Patria AMV in the South African Badger configuration.
July 19, 2011 defpro.com
Denel’s order pipeline continues to grow with prospects to the value of R44 billion* that are currently being pursued. Zwelakhe Ntshepe, Group Chief Executive Business Development and Corporate Affairs, says total order book including confirmed contracts already exceed R21 billion which includes the South African National Defence Force’s contract, Project Hoefyster, for the delivery of a new-generation infantry combat vehicle.
He says the firm prospects in the pipeline will significantly strengthen Denel’s turnover and contribute to the turnaround process at the country’s largest manufacturer of defence, security and aerostructure products. Earlier this month the State-owned company released its results showing a net profit of R111 million – returning to the black for the first time since 2001.
Ntshepe says contracts of about R5 billion were concluded shortly after year end, including the largest export order ever secured in Denel’s history.
The company intends to grow the opportunities to R70 billion and ensure the conversion of at least R21 billion of this into confirmed orders over the next three years. In the coming year alone contracts to the value of R14 billion will be confirmed.
Denel’s primary mandate is to provide strategic defence technology, products and services to the SANDF. There has been a more concerted focus on export markets and 79% of the new business prospects are coming from international clients.
The company is focusing its marketing activities primarily in the Middle East and the Asia-Pacific region while Africa is regarded as an area with significant growth potential.
Ntshepe says the prospects being pursued cut across all Denel’s divisions and products ranges. This include Denel Dynamics (missiles, precision-guided weapons and unmanned aerial vehicles); Denel Land Systems (artillery, combat vehicles and turrets); and Pretoria Metal Pressings (small and medium calibre ammunition).
Project Hoefyster, involves the development and production of the Badger-family of infantry combat vehicles to meet the requirements of the SA Army and replace its fleet of Ratels. Denel Land System is responsible for the development of five state-of-the-art modular combat turret variants armed with the home-grown 30mm CamGun, 60mm long-range mortar systems and Denel Dynamics’ Ingwe anti-tank missile system is integrated into the Patria 8X8 vehicle platforms.
264 Badger vehicles will be delivered to the SANDF over an eight year period.
In addition Denel Aviation is growing its business to provide maintenance, repair and overhaul (MRO) services to a growing number of clients operating in South Africa and on the rest of the continent.
The upgraded Rooivalk Combat Support helicopter was delivered to the SA Air Force in April while 12 Cheetah C supersonic fighters were sold to the Ecuadorian air force.
Denel Mechem is a world-leader in demining and battle-clearance operations such as the recent clearance of remnants of war explosives, most notably this year in countries like Sudan and Angola.
Ntshepe says Denel’s recent marketing successes can be attributed to a number of factors:
• A more focused and aggressive marketing strategy to pursue opportunities and convert them into sales. Denel maintains a highly visible presence at most of the major international defence exhibitions in the Middle East, Asia and Africa.
• Strong back-up and support from the South African government. This is a crucial factor in the international defence industry as client countries expect its suppliers to demonstrate support and guarantees from its government.
• The quality of the products developed and manufactured by Denel as well as its capacity to back-up sales with maintenance, technical support and spare-parts throughout their life-cycles.
The international defence market remains highly competitive and was adversely affected by the global economic downturn.
“Converting opportunities to order is going to require significant investment and time, including the on-going support of government,” says Ntshepe. “We are, however, optimistic that we can build on our recent successes and meet our targets to grow our order cover and turn opportunities in the pipeline into confirmed orders that will grow Denel’s business and contribute to the company’s profits”.
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* R44 billion = $6.34 billion; €4.5 billion