From Creamer Media in Johannesburg, this is the Real Economy Report. This year is a big year for the Airbus Military A400M military transport aircraft programme, which involves South African industry. Keith Campbell reports.

Keith Campbell:
Earlier this year, Airbus Military President and CEO Domingo Ureña hailed 2013 as “the year of the A400M”. This year has seen the first production aircraft come off the final assembly line and the start of the delivery process to customers. At the end of last month, the A400M received its type acceptance for its Initial Operating Standard from Europe’s Organisation for Joint Armament Cooperation, which acts on behalf of the programme’s seven European core partner countries – Belgium, France, Germany, Luxemburg, Spain, Turkey and the UK. There is also, currently, one export customer – Malaysia. Between them, they have 174 aircraft on order. By the end of this year, four of these will have been delivered to two customers – three to the French Air Force and one to the Turkish Air Force.

The A400M programme has significant South African content. Private-sector company Aerosud has six work packages for the aircraft and produces various structures for it, such as the nose fuselage linings, the cargo hold linings, cockpit linings, cockpit rigid bulkhead, the aircraft galleys and also the wingtips. State-owned Denel Aerostructures makes the wing/fuselage fairings and the centre fuselage top shells. Both companies are now ramping up their production. For example, Denel Aerostructures last year produced eight A400M shipsets – a shipset is a complete set of components for one aircraft – but this year it will manufacture 16 shipsets, rising to 24 next year. The company expects production to stabilise at 24 to 30 shipsets a year.

The  development programme for the A400M has lasted ten years and so far more than 5000 flight test hours have been accumulated. There have been innumerable tests and trials, covering the aircraft’s ability to use rough airstrips, to operate in very hot and very cold conditions, to take off and land at high altitude airfields, to abort take offs, to fly high and fast and low and slow. Avionics systems, including night vision aids for the pilots, have been tested. Different types of cargo, including helicopters, have been loaded on to, and unloaded from, the aircraft. There have been air to air refuelling trials – in some the A400M  has been the receiving aircraft, in others the A400M has been the tanker. There have been demonstrations of the A400M doing in-flight refuelling of helicopters.

Airbus Military is confident that the A400M has a great future. It sees market opportunities in Asia, the Middle East, Australasia and South America. It expects to export 400 A400Ms over the next 30 years, and says that that is a conservative estimate.

Shannon de Ryhove:
Other news making headlines this week: ArcelorMittal South Africa is optimistic of sealing the Thabazimbi deal with Kumba in the second half of the year; Cesa moves on its first graft case as it sharpens its corruption-busting tools; and a homegrown gas-pressure regulator has global aspirations.

ArcelorMittal South Africa CEO Nonkululeko Nyembezi-Heita says the outcome of the negotiations between it and Kumba Iron Ore over the future of the Thabazimbi mine, which is a tied supplier to AMSA’s Vanderbijlpark works, should be concluded during the second half of the year.

ArcelorMittal South Africa CEO Nonkululeko Nyembezi-Heita

Consulting Engineers South Africa, which represents more than 450 member firms, is moving ahead with its first anticorruption case, having established a so-called ‘war chest’ in 2012 to enable it to take legal action in instances where corruption is suspected.

CESA CEO Lefadi Makibinyane

Welding, cutting and gas products and services company African Oxygen Limited (Afrox) launched a technologically advanced gas-pressure regulator, the Smoothflo regulator, in South Africa last month. The regulator embodies innovative features and represents years of research and develop-ment investment. It will soon be launched in Europe, North America and Australia.

Afrox head of hard goods and exports Nazmi Adams

That’s Creamer Media’s Real Economy Report. Join us again next week for more news and insight into South Africa’s real economy.