[Satellite News 07-17-09] Surrey Satellite Technology Ltd. (SSTL) must be successful in its U.S. expansion campaign, as the company is going all-in to meet the expectations of owner EADS Astrium, SSTL CEO Matt Perkins told Satellite News.
    While the weak economy and the resulting credit crunch are impacting the small satellite manufacturer, Perkins said SSTL is well positioned and ready to offer a strong value proposition in a financially conservative environment. “We are quite fortunate in that our portfolio is spread across government, institutional and commercial opportunities. We see a slow down in one, but the other two are holding up quite nicely, so we are confident we are going to deliver the financial performance and revenues this year,” he said.
    Looking forward to opportunity rather than dwelling on the present, Perkins previews SSTL’s plans for the remainder of 2009 and explains the demand for small satellites in difficult economic times.

Perkins: We have been very fortunate in that we have been able to supply missions, platforms and equipment to U.S. companies in the past. However, it is clear that the best way to address this market is to have in-country capability run by U.S. citizens and with an arm’s-length relationship with its parent company back here in the United Kingdom. That is what we are in the process of setting up. We are currently recruiting people to put into the most senior roles within that organization, with eight people now based in Englewood, Colorado. We have plans to expand that to 10 to 12 people over the next few months.

Perkins: It is clear that there is interest in the United States, which traditionally has been a very difficult market to develop. We think the capabilities offered by small satellites are rapidly advancing. We use commercial-off-the-shelf technology. We have proven the technology. We have provided information about the availability of a satellite with sub-1-meter resolution for global mapping. Five years ago it would have been inconceivable to come up with a small satellite with that capability. Now we are ready to deliver that capability and that is a very rapid advance, and that is just in the area of optical imagery.
    In the area of communications satellites, we are investing in the development of a small geostationary satellite with funding support from the European Space Agency. It is very complementary to Astrium’s offerings in terms of communications satellites, and we have a number of potential customers. We believe that the small satellite industry is going from strength to strength and whilst there is also a wider range of competitors, we are confident that we will continue to lead the marketplace.

Perkins: We have business development and legal contract capability already in place as well as systems engineering capability. There is a lot of appetite for SSTL products based on our heritage and experience, and we think we can provide price points not really seen before in the United States. We are also looking to see whether that can be coupled with affordable launch solutions for small satellites, and the progress SpaceX has made is a key opportunity for the company. We want to look at how we can grow that opportunity more quickly.

Perkins: We have John Paffett, who is a member of the U.K. management team, as an interim person in charge right now. One of the early tasks he has is to find an appropriate CEO to run the U.S. operation. Ultimately we expect our U.S. operation to have around 250 people by 2012-2013. The intention is that it would replicate what is available in the U.K. in terms of a design and manufacturing capacity focused on serving U.S. customers.

Perkins: Any stimulus-type package is there to generate economic advantage and growth and help offset problems of the credit crunch. Our clear objective at SSTL is to change the economics of space. We want to make space more accessible and affordable to a wider range of humanity. Putting such packages into place will have an advantage in whichever economies we go into. However, that money has to be well spent once we are within that market environment. Value for money will be provided if that funding goes into the space industry.
    Having said all of that, our traditional market has been international. Europe has not been a major customer for us. We have looked further a field and are looking at the United States as one of our major growth drivers, setting up facilities and offices in-country. If any of the stimulus money is available for the space industry, there is an opportunity for us to use it very effectively in the United States.

Perkins: Our drive into the United States has to be successful. We are putting a lot of time and energy into this, not just setting up the U.S. capability but making sure that we have the right people boarding place to operate the entity in the way that we want. We also need to make sure that we serve the needs of our customers. We believe that the acceptance of small satellites is growing and that it will bring a much wider customer base.
    In order to deliver, we also need more manufacturing space. We are constrained at this point in time but are developing plans to acquire additional manufacturing space. We also want to work more closely with Astrium, develop synergies and demonstrate to our new owners the power and advantage which they have gained by acquiring SSTL. This will hopefully take them into areas not previously envisioned. We will complement their product line, delivering missions that they would not have undertaken themselves. That is a very powerful objective for us but also a key challenge.