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Venga
Aerospace Systems has entered the 3D imagery and graphics business. An impressive
corporate turnaround boosted through joint ventures and exclusive licensing and patents.
Technology
Consumer 3D
(YVY-TSX Venture)
Venga Aerospace Systems Inc.
Suite 200, 111 Eglinton Avenue East
Toronto, ON, M4P 1H4
Phone: 514-489-7175
Hirsh Kwinter
President
Interview conducted by:
Lynn Fosse
Senior Editor
CEOCFOinterviews.com
November 2003
BIO:
Hirsh Kwinter is Venga's Executive Vice President. He is a
Montreal-based businessman, who has been an investor in Venga Aerospace since 1993.
Hirsh's recent business experience portfolio includes:
- Negotiation of exclusive
rights and distribution agreements for manufactured products, and establishing markets in
Canada, Europe and the Middle East;
- Structuring and execution of a
deal which raised $2 million in funding for Venga Aerospace in 1993, and the use of the
proceeds to develop and make the Venga prototype aircraft mould;
- Personal financial planning
and advice for a client portfolio;
- Conception, implementation,
and execution of a successful corporate yacht charter business on Toronto's harbour front;
- Hands-on experience as a
supervisor in a public practice environment with a Chartered Accountancy firm.
Hirsh Kwinter holds a Bachelor of Arts degree in
Sociology from the Universite de Montreal and a Bachelor of Commerce Degree in Business
Administration and Accounting from Concordia University in Montreal.
Company Profile:
Venga Aerospace Systems Inc. (YVY-TSX Venture) was established in 1987. The company’s
initial business objective was the design and development of an all-composite jet aircraft
to meet a growing demand for a low cost, high performance aircraft, known as the TG-10
Brushfire, capable of being used for both training and light attack functions. In response
to changing market conditions, Venga, in late 1997, re-focused the Brushfire aircraft's
intended application from a manned military trainer to a full scale, unmanned drone
aircraft useable as both a target for weapon testing and as a tactical surveillance
platform.
In an effort to diversify its business operations, Venga, in March of 1999, created the
Deep Focus Art joint venture to commercially exploit proprietary 3D graphic technologies.
In a comparatively short time period, Deep Focus Art established itself as an important
player in the fast growing 3D-visualization market. In December of 2002 Venga further
created the CLIK 3D Joint Venture which made it a leading player in the l 3D consumer
camera and 3D film processing retail market.
CEOCFOinterviews: Mr.
Kwinter, where was Venga when you became president and where is Venga today?
Mr. Kwinter: “We initially started out as an aerospace
company in 1987 with a stated corporate goal of building the world’s first full-scale
jet trainer. In 1998 there was a fire which resulted in the destruction of our plane. We
tried to raise funding to rebuild our plane but ran into difficulties. I came on as
president, and began looking for an ongoing business that was an immediate revenue
generator. Our search focused on the field of 3D imaging which is market with annual
sales in excess of 4 billion dollars. We were able to create a series of joint
ventures with a number of leading imaging and technology companies both here in North
America and in the Pacific rim and we are now considered a leading force in the consumer
3D graphics business. In addition, we have positioned ourselves with a number of
established and innovative graphic firms which has allowed us to secure several licensing
agreements granting Venga an unprecedented range of capabilities, products and market
opportunities in the field of 3D graphics. Our most current effort was the creation of the
CLIK 3D joint venture which through a range of upscale retailers and a comprehensive
e-commerce site will offer the consumer a variety of new and exciting line of 3D products
and services. Most importantly we are going to aggressively target the millions of
current consumers in North American markets who own 3D cameras, who until now, had no one
to whom they could send there films for processing.”
CEOCFOinterviews: Will you tell us more about 3D cameras and
who uses them?
Mr. Kwinter: “ We sale a variety of 3d cameras; from
disposable ones that retail for less than $20 USD to professional models that can cost in
excess of $1,200.00. Our cameras come in various configurations ranging from 2 lens
up to 5 lens models. All of our images are printed on patented print material that
allows the viewer to see the 3D effect without the use of special glasses. While the
consumer 3D camera market is a niche market, it is a large and lucrative one. Typically,
3D camera users tend to be more upscale and professional”
CEOCFOinterviews: How do you get the word out so that
everyone can enjoy 3D pictures?
Mr. Kwinter: “Venga Aerospace Systems Inc. (YVY-TSX
Venture) was established in 1987. The company’s initial business objective was the
design and development of an all-composite jet aircraft to meet a growing demand for a low
cost, high performance aircraft, known as the TG-10 Brushfire, capable of being used for
both training and light attack functions. In response to changing market conditions,
Venga, in late 1997, re-focused the Brushfire aircraft's intended application from a
manned military trainer to a full scale, unmanned drone aircraft useable as both a target
for weapon testing and as a tactical surveillance platform.
In an effort to diversify its business operations,
Venga, in March of 1999, created the Deep Focus Art joint venture to commercially exploit
proprietary 3D graphic technologies. In a comparatively short time period, Deep Focus Art
established itself as an important player in the fast growing 3D-visualization market. In
December of 2002 Venga further created the CLIK 3D Joint Venture which made it a leading
player in the l 3D consumer camera and 3D film processing retail market.”
CEOCFOinterviews: What type of competition exists in this
market place?
Mr. Kwinter: “There really is no competition. We are
basically the sole 3D processor in North America. There is one other company in Georgia
that is doing the same thing that we do. But from what our customers tell us, their cost
is twice as much, the turnaround time is several months and the quality is not up to ours.
I think that we have a very interesting model and if we approach this opportunity properly
we can achieve and maintain dominance in a market that has in the past proven to be very
lucrative. It is interesting to note that several persons have cautioned us to learn
from the Sony experience with their BETA video technology. They were the only VCR
manufacturer and at the time they did not license it. Eventually their strategy resulted
in the creation of competition, which eventually ended up winning. Our strategy is
based on excellent customer service and adding more innovative items to our product line.
If we maintain this I am not worried about competition. We will always hold
our position of dominance.”
CEOCFOinterviews: Do you need to continually update your
technology?
Mr. Kwinter: “We have the latest technology. Our
greatest edge is the design of print material which is a lenticular sheet which has a
photographic emulsion coated on the reverse side. We have no problems with registration
and thus our end product is superior to anything out there. We use a patented
process, so in order to compete someone would have to go out and develop a new process.
Given the lead time and how long it would take to get into the business, I cannot see
anyone wanting to try it.”
CEOCFOinterviews: Do you expect to do much business from
selling the cameras and artwork?
Mr. Kwinter: “Cameras are what it going to grow the
business. We have a million cameras as a base out there already, which obviously is a very
helpful start. The cameras give us a product to sell, but we are not necessarily looking
to make much money on the cameras. We use the cameras similar to the way the ink jet
printers are used by their manufacturers. Today, they sell the printers at a low cost,
because they make their money by selling you the ink and other supplies. If I can get the
camera into your hand and you take a picture, you’re going to have to come to us for
processing. It is, fortunately for us, a largely captive audience.”
CEOCFOinterviews: Can you tell us about the financial
condition of the company?
Mr. Kwinter: “Our financing has always been tight. When
I took over the company, we were $600,000.00 in debt with no assets. In addition, we had
lost our listing on the stock exchange. As a shareholder at the time, I was told that this
was an impossible dream. It was hard enough to worry about raising money and the existing
debt, but we prevailed. I told people that just because they had limitation, they were not
to project them onto me. We were able to restructure the company and get a listing on the
Canadian Venture exchange. Further, I was able to raise funding. Unlike other companies,
everyone working for Venga is doing it for the value of their shares and I defy you to
find any other company that has that kind of management style or commitment . As a result
of our unique situation, the CBC (Canadian Broadcasting Corporation) did a feature show on
us in December, to show the obstacles that we have had to overcome. I am quite impressed
with where we are sitting today and if you take into consideration the limitations that we
have on salaries and funding, I think that we have come quite a ways.”
CEOCFOinterviews: In closing, why should investors be looking
at Venga?
Mr. Kwinter: “Investors should realize management’s
commitment to making this company successful. We have people working with us who have a
history of being successful in other businesses. They have made sacrifices to add value to
the company. We feel that our track record speaks for itself. We have now passed the
consolidation stage and we are moving forward. We believe that with hard word,
perseverance and dedication anything is possible."
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