From Old China into Commercial GNSS
After the death of Mao Zedong, who had himself changed the “cultural” face of China, Deng Xiaoping led China from 1978 until his death in February 1997. During that period, China advanced economically further than it did in the previous 200 years, and rose from a financial backwater into one of the world’s largest economies. From 1978 to 1998, GNP increased 500%, average annual income rose from a few hundred dollars to $1,800, savings increased 14,000%, and exports went from $10 billion a year to $153 billion. In a Chinese 1998 survey, Deng was named the number-one hero in China.
To achieve all this, there had to be a strategy — a vision of how to bring about such significant change. The approach chosen was to lead and support through government-sponsored initiatives — and the group who was in the best position to be able to convince people and demonstrate by example was China’s well-educated military.
So now we get to GNSS, and of course one of these initiatives was to emulate what the U.S. had done and to create its own satnav system. So we have the BeiDou/Compass space and ground control infrastructure. And having built all this, indeed they did come and a Chinese GNSS industry began to emerge. But it nearly didn’t happen.
In 1994 as part of Deng Xiaoping’s efforts, a state company was formed to pursue economic reform. Ruxin Zhou was one of those military guys who was there, and he recognized that the planned military BeiDou satnav system could be an avenue towards a huge commercial opportunity for China. But the Chinese military was already launched on a course to build BeiDou for their own purposes, and maybe they didn’t want to get caught up in these economic changes going on with the civilian population. As a member of the government advisory group, Colonel Zhou worked long and hard to promote his concept with several levels of government and to persuade military leaders and those involved with BeiDou that they should participate in Xiaoping’s reforms. Ultimately he was successful, and BeiDou eventually emerged as a joint military civilian system.
The next step was to somehow create a commercial business out of all this. To do that, in 2000 Mr. Zhou formed Beijing BDStar Navigation Company Ltd. with only himself and another original founder — Mr. Jianhui Li. Based in Beijing, BDStar was ideally located close to the government, close to military management, and close to the BeiDou operations and control centers. Coincidentally, around the same time, NovAtel in Calgary was beginning to be active in the region and was looking for dealers to market its OEM receivers into China. After a trial phase with a couple of dealers, it was finally agreed that BDStar would represent NovAtel exclusively in China.
That’s when I first met Ruxin Zhou — with U.S. WAAS development well underway, it turned out that China was also interested in creating its own Satellite Navigation Augmentation System (SNAS), and was considering NovAtel’s WAAS GI reference receivers for the ground infrastructure. Mr. Zhou became the contact point between NovAtel and BDStar, and what followed was what appeared to us to be a lengthy, frustrating negotiation which rolled out in both China and in Canada. Now we know that not only was the SNAS program making sure it understood the technology inside the NovAtel WAAS receiver, but Mr. Zhou was also learning English, the ways of doing Western commercial business, and, most of all, he was getting to know and be comfortable with us.
NovAtel went on to win three contracts to supply 85 WAAS receivers to the SNAS system over three years, and the relationship with BDStar and Mr. Zhou became one which both sides wished to grow and prosper. NovAtel OEM receivers were also supplied in quantity into a number of applications that BDStar developed in China over many years. BeiDou was also an important catalyst to initially help BDStar gain traction — the company equipped 40,000 fishing boats with BeiDou messaging receivers over several years, used for basic communication across the fleet and for location reporting to monitor authorized fishing areas.
Fast forward to today. Almost 15 years have gone by. Mr. Zhou is now chairman of the board of the BDStar Navigation group of companies, and Mr. Li is president, running day-to-day ongoing business at BDStar. I sat down with my old friend in Tampa at the Institute of Navigation (ION) GNSS + Conference to catch up with the growth and expansion of this business and listen to the many achievements that have now turned BDStar into the largest (¥780 million RMB = $127 million US) GNSS-based public company in China. BDStar had a difficult beginning between 2000 and 2007, like many start-ups, but has now emerged as a profitable leading enterprise within the Chinese BeiDou industry.
Ruxin Zhou was born in March 1963, and he has been involved in China’s GNSS industry since 1994. He lives in Beijing, and is the father of two sons. He is also vice chairman of the Association of GNSS of China. He earned his BSc degree in 1983 followed by his master’s in 1989, both at University of NanKai in Tianjin. His MBA was awarded by the University of Beijing in 2003.
Ruxin Zhou considers BeiDou an important part of the GNSS industry, and he is looking forward to cooperating with other GNSS related companies inside and outside China to add more value to users.
Mr. Zhou chairs the BDStar board of directors — one of whom is the president of the company. There is also a group chief technology officer (CTO), a board secretary who is responsible for investment, three outside directors from industry, and an advisor who is familiar with government financial policy. Along with the parent company BDStar Navigation Products Division and its internal GNSS Applications Division, there are nine subsidiary companies, each of which is governed by a small management board.
- BDStar Information Service Co. — Largest BeiDou operations service provider.
- Unicore Communications, Inc. — Consumer and precision chipset and board-level receivers.
- BDStar Hong-Kong — Import/export company for the group.
- Shenzhen XG Electronics Co. — Vehicle electronics and installations.
- BeijingSinsTek Technology — MEMS inertial technologies for defense.
- Beijing Hanvic Photoelectricity Co. — Navigation using IR/photo–electric technologies.
- BeiDou Information Equipment Co. — National Defense equipment and services.
- BeiDou Tianyuan Navigation Systems Co. — Navigation solutions provider (% ownership).
- Shenzhen Huayun Tongda Satcom Co. — BeiDou metrological applications (% ownership).
Recently, the BeiDou Equipment Division within BDStar has become a separate company known as BeiDou Information Equipment Co., and another company — Harxon, which manufactures antennas — is in the process of being added to the group.
The number of people working within the BDStar group has grown from an initial staff of 20 when Mr. Zhou and Mr. Li began operating the company, to around 1,500 people today in 2014.
BDStar Navigation is where this all began as a value-added reseller for NovAtel OEM receivers — integrating them into a number of applications, such as vehicle, marine and military navigation installations. BDStar was also instrumental in the establishment of the ground infrastructure for SNAS and took part in the construction of the system. As this business increased, installations became focused within a separate group, along with building the equipment using integrated NovAtel GPS and inertial OEM equipment — the GNSS Applications Division.
With an increasing number of satellite launches, and a growing ground infrastructure, BeiDou began to become a more important part of China’s GNSS/navigation infrastructure. BDStar began to play a larger role in the emerging BeiDou program (BeiDou System or BDS), and it became clear that BeiDou technology would have to be developed by BDStar in China. And so the spin-off and company start-up phase of BDStar’s growth got underway.
BDStar Information Service Co., Ltd.
BDStar Information Services Limited is a wholly owned subsidiary of BDStar Navigation, providing location-based system solutions and information services, based on the BeiDou Navigation Satellite System, for the fishery, agriculture, forestry, water conservancy, and meteorology industries. By integrating Internet and mobile communication networks with geographic information, BDStar Information Service has now become the largest BDS information service provider in China with more than 40,000 BeiDou end-users, hundreds of government users and more than 100,000 mobile phone users. The service is 24/7/365 and includes real-time positioning, and short message communication for typhoon warnings, emergency alarms and other related services. The system has capacity for over 100 million navigation positioning and communications messages per year.
Unicore Communications Inc. (Beijing)
Unicore Communications Inc. is a share-holding subsidiary of BDStar Navigation — a high-tech company dedicated to highly integrated system-on-a-chip (SoC) IC design and GNSS algorithm development. Unicore is focused on the commercialization of BeiDou through advanced GNSS professional applications and innovative technology breakthroughs — one of the leading Chinese companies involved in the “industrialization” of BeiDou systems.
Unicore provides turn-key location-based services (LBS) in both the GNSS professional and consumer navigation segments. An innovative core chip has been independently developed, providing high-performance GNSS as well as low-cost, low-power, high-quality products with positioning accuracy ranging from millimeter all the way up to meter levels. Not only have high-precision requirements for surveying, mapping and CORS reference stations been satisfied, these components have also been used in less onerous applications such as vehicle monitoring and personal navigation.
By the second quarter of 2014, Unicore has sold more than one million BeiDou SoC chips and won multiple breakthroughs in BeiDou multi-GNSS applications such as in-dash automotive navigation, automatic driving test system, Ground-Based Augmentation System (GBAS), and the International GNSS Monitoring and Assessment Service for Open Service (iGMAS).
Beijing Hanvic Photoelectricity Co., Ltd.
Beijing Hanvic Photoelectricity is a share-holding subsidiary of BDStar Navigation targeted at the infrared thermal imager market. The company has used in-house infrared optics, imaging circuitry, image processing, artificial intelligence, mechanical structures and system engineering to develop a number of products using planar and linear arrays. Short-medium-long-wave infrared cooling thermal imagers can provide users with a visual context under varying weather conditions from up to tens of kilometers from a target object. These products are widely used in scientific research, electrical distribution, forest-fire prevention, surveillance, public security, firefighting, and anti-smuggling.
Beijing SinsTek Technology Co., Ltd.
Beijing SinsTek Technology is a shareholding subsidiary of BDStar Navigation specializing in the original development of inertial navigation, inertial measurement, and measurement and control systems and devices- for which SinsTek owns all related intellectual property rights. SinsTek has independently developed products such as high-precision quartz accelerometers and gyros, mixed inertial navigation systems, missile-borne computers, a missile overload switch and a ground control system. Products and systems have been widely used within China in various fields of national defense and also commercially.
Shenzhen XuGang Electronics Co., Ltd.
Shenzhen XuGang Electronics was founded as a shareholding subsidiary of BDStar Navigation in 2001. The company undertakes product development, design, manufacture and sales of medium- to high-end consumer-level vehicle audio-video navigation products and services. The company has more than two decades of experience in automobile accessories, and has good cooperative relationships with China’s major automobile manufacturers. With a marketing network that extends across China, the company is one of the most important automotive electronics and navigation products providers in China. Automotive products are also exported to the U.S., Russia, Brazil, Israel and to other countries.
The scope of this business includes:
- CAR navigation/CAR audio original design manufacturer (ODM) — High volume/high-quality production of auto accessories, auto electronics and GNSS products.
- Marine radio ODM — Waterproof hi-fi player/radios have won wide recognition in Europe and the U.S. This is the only Chinese company whose SIRIUS satellite radio technology has been certified in the U.S.
- Telematics auto network solutions — BDStar auto navigation system and BDStar Black Box have been independently developed, fusing sensors, network communications, processing and controlling technologies to provide telematics products and services for auto makers and commercial consumers.
Navigation Products Division
The Navigation Products Division has successfully collaborated for more than 10 years with NovAtel as its value-added reseller (VAR) of GNSS and GNSS-inertial products in China. Focused on satellite positioning and inertial navigation applications, BDStar has promoted domestic Chinese navigation and positioning applications development, and has established close cooperative relationships with domestic inertial and integrated mapping companies, research institutes, and other sectors. Application fields include railways, electricity, telecommunications, meteorology, and seismology. Quite naturally, independently developed BeiDou products have also followed this route to market in China.
GNSS Application Division
The GNSS Application Division is the business division of BDStar Navigation, which is mainly engaged in the development, production, sales, and service of the products based on high-precision GNSS technology applications. With the objective of becoming expert in high-precision GNSS solutions used in the developing industry using the “Internet Of Things (IOT),” the company provides a series of GNSS terminal products and solutions for the civilian market. Applications have included agriculture, container ports, and deformation monitoring. Meanwhile, the successful port IOT that this division has provided for Tianjin Port has now been implemented at more than 20 domestic and foreign ports including Shanghai, Ningbo, Shenzhen, and in India.
BeiDou Information Equipment Co.
BeiDou Information Equipment, a wholly owned subsidiary of BDStar Navigation, is focused on supplying products for national defense and government agencies, and provides complete solutions and products for dispatch management of hazardous materials and special cargo handling. Several successful projects have been undertaken, including special hazardous vehicle command and monitoring, public security, anti-terrorism, forest-fire prevention, emergency management, personnel command and monitoring of disaster relief, public security, and border defense. The division relies on its experience in system engineering, command and control software, radio system design, and military satellite navigation to provide users with terminal products such as navigation, timing and heading, and location-based military information service systems. Specific products developed include terminal equipment, vehicle-mounted navigators, vehicle traveling data recorders, police positioning and telecommunication terminals, and an emergency communication system.
BDStar’s Future
Following this phase of significant growth, what does the future hold for BDStar? We know that China’s huge annual rate of GDP growth may have slowed a little, but Mr. Zhou still has pretty big aspirations for his group of companies. His target for 2020 is to have BDStar reach annual sales of 10 billion RMB ($1.63B US). To get there, his intermediate step is to reach 2 billion RMB ($326m US) by the end of next year. Overall, this represents a ten-fold growth in revenue over six years — by Chinese industrial standards, this might even be termed “modest” growth.
But where will all this growth come from? The strategy appears to be textbook:
- Through significant organic (internal) growth, or by doing the same things better and to a greater extent.
- Through strategic partnerships with targeted leading companies in key growth areas.
- Through further acquisition of companies that would improve the bottom line and also benefit from the synergies of the existing corporate group.
While the anticipated course would be to add companies at the corporate level, it’s possible that some companies within the organization may also get to the point where they see adding an organization below or alongside may become a profitable avenue for their own growth. Of course, other suitable companies in China would be on Mr. Zhou’s strategic acquisition list, but he’s also looking for expansion elsewhere around the world. The U.S. market is significant for the type of products and technologies available in the BDStar group, so it would be natural to anticipate that a North American acquisition could help improve product distribution and development. As BeiDou becomes an integral part of global GNSS, and industry partners seek more than Open Service capability and better Chinese access, its also conceivable that partnerships with North American players could come about.
So, at least with BDStar and some other similar Chinese companies, it would seem that those earlier 1990s aspirations of the Chinese government to create a commercial economic sector within the Chinese economy have at least begun to show a measure of success in the GNSS market segment.
Tony Murfin
GNSS Aerospace
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