South African armoured and mine protected vehicles company Denel Vehicle Systems (DVS) has won its first order since becoming part of the Denel group at the end of April. “It’s a sizeable contract,” reports DVS CEO Johan Steyn. “We won the contract in July. It’s a follow-on contract for RG31 vehicles from a Middle Eastern country.”

DVS was previously BAE Systems Land Systems South Africa. The company retains the three division structure it had before the takeover by Denel. However, what was Land Systems South Africa Dynamics is now Denel Mechatronics (to prevent confusion with Denel Dynamics, the group’s guided weapons, unmanned air vehicles and space business). The other two DVS divisions are now Denel OMC and Denel Gear Ratio.

DVS’ current core product line is the RG12, RG31, RG32 and its latest design, the RG21. “We expect to do more sizable business in the Middle East in the next 12 months,” he assures. The RG21 is part of the company’s marketing drive in the region. “We are planning a customer demonstration in the Middle East in the next two months. We feel fairly positive about that. Our focus now is to develop the RG21 further, in different customer configurations and to add the optional extras customers sometimes want.”

The company is hopeful of follow-on contracts for its RG32 vehicle family from its European customers. These would likely happen over the next few years. But the market for mine-resistant ambush protected (Mrap) vehicles, as the Americans call them, is now very tough. “The Mrap market is saturated,” he explains. “The main market areas are now likely to be in meeting special customer requirements, such as mortar carrier versions of vehicles like the RG31, rather than stock-standard Mrap armoured personnel carriers.”

DVS is the third company within the State-owned Denel group to operate in the armoured vehicle realm, along with Denel Land Systems (DLS) and Land Mobility Technologies (LMT). “There is no conflict in products between DVS, DLS and LMT,” he assures. “DLS is a complex combat systems house; they run complex systems like the Badger [infantry fighting vehicle] and the G6 [self- propelled gun]. That’s not the league we operate in. And if you look at LMT’s vehicles, there is very little overlap with ours. I don’t see any conflict at all.”

Likewise, there is no duplication between the gun turret capabilities of Denel Mechatronics and DLS. “Mechatronics deals with remotely-operated turrets, DLS with manned turrets. There is no overlap at all,” points out Steyn. “We’ll definitely make a sales breakthrough with our remotely- operated turrets within the next 12 months.” (Mechatronics is also responsible for the sights for the Badger.)

“There are, in fact, more advantages than disadvantages for Denel,” he affirms. “We are now one team and Denel’s landward systems cluster can now make complete offerings to any client. For example, DLS can offer the G6, but artillery needs support vehicles, which we and/or LMT could provide, depending on the customer’s requirements. Another example: Denel can now offer complete land systems solutions to any customer – vehicles, weapon systems, logistics support and long-term support. Thus, we can meet any and all requirements from any and all clients. This is a massive capability within Denel.”

Gear Ratio fits in as well. It produces, maintains, repairs and overhauls the drivetrain of all the South African Army’s wheeled armoured fighting vehicles, including the Ratel infantry fighting vehicle, the Rooikat (Lynx) armoured car and the G6. “You won’t find that capability elsewhere in South Africa. And Gear Ratio is a very good business, which shows constant growth.”

Steyn believes that the transfer of ownership from BAE Systems to Denel has been good for the local company. “The change has been very positive. We had some issues in the past from some quarters in South Africa because of our foreign shareholding. Moreover, Denel has been very strong in certain markets, markets in which we were not strong. I see opportunities in those markets.”