Finnfund

You’ll come across the products of Detection Technology Oy wherever the world’s most advanced radioscopic equipment is in use.

The ultra-sensitive sensors manufactured by this Finnish company are at the core of the security inspection devices used at airports and border crossings. In hospitals, its sensors can be found in tomography equipment used for scanning cross sections of the body.

“We are seeing a rapid increase in world demand for the technology needed for both security and health care,” says Mikko Nuutinen, managing director of Detection Technology.

As in many other fields, growth in the security sector is strongest in the Far East, where Detection Technology is investing heavily. The company began processing silicon wafers in China back in 1995, and operations in Peking are now being expanded. Finnfund is participating in the project with a one-million euro share of the finance. The new planning and assembly unit will be complete in the second half of 2005.

Finnfund senior investment manager Matti Kerppola says that Detection Technology is an especially attractive partner because the project and the company’s production and products combine the elements that are important to Finnfund. They stimulate development and show the positive aspects of globalisation - seamless cooperation between Finland and China in product development and production. Plus the employment effects, a positive image and good future corporate prospects.

Close links with universities

Detection Technology was established in 1992 by a group of researchers at Finland’s VTT Technology Research Centre, Helsinki University of Technology and the University of Helsinki . For the first few years the company operated alongside VTT in the Helsinki metropolitan area before moving its headquarters to Ii, a town near Oulu in the north of Finland.

Co-operation with China dates from the company’s early years, because some of its founders were working with Chinese experts at the European particle physics laboratory CERN.

“It was personal contacts that led to the start of operations in China,” Nuutinen explains. “Initially our partner was a top Chinese university. It has specialised in the very sector where we operate.”

Detection Technology also cooperates closely with the academic world in Finland. Chinese employees at Ii have been able to continue studies at the same time at the University of Oulu.

“Two dissertations and several treatises have resulted from this,” Nuutinen points out, “and our Finnish employees have also done university research work in this field.”

Growing markets in mainland China

In addition to its Peking plant, Detection Technology has had a production unit in Hongkong since 1999. Now production is shifting to mainland China. Forty percent of the company’s 60-plus employees are Chinese.

“Mainland China has become a major player in semiconductor manufacturing. In Peking, we also make certain kinds of X-ray cameras for Chinese customers, alongside our silicon wafer production line. The Chinese prefer to buy products made in their country. Otherwise they make them themselves,” Nuutinen explains.

Detection technology has a strong position in the Chinese market because in practice all of the manufacturers of end-user equipment are the company’s customers. Its greatest rival is a major Japanese corporation Hamamatsu. It has high-quality products, Nuutinen concedes, but they are not price competitive with the Finnish company.

“It’s also a good thing for us that Hamamatsu so far has no plans to begin production in China” he adds.

Security market growing fast

The Peking Olympics in 2008 are stimulating extra Chinese demand for security products. Before that date, China is due to begin using security inspection equipment at thousands of bus stations, etc. In Europe and North America, meanwhile, old inspection devices are being replaced with faster and more precise technology.

The terrorist attacks of September 11th greatly increased demand for equipment. This shows in sales of large X-ray machines for inspecting entire vehicles and containers at border crossings, ports and airports. One of the largest growth areas is equipment for X-raying shipping containers, a market boosted by antiterrorist measures in the United States.

“The world market for radioscopic machines used in security and health care is growing at 15-20% per year,” Nuutinen estimates.

Inspection equipment is also expanding into new fields, such as food processing, where an X-ray machine can find, for example, a chip of bone in a packaged meat product.

For further information at Finnfund please contact Mr Matti Kerppola, tel. +358 9 34843334, email firstname.lastname@finnfund.fi