materials that we can sell, so hopefully this will be well managed and keep the costs low.
Here is a question from Rick, who asks, "There's been a lot of publicity about the growing demand for Copper as a result of electric vehicles. Does the Copper Division service the automotive industry now?
Yes, we do. One of our main customers, or a large customer for us, is Honda, as a matter of fact, and so that is a, an area that, we would like to continue to grow more in, but we do serve the automobile industry today.
Okay, Mark, that is the last of the questions we have.
Okay.
If anyone was wanted to ask a question, for some reason couldn't put it in the chat, please email me your questions at jim.sims@ibcadvancedalloys.com. I will get back to you with the answer as best I can. Thank you all for joining us today. Have a great day, and we look forward to talking to you soon. Take care.