NewSpace Systems (NSS) is an advanced manufacturer of robust satellite subsystems and components. NSS is particularly strong in the area of Attitude Determination and Control Solutions (ADCS). The NewSpace company, based in South Africa predominantly focuses on excelling in the operational constellation market. NewSpace Systems is a trusted supplier of components and sub-systems to the International spacecraft market. The company focuses on commercial constellations providing new services in communications and Earth observation. NSS are particularly well-recognised for their Attitude control products.

Space in Africa reached out to James Barrington-Brown, the Chief Executive Officer of NSS. the resulting interview comprised of discussions ranging from the regulatory nature of the South-African space industry, patronage from within Africa, and many more. Below is the question and answer with James Barrington-Brown.

In our 2019 Newspace report, we profiled 34 upstream companies, 21 are based in South Africa. From your perspective, why is there such a preponderance of NewSpace Companies in South Africa?

It is a great question. For South African companies that are upstream – manufacturing (space) hardware, one of the critical benefits we have had is a good supply chain. So, we can subcontract the manufacturing of metal parts, 3D printing, chemical processes and purchase international components through local agents. There is an excellent supply chain below us, which is not the case in many African countries.
Furthermore, (in South Africa) excellent universities are supplying the skills. In the Western Cape, where we are based, we have three universities with a long heritage in space (education).
In the downstream sector, where people are taking space data and creating informational services from space data, there is a much lower barrier of entry for that – you need access to the internet, a high-performance computer, and the rest is just entrepreneurship and having a good idea. I am not sure why there should be more South African companies downstream than the rest of Africa. Still, I am aware that the Space Agency does give access to space data to help develop applications before bringing them to market.
For NewSpace Systems, in particular, it’s the skilled workforce and the supply chain.

In South Africa, how do the legal framework and regulations benefit NSS? Are they favourable? Is there room for development?

I am not aware that the regulation in South Africa is any better than other African countries, but I am not familiar with those other countries. There is still foreign exchange control; there is still government control over export licensing and usage of communications frequencies. However, it is quite easy for the South African government to give work to private companies. That said, there is a government-owned space company that potentially makes it quite difficult to compete. There are also university spinouts that were effectively subsidized because of the government funded their initial technology development. So I don’t think it can be the regulatory environment responsible for the growth of NewSpace companies in South Africa; I think it is a supply chain, skill-based, and maybe an entrepreneurial spirit. The South African government is not yet focusing on creating an efficient regulatory environment for space companies – it is trying to, but it’s not there yet.

The company has exported its products to about 20 countries. It has partner/resellers in 7 countries across 5 continents, including China, India, Japan, Taiwan, the Netherlands, the United Kingdom, and the United States of America.

It’s now 25 countries across 6 continents.

That is lovely.  Of these 25 countries, how many are African countries?

None

From your business perspective, what do you think is the reason for this?

I think Africa is at a point where they are doing two things. One is that they are buying space assets but are not looking to Africa. For instance, Ethiopia and Egypt are working with China, Angola is working with the Russians, Nigeria has worked with China, and the UK, Algeria and Morocco are working with France. These countries are buying big space assets with government money and not trusting African suppliers. And then, at the other end of the market, there is space research in universities. They are building CubeSats – Ghana, Kenya, Namibia and many more. So, for a company like NSS, which really focuses on the commercial and microsat market, there are currently no customers in Africa. There are either large satellites being bought from Europe and China, or there are nano-satellites done for research purposes where there are smaller budgets. I think it is only a few years before there are opportunities in Africa, but at the moment, there are not for us. And again, remember NewSpace Systems is a hardware company – there are many opportunities for services in Africa using space data processing, forestry, agriculture, security, maritime. All these services are needed throughout Africa, but it’s just not a market NSS are part of.

In my research, I realized that NSS gets less than 10% of its revenue from Africa. I think this explains very well why.

Yes, and last year less than 3%. The revenue from Africa is actually from the South African Government for funding technology development. There are one or two space missions in South Africa that we have supplied to in the past, but we are really export-driven – export out of the continent, unfortunately.

Are NSS export-driven because it is your goal as a company, or is this just NSS utilizing the cards you have been dealt with?

Yes, absolutely. As an African company, we would love to be delivering products into Africa, and I find it frustrating that the African countries who are buying space assets are not looking within the continent. There is certainly capability in Nigeria and South Africa, but when Ethiopia and Egypt wanted a small satellite, they looked outside the Continent.

The newly established African Space Agency, I hope, should be able to remedy this issue because, in the end, what we want is an Africa-first space industry.

Yes, I 100% support that. There is a huge opportunity for the African Space Agency to encourage and support indigenous African technology development, which will ultimately lead to exports.

The US makes up 40% of your exports. Can you tell me why?

Yes, and that’s closer to 50% now. We are mostly selling into commercial programmes, and the US is where all the space investment is – there are a lot of private industries and private funding in the USA on top of massive Government spending. So if you look at well-known space companies like SpaceX, OneWeb, Planet, etc., they are all manufacturing in the US.

You earlier mentioned a government space company in South Africa, and it has been hard competing with them for government funding. How much competition do you face? First from within Africa, and then from outside Africa?

There is a little competition from the university spinouts from within Africa and from the government space company, but nothing from the rest of the continent yet. However, in the international market, we are competing against mostly European and US companies.

NSS is approaching an annual turnover of US$ 10 million?

We are well on our way towards that level. The market we are in is growing rapidly, and we are growing both our market share and product range at the same time. We are in the middle of expanding our manufacturing facility to satisfy the growing demand and increasing our investment in R&D, so I think we are in a comfortable position looking forwards.

Am I safe to assume, with your valuation, that the company has been faring better despite your competition?

Yes, we grew more than 80% in revenues last year and even more in terms of contracts signed, and we don’t see any signs of slowing down this year. For any company to grow that much in such difficult times is impressive.