Interview with James Lee, CEO, Suprema, Inc.

FBJames Lee Suprema

Suprema Inc. launched Korea’s first IPO in the biometric sector on July 11, 2008. Can you please provide our readers with a brief background of the company leading up to this news?

Suprema

Our recent successful IPO well reflects our company’s outstanding business growth and potential. Today, Suprema’s stock is traded on KOSDAQ at KRW 36,000(USD 33.00) per share and our total market capital exceeds USD 100 million. The key factors for our success in the recent IPO are high growth rate and widespread customer base backed by our leading technology in biometrics. Our revenue has increased at a CAGR of 96.3% since 2004, and in sales, export accounts for about two thirds of the total sales. Our customer base is widely distributed worldwide across Europe, Asia, the Americas and Africa/Middle East. Our core fingerprint recognition technology has also received international acclaims, earning top ranking at the last two Fingerprint Verification Competition (FVC 2004 & 2006), the world’s largest, bi-annual evaluations of fingerprint matching technologies.

FB

Can you review your product lineup?

Suprema

We are offering a full range of fingerprint-based products including fingerprint OEM modules, access controls, outdoor locks, time & attendance systems and software. In this area, we have launched innovative products with industry-leading features such as the world’s first biometric access control with full color LCD and Wi-Fi LAN. And recently, we have launched a range of IP-based access control systems and software. With such approaches, we have been a trend-setter for the industry and brought extra benefits to our customers by leveraging the merits of innovative technologies with biometrics.

Moreover, our product lineup is now expanding to a range of e-passport readers and live scanners for the electronic passport systems and civil & criminal identification markets with initial deliveries of passport readers to airline ticket counters and auto-gates in Incheon International Airport, and live-scanners to the national police agencies of Korea & Japan (KNPA & NPA Japan).

FB

Suprema works with many leading worldwide companies like Samsung, Hitachi, Siemens, and Assa Abloy. How do there relationships work?

Suprema

At the beginning, it was difficult for us to overcome the barriers for engaging partnerships with multi national companies. But, unlike other Asia-based companies, we focused on improving product quality and establishing the Suprema brand as a reliable name throughout the industry. Once we became capable of offering a certain quality of products and services to the top-tier multi nationals, we also became a favorable supplier to the global corporations. To achieve these goals, we have gone through layers of process innovation to cut down the cost of production and the same to the research & development as well as quality control issues.

FB

Suprema’s fingerprint algorithm has performed very well in the international Fingerprint Verification Competition. Can you elaborate on this for us?

Suprema

As you may aware of, the FVC is the world’s largest evaluation of fingerprint matching technologies. In the FVC 2004 and FVC 2006, our fingerprint recognition algorithm ranked top among participants in light and open category, respectively. In FVC2006, we ranked No.1 in medal rank of open category by winning 7 gold medals. In FVC2004, we recorded the lowest error rate in the light category. Suprema is the only company who has won both categories (open and light) of the last two events, FVC2004 and FVC2006. We are now focusing more on more precise fingerprint verification for unordinary fingerprints such as wet, aged, infantile and certain occupations mainly using fingers and hands.

FB

You are a very international company. How many countries do you operate in and where are you seeing the greatest growth?

Suprema

At the moment, export accounts for more than 70% of the total sales, evenly distributed worldwide to over 2,500 sites worldwide, across Europe (30%), Asia (27%), the Americas (25%) and Africa/Middle East (18%). Our primary export market has been Europe and recently, we see rapid growth in fast-developing economies such as Brazil, India and Russia.

FB

You just announced that your algorithm for automated fingerprint identification system (AFIS) was chosen by South Korea’s National Police Agency (KNPA). Please tell us about this news.

Suprema

KNPA’s 3-year phased AFIS project focuses on improving the quality of fingerprint images in its legacy database and upgrading administration software for the database. While most other country’s AFIS only focus on criminals’ fingerprint indexing, KNPA’s extensive AFIS database made of ten-fingerprints from the country’s whole population of over 40 million citizens which makes up over 400 million fingerprint images. For this massive fingerprint database, our latest algorithm plays critical role to upgrade the system’s performance. According to KNPA’s test results, our new algorithm shows significant improvement in matching speed and accuracy especially for identifying latent fingerprints and rolled fingerprints. Hence, with the new algorithm, the agency expects improved efficiency in criminal identifications and background checks.

Unlike civil AFIS, national police’s AFIS requires high-performance matching technology for its larger database. And our recent success with the Korean National Police Agency (KNPA) reflects our technological leadership in the region. Furthermore, we are confident that our new-generation AFIS technology exceeds international standards and requirements. We also set a plan for developing an ultra-high-speed matching algorithm, and expanding our sales scope to the international opportunities.

FB

In terms of new product development, what can we expect to see from Suprema in the near future?

Suprema

Today we are experiencing very high competition in the commercial part of biometric industry, especially for the low-end market. Since our primary focus was on high-end market where we have to compete with top-tier multinationals, we have more pressure on product quality innovation and technical issues than the cost and price issues. As for the fingerprint-based access controls and time & attendance devices, we have a complete range of products with leading features and technologies.

On the other hand, there are more opportunities in public sector of the market. In most of developed countries, we see strong growth in demand for live-scanners and electronic passport market and it is emerging into developing economies. We are very optimistic about our recent launching of internationally-certified e-passport readers and live-scanners. Our RealPass electronic passport readers are ARINC-certified and have been selected by South Korea’s nationwide passport issuing offices, check-in counters, auto-gates and boarding gates of the major airport.

As for the latest RealScan live-scanning systems, Suprema has been selected by the national police agencies of Korea & Japan. Also, we have recently gained official certification from the Federal Bureau of Investigation that our live-scanners met the agency’s Image Quality Specification Appendix F standards and we are the first Asian company (and 7th worldwide) to comply with the FBI IQS Appendix F for palm-print live-scanning devices.

We are going to launch the RealScan live-scanner in the US market through Biometric Consortium Conference 2008 in September and we will pursue aggressive marketing campaigns to expand our business to the international government projects.Suprema Biometrics