Company speeds ahead by putting the brakes on; Tony McDonough meets JULIO FARIA, managing director of Surface Transforms.
THE world is full of clever people with fantastic ideas whose downfall is a complete lack of business acumen, but that is not an issue for Julio Faria.
The 54-year-old engineering expert is managing director of Surface Transforms (ST), a company that is aiming to grab a slice of a multi-billion pound market for aircraft and automotive brakes using lightweight, carbon fibre reinforced ceramics (CFRCs).
Frodsham-based ST was started by Faria in 1992, along with colleagues from his former employer ICI, and in August 2002 began trading on the Alternative Investment Market (AIM). It currently has a market value of pounds 4.6m.
The immediate focus is selling brake discs and pads in Europe using CFRCs for the automotive parts aftermarket - parts that are fitted to factory made cars after they've been sold, to enhance performance.
ST has launched a consumer brand - SystemST - to meet potential market demand, which it values at around 200,000 ceramic discs per year with potential revenue in the order of pounds 140m per annum. It expects to command up to 5% of this market.
The brake sets are aimed at owners of performance road cars, such as Porsche, Audi and Jaguar. These drivers are seeking significantly enhanced braking performance, and are therefore eager consumers of specialist brake parts.
To market SystemST, ST has signed an agreement with German automotive parts supplier METEK, one of Europe's leading suppliers of braking systems to the automotive industry.
South-American born Faria is not modest about the long-term benefits of the technology both in the automotive and aircraft sectors.
He said: 'Surface Transforms is all about taking this exciting new technology to what we believe is a global market. We think it will change the way cars are made. The technology is lightweight and energy saving and of course energy saving is what we all want.'
It was hoped ST would supply CFRC brakes for the new Airbus A380 superjumbo but those hopes were dashed earlier this year when it became clear ST would not be able to meet the European aircraft maker's tight timetable.
Faria added: 'The focus at the moment is very much on the automotive sector because we have to make sure we give a return to the shareholders but we are still working in the aircraft sector.
' There are only five companies in the world making aircraft brakes and we are working with two of them so I still believe we have an advantage in that market.'
Faria was born and brought up in Georgetown, Guyana, before winning a scholarship to study chemical engineering at Leeds University. He returned to Guyana to work in the sugar industry and then moved to Montreal in Canada where he joined CIL, ICI's Canadian subsidiary.
This was followed by the plastics division in Hertfordshire, then its New Science Group in Runcorn. He was involved in several new technologies at ICI, but ultimately ICI was unwilling to enter the downstream carbon fibre composites markets.
He said: 'When you are at school you decide you want to do something practical but also with a strong theoretical base. It is about taking lovely ideas to the market. The crucial question is whether people will buy it - that is the measure.
'I started in pure engineering and then I got involved with the people selling the products. Out of that I began to understand what customers wanted. It was the desire to make things commercial.'
In 1986 he left the then security of ICI to form April Computing Executive, then April Training and April Agri-Biologicals and proceeded to take a series of products from invention to the market, funding the process with cash developed by selling hardware and software.
Today April Training has established itself as a producer of management training software used by many of the UK's Universities and business schools.
Faria began ST in 1992 along with Professor David Clark, Dr Margaret Steel and another engineering expert, Phil Norton-Berry, with a mission to exploit new material and process patents from ICI. It was floated on the Ofex market in 2000 and later switched to the AIM in 2002.
Now employing 17 people the firm is also using CFRC technology to develop military armour and civilian and military rockets and has also looked at the brakes market for Formula 1 racing - a passion of Faria's - but decided the sport's strict rules would make viability difficult.
He said: 'We wanted to come in with much higher performance brakes and then we realised this could also work in road cars.
'We always knew the market was there but it was so expensive and at first we didn't think it was viable but we tried successfully to bring the price down. People who are interested in the performance of a car want a vehicle that is light - that's how you improve fuel economy.
'At the moment the market is for high performance cars because the product is still new and very expensive. It would be difficult to persuade Ford to pay pounds 1,000 for brakes for the Fiesta when at the moment they may pay around pounds 10. But it is early days and in 10 years time it could filter down.'
The company has yet to attain profitability but Faria is confident this is not far away insisting its investors were prepared to be patient The current board holds around 25% of the stock with around 1,000 small investors holding 30% with the rest being held by City institutions.
He added: 'These days it is a lot easier than it was 10 or 15 years ago to find investors. If you put together a strong team and you have the belief in the AIM market people will take risks.
'When you start the business you need as many skills as possible - later on it is important to bring in experts from the outside - no one person is clever enough on their own.
'If I build a strong enough team they can take it onto another level. It always hard to take a step back but what matters is the company must grow and be successful - you always have to keep that in mind.
'People don't last forever but businesses can last a long time
Age: 54Born : Georgetown, Guyana, South America Highest educational qualification: Chemical engineering degree from Leeds University Best advice received: Never give upin a Formula 1 team
Julio Faria: If I build a strong enough team they can take it on to the next level
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|Publication:||Daily Post (Liverpool, England)|
|Date:||Jul 13, 2005|
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