G&H: 2021 in review, 2022 on the horizon
Dr. Stratos Kehayas, G&H Group Chief Commercial Officer and acting Chief Technology Officer, reviews a memorable 2021, and explores the progress and opportunities 2022 might bring for G&H and the wider photonics market.
Q: It’s fair to say that 2021 was not without its challenges – so what was the key to weathering the storm and even emerging stronger from it?
At G&H, it was about continuing to invest and innovate, continuing to operate safely, and reading the market carefully to position ourselves for future growth.
COVID, of course, made its presence felt. When it came into our world, it meant that we could no longer interact at work, visit clients or suppliers, and, in general, access to our innovation ecosystem was greatly reduced.
Adding to the general sense of strangeness and disruption, I recall that the drive to the factory to oversee anti-COVID measures during the early days of the pandemic was like a scene out of a post-apocalyptic movie.
But we stood up to the challenges and the business fared well as a result.
I remember the first thing we did was to set-up an exec-level team to quickly and efficiently respond to the developing situation. This included rapidly reconfiguring office and manufacturing space, dispersing desks and machinery, and moving communication and interaction onto a virtual footing.
We even reengineered manufacturing procedures, converting two-people processes into single-person operations. In one instance, this enabled us, despite the difficult circumstances, to hit a delivery schedule within a space programme that had very tight deadlines and a fixed launch window.
Via responses like these, the outcome was that throughout the pandemic we continued to supply key areas such as undersea communications, defense systems and medical devices.
Q: What is it about the way G&H does business that enabled it to succeed in 2021? What are its differentiators?
For us, this was about homing in on specific niche areas where we add value through a combination of product differentiation and technical heritage, enabled by strong R&D investment.
This positioned us to diversify into new market segments and, in turn, identify more specialist niche opportunities where there was an unfulfilled client need.
Vertical integration was also a keystone in 2021, enabling us to “move up the value chain” by offering functional modules and sub-systems containing the components we make in the UK and US.
The textbook view as to why this is an advantage to the customer is that controlling the supply chain can lead to price competitiveness. However, the real upside is in our ability to fine-tune the specifications of the components we make and that are used in the system being designed. A system is not simply a collection of parts – having customized and better-performing components that are optimally interconnected for the specific system in question is what delivers a strong differentiator.
And whilst any system is only as reliable as the components used to build it, its success is ultimately about much more than just hardware. For this reason, a major part of our strategy in 2021 was to continue investing in people and skills to embed manufacturing excellence at every level of our organization – building a commercial team that is technically-savvy and an engineering team that has commercial acumen.
Q: Which new products and solutions were developed and commercialized by G&H in 2021?
In 2021, we continued to invest in and execute on new product development, achieving record new product revenue across all our core markets of £18.1m.
Examples include a new electro-optic sighting system with thermal imaging for increased situational awareness, a new mid-infrared imaging system that delivers better visibility in challenging environments with limited lighting, new fiber coupler and acousto-optic modulator devices for semiconductors, and new components and sub-systems used in cardiovascular imaging.
Q: Can you give us a sense of some of the high-profile applications, projects, and missions G&H products were used in during 2021 in space?
Our development work in key space programs and missions continued apace in 2021.
This year saw our first fiber-optic amplifier systems and lasers launched into space on board the NEC Japanese Data Relay Satellite – the world’s first laser communication system launched in the geostationary orbit that makes use of the 1.55-micron infrared band.
2021 was another significant year for the acousto-optic part of our business. The NASA Rover successfully landed on Mars fitted with an acousto-optic tunable filter, made by G&H in Ilminster, UK, in its spectrometer instrument.
In general, we saw a healthy increase in demand in 2021 for components and modules for laser communications for satellite constellations, vindicating our past investments in designing, developing, and qualifying space photonics solutions.
Q: What did G&H achieve as a business in 2021, and what can you say about how the business performed overall?
In what has been a tough time for many businesses, our full-year reporting in 2021 painted an encouraging picture.
With pre-tax profits up almost 30%, an order book up nearly 9% on the previous year, and a strong cash flow position, we are equipped to pursue important new strategic goals in 2022 and beyond.
And with commercial aerospace and medical lasers staging a sustained recovery post-pandemic – and telecommunications and life science continuing to perform at a high level – the outlook for us and others engaging with these sectors is positive, heralding, as our CEO Mark Webster states, “substantial long-term growth.”
Q: How have market trends changed between 2021 and 2022 – and how is G&H ensuring it is in a position to respond?
Market dynamics are of course constantly changing, but currently the microelectronics and telecommunications industry is strong, driven by the Internet of Things (IoT), 5G roll-out and new fabrication facilities and foundries in the US and Asia Pacific.
The drive for zero-carbon electricity by 2035 and a net zero economy by 2050 will also underpin more innovation in the way we convert and use energy, and this will rely on being able to measure it – again, a photonics stronghold we are actively involved in.
On the life sciences side, the pandemic has shown how important analytics and diagnostics are, but beyond that the need for more point of care diagnostics and early diagnosis of chronic diseases will all require more optics and photonics solutions and components – in particular, for functional, real-time medical imaging and combined imaging and therapeutics.
Last year, we also invested in our new ultra-cleanroom in Torquay, UK, which will enable us to make couplers for semiconductor fabrication, and in the launch of our Optical Systems Innovation Hub, where we will conceive and design our next generation precision optical systems.
I often say that innovation happens best at the interface where different technologies or disciplines “collide”, and our planning certainly reflects this. We will focus on areas that combine at least two disciplines – for example, electronics and mechanics (mechatronics), or optics and mechanics (opto-mechanics).
In this way, our engineering team skillset will continue to evolve and be able to convert new, exciting business opportunities.
And that, at the end of the day (and year!) is what changing the world with photonics is all about.