Founded in 2011, Dongguan Yutong Optical Technology Co.,Ltd is a professional lens manufacturer whose clients include some of the largest brands in security. This year, the company makes its debut on Security 50, ranking No. 18. In an interview, its chairman discusses what makes his company successful over the years.
Founded in 2011, Dongguan Yutong Optical Technology (YTOT)
is a professional optical lens manufacturer focusing on the R&D, production and sales of precise optical lenses used in IP cameras, in-vehicle solutions and machine-vision systems.
Pinguang Zhang, Chairman of YTOT, said he always had an interest in security, which he believed had huge business potential. “From the very beginning I had the feeling that security was an industry full of opportunities. I stayed in Japan before and saw security solutions deployed on the streets and in storefronts. I thought security awareness in China would eventually increase, and demand for security products would pick up. So I got rid of all my other business interests and focused purely on security,” he said.
Indeed, there’s certain truth in Zhang’s statement. At least before COVID-19, security had been on a growth trajectory for decades. In fact, strong demand for security is reflected in YTOT’s own performance; the company has achieved remarkable growth over the past nine years. This year, the company debuts on Security 50
and ranks at No. 18 with 2019 total revenue of US$178.2 million.
Advanced manufacturing capability
YTOT’s success certainly had to do with its advanced manufacturing capability – an area that YTOT has invested a lot of money and resources in to enhance product quality and production efficiency. Today, YTOT has two manufacturing plant bases, one in Dongguan and one in Shangrao city, Jiangxi province. Together, the company has the capacity to produce up to 18 million lenses per month.
What sets YTOT apart from its peers is that, from the beginning, it has caught up with the Industry 4.0 trend and adopted automation, which has effectively helped the company cut down labor cost and achieve further efficiency. “Dependency on labor has certain problems. A new worker needs to be trained for several months before being sent out to the assembly line. He may leave in less than a year. What I tried to do was to reduce dependency on labor,” Zhang said. “So we turned to automation. Luckily before YTOT founded, as a digital camera lens OEM for Japan, we’ve had experience in this regard. We introduced this automation concept to the new company. Immediately, we achieved cost-down and quality improvement.”
Today, at YTOT’s manufacturing facility, glass spherical lens processing has automatic production lines for core taking, coating, bonding and inking. Plastic aspheric surface processing has an intelligent molding production line and an automated coating production line. Lens assembly has a fully automated machine assembly production line, automated assembly production line, MTF automated inspection production line, automated locking production line, and multiple independent research and development machines to assist lens assembly.
Local and global customers
YTOT also has a clear market positioning, offering fixed and small zoom lenses for mid- to high applications. “We’ve always been able to stay one step ahead of our competitors. At the time of our founding, VGA was still the mainstream, yet we were able to make lenses for 1.3MP and 2MP applications. At present, we already have the ability for the mass production and supply of 8MP and higher pixel products. At the same time, YTOT is also one of the first lens manufacturers to launch starlight lens and full-color lens," said Zhang.
The company positions itself as a lens supplier for the world’s Top 20 security companies. Today, it supplies to some of the biggest security brands in the world, for both Chinese and international clients.
“In fact, just several months after we were founded, we entered the supply chain of Hikvision. At that time, the top customers of the industry were looking for a Chinese partner that could supply high-quality lenses at lower prices than Japanese brands. We were able to offer prices one-sixth or one-seventh lower than those of Japan, at a quality not inferior to them,” Zhang said. “We also supply to Hanwha and Axis. Axis usually chooses a partner after a three-and-half-year assessment period. For us, it only took them two and a half years.”
A yearly review and preview
Last year, the company’s growth was an impressive 23.4 percent compared to 2018; on Security 50’s top growth chart, the company ranks No. 18. This year, inevitably, the company will be impacted by COVID-19. “We had expected earlier that this year we’d achieve a 50 percent growth. But with COVID, that’s impossible. But then, pandemic-related solutions have picked up. We received a lot of orders for our clients’ thermal and facial recognition solutions,” Zhang said.
As for next year, Zhang has high hopes for his company, based on optimism the overall demand in security will grow. “Next year, the industry may see rapid growth. While COVID may still be a problem, the economy will keep moving, and the industry will continue to grow. The market is too big,” he said.
As for the company’s future strategy, Zhang said YTOT will continue to focus on security, while expanding into other niches as well. “Our core products will remain fixed and small zoom lenses, which will only see more demands down the road. With lens resolutions getting higher and higher, large zoom lenses will see shipments dwindle, and fixed and small zoom lenses will become the mainstream,” he said. “Also, with the completion of our new factory next year, we’ll expand the product line of in-vehicle solutions.”
Further growth expected down the road
Indeed, as the market becomes more competitive, companies must reply on solid manufacturing and clear market positioning to win out. YTOT has achieved both: It has developed strong automation capability and provides high-quality, competitively priced lenses for security applications in the mid- to high-end segments of the market. It’s no surprise that with such a clear strategy, YTOT has achieved high growth over the years, and we can expect this growth to continue in the years to come.