Kelvin Hughes is the Naval and Marine Division of Smiths Group Plc and is responsible for naval, marine and radar products. The company has been providing maritime equipment and supplies for more than two hundred years.

　

Today, Kelvin Hughes has a worldwide reputation for naval and maritime navigational radar and ship navigation systems. The company is the world's largest marine navigational charts and correcting agent.

　

　

Kelvin Hughes Limited is a company with a very long history dating back to the early 18^th century. The company claims to be the longest-established instrument company in the world. The list of dates below show some of the most important milestones in the recent history of Kelvin Hughes.

1948: The first British marine radar to gain Ministry of Transport type approval was produced by Kelvin Hughes.

　

1961: The name Kelvin Hughes was used for the first time(it was previously known as Kelvin and Hughes) as the Kelvin Hughes division of Smiths.

　

1967: Kelvin Hughes won the Queen's Award to Industry for dual radar interswitching.

　

1968: Kelvin Hughes won the Queen's Award to Industry for the Humber Fish detection system.

　

1981: Kelvin Hughes developed the Anticol Automatic Radar Plotting Aid (ARPA).

　

1985: Kelvin Hughes developed Radpak low-cost ARPA.

　

1990: Kelvin Hughes acquired Lokata.

　

1991: Kelvin Hughes launched its 'Nucleus' range of colour radars and its integrated Bridge System. ATC displays were also introduced.

　

1992: Lokata was relocated and integrated into the Kelvin Hughes site at Hainault in Essex.

　

1993: This year saw Lokata launch the unique Search and Rescue Transponder with Integrated Mast (SART). Kelvin Hughes launched its CDU compatible with Admiralty Raster Charts Service (ARCS)as part of its Integrated Navigation System.

　

1994: Kelvin Hughes acquired Qubit, a manufacturer of marine navigation and survey equipment. This year also saw the launch of the 'Nucleus 2'.

　

1995: Kelvin Hughes won the Marine Log Innovative Product of the Year Award for Nucleus 2 and SART. This year also saw the launch of the Ninas 9000 bridge. Qubit followed Lokata in relocating to the Kelvin Hughes site at Hainault in Essex.

　

1996: Kelvin Hughes launched Nucleus 2 5000.

　

　

Kelvin Hughes is part of Smiths Group Plc, a world leader in advanced avionics, medical systems and specialised industrial products. Smiths Group Plc was formed in December 2000 following a merger between aeronautical majors Smiths Industries and TI Group. No major changes have occurred as a result of the merger, however, there is now increased cross-fertilisation of information and ideas.

Kelvin Hughes remains a subsidiary of the group's aeronautical activities. Its head office, which undertakes design, engineering, production and administrative activities, is located in Hainault, Essex, with subsidiary companies in the Netherlands, Denmark, Singapore and China. (The Chinese subsidiary was only opened in Shanghai two years ago.) Kelvin Hughes also has 100 service agents around the world.

The locations of the overseas subsidiaries are as follows:

　

Netherlands:

Benelux Kelvin Hughes Observator BV Nieuwe Langeweg 41 3194 DC Hoogvliet, Rotterdam The Netherlands Tel: +31 10 416 76 22 Fax: +31 10 416 72 18

Scandinavia:

A/S Kelvin Hughes Marselis Boulevard 175, DK-8000 Arhus C Denmark Tel: +45 86 11 28 88 Fax: +45 86 11 27 26

　

Far East:

Kelvin Hughes (Singapore) Pte Ltd 8 Pandan Avenue, 2nd Floor Singapore 609384 Tel: +65 545 9880 Fax: +65 545 8892

　

China:

Kelvin Hughes Shanghai Representative Office Unit H, 15/F, Majesty Building 138 Pu Dong Avenue, Shanghai 2001 20 P. R. China Tel: + 86 21 58772105 Fax: + 86 21 58785944

　

Lokata, which was acquired by Kelvin Hughes, manufactures search and rescue transponders (SARTs), NAVTEX receivers and emergency positioning and radio beacons (EPIRBs), used in search and rescue applications. Qubit was acquired by Kelvin Hughes in August 1994, and designs and supplies integrated radar and hydrographic equipment as well as navigation systems for the offshore industry.

　

Smiths Group's annual turnover for FY 2000 was around £2.5bn2(474 billion yen), with the Aerospace Division accounting for £609m(116 billion yen). As marine-related businesses within the Aerospace Division contribute less than 10% of overall turnover, it can be deduced that Kelvin Hughes has an annual turnover of around £61m(11.6 billion yen).

　

As for profits, Smiths Group recorded £243m(46 billion yen)in FY 2000, with the Aerospace Division accounting for £84m(16 billion yen). Korea is its biggest market at present, but Kelvin Hughes does not publish a breakdown of its international market segments or any other financial information. The following graph indicates the turnover and profit of the Aerospace Division of Smiths Industries.

Smiths Group derives half of its profits from the United States, with the rest coming from mainly the UK and other countries around the world. The latest data from Smiths Group indicate that their profits by origin are as follows:

The Aerospace Division of Smiths Industries has been successful over the last five years, with increasing turnover and profit. The chart below indicates this sustained growth:

Kelvin Hughes employs about 500 people, of which about 400 work at its UK head office. During the early 1990s turnover at Kelvin Hughes is said to have doubled; profits more than doubled; and employment risen by over two-thirds. Around 90 per cent of the company's equipment output is exported.³

　

Around 80 per cent of Kelvin Hughes's business comes from sales of electronic equipment, half of which is accounted for by commercial vessels of 10,000 gt or more. The remaining 20 per cent of Kelvin Hughes's turnover comes from sales of data to shipowners. The company supplies information to 4,000 vessels each week and claims to supply data to half of all vessels over 10,000 gt in respect of which it is able to supply data.

　

Towards the end of 1994 Kelvin Hughes launched its latest integrated radar, navigation and electronic chart display systems (ECDIS), which are comprised of the Nucleus 2 6000 automatic radar plotting aid (ARPA), Integrated Navigation System (NINAS 2), and Chart Display Unit (CDU 2).

　

The enhanced Nucleus 2 6000 computer is capable of tracking up to 50 targets compared to 40 previously, increasing the system's capability in heavily congested sea-lanes. In addition, Nucleus 2 has 'Footprint Acquisition Zone' facility, allowing navigators to define and select a number of inclusion and exclusion zones within which the computer will initiate automatic tracking, reducing operator workload in high traffic density areas. The original Nucleus series sold over 1,000 units in 3 years.

　

The navigation system NINAS 2 can interface with a wide range of other devices, including GPS and Decca positioning sensors, doppler logs, echo sounders and comprehensive autopilot installations. An electronic plotting table can be used to provide the system interface with paper charts. The system also includes a comprehensive data logging suite, including ownship position and ARPA target data.

　

The CDU 2 can be used as a stand alone unit or together with Nucleus 2 6000 and NINAS 2. The electronic charts are official Hydrographic Office Nautical Charts, which are in a raster scan or vector digital format.

　

The more recently introduced Ninas 9000 integrated bridge system offers a totally integrated navigation and command package. It can be installed on any type of bridge or vessel.

　

The Ergo Pod is a revolutionary design from Kelvin Hughes. It incorporates a remote pod that allows the navigator to control the radar from his chair. Kelvin Hughes most recently introduced its latest product - the NDR 2002 Voyage Data Recorder (VDR). The VDR is designed to collect data from the various sensors on board the ship and store the information digitally, in an externally mounted Crash Survivable Module (CSM).

　

Lokata equipment comprises emergency positioning beacons and radar transponders, mainly for search and rescue applications. Qubit - which was a rival - supplies integrated radar and hydrographic equipment, as well as navigation systems for the offshore industry.

Kelvin Hughes holds the ISO 9001 quality approval, certified by Bureau Veritas QI. Its quality audits of suppliers go beyond ISO requirements, and are carried out by the company's quality assurance team not its purchasing department.

　

Kelvin Hughes manufactures little of the equipment which bears its name, concentrating instead on design, assembly and testing. The company carries out all equipment design (apart from aesthetics), design of electronics systems and designs of printed circuit boards as well as writing the software which drives the systems. One of the few items which the company manufactures is antennae, but it only does so because it was unable to identify a supplier capable of meeting its stringent quality demands. For the same reason, the company recently commenced production of monitors.

　

　

Kelvin Hughes has its own sales and service companies in the Netherlands, Denmark, Singapore and China. Services can be provided on an 'as and when' basis, or customers can enter into a maintenance agreement for a single fee, which covers the cost of labour and spare parts for any services required during the period of the agreement.

　

Kelvin Hughes has dealt through a distributor in Japan for over 35 years. Kaigai Gijutsu KK acts on behalf of a number of companies, but specialises in marine products. Its head office is in Yokohama and it has another office in Kobe, employing 38 staff in total. Its sister company, Shinwa Industrial, provides after sales service on behalf of Kelvin Hughes. It has 50 staff but can call on other contractors to provide 130 service engineers in total. The main address for Kaigai Gijutsu KK is:

　

Kaigai Gijutsu KK

Nedlloyd House

25 Yamashita-cho

Yokohama 231

Tel.: +81 45 664 7318

Fax: +81 45 664 7320

　

　

Kelvin Hughes claims to supply 1 in 4 new large commercial ships with radar systems. Most of its business, however, comes from retrofits to vessels, usually brought about by them having to comply with new IMO regulations. Outside of Japan the company's main competitors are Sperry Marine and the German firm STN Atlas, in respect of equipment for new vessels, and Racal Decca in the retrofit market.⁴ In Japan Kevin Hughes has found it difficult to market its charts services, although it is regularly supplying information to around 100 Japanese vessels. In terms of electronic equipment the company has had the occasional success and certainly perceives the market to be more open than it once was. However, it still detects a strong preference among Japanese shipyards towards domestic equipment manufacturers. The company believes that this is especially the case with its products which are relatively high profile.

　

Nevertheless, Kelvin Hughes claims to receive orders for electronic equipment from up to ten Japanese shipyards each year, including Mitsui, IHI, MHI, Namura and Imabari among others.

　

Recent developments include moving into on-screen display of charts and electronic storage on compact disc. The company's equipment has to meet various safety and environmental standards, including being able to withstand vibration and electrical shocks. In addition, size and weight restrictions imposed by operators of high-speed ferries and patrol boats pose further challenges.

　

　

The company moved to Hainault, near London, in 1917. Several years ago it proposed to demolish the buildings on the site in order to construct purpose-built facilities which would better match its current requirements. This was not possible because of local planning restrictions. Instead, the company implemented a comprehensive refurbishing programme, spending around 75 million yen per annum between 1993 and 1996.

　

Kelvin Hughes has also invested in new testing facilities, environmental testing facilities and a local power supply. Investments in Information Technology have included new CAD/CAM equipment, used for printed circuit design, which has helped to reduce development costs.

　

Following the acquisition of Lokata, production has been transferred from Falmouth to Hainault. Similarly Qubit's business was transferred to Hainault at the end of 1995. This consolidation of business activities is said to have led to savings, both in terms of overheads and staff costs.

　

Kelvin Hughes has engaged, and continues to be involved, in a number of technical collaborations. The company has relationships with several universities, including Southampton, John Moores University in Liverpool and Plymouth University, and has funded a number of Ph.D. students. Kelvin Hughes has collaborated with other companies including Racal, the Norwegian firm Norcontrol and the UK Hydrographic Office. It has taken part in a European Commission sponsored Brite-Euram project with BMT, British Steel and BV of France, and is applying for funds from the Brite-Euram scheme for a project with Det Norske Veritas and the Danish Maritime Institute. The former project looked at the effects of stress and corrosion on bulk carriers, with Kelvin Hughes contributing expertise in respect of motion sensors.

　

Kelvin Hughes has a non-manufacturing joint venture in Russia (to promote sales)and in 1994 concluded a licence agreement with Yokogawa Denshikiki Co., Ltd of Japan for the manufacture of navigation systems. Yokogawa is restricted to supplying Japanese vessels, which is an area of the market in which Kelvin Hughes has had little success.

　

The relocation to Hainault of companies which Kelvin Hughes has acquired (Lokata and Qubit), has created some problems in respect of the space that is available. Local planning restrictions mean that expansion on-site is not going to be possible.

　

New product development is driven by the marketing team rather than the engineering team, with the Sales and Marketing Director taking a leading role. There are, nevertheless, around 50 staff members engaged in research and development work, and it is generally believed that one of their main strengths is innovation. The company is, however, very conscious of the danger of developing a technically brilliant product that may be expensive to manufacture and/or fails to meet customer requirements.