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SA defence group seeks major revenue, orders, boosts within five years

15th November 2013

By: Keith Campbell

Creamer Media Senior Deputy Editor

  

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South Africa’s State-owned defence industrial group, Denel, is modernising most of its product offerings to increase its competitiveness in the international defence markets. “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,” Denel Group CEO Riaz Saloojee recently told the Parliamentary Portfolio Committee on Public Enterprises.

The group aims to increase its revenues to more than R7-billion by 2018 and achieve an order book worth five times that amount, or more than R35-billion. About half that order book would be for customers within Africa, including South Africa. The other main markets targeted by Denel are the Asia-Pacific, the Middle East and South America.

Currently, exports account for 50% of total group revenues, which have improved by more than 10%. Profit increased by R30-million to R71-million. Only one unit in the group, Denel Aerostructures, continues to lose money, but it has improved its situation by 35%.

The group’s research and development spending exceeds R528-million a year. This is planned to increase, with a special focus on unmanned vehicles and artillery. Denel is also introducing new missile technology. It will continue to produce world-class products in these areas, as well as in ammunition and in the maintenance, repair and overhaul of fixed wing aircraft and helicopters, particularly in Africa.

During the past year, the group restructured itself from 11 businesses into six divisions, and support services are now shared across Denel, optimising costs and achieving savings. The group has also bought specialised armoured vehicle manufacturer LMT.

Denel also undertakes skills development and socioeconomic initiatives in order to support the country’s development policy. The group’s skills development programme, which includes bursaries for engineering and artisan training, costs R46-million, equivalent to 3% of its payroll spending. It is seeking to make itself an “employer of choice”. Saloojee also noted that Denel was involved in the protection of the country’s natural resources, including the fight against rhino poaching.

Saloojee listed a number of important achievements by the group over the past year. One was the delivery of the last (of a total of eleven) Rooivalk attack helicopter to the South African Air Force (SAAF), which calls the machine a combat support helicopter. Others achievements were the continuing qualification of the A-Darter infrared homing air-to-air missile, being developed jointly with Brazil, and the start of the contract to build the new Badger infantry fighting vehicles for the South African Army. (The Badger is a local adaptation of Finland’s Patria armoured modular vehicle.)

Meanwhile, it has been reported that the SAAF has deployed three Rooivalks to the Democratic Republic of Congo to join the aviation unit of the United Nations Mission in the Congo (Monusco) and support Monusco’s Interven- tion Brigade, which includes South African troops. Defence-web reported that the Rooivalks have already undertaken successful combat missions against M23 rebels in the east of the DRC.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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