From the Alps to the Rockies: Ruag Space’s strategy to crack the U.S. market

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WASHINGTON — Bern, Switzerland-based Ruag Space is an anchor supplier of spacecraft components and rocket parts for all manner of European government space programs. The European Space Agency is such a large customer for Ruag Space that the company often describes the agency and its 22 member states as a market in and of itself.

But Ruag Space’s largest area of investment — and growth — is the United States. Last year, 25 to 30 percent of Ruag Space’s $350 million in revenue came from U.S. customers. That roster includes payload fairings for United Launch Alliance, satellite structures and dispensers for OneWeb, and parts for the NOAA/EUMETSAT Jason-3 oceanography satellite.

For Peter Guggenbach, CEO of Ruag Space, it is not only the civil space opportunities that lured Ruag across the Atlantic, but the intense demands of the startup-heavy NewSpace sector. It might come as a surprise that a company with a steady stream of European government business would seek out very demanding foreign customers with big dreams and limited cash. Guggenbach embraces the challenge, and is building footholds in Alabama, California, Colorado and Florida.

Guggenbach spoke with SpaceNews about Ruag’s westward expansion.

Ruag has expanded in the U.S., particularly with your work with ULA. Is the U.S. Ruag’s next major market? 

For us, the U.S. market is very cool, and has a lot of opportunities. Ruag is a company which values partnerships and is willing to invest. We are not just building products, we are working closely with our partners to enhance and continuously develop products better.

We’ve won two substantial parts for the OneWeb project – the satellite structures and the dispensers – and we are building a smaller facility of 15 to 20 people in Florida.

When entering partnerships, we increasingly try to seek as much standardization as possible in order to get to certain volumes. This means we can tremendously lower our costs, which is then a cool thing for our partners who want to be competitive in the market.

Outside of ULA and OneWeb, what else is drawing you to the U.S. market? 

There are many attractions – be it in regard to existing customers, new business or technology development. For instance, one domain is in the digital electronics field like high-throughput satellites. There are a number of potential partners which we are talking to right now. Also for our RF products, we hear from many primes. At the same time, we strive to further advance the technologies and products.

Ruag Space CEO Peter Guggenbach, left, and ULA CEO Tory Bruno toast their business relationship Wednesday at the 33rd Space Symposium. Credit: Tom Kimmell
Ruag Space CEO Peter Guggenbach, left, and ULA CEO Tory Bruno toast their business relationship Wednesday at the 33rd Space Symposium. Credit: Tom Kimmell

What obstacles does Ruag Space encounter in reaching the U.S. market, and how are you preparing to overcome them?

Firstly, you need to get a foot in the door, deliver to your promises and have the word spread. An advantage is that we are already known for our European legacy and previous collaboration with U.S. customers.

However, in the past, an obstacle had been that our teams and manufacturing facilities were based in Europe. In order to be close to our customers, we are now building up a strong presence and a local workforce in the U.S.

The U.S. employer market is great in this sense, as there are many talented and skilled professionals. We experience that our flexibility, the career paths we offer, as well as the investment we are making attract great people.

How is the NewSpace movement impacting Ruag’s business? Do new operators (besides OneWeb) or launchers present real opportunity or is it mainly hype? 

NewSpace for us is not a danger, it’s a cool opportunity to use new technology and do things completely different. That has added up nicely for us so far and we are generating substantial business in this segment. We go with our partners to cut costs up to 50 percent. It can be done if you apply technology in a smart way. By using commercial-off-the-shelf digital hardware, costs can be reduced by a factor of five. Lean forward, think different, put our customer in the center, and then whatever we do, keep the commitment and the promise that we have made.

It is also a chance for Ruag, coming from a traditional business, to attract a lot of motivated, forward-thinking employees. The U.S. has great potential, and we are investing. There is great business opportunity in the U.S., and we particularly seek to invest close to our customers.

How many people does Ruag have in California’s Silicon Valley?

Just a handful. Our plan is at the end of the year to have 15 to 20. We are overall around 1,300 worldwide. By the end of the year there will be roughly 100 in the U.S. But in the end, it’s not about the number of people, it’s about doing the right thing around our customers.

What new approaches are you taking to manufacturing equipment for space?

For the manufacturing of payload fairings, we have used autoclaves. We are working with industrial ovens that are much more energy efficient and – due to their size – allow us to cure the structures in full size. This reduces integration time of individual pieces and cuts costs down tremendously.

If customers want additive manufacturing, we apply it where applicable. If they want their products manufactured the traditional way, we do offer this as well.

And obviously, commercial off the shelf. Every manager in my company has COTS targets, and we are doing well there. We try to increase every year the COTS percentage in our products.

Are there other business opportunities in Europe that Ruag is eyeing currently? 

A lot. Ruag has the most growth potential in the commercial channels. We came almost entirely from the ESA/institutional market. Meanwhile, we do more than 50 percent on the commercial market. This is where the growth lies. I think also you quickly get that sensibility to be cost efficient, to be fast on the market and agile in your delivery. But at the same time, there is ESA development, and we will seek further NASA involvement in the future. It is a clear focus to contribute and be there.