What Economic Slowdown? Exports Surge, Revenue Up For South African Defense Business

By Dana Sanchez Published: September 13, 2016, 2:29 pm

In the past financial year, revenue has grown 41 percent at Denel, South Africa’s state-owned aerospace and defense technology conglomerate, thanks in large part to exports, Business Day Live reported.

Business has also grown significantly for Paramount Group, Africa’s largest privately owned defense and aerospace business. This homegrown South African firm does business in 30-plus countries, led by founder Ivor Ichikowitz.

Passionate about his mission to make Africa safer, Ichikowitz describes Paramount’s success as “remarkable because it’s an African story,” according to Defence Web. “In 10 short years,” he said, “we have grown out of South Africa and into a global technology and manufacturing powerhouse.”

The Paramount website says the firm is “not just manufacturers. We see ourselves as pioneers. Partners. Innovators. Solutions engineers.” The firm employs 3,000 people at 16 facilities in and outside South Africa.

Denel and Paramount both plan to showcase new products and announce new partnerships this week at the African Aerospace and Defence Expo, scheduled for Sept. 14-18 at Pretoria’s Waterkloof Air Force Base.

Denel’s revenue grew 41 percent to 8.2 billion rand ($566,339,478 US) in the past financial year, according to acting group CEO Zwelakhe Ntshepe. He attributed that largely to a 6 percent growth in exports. Exports now account for 58 percent of Denel’s revenue, Business Day Live reported.

“We are strengthening our existing capabilities in the landward defence and vehicle sectors, and increasingly moving into command and control, missile technology, unmanned aerial vehicles and cyberspace,” Ntshepe said.

Here’s a look at new products and partnerships for Denel and Paramount:

Mombe 8 armoured vehicle

Paramount’s latest armoured vehicle, the Mbombe 8, an 8×8 wheeled infantry fighting vehicle, will be unveiled for the first time in African during the expo, Defence Web reported.

Africa Truck

Denel plans to launch a demonstration model of its Africa Truck, which it says meets the need for logistic and transport vehicles. The truck is based on Denel’s mine protection technology and can be used by peacekeeping support forces deployed in Africa, Ntshepe said, according to Business Day Live.

New aircraft factory under onstruction at Wonderboom

Paramount has an aircraft factory under construction of Wonderboom Airport, north of Pretoria. It will produce the Africa-designed-and-built Mwari, a militarized version of the AHRLAC advanced high performance reconnaissance light aircraft aircraft.

AHRLAC is a counter-insurgency aircraft developed in a joint venture between Paramount Group and South African defense contractor Aerosud.

Paramount manufactures in Asia, Middle East

Paramount has new production facilities in Central Asia, and local manufacturing with partners in the Middle East. It also has business partnerships with industry heavyweights including Boeing, Airbus Group and QinetiQ, Defense Web reported.

The business model is proven to bolster international knowledge transfer, economic development and national security, Paramount said.

Denel Asia

Denel said it plans to announce an agreement with Poly Technologies, the Chinese state-owned defence supplier, to collaborate in the local maritime sector. The agreement will cover ship repairs, shipbuilding, naval systems and marine services, Business Day Live reported.

Denel in Hong Kong

Denel has been at loggerheads with the Treasury over the legality of the establishment of Denel Asia, a joint venture between Denel and VR Laser Asia, a company owned by a close associate of the Gupta family, Salim Essa.

Denel Asia is a newly created joint venture registered in Hong Kong between Denel and VR Laser Asia, a company owned by Salim Essa, a close associate of the Gupta family, Business Day Live reported.

Denel executives said in Parliament last week that the arms company was still engaging with Treasury through the Department of Public Enterprises to clarify its legal compliance in establishing Denel Asia.

There was some conflict between Denel and the South African Treasury over legal compliance in creating the joint venture.

Illegal fishing and pollution

Denel plans to develop and market local maritime technology with South Africa’s Council of Scientific & Industrial Research that can detect illegal fishing in South Africa’s coastal waters and unauthorized dumping of waste oil in the ocean.

Denel developments against cyber warfare, terrorism

Denel plans to announce the creation of a dedicated business unit to focus on counter-measures and cyber warfare, Ntshepe said, according to Business Day Live.

Denel is developing the Cheetah C-RAM missile to counter rockets, artillery and mortar fired by terror groups and militias. The Cheetah C-RAM will be integrated with defense equipment for fast deployment in homeland security.

Passenger aircraft development

A full-scale model of the South African Regional Aircraft — SARA — developed in collaboration with universities and researchers – will shown at the expo. This is a project to develop a future passenger aircraft that can service smaller regional routes not covered by the major airlines.

 

 

 

 

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