South African aerospace company Denel Aerostructures (DAe), part of the State-owned Denel defence industrial group, signed a renegotiated agreement with Airbus Military in Kempton Park on Monday covering the South African company's participation in the A400M military airlift programme.

DAe manufactures the wing/fuselage fairings and the fuselage top shells for the A400M.

The renegotiated agreement covers the wing/fuselage fairings and the top shells and will result in Airbus Military paying increased prices for these aerostructures from DAe, making their production economically viable and sustainable for the South African company.

Speaking at the event, Public Enterprises Minister Malusi Gigaba highlighted that Airbus Military and Denel had been strategic partners since 2005. "The industrial partnership between Denel and Airbus contributes to skills development, to high-tech manufacturing."

"Denel Aerostructures has some of the most highly skilled engineers and technicians in the country," said Gigaba. "This is why the government considers Denel as a group, and Denel Aerostuctures in particular, and the aerospace industry, as a national strategic asset."

He pointed out that DAe's losses were now, for the first time, below R100-million and that the company was projecting it would break even by 2016/17. "The company was forced to do some deep restructuring between 2009 and 2011, which reduced employment, to ensure that the core structure of the company was sustainable," he acknowledged.

The Minster also urged DAe to use its experience from the A400M project to "diversify it's revenue streams" and called on Airbus Military to help DAe to market itself to the European group's other Tier 1 suppliers.

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