South Africa shines at DSEi

14 September 2011 by Jonathan Katzenellenbogen - defenceWeb

After years of rising defence budgets, most countries now plan major cuts in spending in the face of the economic and financial crisis. It is this background that heavily dominates Britain's and one of the world’s largest defence exhibitions, the Defence and Security Equipment International (DSEi) being held in London this week.

With dim economic prospects and the Great Recession behind a rolling wave of financial and sovereign debt crises, the prospects for additional cuts in defence spending across most major economies except China, India, and Japan are real.

The UK has already announced cuts of eight percent over the next four years and is laying off personnel and has cancelled or delayed a number of major programmes. In a sign of the times, rather than come up with any grand vision for the future, UK Defence Secretary Liam Fox announced at the exhibition that his ministry would name and shame contractors that are beset by delays and that overshoot budgeted costs.

For South Africa the downturn in international defence spending, the strong rand, as well as the political turmoil in some of its most lucrative markets in the Middle East, has severely dampened export prospects. SA has yet to make any major inroads into the large Asian markets, although officials say there are good prospects in Malaysia. In the face of recession, SA will have to keep up a presence at the big defence shows to push for new markets, as it is often wise to keep up advertising spending in a recession.

In the face of recession and a strong currency, SA's defence industry will have to rely more heavily on its other sources of competitiveness. Simphiwe Hamilton, Executive Director of the South African Aerospace Maritime and Defence Industries Association speaking at the launch of the latest SA Defence Industry Directory said these advantages were based on its position as a non-aligned reliable, and affordable supplier. The ability of SA industry to manufacture short-runs into niche markets has also helped in the past and could be increasingly important.

SA’s Department of Trade and Industry makes a heavy annual commitment to helping defence companies show their wares at the major international defence and security shows around the world. It is estimated that the cost of the SA show participation to the Department of Trade and Industry came it at around R6 million this year.

Any defence company that wishes to show it is serious about international marketing needs to be at DSEi. The shows numbers and visitor profiles are impressive and despite the downturn, the exhibitor and visitor numbers are expected to keep up with those of two years ago. This year there are close to 1400 exhibitors from 46 countries. And the number of visitors are expected to keep up with those of two years ago – 25 000 from nearly a hundred countries.

Many of the same 23 companies were on the SA stand two years ago, but there were a few new offerings. These included Simonstown based Nautic Africa, which builds a range of small and medium sized fast boats that can be used for patrols and anti-piracy operations. Expecting greater interest since its recent qualification, Denel placed its Neopup (Paw-20m) grenade launcher in a prominent position. The weapon is a good sign of South African inventiveness, but one that has yet to find a market, as it was not built to a specification and therefore has yet to fit into any military’s existing requirement.

Another new South African offering was Less Lethal Africa’s range of rubber bullets and ammunition for shot guns. With the growing international focus on public order policing, the Johannesburg-based company reported a strong interest in its stand. One of the company’s innovations is a transparent shot gun shell, which allows police forces to immediately identify the cartridge.

Benoni based BAE Land Systems OMC had its recently blast-tested eight wheeled RG41 armoured combat vehicle on display. It is positioning the vehicle as one that offers good value for a developing country.

At its briefing on SA as "a hub for future innovation" the DTI show-cased SAAB SA's LEDS-150 armour self- protection system, Zeiss SA's TLS40i Day Night Target Locator, Denel's M6 Long Range Mortar System, and Pretoria based Rapid M's RAPTAWC RT5 Tactical Data Terminal.

While it is gleaming new products that dominate the show, the pressures on defence budgets, mean companies are having to put greater effort into marketing their service offerings. Defence forces will increasingly be forced to keep equipment for longer and ensure lower life time cost with improved maintenance options.