Maybe CPH might finally take off?

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    Success is in the pipeline for fibre-optic trailblazer
    By Pam Kershaw
    June 15 2002

    A small Australian fibre-optic company is challenging some of the world's largest perimeter security organisations as a result of heightened international security fears since September 11.

    Future Fibre Technologies Pty Ltd, a company founded eight years ago by Canadian-born Edward Tapenes, turns over just $5 million a year.

    But its fibre-optic sensing technology is being trialled on the 4000-kilometre United States-Mexico border and the company has fielded about 40 international inquiries for multimillion-dollar contracts to monitor gas and petroleum pipelines.

    Bill Younger was recently appointed the firm's chief executive, with a brief to manage the company's rapid growth, focus on core products, develop international marketing alliances and plan future development.

    While Younger has yet to complete his business plan, he predicts the company will be turning over $50 million within three years and $100 million within five years.

    Future Fibre Technologies has received inquiries for fibre-optic sensing systems to check the integrity of everything from jet engines to turbines and railway tracks to aircraft structures.

    "We've got inquiries from so many different organisations, but we've been rejecting a lot of them," Younger says. "The focus of the company is now on the three primary products which have the biggest international market."

    These are an IT security monitoring system, which uses existing fibre cable communication links to provide early warnings of tampering or intrusion into the link; a fully automated perimeter security system that detects intrusions along fences, boundaries or high-security areas; and a pipeline security system that detects and locates leaks, illegal taps or excavations around oil and gas pipelines.

    While the firm is not the only one to offer security systems using fibre optics, Younger says its world-patented system is superior to competitors' products.

    It can install security zones of up to 50 kilometres in length and its locator technology can pinpoint a break-in or sabotage to within 20 metres.

    Competitor systems are not capable of running such long zones and cannot pinpoint a break-in, he says.

    The bigger the project, the more price-competitive the company's products become.

    In installations of up to one kilometre, its price of $US60,000 ($105,000) compares with competitors' costs of $US50,000. Future Fibre's price falls to $US30,000 for the second kilometre and to $US4500 after about 10 kilometres.

    "For our competitors, it's $US50,000 for every kilometre they want to run," Younger says.

    Monitoring and maintenance costs are also significantly reduced. The glass fibre-optic cabling does not corrode and the long security zones and locator technology mean the cost of employing border patrols or security forces is substantially reduced.

    The company has installed about 30 security systems internationally, most of them in Asia.

    It is now talking with major petroleum companies such as BP, Exxon, Amoco and Shell about pipeline security and will start trials in the US this month.

    "There is no other product capable at the moment of checking for pipeline interference, where somebody is just randomly digging with a backhoe or bobcat and damages the pipe, or terrorist activity where they could completely disrupt oil or gas supplies and cause major damage," Younger says.

    This market holds the greatest international potential for the company's systems because there are "hundreds of thousands of pipelines around the world".

    Terrorist threats in the US have also heightened concerns about protecting essential services and facilities that could put whole cities at risk were they attacked, including energy infrastructure, water supplies, financial services, data centres, airports, bridges and roads.

    The firm plans to open a US office this year. As it has identified its strengths as development and manufacturing, not sales and marketing, it is also choosing international partners to market its products worldwide.

    Younger's appointment allows Tapenes, who developed his fibre-optic expertise when working for the Canadian air force, to focus on research and development of next-generation products.

    Younger, meanwhile, is trying to find additional technology, production and training staff to build the firm's workforce of 15 people. "One of the biggest struggles is just the growth we're going through at the moment," he says. "We're trying to find the right people and get them on board quickly enough to really capitalise on the demand that's in the marketplace."

    The company has so far funded its growth from investments by stakeholders including JB Were's Private Equity Fund, CPH Investment Corporation, Seafirst Australia and a number of private investors. It intends raising capital in the US, probably in the next six months.

    There are plans to float, but Younger can't see this happening within 18 months. "We would want to have a very solid foundation first."

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