Defence industrial group Denel can play a central role in rebuilding the South African defence industry, argues group CEO Riaz Saloojee. “We’re agile. Because we’re State-owned, we can play a key role in the development of defence and play a key role in empowering the supply chain.”

Thus, the group could be used “as a pivot to rejuvenate the very real landward [defence industrial] capability” in South Africa, through the Hoefyster (Horseshoe, in English) programme. This programme will replace the South African Army’s current force of Ratel (Honey Badger, in English) infantry fighting vehicles (IFVs), which first entered service some 35 years ago, with the new Badger IFV.

The Badger is a South African development of the Finnish Patria armoured modular vehicle, modified by Denel Land Systems (DLS) to meet South African requirements and fitted with a DLS-developed turret. (This turret, which comes in several versions, has already won a €340-million export deal with Malaysia, where it will be fitted to the country’s new IFV, which is based on a Turkish design.) “It will be a huge boost to the local vehicle sector,” affirms Saloojee. “It will assist a significant number of companies.”

The original contract was signed in 2007. “The project has two phases – one developmental, one production,” he explains. “There are not two contracts.” In early July, it was revealed that the Department of Defence (DoD) had approved the start of the production phase.

The DoD’s procurement, disposals and research and development agency, Armscor, is busy with the contracting process for local production. “We hope to resolve any outstanding issues with Armscor in the next few weeks. And then we’ll start allocating resources for production,” he reports.

Similarly, the group can play a role in strengthening the country’s advanced manu- facturing and high-technology capabilities. This could be promoted through government acquisition programmes in civil aviation as well as defence. “Definitely, we cannot go into acquisition programmes without a substantial added value coming to local companies through offsets,” he avers. “It would be irresponsible of us not to use these opportunities to strengthen our manufacturing.”

Regarding aviation, in particular, he points out there are two types or levels of opportuni- ties. “First, with original equipment manufacturers (OEMs): identifying work packages that can be made in South Africa. [Denel has] advanced manufacturing – Denel Aerostructures. On the aerostructures side, we will be losing golden opportunities if we don’t use these acquisitions to enhance our manufacturing capabilities.”

The second type or level of opportunity in aviation is achieving certification for the maintenance, repair and overhaul (MRO) of aircraft from the OEMs, in return for buying new aircraft. South Africa has three State-owned MRO entities – Denel Aviation, South African Airways Technical (SAAT) and SA Express Technical – all based at Johannesburg’s OR Tambo International Airport. Recently, Public Enterprises Minister Malusi Gigaba stated his desire that these three companies work together and achieve synergies in their opera- tions in order to create a world-class MRO capability at the airport.

“It makes sense – we need an integrated approach,” agrees Saloojee. Duplication has to be avoided and training and skills standardised. “Otherwise we won’t be able to take full [advantage] of approaches to major [aerospace] companies.” Talks between the three companies are already under way.

“Denel is here to stay,” he asserts. “We will be a key player in this industry – not only in South Africa but in Africa and elsewhere.”