Denel acting CFO Odwa Mhlwana has confirmed that the creation of Denel Asia, a joint venture with South African private-sector company VR Laser, has been approved by the relevant governmental authorities. Furthermore, they have agreed that nothing wrong was done in setting up the company, which is to be based in Hong Kong.

“Certainly, Denel Asia is a critical market [sic] for our growth,” he said in response to a journalist’s question at the group’s annual report media briefing on Tuesday. “The competition [in Asia] is extremely, extremely severe. Now, Asia has been a market we’ve been excluded in [sic] for a very long time. It is a very lucrative market.” It is Denel’s strategy to get into this market.

The creation of Denel Asia became embroiled in a controversy between Denel and the National Treasury. In addition, the shareholders of VR Laser include members of the Gupta family, which has become controversial in South Africa because it is widely seen as, and accused of, exploiting close personal relationships with President Jacob Zuma to win government contracts.

At the same event, acting group CEO Zwelakhe Ntshepe reported that the company’s G6 wheeled 155 mm armoured self-propelled gun system was being upgraded. “In the Middle East, one customer has 45 calibre barrels [that is, the length of the barrels is 45 times the calibre of the gun], but we’ve improved the barrel and improved [the system’s] mobility. Another country wants a 52 calibre barrel; we’re looking at a 52 calibre barrel for a Middle Eastern customer.” He noted that the 52 calibre barrel was attracting a lot of interest in that region. Denel had proposed two options to meet that interest and hoped to secure a deal in the near future.

In addition, Denel has the T5 project: a 155 mm gun/howitzer, as in the G6, but mounted on a truck chassis. “It’s currently doing tests in one of the [interested] countries,” he reported. “It’s doing very well.” The T5 is a Denel flagship project and the company hopes to penetrate the Asia-Pacific region markets with it.

The South African Army has a requirement for a light artillery piece. Some years ago, Denel developed a prototype 105 mm gun/howitzer, designated the Light Experimental Ordnance (Leo), regarded as a world-leader. “We still have the gun,” he assured. “We’re, at this point in time, looking for a partner to codevelop the gun.” Should the Army order the weapon, Denel would do an analysis to see if it was practical for the group to develop it alone. This would depend on the numbers ordered, and the South African Army requirement was currently only for a limited number of guns.