Up in the air

14 Dec 2011

Author: Cameron Cooper

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MTECH Systems, a Victorian-based company, is forging a reputation as a smart exporter of aviation meteorology technology.
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Safe landings come from understanding the prevailing weather conditions and associated risks. MTECH Systems, a Victorian-based company, is forging a reputation as a smart exporter of aviation meteorology technology courtesy of its meteorological sensors and advanced weather systems, including a cloud height sensor (providing accurate cloud data), a transmissometer (measuring visibility) and the lightning strike sensor (detecting storm and lightning activity). These sensors form the main components of systems used at airports around the world to assess weather conditions and manage associated flying risks.

MTECH has secured two major export deals in the past year. In India, it is supplying 30 runway visual range systems, which assess the visibility available to aircrafts on runways. These systems will be supplied to air bases as part of an air force program to modernise infrastructure. If the project goes to plan, there is an option to roll out the technology at 30 more airfields around the country. In Taiwan, it is providing 14 aviation weather observation systems to the  air force.

With its origins dating back to 1923, the early product range for MTECH’s forerunner included conventional meteorological equipment such as barometers and temperature gauges. Today, the privately owned company delivers a sophisticated range of meteorological information and automated control systems to air traffic controllers and meteorological professionals. Its staff cover the gamut of experience from the engineering, computing, telecommunications and electronics industries as well as civil, military and meteorological organisations. Exports are crucial to the operation, with 98 per cent of sales coming from overseas markets such as Europe, Asia and Africa.

CEO Jeremy King says international airports represent the company’s major market. “Aviation weather systems for military applications and airports are our core business, but increasingly we are supplying products like lightning detection systems for mines, railways and military ammunition depots.”

Over its long history, MTECH has been conscious of continually evolving to meet market needs. About five years ago, it engaged in a research and development program to upgrade all its key products. “So we went from … a portfolio of ageing core products to having innovative, class-leading technologies. Investment in the latest designs and some attractive product features took us from being the last in the pack to one of the first in the pack,” King says.

He is confident the investment in MTECH’s technology will continue to pay off, while price advantages over rivals also give it a competitive edge. “Australia is less expensive to manufacture in than some of our competitors ... In places such as Finland, Germany and France, the cost of manufacturing inputs can be very high.”

While King concedes that of the top five or so players in aviation meteorology, MTECH is “the smallest of the big boys” in terms of size and scale, he believes a global economic shake-up will play into his company’s strengths. In particular, he expects the rise of Asian powerhouses such as China and India to aid the cause.

“In Australia we have emerging markets which are positioned right on our doorstep, when compared with Europe and the US, so China and some of these exploding Asian countries, such as India, are much easier for us to service being close to their time zone. We expect this proximity to the emerging markets to give us a competitive edge over our European counterparts into the future.”

Climate change is also creating demand for weather-related technologies. “Global warming seems to be having an increasing impact on our lives, businesses and organisations, so there’s a renewed focus on the need for accurate weather data. This is especially true in civil aviation where we now have bigger planes with more people on them, flying closer together and in increasingly difficult weather conditions,” says King.

Growth in civil aviation as airports add new runways, and new tourism hot spots such as Vietnam emerge, represents another growth channel for MTECH. However, it is China that potentially holds the key revenue opportunity. “You don’t really need to say much about China. It speaks for itself,” King says. “There are some incredible statistics about plans to open 45 new airports in the next five years. It’s just a phenomenal amount of growth there ... It’s a market we are looking to for significant growth.”

Indeed, MTECH’s export activities stretch far and wide and include smaller nations such as Nigeria, Paraguay and Vietnam. While the company is eager to explore such markets, King says it remains vigilant about contractual and funding agreements in countries such as Nigeria, which has a chequered international business reputation.

“Dealing reliably with foreign banks and making sure that all your commercial arrangements are absolutely watertight is obviously critical everywhere, even more so in some developing markets. Being assured of your business partners and the legality of their operations is always vitally important as well.”

MTECH won the Small Business Award at the 49th Australian Export Awards in December 2011.