Denel aims to grow revenue to R7bn
State-owned defence company Denel on Tuesday said it intends to grow its yearly revenue to more than R7-billion in the next five years and create a long-term order book of more than five times its turnover.
Briefing Parliament’s Portfolio Committee on Public Enterprises, Denel group CEO Riaz Saloojee said the company was modernising its product offerings in most of its divisions to provide it with a competitive edge in the global defence industry.
The company would also continue to develop “world-class” products in the strategic areas of artillery, unmanned aerial vehicle (UAV) systems and ammunition, as well as its provision of maintenance services for aircraft and helicopters in Africa.
“By 2018, Denel will have moved from its current position as a ‘good company’ to [being] a ‘great company’ and a national asset that all South Africans can be proud of,” said Saloojee.
The local manufacturer was already supporting South Africa’s national security and peacekeeping efforts, contributing to the country’s strategic military independence and defence stature.
The company was steadily growing its order book and pursuing an opportunity pipeline of R35-billion – of which almost 50% was in Africa, including South Africa. There were also various opportunities in other primary target markets in South America, the Middle East and the Asia-Pacific region.
Saloojee highlighted that Denel had undergone significant restructuring in the past year with 11 businesses integrated into six divisions. Support services were now shared across the group, leading to cost optimisation and savings.
Revenue had improved by more than 10% and profit grew by R30-million to R71-million, he noted, adding that the only remaining loss-making unit in the group, Denel Aerostructures, had improved its position by 35%, while exports contributed 50% of the group’s revenue.
The company was investing more than R528-million a year in research and development, which was expected to grow in the coming years with specific focus on artillery and UAV production. Denel also improved its technology base in the field of asymmetrical warfare through the acquisition of specialised armoured vehicle manufacturer LMT and the introduction of new missile technology.
Its primary achievements during the past year included the delivery of the final Rooivalk combat support helicopter to the South African Air Force, the ongoing qualification of the A-Darter air-to-air missile in collaboration with Brazil and the start of the contract to deliver the Badger infantry combat vehicle to the South African Army.
Saloojee said Denel continued to contribute to national developmental objectives through skills development and socioeconomic initiatives, as well as through its support for efforts to combat rhino poaching and protect South Africa’s natural resources.
The company was repositioning itself as an employer of choice through branding and recruitment strategies, spending 3% of payroll – R46-million – on skills development and providing bursaries to students in a range of engineering and artisan training fields.
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