Infrared expert Cedip plots rapid expansion

10 Nov 2006

Cedip Infrared Systems of France is forecasting growth of 20% in 2007 as the company expands into Asia and the US. Philippe Darses, co-founder and managing director at Cedip, talks to Jacqueline Hewett about how to make money from infrared imaging.

Strong financial results for the first half of 2006 and a million-dollar contract to supply equipment to the US Army are just two of the reasons for the current confidence and optimism at infrared camera maker Cedip Infrared Systems of France. Sales for the first half of 2006 came in at €7.7 m, an increase of 19% on the same period in 2005, and the company is in no doubt that it will achieve its target of 10% total group growth by the end of the year.

Cedip also plans to carry this momentum into 2007 and is forecasting a group growth of 20%. Other moves on the cards include an increased presence in China and the US through either establishing subsidiaries or making acquisitions. Given the company's successful track record, there seems little doubt that Cedip will be the one to watch in 2007.

Three specific areas

The current growth is a far cry from the company's humble beginnings in 1989 when Pierre Potet and Philippe Darses founded Cedip to develop electronics and software for infrared camera users. "We got our first customer in France and then some additional business in Europe," Darses, now managing director of Cedip, told OLE. "We moved to a new location and quickly grew to 10 people."

Darses explains that the firm moved gradually into camera technology and began extending its product line and manufacturing facilities. "Today we are 60 people and have subsidiaries in the UK and Germany for sales," he said. "Last year we bought PolyTech of Sweden – a maker of airborne stabilized equipment – and this extended our product range. We now export 85% of our products."

Today, Cedip's extensive product portfolio includes systems in all three main wavebands of the infrared domain: short-wave infrared, 1–2.5 μm; mid-wave infrared (MWIR), 3–5 μm; and long-wave infrared, 8–12 μm. The company uses mercury cadmium telluride and indium antimonide detectors, and offers system performance ranging from standard to high-resolution.

"A typical camera criterion is sensitivity – its capability to detect temperature," said Darses. "Our products start at 10 mK, which is the ability to detect changes in temperature in the order of one hundredth of a degree. Distance of detection is also important and this can be anything between 1 and 10 km, depending on the optics."

Cedip's success comes from a unique combination of expertise in electronics, optical design, precision mechanics and software. "We have two main detector suppliers and we subcontract the manufacture of the mechanical, optical and electronics parts," explained Darses. "We assemble and calibrate our systems in a 400 m² clean room and our products are subjected to rigorous testing. Each camera is calibrated individually and is completely traceable through our standard ISO procedure." The company then targets its products at three areas: instrumentation and industrial control; civil and security surveillance; and airborne systems.

One niche market, which Darses estimates to be around 5–7% of Cedip's business, is the use of MWIR cameras to perform mechanical testing in the automotive industry. Here, a component is stressed at various frequencies and an infrared camera monitors the temperature reaction of the material.

"We started with the automotive companies and now we are one step down the chain working with the suppliers to the automotive industry," said Darses. "Automotive companies such as Honda and Toyota asked their suppliers to invest in this equipment. This is a big market in Japan for us."

Contributing to the civil and surveillance side of Cedip's business, the company has just secured a million-dollar contract to supply six high-performance, high-resolution cameras to a US Army research centre. The idea is to use the cameras to detect ground-to-air shoulder-fired missiles known as MANPADs (man-portable air defence systems) in an airport. "Imagine six infrared cameras mounted in a circle every 60° so that they can inspect the full area of the airfield," said Darses. "The cameras can detect the heat trace from the missile and locate where the MANPAD has come from and alert other equipment. We will have delivered all of the cameras by the end of October."

Darses says that this is the second such contract that Cedip has secured. "The customer is still testing and demonstrating the system," he said. "But if it works, I believe that it will be significant recurring business for Cedip."

According to Darses, the surveillance and airborne markets are up and coming and will be the fastest growing in the near future. "Surveillance applications are around 30% of our business and we expect this to grow very quickly," he said. "Our acquisition of PolyTech gives us airborne capability. This is currently 15% of our business, but again, we predict rapid growth."

As well as offering a portfolio of standard products, the company also takes on customized development that Darses estimates to be 20% of the total business. As an example, he describes an inspection system designed to detect defects in nuclear power plant components.

"This system was designed for Areva [a leading constructor of nuclear power plants] and is typical of the development that we are capable of," said Darses. "The camera is mounted on a robot and goes into contaminated areas. It is capable of performing real-time inspection to detect defects in the inspected part."

Turning from applications to geography, Cedip is keen to expand into Asia–Pacific, especially China, and the US. "We have strong and recurring orders from China but we believe that if we were present there permanently we could do a lot more," said Darses. "The signature analysis market is very strong in China, and R&D is also coming on very quickly."

Cedip's strategy for expanding into the US revolves round creating a subsidiary. "The US market is half of the worldwide market for infrared imaging, so naturally we want a share of this," said Darses. "We hope to establish a subsidiary in the US in the first half of 2007 and then in China in the second half of next year. We plan a 20% growth in 2007 – this is in terms of sales."

It remains to be seen whether Cedip can follow through on its plans but, given the company's recent track record and financial performance, it seems highly likely that Cedip is the company that we will all be hearing more of in 2007.