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May 29, 2013 | Tom Ballard

Diversification strategies have served Nucsafe very well

Nucsafe(EDITOR’S NOTE: This is the second in a two-part series on Oak Ridge-based Nucsafe.)

Oak Ridge-based Nucsafe faced the typical challenge that many companies do – too reliant on a handful of customers. As noted in the first article in this series, 80 percent of its revenues in 2005-06 came from two customers. Today, a typical year finds the company with anywhere from 30 to 50 customers.

Chief Executive Officer Rick Seymour says Nucsafe has successfully found ways to diversify both its radiation and nuclear markets through market differentiation and by licensing an X-ray backscatter technology that is synergistic to its radiation technology through technology diversification. Its X-ray backscatter products are just now coming to market and may well represent the majority of its growth going forward.

“We also decided to diversify markets . . . moving into steel and X-ray,” Seymour said. Nucsafe licensed X-ray backscatter technology from the University of Florida in 2008.

An important existing market for Nucsafe’s radiation and nuclear business is the steel industry. Although not regulated like many of the other radiation and nuclear markets in which Nucsafe operates, this market is financially driven. Despite other strong historic competition in this existing market, Nucsafe has been winning orders by listening to its clients and solving their problems.

Bill Richardson, the company’s Chief Commercial Officer, explained that 80 percent of the steel produced in this country comes from recycled steel, and one of the concerns is contamination that might include radiation. A contamination event can cost the steel manufacturer millions of dollars in clean up, remediation and lost profits from downtime. Nucsafe has adapted its technology to serve that important domestic industrial sector.

The reduction of helium-3 availability, a gaseous isotope of helium produced largely as a by-product of the decay of tritium used in nuclear weapons, resulted in an exponential increase in prices of the gas, due to decreased supplies relative to increased demands. This situation forced every government agency, university and research facility as well as those companies involved in neutron detector manufacture to look for alternative technologies.

Looking back on that period, Seymour says, “Our technology has become more price and technically competitive as a result,” emphasizing the long-term positive impact that challenges can provide.

Nucsafe’s neutron-sensitive glass technology is now being used in oil and gas exploration and is being further developed as a commercial alternative for neutron detection in security and other commercial applications.

Nucsafe’s newer X-ray backscatter technology serves a variety of diverse, emerging non-destructive test markets. It is being driven not by regulation, but by process improvement and quality assurance for a variety of markets.

“Our niche is non-destructive testing where we can see sub-millimeter features,” Lester Sideropoulos, Chief Operating Officer, said. Unlike traditional X-ray machines,  “Backscatter X-ray detects radiation that reflects from the target,” He said. “It allows for less destructive examination and can be used when only one side of the target is available for examination”.

The technology allowed Nucsafe to develop a system to scan an entire aircraft fuselage as well as other defects in both military and commercial aircraft. Ultimately, this technology earned Nucsafe, Boeing Corporation’s “Premier Supplier Award.” It is also being used in security applications as well as other aerospace applications.

“We have always had strong export sales since 2005, winning the Tennessee Department of Economic and Community Development Governor’s award in 2010 for Trade Excellence,” Seymour said. Nucsafe has continued to expand its sales effort into other parts of the world with a strong focus on England, Japan and China.

The UK has always been a priority for Nucsafe, but Asia is a more recently identified area of opportunity. “Sixty to 70 percent of our backlog is currently international,” Seymour said.

The CEO said Nucsafe’s philosophy has always been “not trying to sell you our solution but to solve a customer’s problem.” It appears that this “product lifecycle” commitment is serving the company well. No two businesses are alike and all face challenges at times, success is predicated on determination, perseverance, and a bit of good luck.

In Nucsafe’s case, Seymour says you can add a great group of people, a fine community to work in and a little bit of lunacy.



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