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Market Pressure Drives Connector Innovations

June 12, 2009
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Dr. Bernd Niedermann’s university studies were on Economics, Communication Science and Chemistry at Freiburg, Mainz, Germany; St. Gall, Switzerland and Princeton, Ryder College, USA. He has been Head of Corporate Communications at HUBER+SUHNER AG, Pfäffikon, Switzerland, since 2007. Before that he held positions as Head of Corporate Publications at GEORG FISCHER AG, Senior Press Officer at NATO and CEO of Precision GmbH (Building Technology), Dresden, Germany.

MWJ: Two family-owned Swiss companies evolved independently before merging to form HUBER+SUHNER AG in 1969. Can you explain briefly how the company has evolved during those 40 years?

Niedermann: Over that period the HUBER+SUHNER Group has evolved to become a leading international manufacturer of components and systems for electrical and optical connectivity for communication, transportation and industry. It has achieved this status by drawing on core competencies in the areas of high-frequency, fiber optics and low frequency. The comprehensive product range includes coaxial, fiber optic and copper cables, cable systems, connectors, antennas and lightning protection components.

MWJ: What have been the major milestone achievements during that period with regards to the RF/microwave and wire/cable products?

Niedermann: We are proud to say that there have been a lot of very good products that have helped us to be successful, so I’m quite reluctant to pick out one as a being a ‘milestone’. More important and challenging, in my opinion, especially in the RF field, is the future and I would rather focus briefly on a couple of products that are driving the company forward.

For instance, sectors of the coaxial connectors’ market are becoming increasingly exposed to competition and price pressure from Asian manufacturers, so HUBER+SUHNER is focusing its efforts on innovative products in the high Gigahertz range, which are far more demanding in terms of development and production. The new MMPX connector generation for frequencies of up to 65 GHz is used as standard by various manufacturers of high-tech test systems.

The demand for high-quality microwave cables is constantly increasing too. The recently developed SUCOFLEX 400 cable family for applications in antenna and medical technology has met with a very positive response from customers. Also, the ground-breaking EACON system, consisting of a field-assembled microwave cable, provides us with access to the aviation market.

MWJ: Your key markets are Communication, Industrial Applications and Transportation? Please explain the company’s key activities in each of these areas.

Niedermann: Basically, we aim to be successful in these three markets with our three technologies Radio Frequency, Fiber Optics and Low Frequency.

Antennas for wireless connection within public transport facilities are developing into an interesting application. These include railways, buses and ships. The need to access the internet via WLAN when travelling to work, and to have access to data, is leading to the establishment of specific communication networks and WLAN hot spots, for example in railway carriages. To cater for this need, HUBER+SUHNER offers high-tech antenna solutions with high broadband capacity, enabling signals from a wide range of services to be transmitted simultaneously.

These services include, for example, video data from security cameras in trains, and operating and control system data exchanged between the moving train, the train driver and the control centre, ensuring a safe and efficient journey. Thanks to the high broadband capacity far fewer individual antennas are required per train than if each system were served separately. As well as the antenna itself, HUBER+SUHNER also provides the most suitable connector technology and all the necessary cables and connectors, thus acting as a single-source supplier.

The LF division’s existing relationships with manufacturers and operators of railway systems represent a competitive advantage. These relationships facilitate the antenna team’s access to the market and ensure that we are totally familiar with the standards which apply in this sector.

The high-tech radio frequency cables and components business with customers in the space and defense sectors is one of HUBER+SUHNER Radio Frequency Divisions’ specialist areas. Of particular interest is the large-scale order for the Eurofighter Typhoon aircraft’s defense system, placed in 2008. This order, which will be processed over the coming year, is for assembled radio frequency cables and connectors for the second batch of 236 aircraft. Another attractive order in the space sector is for the supply of high-quality fitted cables for use in the Global Star 2 satellite program. Space travel requires the use of extremely light cables which can withstand temperature fluctuations of over 400°C and transmit distortion-free signals.

Building on the reliability and accuracy of its radio frequency products, HUBER+SUHNER is currently establishing itself as a top supplier of medical technology for applications in diagnostic equipment, radiotherapy, patient monitoring, and for minimal invasive solutions for micro surgery. The recent development of the SUCOFLEX 400 microwave assembly family ensures that the company will continue to cover the latest needs of high-tech niche markets. The test and measurement market segment benefited especially from close cooperation with our global key customers and our well established products. The Malaysian-based assembly lines for our SUCOFLEX fitted microwave cables have been extended to ensure that one of the main production plants of the leading manufacturer of test and measurement systems can be served with even more efficiency and flexibility.

MWJ: Does this diversification help to spread the risk and does current performance in a particular sector affect future investment in that sector?

Niedermann: We are convinced that our strategy of diversification initiated by our CEO Urs Kaufmann in 2002 not only helped us to spread the risk but also helped us to gain market share in attractive niche markets. Our investment strategy is not affected by the current performance of a particular sector and investments are normally long term.

MWJ: HUBER+SUHNER’s motto is Excellence in Connectivity Solutions. What is the company’s definition of ‘connectivity solutions’?

Niedermann: On the one hand it means the ‘connectivity’ of all our products, systems and engineering to ensure perfect data flow. On the other hand, we aim to be very closely ‘connected’ to our customers in order to deliver a perfect service.

MWJ: How does the company fulfill this commitment to excellence and still remain competitive, especially in the current economic market?

Niedermann: In three words: Quality, Quality and Quality.

MWJ: Although based in central Europe HUBER+SUHNER is very much a global company. Please outline the depth of your global activity in terms of subsidiaries and distributors.

Niedermann: The company has a global presence with 18 subsidiaries and representatives in over 60 countries around the world. We also work closely with over 40 distributors. We try hard to serve our customers in most countries whenever possible and last year, for instance, we established a subsidiary in Dubai.

MWJ: Geographically what are the company’s key markets?

Niedermann: Traditionally Europe is the key market for HUBER+SUHNER. Overall Asia has become very strong over recent years while activity in North America has weakened. The BRIC countries have delivered good growth rates and have good potential for further growth.

MWJ: Do you develop and market products for specific geographic markets and if so to what extent?

Niedermann: Not especially for regions but ‘customizing’ products is a preferred business for HUBER+SUHNER.

MWJ: The company’s Group activities are controlled through the HUBER+SUHNER Global Management System? How does such a system operate and what are its advantages?

Niedermann: As I mentioned earlier, to be as close to our customers as possible we have established 18 subsidiaries and work together with about 40 distributors worldwide. This is indeed a challenge for the Group management. In short: We identified a number of key ingredients that our subsidiaries deliver to the Group. We established yearly meetings of the General Managers and the Executive General Management. Transparency, flexibility and concise working practices are the main targets within our Global Management System.

MWJ: Environmentally beneficial business activities are a declared element of HUBER+SUHNER’s corporate policy? Please explain why the company has taken such a ‘green’ stance and the extent of this policy?

Niedermann: I wouldn’t say it was just ‘green’ but also the company’s ‘blue’ corporate color that describes the sustainable activities of HUBER+SUHNER! The company has a Group-wide mandatory commitment to careful handling of resources and emissions that has achieved positive results during the last 15 years. Like many other entrepreneurs the company has recognized that saving energy and resources also has an economic impact in terms of cost reduction.

HUBER+SUHNER also has significant market share in the fields of renewable energies such as Solar and Wind. The company’s sustainability-oriented environmental policy, and the specific environmental objectives derived from it are gaining widespread recognition. Ethos, the Swiss Foundation for Sustainable Development, awarded HUBER+SUHNER its second highest rating.

MWJ: How important is research and development to HUBER+SUHNER?

Niedermann: Essential. However, the company does not innovate as “l’art pour l’art”. There is actually a continual innovation process. In many cases we work closely together with our customers in the sense of ‘simultaneous engineering’ to meet their needs right from the beginning of a product cycle.

MWJ: What particular fields of technology is the company currently targeting?

Niedermann: We are putting particular emphasis on the optimization of materials for our cable and cable systems. And very interesting fields for us are applications for Solar and Wind power plants and for hybrid technology (automotive) and electric motors. We are also targeting the wide field of RF antennas and connectors for harsh environments.

MWJ: At the company’s Annual General Shareholders meeting in April it was announced that HUBER+SUHNER’s sales and operating figures had increased from CHF 732 million to CHF 760 million in 2008. However, the company recognized that there had been a significantly slow start to 2009. What particular measures are you putting in place to address the economic downturn?

Niedermann: HUBER+SUHNER will monitor the development in its various markets very carefully and, where necessary, adapt its cost base as socially acceptable as possible, but also strictly according to the prevalent market conditions. However, the company will adhere to its strategic growth initiatives and corresponding development projects.

MWJ: HUBER+SUHNER has successfully reached the 40 year landmark. What are the company’s key strategies that it is employing to sustain that success now and into the future?

Niedermann: One important point is the very solid financial situation that gives HUBER+SUHNER the entrepreneurial flexibility to invest in the Group’s future despite an increasingly difficult environment and to seize the opportunities that will open up. As has been the case for the past 40 years, we will continue to strive to meet the needs of customers throughout the world and distinguish ourselves with continual innovation. At the heart of our offering is a broad range of products and consistent high quality, backed up by fast, flexible and reliable services. We concentrate on complex applications that allow us to differentiate ourselves, representing usable added value such as expanded product functionalities, customer-specific innovations and engineering.

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