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PCO’s President: “We’re planning to carry out works in new areas.” Focus on Military and Civil Markets. [Interview]


“In a longer run we’re planning to carry out works in new areas too, which would make it possible for us to reach both military, as well as civil markets”, states Krzysztof Kluza, PCO S.A. President, during his interview for “Here we’re referring primarily to space technologies – optoelectronic components for satellites and ground [control] stations”. Within the conversation, the PCO’s representative also covers the issue pertaining to involvement of the company in the ongoing modernization programmes pursued by the Polish military.

Jędrzej Graf: PCO acts as the primary supplier of optronics for the Polish military. In 2016 a contract with a value contained in an amount of 350 million zlotys was signed, which seems to be the most significant procurement of this kind in history. Some of the equipment is going to be received by the Territorial Defence Component of the armed forces. What are the main plans the company made for the year 2018, to make the best use of the development opportunities?

Krzysztof Kluza, PCO S.A.’s President: We’re involved in a number of modernization programmes. We are already active in case of the initiatives pertaining to fighting vehicles, Leopard 2 main battle tanks, Krab howitzers or Rak self-propelled mortars.

However, one must admit that the upcoming year is going to be unique, in many areas. First of all, the investment scale is going to be greatly expanded. We are also going to intensify our R&D activities. It is also our intention to greatly increase our involvement on the export markets.

When it comes to research and development efforts, will the company be focused on the existing products, or is the management board going to look towards any new domains?

R&D works will take place in several areas. Most definitely we’re going to get involved in modernization of the existing systems, for instance in the area of thermal imaging. Demand concerning better and better sights and thermal imaging cameras is growing, and our company, consequently, is responding.

PCO is also willing to integrate the existing solutions. Here I am referring to the 360 Degrees Observation System for instance, or cameras fitted with automatic target tracking systems (videotracker). Similar activities were taking place at the company beforehand, however the scope of the undertaken work is going to be extended.

In a longer run we’re planning to carry out works in new areas too, which would make it possible for us to reach both military, as well as civil markets. Here we’re referring primarily to space technologies – optoelectronic components for satellites and ground stations. These systems include telescope components and datalinks based on optical technologies. This is a long-term plan, which may fit well in the project aimed at building the Polish satellite. We will be able to offer similar services to major global brands.

We also want to get involved in works on innovative technologies, such as holographic near-eye displays providing the user with 3D imagery. This is yet another example of a product which can find broad field of military and civil applications. Devices as such could be offered to firemen, air traffic controllers or even healthcare employees. The programme would be pursued in collaboration with the research institutes.

According to the assumptions of the Polish National Space Programme, the domestic industry is expected to be involved in building of the first and subsequent optoelectronic satellites.  Is PCO ready to participate in these operations?

We have created a roadmap already, for the technologies destined to be used in space applications. Our analyses suggest that within 3 to 4 years we’d be ready to deliver equipment that would be qualitatively comparable to the solutions available on the global market. We assume that not only would the said hardware be used in the domestic programme, but also by the commercial customers.

Here we’re referring primarily to investment in microsatellites, weighing around 100 kilograms. Thanks to the above we will be able to series manufacture our hardware, instead of focusing solely on long-term and costly projects for standard satellite solutions. Obviously we’re intending to get involved in both areas.

Let’s discuss the land programmes. Back in December PCO declared its readiness to modernize tank optronics in case of the upgraded Leopard 2 platform. What is the current stage at which the said project finds itself, when it comes to involvement of your company?

Recently we have showcased our solutions in Germany, because during the first phase they would need to be accepted by the foreign partners. We have received positive feedback. At this stage our view is that the programme proceeds as planned.

I’d like to recall the fact that in case of the Leopard 2PL programme, PCO delivers thermal imaging cameras both for the panoramic commander’s sight, as well as for the gunner’s sight, or the night/daytime camera for the driver – the reversing camera. When it comes to the finances, this is one of the most significant contracts where our involvement remains clearly visible. The works are based upon a long-term contract, thus the company is going to receive only a certain portion of the remuneration amount this year, while the remaining income is going to be distributed across the upcoming years.

Last year PGZ presented its proposed upgrade package for the T-72 main battle tank. The vehicle was equipped with components developed by PCO. SAVAN-15 fire control system, however, was delivered by a foreign partner, even though its counterpart: SKO Radew solution, had been in the making before.

So far, analytical conceptual phase has been in progress, when it comes to the T-72 upgrade programme. The analysis is being carried out by the Armament Inspectorate. Bumar-Łabędy is the leading entity belonging to the PGZ Group. PCO representatives have been involved in a series of meetings aimed at developing the scope of the programme.

Among the products we can offer, one can find NVG solutions, SOD 360 Degrees Observation System and Obra self-protection suite. We are also scrutinizing the option of using other components of ours on T-72. However, this would depend on the requirements defined by the military.

Let’s address the issue of the foreign marketplace. Last year an agreement was signed to deliver night vision systems and cameras for the Ukrainian BRDM, BTR and BMP platforms. Ukroboronprom was acting as the main partner. What stage has been reached when it comes to implementation of the said agreement by PCO? What are the further prospects of cooperation with the said partner and what are the export prospects for the Polish company?

Undoubtedly we’re willing to maintain our continued presence on the European markets. Cooperation with Ukraine, when it comes to observation systems for the fighting vehicles, is still going to be expanded. Not only are we offering vehicular optoelectronics on the Ukrainian and other European markets, as our offer also includes NVG systems for aircrews, including helicopter crews.

The latter group of products is especially attractive for the EU member states, as it was recently certified by EASA for civil applications. We have already received our first order concerning the civil PNL-3M “Orlik” goggles from Norway. In case of the EU member states the product in question enjoys strong interest. At the moment we’re also working on certifying the said product according to the FAA requirements.

Furthermore, Asian and Middle-Eastern markets have a key significance for us. Our equipment may be used to modernize main battle tanks, including the T-55. One of the states is already testing the SOD 360 Degrees Observation system. We are also delivering inventory for the special operations forces.

PCO acts as integrator and leader of the Tytan modular infantry combat suite programme. According to the schedule available, the deliveries were to happen until 2020. Will this deadline be met?

Tytan programme progresses in line with the schedule, all of the stages that have been completed so far were finalized timely. Tytan programme is currently in its second stage. Initial project for the second stage has already been accepted. Currently the technical design of the system is being worked on. In practical terms this means that the individual elements of the Tytan suite come to life in a form of prototypes, which would result in creation of the whole ensemble. Then, qualification test programme is expected to take place.

I do have to admit though, the work schedule has since been updated twice, which resulted from the general changes introduced by the Ordering Party, when it comes to the system’s tactical and technical requirements. Within the framework of the Agreement changes may be made to the product specification which translates into change of the arranged deadlines pertaining to the final implementation.

The consortium working on Tytan involves several companies. What are the project management challenges faced by PCO, as the project lead?

Not only is PCO responsible for development of the system elements forming the reconnaissance and observation subsystem, as it is our responsibility to define the system architecture, systemic requirements and compatibility. We’re also working on development and designing of the wiring, we are co-developing the system software, we’re responsible for comprehensive technical documentation and for carrying out the qualification test programme. Furthermore, PCO has been tasked with project management, we’re dividing the tasks, monitor the progress and provide feedback. PCO is the company that maintains communications with the Ordering Party, we’re managing all aspects related to formal performance of work.

We are convinced that we will be able to deliver system that is so convoluted and expansive. Following the completion of works defined by the agreement in force, i.e. after the qualification test programme is successfully completed and the Armament Inspectorate takes over the Technical Documentation of the Tytan ensemble, we’re hoping that deliveries would be taking place on the basis of the framework agreement signed back in 2014. PCO is going to act as the representative of the consortium responsible for integrating and delivering the system within that scope too.

Programme assuming that the services subordinated to the Ministry of Interior and Administration, Police, Border Guard would be modernized is underway. What are the most important projects pursued by PCO, with the uniformed services in mind?

PCO S.A., within the framework of the project aimed at modernizing the uniformed services, is reacting to the tendering procedures concerning the products belonging to the domain of optoelectronics. We are also monitoring the needs expressed by the potential customers within that scope, in the context of business dialogue. 

I’d like to ask you about cooperation with the academia and a number of R&D entities. PGZ has been trying to encourage this cooperation for quite some time now. What are the benefits that could be obtained through collaboration with the academia?

PCO is a model example of a Group’s company, when it comes to establishing and developing such cooperation. The cooperation is wide, also at the planning and preparation stages pertaining to indicating the potential direction of the development works. A scientific council is appointed within the company’s structure, involving representatives of several research and scientific entities.

We’re working together with academic entities such as the Military Institute of Armament Technology, Warsaw University of Technology, AGH Cracow University of Technology, or independent institutes including Military Institute of Armament Technology or Institute of Applied Optics. Cooperation of this kind brings us a lot of added value. Involvement of the research and scientific entities translates into tangible benefits during implementation and further performance of work related to projects.

Reaching beyond the above area, we are looking for new employees at the Universities, which is a part of long-term cooperation programmes. The students and graduates get an opportunity to get acquainted with the company as they learn, or write the theses, while the company may profile the persons proper [it would like to employ - translator’s note]. Thanks to the above we are able to employ properly qualified and creative candidates.

PCO is also placing a great emphasis on photonics. Are you planning to develop this area in 2018 and onwards?

Photonics is one of the primary areas of interest for us, especially when it comes to optoelectronics. The R&D works use up to 10% of our annual income here. This is a domain which experiences growth which is so intensive that without any research done in this area we would not be respected on this market.

When it comes to the specific areas of photonics, I can only reveal the fact that we are continuously perfecting our products. We’re increasing the resolution of our cameras, expanding the spectrum within which they detect the signals, we’re developing perfected image processing algorithms. We are also implementing new technologies to qualitatively improve our products.

We have just finalized an investment in the thin layers imaging technology. We are also in the process of acquiring the “freeform” technology allowing for manufacturing of lenses and mirrors of any shape. All of the above is to make it possible for us, when using PCO sensors, to detect the threats as early as possible, being able to identify them.

Thank you for the conversation.

Interview conducted by Jędrzej Graf