Stratech Group

[Bubbachuck]

Interesting to see the first set of results for this newly restructured group.

[roxhockey]

It's hard to believe they'll get 60 airports when they won the Changi contract in 2009 and in the six years since have won what, 3 more airports? Where is this mass takeup Going to come from?

[Curiousparty]

We applied a 50% discount , i.e. 30 airports to be achieved over next 5 years. So on average, we have about 6 airports in one year.
(5 airports have been secured to date)

FAA approval only came in March 2012. This approval should help to accelerate the pace of new tender wins for Stratech.

*******
iFerret, which was certified by the United States Federal Aviation Administration (FAA) in March 2012, is swiftly gaining acceptance in the global aerospace industry.

a. In February 2015, Stratech and its local Hong Kong partner were awarded the HK$280 million (or about USD$36.88 million) automated FOD detection system contract for the Hong Kong International Airport.

Other global hubs that iFerret secured include
b. Changi International Airport in Singapore which has been monitoring both its runways for almost 6 years,
c. Dubai International Airport in the United Arab Emirates and
d. O'Hare International Airport in Chicago in the United States of America which is for the FAA performance assessment.
e. Moreover, this now-acclaimed system was also recently successfully installed at an air base under one of the world’s top air forces, opening up a largely untapped market.

[thor666]

Links I found from YouTube:

The iFerret:
https://m.youtube.com/watch?v=41329gq-oRg

Varec/xsight? (competitor?)
Has a more slick presentation than Stratech. IFerret looks bulky relatively.
https://m.youtube.com/watch?v=hT6GUX451Zc
https://m.youtube.com/watch?v=SqzFXuJ-VMo

The more manual systems:
https://m.youtube.com/watch?v=_8G8CHzf8dw

A Google search shows the 3 other competitors:
QinetiQ – Tarsier
Stratech – iFerret
Trex – FOD Finder
Xsight Systems – FODetect

(Not vested)


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[thor666]

We applied a 50% discount , i.e. 30 airports to be achieved over next 5 years.

Hi curiousparty,

I am going to be the devils advocate and say that the recent wins by Stratech mare mostly for airports that are well funded. (Sg, hk, dubai). Reckon that poorer airports will still stick to conventional/existing FOD detection

So from that basis, I think you may want to look at a more stringent approach of the airports which are likely to be well funded.

I agree with some of the forummers. At this point Stratech does not have a competitive moat, but rather they are in an oligopolistic segment. As long as they keep costs down, expand well and start innovation in their products, they should grow with the market. Multibagger? Probably more of a three fold than ten fold at the moment, assuming good execution.


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[vesfreq]

We applied a 50% discount , i.e. 30 airports to be achieved over next 5 years.

Hi curiousparty,

I am going to be the devils advocate and say that the recent wins by Stratech mare mostly for airports that are well funded. (Sg, hk, dubai). Reckon that poorer airports will still stick to conventional/existing FOD detection

So from that basis, I think you may want to look at a more stringent approach of the airports which are likely to be well funded.

I agree with some of the forummers. At this point Stratech does not have a competitive moat, but rather they are in an oligopolistic segment. As long as they keep costs down, expand well and start innovation in their products, they should grow with the market. Multibagger? Probably more of a three fold than ten fold at the moment, assuming good execution.


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Hi,

I shall then be the devil's advocate's devil's advocate

I can't help but be quite curious also as to why it has to be well funded airports which have the finances to implement iferret? Is the cost so prohibitive? I did a google search and have come to nothing. (PS: Anyone happened to have a figure on how much is the cost of implementing iferret? It should be useful in assessing the affordability of such systems, from the "poorer" airports' perspective.)

It seems that its not so much about cost of implementation. If I operate an airport, the main deciding factor would be the cost of labour savings vs having the iferret. The savings should be more sizable, with greater daily frequency of flights. Using concept of absorption costing, more flights means cost of implementation and amortising of system operating cost can be spread to more flights. Airport could also up its taxes charged to each passenger taking a flight. The iferret operating cost (as such) may not eat into the airport's margins. Just a thought.

For heavily used airports and military airbases, its financially worthwhile.

IMO, the real hurdle may be selling iferret to airports with low frequency of flights. In such case, better to rely on manual labour. Not necessarily faster, though can be more convenient and more readily available.

Just my view.

PS: I had a random thought of using Stratech revenues to work backwards for the fees charged to the airports using iferret. May be a rough measure of how much that figure could be.

[thor666]

Vesfreq: I concur your view. Some of the YouTube vids still show militarymen scouring the floor for FODs, so that does say something about whether these places should spend millions per year on such a system - (I'm using the awards to hk and Dubai as reference). Though FODs are on another vid, one of the top 10 reasons for plane damage and costs.

Shall spend a bit more time digging the history of Stratech. Good management is critical. I noted that the company had 3 yrs consecutive losses before turning the corner.


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[Curiousparty]

Tks for all the contrarian opinions. Much appreciated

The assumption made was that out of the 10,000 or so airports in the world, only 2% would opt for some form of automated FOD system. The remaining 98% will continue with manual or human scanning.

2% of 10,000 = 200 airports.
Out of these 200 airports, it was assumed that iFerret only managed to secure 30% or 60 airports, even though Stratech appeared confident of eking out an lion's share.

What are a few millions of dollars to big international airports where operating costs can run up to hundred of millions or billions of dollars a year? It is akin to "changing to a new pair of tires" which can last you longer...

Was this assumption unreasonable?

tks.

Vesfreq: I concur your view. Some of the YouTube vids still show militarymen scouring the floor for FODs, so that does say something about whether these places should spend millions per year on such a system - (I'm using the awards to hk and Dubai as reference). Though FODs are on another vid, one of the top 10 reasons for plane damage and costs.

Shall spend a bit more time digging the history of Stratech. Good management is critical. I noted that the company had 3 yrs consecutive losses before turning the corner.


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[Curiousparty]

Stratech Systems iFerret FOD Detection System chosen by Dubai International Airport

Dubai International Airport, a top Middle East airport hub that handles more than 60 million passengers annually, has signed a contract with Stratech Systems of Singapore to manage its Runway Debris Management System.

The contract is for the installation of Stratech’s iFerret Intelligent Airfield/Runway Surveillance and Foreign Object & Debris (FOD) Detection System. Developed by Stratech, a market leader in RDMS solutions, iFerret is the world’s first intelligent vision-based FOD detection system, providing real-time, automated FOD detection, location, classification, measuring and recording approved by the U.S. Federal Aviation Administration (FAA). Covering the runways and taxiways crossings, it will help prevent potential aircraft damage and fatalities caused by FOD, ensuring airfield safety and security.

IFerret has also been deployed at Singapore Changi International Airport, Chicago O’Hare International Airport, and Dusseldorf International Airport. In September 2013, iFerret was selected by one of the world’s top Air Forces, according to Stratech, marking the first time that iFerret and any FOD detection systems had been installed in an airbase, paving the way for it to enter into a previously untapped market.

The FAA has published advisory circulars that provide directions on specifications and funding of FOD detection systems, and these have since been adopted as de-facto standards by airports globally. IFerret received FAA approval in March 2012. The company says that winning the Dubai contract is significant because, of the three systems approved by the FAA, the Stratech iFerret has beaten one and will be replacing the other.

“We are confident that iFerret will enhance aviation safety for travelers and employees in this very busy airport,” said Stratech Executive Chairman Dr. David K.M. Chew.

The contract was consummated in partnership with Bayanat Airports Engineering & Supplies Co., Stratech’s partner in the UAE. Bayanat has a successful track record of completed projects in the UAE, operating for the past 15 years in the region, with numerous projects in Dubai International Airport and Dubai World Central -- Al Maktoum International Airport.

“There are more than 280 commercial airports and military bases in the Middle East,” said Dr. Chew. “The aviation industry here is growing rapidly, supported by strong economic growth. There is great potential in this region for automated FOD systems, airside surveillance and network intelligence -- command and control for clusters of airports and airbases.”

Listed on the mainboard of the Singapore Stock Exchange, the Stratech Group delivers large-scale complex, real-time, mission-critical systems in the areas of intelligent vision, intelligent transport (air, land, and sea) and e-Systems for governments and businesses.

[Curiousparty]

iFerret is currently deployed at the following 6 airports:-

1. Changi Airport
2. Chicago O’Hare International Airport
3. Dusseldorf International Airport (Germany)
4. Dubai International Airport
5. Hong Kong
6. Undisclosed military airport ("one of the world’s top Air Forces")