Denel looks to Africa for growth

Written by defenceWeb

Tuesday, 17 May 2011

Denel says it is ready to explore growth opportunities in Africa and expand its range of products and services on the continent. The company hosted a number of defence attaches from several African countries in an effort to showcase the company’s products.

South Africa’s largest defence group hosted the attaches at its PMP (Pretoria Metal Pressings) facilities in Pretoria yesterday. According to Talib Sadik, Denel CEO, the purpose of the meeting was to showcase South Africa’s defence products as designed and manufactured by Denel. « This is very important for African defence forces to know that the capacity exists on our continent to maintain their fleets to the highest levels of safety and quality, » he said.

Sadik added that the company has equipment that is « thoroughly tested for the African market and highly suitable for the geographic and climatic conditions on the continent. » Such equipment ranges from assault rifles to heavy artillery.

According to Brigadier General Emmanuel Miburo of Burundi, Denel has established a good reputation for the quality of its products and its participation in peacekeeping operations. Denel Mechem, for instance, has undertaken landmine clearing operations in Angola, the Democratic Republic of the Congo, Eritrea, Ethiopia, Mozambique and Sudan.

« We are impressed with the range of weapon systems manufactured by Denel – ranging from the Rooivalk combat support helicopter, missiles and guided weapon systems to world class small and medium calibre ammunition, » Miburo said.

Denel offers a wide range of products and services, such as aircraft maintenance, repair and overhaul (MRO), and mine clearing.

Denel makes a wide range of civil (hunting) and military ammunition, from 5.56 mm and 7.62 mm rifle calibre to 105 and 155 mm artillery shells and 60 mm and 81 mm mortar rounds. The company also manufactures air-to-air, ground-to-air and air-to-ground missiles like the Umkhonto air defence missile, Mokopa anti-tank missile and A-Darter air-to-air missile.

Other products include the NTW20 anti-material rifle, G5 and G6 artillery, turrets for armoured vehicles and Seeker series of unmanned aerial vehicles (UAVs).

Denel has sold products and services to 32 African countries. Most of it is logistical. For instance, Denel has sold landmine removal, battle area clearance and contraband detection services in countries such as Angola, the Democratic Republic of the Congo, Eritrea, Ethiopia, Mozambique and Sudan. Sadik said Denel would continue focusing on maintenance, repair and overhaul work.

Over the past three years Denel has invested R447m in local plants and is concentrating on « new products » such as mortar, artillery and naval ammunition, a new minefield clearing system and 40 mm ammunition.

Denel has been actively pursuing African sales, and last year was in the process of finalising a deal with Libya to sell R6.289 billion worth of military hardware to the country, including G6-52 artillery systems, missiles, grenade launchers and anti-material rifles.

The Mail & Guardian obtained an internal Denel memo outlining a successful arms sales trip to Libya last year. « The MOU is initiated and will be signed in due course. The trip received the blessing from both the presidencies. The Brother Leader also stressed the importance of having Africans trading within the continent, » the memo reads. « The president of Libya and his South African counterpart will sign within the coming year.”

Denel did not sell any weapons to Libya last year and the current situation seems to have ruled out sales for the near future. The arms embargo and political crisis have scuppered huge defence deals with other countries, such as France and Italy. Russia estimated it lost out on US$4 billion worth of military sales to Libya following the crisis there.

Denel Aviation, part of the State-owned Denel Group, is also pursuing markets beyond South Africa’s borders. Denel Aviation CEO Mike Kgobe said last year that Denel Aviation was focusing on North Africa in particular in an effort to overcome the declining South African Air Force (SAAF) budget. In the past, the Air Force was the biggest customer for the company and through work with the SAAF, the company has built up infrastructure to compete with global players.

Five years ago the loss-making Denel instituted a radical reorganisation plan, and managed to cut its losses from R533 million in 2009, to R246 million last year. In 2005, the industrial group posted a R1.6-billion loss. Denel hopes to return to profitability in the financial year beginning April 1, 2012. This target was set out in the company’s corporate plan in 2009. While most of Denel’s companies do well, Denel Saab Aerostructures (DSA) brought the company into the red, and will be sold off.

At its yearly results meeting last year, Denel said it had R15.8 billion worth of orders.

Source: defenceWeb

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