Drug smuggling a boon to U.S. Xray manufacturer

By Anthony Boadle

WASHINGTON, Nov 4 (Reuters) The war on drug traffickers smuggling cocaine
and heroin into the United States has given a shot in the arm to the owners
of Xray technology once used to inspect Soviet missile containers.

American Science & Engineering Inc. grew 60 percent last year in revenues
thanks to sales of its proprietary Backscatter Xray detection equipment
now used to search for narcotics on trucks coming across the Mexican border.

The Backscatter can literally see through trucks that are driven through
the huge scanning device, allowing for rapid inspection of traffic on one
of the world's busiest borders.

"We see the whole arena of cargo inspection becoming the major driver for
our business," said Ralph Sheridan, president and chief executive of the
company based in Billerica, Mass.

"We see a minimum 30 percent growth rate in the next three to five years,"
he told Reuters. "It is a market that will continue to grow over time."

Unlike normal Xray machines used as weapons detectors at airports, the
Backscatter bounces rays off organic and lowdensity materials, allowing
detection of drugs, plastic explosives and weapons and even smuggled
human beings.

It has become a centerpiece of Clinton administration efforts to stem the
flow of narcotics into the United States.

White House antidrug policy chief Gen. Barry McCaffrey is asking Congress
for funding to deploy Backscatter Xray units at each of the 38 crossing
points on the Mexican border.

American Science & Engineering has sold eight fixedsite inspection units
and four mobile units to the Department of Defense and the U.S. Customs
Service. The first inspection facility at Otay Mesa, Calif., has found
27,000 pounds of drugs hidden in trucks since it was installed in September
1994.

A second unit was set up at Calexico, Calif., and a third started up last
week at Pharr, Texas.

Americans spend $49 billion a year on illegal drugs. They consume onethird
of the world's cocaine, most of which is smuggled into the United States
across the nearly 2,000mile frontier with Mexico.

U.S. law enforcement officials say less than 10 percent of the narcotics
crossing the border is discovered. In 1996, they seized 35.6 tons of
cocaine on the Southwest border.

With 250 million people, 75 million cars, 3.5 million trucks and 500,000
rail cars crossing the border each year, drug enforcement and customs
officials have a major challenge stopping narcotics.

The Backscatter allows them to inspect a truck in less than 10 minutes
instead of the up to six hours it takes to search by hand. One in every 10
trucks crossing into the United States at Otay Mesa are now being Xrayed.

Sheridan said some border crossings will need more than one unit due to the
surge in crossborder truck traffic since the North American Free Trade
Agreement went into effect in 1994.

"You have to move to an inspection rate of between 20 and 30 percent of the
trucks before you can truly begin to deter drug trafficking," Sheridan said.

While the drug war is the immediate market for American Science &
Engineering, cargo inspection in general, including sea containers and air
freight, and antiterrorist security will provide longterm sales potential
for its technology.

The last mobile Backscatter commissioned by the Pentagon will be sent to
the Middle East, where the main concern is bomb attacks on U.S. military
facilities.

Another federal agency last month ordered 10 vans equipped with the Xray
detection equipment.

Its commercial application began less than five years ago, and sales have
risen to $30 million a year.

The company was founded in 1958 and first developed the Backscatter
technology working for the old Atomic Energy Commission measuring Xray
emissions for nuclear tests.

American Science & Engineering later made Xray emission equipment for NASA
satellites and measured Xrays from stars.

In the midst of the Cold War, its technology was used to Xray railroad
cars leaving a Soviet missile factory to make sure the missiles complied
with arms limitation treaties.

"We realized we had the capability to Xray larger things," Sheridan said.