Not an experiment, but mission capability

A small Melbourne company predicted the Defence ban on the Chinese-made DJI drone family and funded its own R&D program to build the high-security quad-copter instead.

Amanda Holt, chief executive of SYPAQ, a leading engineering and systems integration firm that makes cardboard drones for Ukraine. Picture: Arsineh Houspian.

“When we arrived at Army Innovation Day 2018 in September of that year with a couple of cardboard drones under our arms, a lot of people giggled,” says Amanda Holt.

They stopped giggling when her company, SYPAQ, won a $1m contract from the former Defence Innovation Hub in January 2019 to develop the flat-packed, cardboard and elastic-band Corvo Precision Payload Delivery System drone, its first-ever drone design. Now SYPAQ is delivering that same drone to a war zone in Ukraine.

And this week the company will launch a new drone, the Corvo Alto, at the Land Forces 2024 Expo in Melbourne. SYPAQ predicted the Defence ban on the Chinese-made DJI drone family and funded its own R&D program to build the high-security quad-copter Corvo Alto instead.

The company is not allowed to reveal how many Corvo drones it has supplied to Ukraine, says Holt, chief executive of Port Melbourne-based SYPAQ, but it’s many more than the 500 publicly stated.

Surprisingly, however, SYPAQ came quite late to the drone – or Uncrewed Aerial System (UAS) – game. Its traditional strengths are in software-intensive systems and systems integration.

The company was established in 1992 by a former RAAF communications engineer, George Vicino, who remains chairman. His son, David, is managing director and appointed Holt as CEO in 2015.

From being a one-man band in 1992, SYPAQ now employs 220 people but, being a privately held company, it doesn’t reveal turnover and profit figures, says Holt.

But she adds that the company would “easily” make the annual Australian Defence Magazine listing of Australia’s top 20 small and medium enterprises, entry for which starts at around $25m.

“Like many veteran-owned businesses, SYPAQ began as a consulting business,” Holt says.

“That’s where the company’s core expertise in systems engineering was established.

“Fairly early on, George identified there was a degree of local context needed, especially when it comes to systems integration.”

You can buy some fantastic technology from around the globe, she adds, but when you’re integrating legacy in-service systems with modern technology, “that’s when you need a degree of local understanding and context”.

The company works in emerging technology and software-intensive systems – especially C4ISREW (command, control, communications and computing, intelligence surveillance and reconnaissance, and electronic warfare) and naval combat management systems.

But it also works in the non-defence sector for government clients such as Services Australia (formerly the federal Department of Human Services), whose combination of legacy and modern software-based systems makes its client payment system incredibly complex, she says, “so the company has a large team of software engineers working on that”.

Holt is an engineer both by training and inclination.

“I’ve transitioned from being a purely engineering team member to management, and now I’m running what’s still a very engineering-focused organisation,” she says.

She began her career close to where she now works, studying aerospace engineering at RMIT University’s former Fishermans Bend campus in Port Melbourne.

After graduating, she worked for simulation firm Adacel on naval combat management system upgrades in Sydney. She moved on from there to Thales Australia where she was engineering acceptance manager on the RAN’s FFG upgrade project, before moving back to Melbourne and SYPAQ in 2007 as general manager aerospace and defence.

In 2015 Holt was appointed CEO of SYPAQ, with the goal of proving to Defence that it could do more than just provide services.

To grow, she says, the company needed to do more. Hence SYPAQ’s Defence Autonomy Centre of Excellence, or DACE. Its headquarters was opened in April 2022 with the support of the Victorian government.

It is a secure, 5000sqm factory accredited by the federal government’s Protective Security agency to Zone 4 levels of classification and cyber security. The only higher level is the stratospherically classified Zone 5.

Here SYPAQ does as much as it can in-house. It conducts classified R&D and systems integration work, and writes software along with mass-producing things such as UASs.

The DACE predated mass production of the UASs, but SYPAQ foresaw the need for it. If you wait for the contract before investing in the infrastructure, personnel, processes and accreditations necessary for full-rate production, Holt says, “you won’t get there because you won’t get the contract”.

“That’s why we opened the DACE in 2022,” she says. “We could anticipate the demand in that UAS space and we understood that if we didn’t build it they would never come.”

The company now has three UAS production lines: the Corvo PPDS, the CorvoX Vertical Take-Off and Landing drone – that won a Defence contract last month under Project DEF129 Ph.4a, which seeks a sovereign, lightweight drone – and the Corvo Alto.

The twin-engined CorvoX was selected following the Advanced Strategic Capabilities Accelerator trial of sovereign lightweight drones in April. It will replace the US-made Wasp lightweight drone in army service, but Defence didn’t want a simple Wasp replacement: it asked companies to push their limits by doing things such as further reducing the cognitive load on the operator.

“We were told that if an Australian company didn’t have the best solution, the ADF wouldn’t buy it just because it was Australian,” Holt says. SYPAQ won, alongside Queensland company Quantum Systems, but she can’t say yet what the contract is worth nor how many UASs the company will build.

“We are excellent at guidance aviation control, we are excellent at autonomy, and we can optimise a platform according to mission type,” says Holt.

“That’s the strategy we have embarked upon and now we have three products in production.

“This is not an experiment. This is mission capability.”