What are some of the upcoming initiatives that Astronautic Technology (ATSB) has planned for 2012?
ARSHAD: We are currently looking at the next generation of satellites. As you know, we recently completed our second satellite, RAZAKSAT. We are now moving on to a third satellite, which the government approved in 2010. We have been appointed as the main contractor for the project. We are also planning to implement another program for communications satellites for which approval was given in 2008. These are the two major programs for space we are working on. In addition to our space projects, we are also embarking on many downstream activities. This is something we are aggressively pursuing and the target market will be ASEAN countries and perhaps the Middle East as well.
What is the composition of the upstream and downstream activities of ATSB?
ARSHAD: Our upstream is basically the space assets. The downstream mainly includes applications. The number of people buying satellites is very limited, but the number of people that are using applications is much higher. ATSB should be looking at a mass market rather than just a specific niche market for those interested in our space assets. We would like to be able to position ourselves as end-to-end service providers. We are a company that offers space assets, as well as downstream activity to users. Many years ago, we focused much more heavily on satellites, our space assets, but in the last 1 to 2 years we've also become remote sensing data image providers for example. Additionally, we provide communications data, GPS and varying applications of science. In 2007, we strongly supported the National Astronaut Program by providing many of the scientific applications in addition to the logistics and all of the downstream activity. There is a lot of money in the downstream activities for us. If you look into the present world market for space, 30% is for the upstream, and 70% is very much focused on the downstream. We therefore do not want to neglect this significant portion of downstream activities.
What are your target markets?
ARSHAD: Within the ASEAN region we see many emerging economies progressing similarly to how Malaysia progressed over recent decades. Malaysia has certainly taken a leadership role in the space business among ASEAN countries. We have been acknowledged by different agencies for our leadership role and now we must move beyond Malaysia because space is very much a global business. To be able to sell our products and services strictly to Malaysia is not feasible. We mustn't be dependent on the government budget, but rather we’d like to see business expand overseas. It would be easy to jump on the bandwagon of the rest of the world by looking to the European and American markets. Rather than doing that, we would like to first take a small step by looking to expand to the ASEAN countries. These are our neighboring nations where we as Malaysians understand their cultures much more than companies from different parts of the world. Further, we will likely target those members of OIC (Organization of Islamic Cooperation) and by doing so we hope to capture some of the Islamic market. Considering the fact that Malaysia is a Muslim country, we understand their cultures a bit more. We believe that we can offer them hi-tech services and more. That being said, we are in fact looking at the European market as well, for there are many interesting opportunities that exist. America is a great market but there are many restrictions for foreign companies that want to do business in the US, particularly in the space industry. There are many regulations that simply do not allow foreign companies to engage in many activities that would facilitate their growth. For example, the International Trade Administration (ITA) imposes many regulations on foreign companies. We have experienced the effects of these restrictions and regulations for many years and have concluded that we cannot continue to attempt to do business in the US. Even our European counterparts must appoint American personnel to their attaché in order to be able to work in the US. We've thus concluded that the American market is a no-go for us.
You have partnered in the past with both European and Russian companies. Will you continue to work with partners from these regions? Who else are you looking to partner with?
ARSHAD: In addition to our search for new partnerships, we are always strengthening our existing partnerships, including with the Europeans and Russians. In fact, for many of our future projects we are talking to some of our existing partners to work in concert with us as we expand our horizons. Because space is a niche industry and such a complex business, there is a long process before coming to agreement on one deal. It is therefore important to have trust in partnerships and build upon that trust over many years. We are looking to forge new partnerships in many parts of the world. Within Europe, we are looking for new partners in Spain, Austria and Italy in an attempt to capture new market share. In this capacity, we hope to leverage Malaysia to be partners with companies from such countries so that we can better position ourselves to sell to the world at large. Moreover, it is not our aim as a country to position ourselves as ‘the cheap labor’ any longer. If Malaysia is going to sell to the world, it must be in the realm of technology and not cheap labor. We should be past the era of cheap labor.
Has Malaysia gotten enough worldwide recognition for its achievements in terms of rapidly developing as a leading space program in Asia?
ARSHAD: Within ASEAN, we have been the leaders for the last 10-15 years. Last year, we were short-listed by Frost & Sullivan as one of the top five organizations among space agencies. The other companies were from Australia, Japan, South Korea and Singapore. This is indeed an acknowledgment of our achievement. The main difference between ourselves and most other leading agencies is that we do not have rocket technology. If we were allowed to have such technology, Malaysia would be much further ahead when compared to other nations. We have had issues with the Missile Technology Control Regime (MTCR), which Malaysia is not a member of. In order to have rocket technology, a company’s home country must first be a member. We cannot become a member because we have not been invited by the US to join. Space is very much a dual-use technology industry, both for civilian and military purposes. Unfortunately, Malaysia has not reached the point yet, where space research, for military purposes for example, has benefited the civilian population. The truth is we are a friendly nation to the world and the US has been friendly to Malaysia; it is a government decision that Malaysia is not yet a member. I've been talking to colleagues within the government departments, and they are making efforts for us to become members of MTCR in the future.
How would being a member of MTCR change things for ATSB and the Malaysian Space industry?
ARSHAD: Being a member, would allow Malaysia to offer comprehensive solutions in terms of space technology. Being near the equator, it would be ideal if we were able to launch our own satellites into Space. One of the main challenges for small countries like Malaysia and all over the world is being able to launch satellites. We can build the satellites, but the carrier to space is very much limited. In 2009 when we launched our first satellites to the near equatorial orbit, which is a unique orbit, that nobody else has gone to. We launched our satellites into this orbit because it benefits us here close to the equator. Meanwhile, the rest of the world is orbiting satellites from pole to pole because of their positions on the globe. People often ask me why the European nations and the Americans are not launching satellites to the orbits closer to the equator: if they were to launch to this orbit they would not benefit from the satellites. They won't see themselves because they are at such high latitudes. Here we see the opportunity to offer something that is niche. We spoke to NASA, JAXA (Japan Aerospace Exploration Agency) and the Russian Space Agencies regarding this topic. They are actually very excited because nobody understands the equator. There are many oceans on the equator and this is where el Niña originates. Scientists are eager to understand what happens within this region and there is not much scientific information regarding the space environment here. There is also a great deal of radiation, which is not being wholly characterized. People understand the Southern Atlantic Anomaly (SAA) but nobody understands what is within the equator. The fact that they do not understand is because they do not have enough scientific data to support their complete understanding. So, this is where we see Malaysia can take a leadership position. Just two years ago we were in Abuja, Nigeria, and the African nations agreed that Malaysia take leadership of the equatorial constellation programs. We are still talking to the Nigerians and other African nations close to the equator regarding how to initiate such exciting programs, which would benefit the equatorial region.
To be able to sell our products and services strictly to Malaysia is not feasible. We mustn't be dependent on the government budget, but rather we’d like to see business expand overseas. It would be easy to jump on the bandwagon of the rest of the world by looking to the European and American markets. Rather than doing that, we would like to first take a small step by looking to expand to the ASEAN countries.
To what extent does ATSB rely on the Government to assist with satellite operations, the construction of projects, and overall operations?
ARSHAD: ATSB is like any other business entity. We do not receive funding from the government in terms of operational or capital expenditures. We do bid for jobs and in the last 15 years our main income has been from government projects. I think that for the space economy all over the world most companies’ business model relies entirely on the government. This is true in the US, in Europe, in Russia and in the rest of the world. In space, the government still drives projects. NASA still gives billions of dollars of awards. What motivates industries to do it is ‘ spin-off’. We want to be able to challenge the space technology industry to later utilize its successes on the ground; space research and development challenges engineers and scientists to do something much more significant. We are now using our iPad and our small iPhone, which are technological evolutions that originated from space. We also understand that much of the research benefits the medical field. Many advances in the treatment of cancer come from space as well. Space research has provided the micro-gravity conditions that cannot be produced on the ground and things can be developed and researched much more in depth on the ISS (International Space Station) for example. This is something people are putting billions of dollars into and the key element here is that all nations are investing for the future of technology. I have always promoted that if Malaysia wants to become a leader and a significant player in the future, we must invest in technology. There's no two ways about it. Malaysia must invest, and keep investing in R & D. For technology, the reward is not tomorrow; it takes years for the rewards. Malaysia must be able to spend the money today for future generations and companies within Malaysia to benefit. Looking back on the last 55 years, I ask, what is a product Malaysia can be proud of having produced? We don’t have any products. If we strategize and have a clear roadmap, in terms of a technological roadmap, then we'll know how to develop our competencies, and god willing, within the next 5, 10, 15 years, Malaysia will be known to be able to produce technology that is used by the world.
What will Malaysia’s position be in the ‘Space Race’ looking into the future?
ARSHAD: Space is for the world’s benefit. In the beginning, Malaysia and many other emerging nations, has felt a sense of inferiority. We believed then that space is a white man’s technology. This however is not true because we know that space has no boundaries. It reaches out to all humankind. One of humankind’s challenges is attaining prosperity. The truth is that the space business reaps many benefits for the people, in terms of prosperity. I would like to see more companies within Malaysia involved in space. Over the last 15 years, we have been the only space company. People don't see the potential gains to be had from investment in space technology. People need to see that space benefits the people.