Siemens competitor GE invests in 3D printing

The turbine that came in from the printer

By acquiring companies such as the Franconian specialist Concept Laser, GE focuses on the billion-dollar business with industrial 3D printers – and intends to make substantial investments in Germany. The company, a competitor of Siemens, has ambitious plans. Frank Herzog took that as a warning. Many a technology pioneer could not keep pace with the development they themselves once introduced. Eventually, the market they once created with their invention positively exploded. And the pioneers with their start-up structures were simply unable to cope; the big players that followed divided the market up among themselves. Despite its being one of the fastest-growing and utterly profitable young companies in Germany, Concept Laser GmbH, which was founded in 2000 by Frank Herzog in the Franconian town of Lichtenfels, was also in imminent danger of suffering the same fate. The business with industrial 3D printers was gradually developing into a multi-billion-euro market, as the Head of the company puts it. It seemed like Concept Laser, too, was “condemned” to grow. So, over the past year, Frank Herzog was searching for a strong partner in order “to remain the driving force of the market and to shape its growth.”

48 parties expressed interest. Eventually, the bid of the US group General Electric (GE) was accepted. Together with Concept Laser, the company has truly ambitious plans: The activities associated with the industrial 3D printers have been consolidated in a new entity called GE Additive and are supposed to turn into a business worth billions of euros. According to information obtained by the Handelsblatt business newspaper from industrial sources, the global headquarters of that entity could be potentially located in Germany. Additionally, there are rumors that GE is planning to invest EUR 100 million in a 3D campus in Lichtenfels – the home region of Concept Laser. Due to the rapid growth, the head office of Concept Laser is currently spatially fragmented to such an extent that the research and development departments even have to be accommodated in containers. A state-of-the-art head office for up to 700 staff members is now set to be built on an area of 25,000 square meters. The beginning of construction works is scheduled for the fall.

As to the background of the US offensive: The process known as additive manufacturing is currently experiencing a breakthrough in the mass production of numerous industrial sectors. “3D printing is the future of industrial production,” says Mohammad Ehteshami, and he is not the only one to be sure of that. Mohammad Ehteshami is the Manager in charge of the newly organized entity of General Electric. When speaking to the Handelsblatt business newspaper, he called additive manufacturing “a revolution.” “And we are at the helm of this revolution.” Frank Herzog, the founder of Concept Laser, was one of the first to recognize that. As a student at university, he was temping for the company of his uncle’s wife – and designed the first metal-laser melting system, still operated manually back then. Today, Concept Laser and Eos GmbH – another German company – are the global market leaders in 3D metal printers. In the past year, the turnover of the company grew by 35 percent to EUR 91 million. That pace of growth under GE is at least to be preserved, or even to accelerate. Because now the medium-sized company can, for instance, make use of the sales and development capacities of a large corporation.

Now that General Electric also acquired the Swedish 3D printing specialist Arcam, which opts for an electron beam for melting instead of laser technology like Concept Laser does, it became the new global market leader. Mohammad Ehteshami is not yet ready to confirm that the new unit will be based in Germany; the official decision has yet to be made. At the same time he says: “Germany is an awesome location.” It boasts technological expertise, essential industrial sectors, and lots of medium-sized enterprises as a target group.

In additive manufacturing, the parts are created layer by layer without molding. The 3D machines allow the manufacturing of parts in any desired shape that previously had to be milled or cast – or could not be realized at all. Nowadays, turbine components can be printed the same way as dental prostheses or jewelry. Shortly before the opening of the HANNOVER MESSE trade show, for instance, MAN Diesel & Turbo announced its plans to start printing components for gas turbines in series.

From prototype to mass production
While at the beginning 3D printing was mainly used for prototyping due to high costs and technological challenges, this method is now getting increasingly more common in mass production as well. “We are observing an increasing demand for cutting-edge industrial structural components that are lighter, boast certain functions, and can benefit from a greater freedom of design offered by additive manufacturing,” explained Roland Fischer, CEO of the Swiss plant manufacturer Oerlikon. The pioneering industries are aviation and power generation. Meanwhile, there is also a jeweler on Munich’s exclusive Maximilianstrasse who creates jewelry by means of the Concept Laser printers. As to medical and dental engineering, series production of parts has already become standard, too. General Electric was among the pioneers due to its strong position in the production of aircraft turbines. For example, GE and LEAP Engine together constructed the first-ever jet engine whose fuel nozzle parts were 3D-printed. The US manufacturer is planning to use the new technology for the next Cessna series, for instance. To further boost its position, GE was ready to invest a lot of money. For Concept Laser alone, GE, a rival of Siemens, came up with EUR 549 million for initially 75 percent of shares. Additive manufacturing still is a relatively long process. The machines by Concept Laser allow printing objects of up to 80 x 40 x 50 centimeters in size. However, that process takes several days. Therefore, it is still nowhere near reasonable to print everything. Concept Laser may exhibit a printed engine block in its foyer simply to show that it is possible, but a part with a structure as simple as that had better be cast for the foreseeable future. “My dream is that one day you can stand there and watch a part being printed,” says company founder Frank Herzog. A passionate entrepreneur and mechanical engineer, he is quite convinced that this vision will one day come true. GE Manager Mohammad Ehteshami has set ambitious goals for the new Additive entity. “Our position is unique.”

He aims at achieving a revenue of one billion US dollars by 2020, which is approximately five times as much as in the previous year. He is planning to sell 10,000 3D printers in 2026; according to industry estimates, two thirds of these could potentially be supplied by Concept Laser. Another goal of GE is to reduce the cost of own production by five billion US dollars with the help of this technology. There are versatile application options. Particularly in terms of spare parts supply, enormous storage and transportation cost saving can be achieved if the service technicians simply print the part on site. Previously at Siemens, for instance, the entire burner head had to be replaced when the burner tip of a gas turbine got worn. It had to be assembled from a great number of individual parts in an extremely cumbersome procedure. It is only recently that Siemens started to remove the tip of the burner head and attach the new, exactly matching one directly onto the burner with the help of laser beam melting with metal. This saves 90 percent of time and 30 percent of costs.

Siemens makes use of 3D printing, too
In February, Siemens was proud to announce another breakthrough: For the first time ever, gas turbine blades completely made by means of additive manufacturing (AM) were successfully tested in a gas turbine at full load. During the test, the components were subjected to 13,000 revolutions per minute and temperatures exceeding 1,250 degrees Celsius. Siemens uses this method in production but does not manufacture its own printers. This similarly applies to the area of robotics, where their Swiss competitor ABB is active. General Electric, however, has made considerable investments. The global market is surely attractive. According to the experts of Wohlers Associates, it grew by 26 percent to USD 5.2 billion in 2015. According to the forecasts of the consultants from Canalys, the market for 3D printers – including the devices for private users, accessories, and services – will probably expand to more than USD 20 billion by 2019. Some experts predict that the market for industrial 3D printers can even archive the level of USD 80 to 90 billion.

However, this sector is also highly competitive. Since 2011, the number of manufacturers of industrial 3D printers have doubled to 62. This number will most likely decrease substantially in the next few years after the shake-out of the market. “There will be further consolidation.” Mohammad Ehteshami is sure of that. At the same time, GE is considering further acquisitions. “We are in search of further opportunities,” he explained.

And Germany will play the key role here. Not only is GE willing to invest EUR 100 million in the 3D campus at the Concept Laser site in Lichtenfels. According to information from the industry, the US group is also relocating the headquarters of its Inspection Technologies business unit to Germany. It pools the methods of material testing in production, for example, by means of X-rays or eddy-current technology. The selection ranges from mobile devices to large machines, which are integrated into the production and continuously check the quality of products. This is particularly important for 3D printing with its complex structures and new material compositions, so there is lots of interlinking.

With the help of digitization, the new devices not only signal that a product is good or must be rejected. They can also provide information on the type of error and possible causes. “We are one of the leading providers worldwide, and we see a lot of potential for further growth,” Holger Laubenthal, Head of the GE entity, tells the Handelsblatt business newspaper. According to industry estimates, the annual sales growth can reach the high single-digit or low double-digit level. The new central administration will be headquartered in the town of Hürth, where GE once took over the traditional company Krautkramer.

Nothing can stop 3D printing anymore – GE Manager Mohammad Ehteshami is convinced of that. What is it that he would like to print one day? A complete aircraft turbine, he answers. And it won’t be all that long until that is possible.

Höpner, Axel


Source: Handelsblatt online dated 4/21/2017
Siemens-Rivale GE investiert in 3D-Druck: Die Turbine, die aus dem Drucker kam (handelsblatt.com)

Photo credit: REMY GABALDA/AFP/Getty Images.