Liquidity-starved State-owned defence industrial group Denel has identified opportunities that would allow it to generate revenues and even create new revenue streams in the coming years. It reported this in its recent briefing to Parliament (which was released by the legislature on June 17).

The group pointed out it was currently implementing its turnaround strategy, which had been initiated in 2018. It also stated that it hoped to accelerate the implementation of this turnaround plan.

It reported that the first phase of the turnaround, undertaken in 2018 and 2019, had been concerned with fact finding and assessment activities. The second phase, now under way and set to run until the end of next year, was focused on stabilising, reforming and focusing the group. 

Phase 3, originally set for implementation during 2022 and 2023, would be marked by the achievement of a performance culture in the company, with good governance, clean audits, a strong balance sheet, reskilled staff, and so on. The final phase, originally planned for 2024 and 2025, would see Denel become a high-performing, operationally efficient and sustainable company with a modern product and services portfolio, with advanced engineering capabilities and producing spin-off technologies for other industries.

The group identified to Parliament its top ten order opportunities for the next five years. These opportunities would be provided by Denel Dynamics (the group’s guided missile, precision-guided munitions and unmanned aerial vehicle – or UAV – business), Denel Land Systems, Denel Vehicle Systems and Denel Aeronautics (aircraft maintenance, repair and overhaul, plus the Rooivalk and Oryx helicopters). 

Denel Dynamics accounted for five of the top ten opportunities. These included two potential orders for its Umkhonto ground-based air defence missile, which Denel rated as having a 50% and a 49% probability of being confirmed (Umkhonto is already in service in its original naval variant). There were also two potential orders for the Seeker 400 UAV, both with, in Denel’s view, a 51% chance of success. And, also currently rated at a 51% probability of success, an order for A-Darter air-to-air missiles.

Denel Vehicle Systems had two new contract opportunities, both rated as 70% probabilities. One was for support contracts and the other for (RG32) Scout 3 light protected vehicles. Denel Land Systems had a 60% chance of an order for its NTW20 20 mm calibre anti-materiel rifle and a 80% probability of winning a contract to upgrade G6 155 mm 6 x 6 self-propelled guns.

Longer term new technologies and revenue streams for the group included – digital national security solutions; cybersecurity and cyberattack; monitoring and control systems for the flow of assets, information, money and people; data fusion, key word definition, threat detection, voice detection and language recognition; and advanced command and control and decision support systems. Others would be maritime surveillance systems; border surveillance systems; border management systems; law enforcement and asymmetrical warfare solutions; and chemical, biological, radiological and nuclear detection systems. Yet more opportunities would be provided by armed UAVs; UAV detection systems; and a consolidated local aeronautical maintenance, repair and overhaul capability. Further future revenues could be obtained from doing research for other entities and producing spin-off technologies for non-defence sectors.