From hobby to analytics: Malaysia's dronetech companies scale up for the future
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KUALA LUMPUR: In the office of Aerodyne Group in Petaling Jaya, Selangor, a drone designer was giving his full attention to fine-tuning a set of propeller guards on his computer.
He studied the blades' dimensions carefully before 3D printing the product, which would then be installed on a custom drone to protect its propellers.
On another floor, a group of data analysts were hunched over the computers and going through photos and footage captured by drones for clients.
A row of TV screens on the wall charted ongoing mapping and geo-survey projects.
"They are not just simply sorting and processing data using human labour," Aerodyne Group's co-founder and Chief Executive Officer Kamarul Mohamed explained to CNA.
"They are examining data already cleaned up by our internal artificial intelligence (AI), performing quality assurance at the same time helping to refine the AI's machine learning process."
The scene at Aerodyne showed there is much more to flying drones than just a cool hobby.
Having evolved beyond a gadget fad, the drones are here to stay. At the same time, there is serious money in the industry.
A study released by PricewaterhouseCoopers Poland estimated the 2015 global commercial drone market at US$127 billion, with applications in sectors such as infrastructure, agriculture, media and security.
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However, as with most disruptive technologies, the dominant mindset in Malaysia towards drones has been a "wait-and-see" approach.
Some industries, such as the media and entertainment industry, have embraced drones quickly for their obvious utility and lower costs in obtaining aerial videos and photo stills, whereas previously one would have to charter a helicopter for aerial footage.
But over time, more and more "prosumer" (the bridge between professional and consumer) drone models have entered the market, lowering the barriers to entry for commercial aerial photography and videography.
While this has resulted in many new amateurs joining the commercial ranks, serious players are moving well beyond footage and stills to combining drone technology with analytics, spawning a whole industry in capturing, processing and presenting drone data for businesses and clients with large physical assets.
GOING BEYOND VISUALS, CAPTURING "ACTIONABLE DATA"
The mainstream acceptance of dronetech began to really take off around end of 2016, noted OFO Tech (Ohsem Flying Object) co-founder and Chief Executive Officer Armi Majid.
Prior to that, clients had to be "brave enough" to adopt what they assumed to be a disruptive technology.
OFO Tech started out as a hardware solutions provider. The founders were engineers by training, and relished building their own drones or customising off-the-shelf ones for clients.
Now, while OFO still builds and tailors its own machines for jobs, the focus has pivoted to data, from acquisition to presentation. It brands itself as an unmanned aerial system solution provider, with its biggest clients coming from the construction, agriculture and land surveying sectors.
"People are more open now, especially those who are more exposed to technology and younger clients," said Mr Armi.
From its four founders back in 2016 to 27 people now in Malaysia and Indonesia, the company is preparing to enter Europe.
Likewise, Klang Valley-based Aerodyne Group Sdn Bhd is also scaling up. It expanded from three founders in 2015 to 270 people in 25 countries currently, including Japan, China, India and Russia.
Aerodyne began generating a positive cashflow by its second year of business. The group carried out its Series A round of venture funding last year and a pre-Series B funding round earlier this year from Japan's Drone Fund, a venture capital firm, to begin serious expansion as an international player.
Starting from just drone-captured visuals, Aerodyne quickly pivoted and went into providing "actionable data". It means processing the raw data captured by the drones, and giving their clients information that the latter need to act upon immediately.
"It depends on the industry, like where your equipment is failing, or if you are a plantation, which areas need better attention, do they need more fertiliser, or are the trees in this section dying," said Mr Kamarul.
These days, clients want more than just "actionable data", he added.
"They want real business insights and a real understanding of the data to allow them to run their operations better."
Mr Armi of OFO Tech added: "In truth, we're becoming more like drone data companies, rather than drone companies".
In terms of the economies of scale in drone manufacturing, Malaysian businesses are far behind global players such as the Shenzhen-based DJI.
Instead, many companies have taken on custom building projects for specific jobs and data analytics. A local company, Fourfang, has developed a fully autonomous drone with its own docking station to recharge flight battery.
REGULATING DRONE USAGE
Is it a cowboy town out there, where drone operators hunt for visuals without supervision? Industry players say no, but vigorous enforcement is nonetheless needed.
At least four different authorities are regulating drone usage and development in Malaysia.
SIRIM (formerly the Standard and Industrial Research Institute of Malaysia) ensures each machine is airworthy, while the Malaysian Communications and Multimedia Commission manages the frequencies allotted to drones to receive their control signals.
The Department of Survey and Mapping Malaysia (JUPEM) issues permits for drone flights on the basis that all mapping activities, including drone mapping and surveying, falls under its jurisdiction due to national security.
As for Civil Aviation Authority of Malaysia (CAAM), drones come under the Civil Aviation Regulations 2016, which state that all drone activities, regardless of size or purpose, require a flying permit. Flight ceiling is capped at 120m above ground level.
In addition, drone flying is barred from certain airspaces, including airports, Malaysia's administrative capital Putrajaya, Istana Negara, military bases, telco base towers and residential areas, unless permitted.
However, Mr William Alvisse, a former aerial photographer and now the executive secretary for the Malaysia Unmanned Drone Activist Society (MUDAS) noted: "So far, the authorities have been very lenient".
MUDAS is a non-governmental organisation involved in research, academia and the aerospace industry. It also promotes dronetech and STEM (science, technology, engineering and mathematics) education among schoolchildren via drone construction workshops.
Besides, it educates amateurs and professionals on the legal usage of drones, while talking to the authorities on how to best regulate the industry without stifling its growth.
One impetus for MUDAS' efforts to engage both sides is to avoid any injury or damage arising from irresponsibly piloted drones.
Back in 2017, a remote-controlled plane hit a boy riding pillion on a motorcycle, resulting in severe injuries, while earlier in 2015, amateurs posted stills they had taken flying over Kuala Lumpur International Airport, resulting in public outrage.
"Although the 2017 incident was an RC (radio-controlled) plane, it still leaves a bad image for the drone community. We can't wait for the first tragedy to happen," Mr Alvisse said.
SOME STILL FLOUT THE RULES
Despite the regulations, there have been instances of rules being flouted.
On social media, amateurs have continued to post drone shots over the Kuala Lumpur Tower or Petronas Twin Towers. Such activities violate CAAM guidelines, which prohibit flying over residential or crowded areas, said Drone.my's Adam Lokman.
In addition, the location fees charged by CAAM (RM250 per drone per location) and JUPEM's RM50 permit fee a day also mean that often, amateurs and even commercial operators tend to disregard the rules, as long as there are no visible consequences, Mr Alvisse said.
Those flying a drone without CAAM's permit could face three years' jail, a RM50,000 fine, or both.
Some players feel that rigid regulation may stifle Malaysia's chances in keeping up with drone technology developments elsewhere.
Regulators in other countries are already putting frameworks in place to promote future technologies, Mr Kamarul of Aerodyne said.
"The usage of drones with smart sensors and autonomous capabilities are going to change the world. We need to see the value of these solutions and introduce necessary framework to run these operations in a safe manner," he said.
Rather than being a big fish in a small pond, Mr Kamarul said promoting a nurturing ecosystem for new technologies would be better for Malaysia.
"We want to see other Malaysian companies rise, and be global players as well, the market size in Malaysia itself is already quite sizeable," Mr Kamarul noted, adding that his own conservative estimate of the drone industry market in Malaysia ran from RM500 million (US$ 120 million), for just drone services, and is still growing.
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PUBLIC-PRIVATE PARTNERSHIP
The relevant government agencies have been engaging the dronetech companies to develop the industry.
One major driver on this front is the Malaysian Digital Economy Corporation (MDEC), which kicked off an initiative to develop the drone scene in 2017.
According to Mr Mohd Safuan Mohd Zairi, who works in MDEC's Enterprise Growth Accelerator and a "dronetech evangelist", the agency under the Communications and Multimedia Ministry has organised two industry roundtable sessions to share both the regulators' and the private sector's concerns, as well as issues in developing and managing the growing drone scene.
Players in the private sector, entrepreneurship enablers such as Malaysian Global Innovation & Creativity Centre and Futurise, as well as the regulators attended the roundtable.
"Futurise has established a drone testing zone in Cyberjaya, and we are also collaborating with the Entrepreneur Development Ministry to boost the creation of more 'dronepreneurs' in the dronetech and air mobility industry," Mr Mohd Safuan highlighted.
Other industry efforts include partnerships with local higher education institutes, while engaging international bodies such as the World Economic Forum's Drone Innovator Network, the Fédération Aéronautique Internationale and global drone technology companies to enhance Malaysia's own capabilities.
Although the local scene is still at a nascent stage, Mr Mohd Safuan said there have been several encouraging indicators.
"We do have local dronetech players such as Aerodyne that have received global recognition, and others are scaling up globally," he said, pointing to OFO Tech as well as another player, Poladrone.
Mr Mohd Safuan is cognisant about the challenges involved.
"We need to tackle four key areas - putting in place adaptive dronetech regulation and policies, certifying talents and developing future skills," he said.
"However, these challenges are not entirely unique to Malaysia, and we can overcome them sooner by putting in place the necessary intervention measures."
Meanwhile, at the grassroots level, enthusiasts are trying their best to cultivate a pool of young talents for the industry.
Among those is Liyana Sobhi, one of the few females active in the drone scene.
Besides being Drone.my's point person for the reseller's social media and marketing and handling walk-in customers, she also works on outreach programmes for kids.
The 25-year-old believes that drones serve as a way to broaden children's minds.
"In schools there'll be robotics and coding, so why not put drones together with those activities? Eventually it'll open up their perspectives on STEM," she said.
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