03 July 2014 by Guy Martin - defenceWeb

Denel Dynamics is poised for growth.Missiles and aerospace house Denel Dynamics plans to nearly double is revenue over the next five years to nearly R2 billion and will do so in part by investing in new products and growing skills.

Denel Dynamics is hoping to achieve revenue of R1.8 billion for 2019 and R152 million in earnings before interest and tax (EBIT), compared to revenue of R999 million in 2013 and EBIT of R21 million (EBIT for 2012 was R40 million, according to Denel's 2013 annual report). Speaking at Denel Dynamics' recent Show and Tell, Dynamics CEO Tsepo Monaheng estimated that Denel Dynamics would grow by an average 12% year-on-year in the next five years.

The company also seeks to grow the number of employees from 872 to 942 and increase investment in skills development by 50%. Monaheng said growing skills is a big challenge - one strategy is to design a Specialised Technical Training (STT) program for employees under age of 35. Monaheng said that there is a crisis situation regarding skilled employment, especially of young people.

He also cautioned that the competition is aggressive as major manufacturers in the industry are moving into Denel's traditional markets as their home markets dry up. He said that South Africa is looking up to Denel Dynamics to deliver on hi-tech systems and solutions. "South Africa should be the country of choice to partner and do business with, the continent is looking up to us for solutions," he said, adding that Denel Dynamics has to not only continue to develop products for the South African National Defence Force (SANDF) but also position to compete in the international market.

Developing products for the SANDF is especially important in light of the Defence Review, which expects Denel to be responsible for sovereign capabilities such as commander and control.

Part of Denel Dynamics' strategy going forward is to keep developing new technology and focus on research and development. Christo de Kock, Chief Operations Executive at Denel Dynamics, said it was necessary to evolve and change especially in light of the fact that six out of the ten major conflict areas in the world are in Africa.

He noted that conflicts are starting more quickly and lasting longer and that warfare is changing and becoming increasingly asymmetric. Cities are more frequently becoming battlegrounds while the nature of warfare is changing - for instance cyber warfare and economic warfare are on the rise while organised crime syndicates and cartels are having a destabilising effect on certain countries - the Mexican drug cartels are a good example.

As a result of these changes, certain requirements are emerging for things like unmanned aerial vehicles, unmanned ground vehicles, unmanned marine systems, static observation sensors, precision weapons, man-portable weapons, weapons with targeted warheads and precision target marking and engagement, de Kock said.

On the protection side, de Kock said that vehicles, bunkers, assets, convoys etc. require protection, both active and passive, such as counter-artillery, rocket and mortar munitions and IED jammers. Another requirement he identified was the need for stealth, particularly a stealth anti-tank missile to defeat countermeasures systems as well an infrared stealth for vehicles.

Denel Dynamics is delving into all these areas (unmanned systems, space, sensors, stealth, and precision weapons) through various projects, many of which are funded by Armscor and the Department of Defence.

De Kock said that it is important to establish a research facility to look at future needs and solutions and that Denel Dynamics will do that and prioritise effort based on the SANDF's needs.

21 February 2013 defenceWeb (Reuters)

Global demand for drone aircraft is especially strong in Gulf Arab states worried about regional instability, industry executives said as a big U.S. manufacturer unveiled the first sale of an unarmed Predator to the Middle East.

Controversy over the legality of attacks by missile-firing drones will not dampen the volatile region's enthusiasm for the technology, in part because export curbs mean most equipment sold will be for use only in reconnaissance, experts say.

Sello Ntsihlele, executive manager for UAVs at Denel Dynamics, a division of state-owned Denel, South Africa's biggest maker of defense equipment, told Reuters this was "the best time" for unmanned aerial vehicle (UAV) sales, Reuters reports.

"Demand is growing fast in developing countries, in the Middle East, the Far East and Africa. The Gulf is critical in all this," he said on the sidelines of the biennial International Defence Exhibition and Conference (IDEX) in Abu Dhabi, capital of the United Arab Emirates (UAE).

"I can't be specific but all countries in the Arabian Gulf are talking to us," he said, adding that Denel's UAV sales had risen around 20 percent in the last four years, driven mostly by the Middle East.

UAE DEAL

The company had received up to double the number of inquiries from prospective clients than at the same conference two years ago, Ntsihlele said.

At IDEX on Monday, the United Arab Emirates announced a deal to buy an unspecified number of Predator drones from the privately-owned U.S. firm General Atomics in a deal worth 722 million dirhams ($196.57 million).

Also on Monday, Abu Dhabi Autonomous Systems Investments (ADASI), a subsidiary of state-owned investment firm Tawazun Holding, said it had signed an agreement with Boeing Co for ADASI to "provide training, support and marketing services" for Boeing unmanned aircraft systems in the UAE.

Frank Pace, president at General Atomics Aeronautical, said his firm's sales had risen by about 120 percent over the last five years, though until now it had not been able to sell to the Middle East due to tight export restrictions.

The UAE and Saudi Arabia are among several states, according to diplomatic cables released by WikiLeaks, that have asked U.S. officials to buy armed drones but which have been rebuffed.

Washington says its commitments to the Missile Technology Control Regime (MTCR), a non-binding international agreement designed to limit the spread of long-range precision weaponry, restrict drone exports.

Thomas Kelly, principal deputy assistant secretary at the U.S. State Department's Bureau of Political-Military Affairs, told reporters at IDEX that "caution" was Washington's point of departure on drone sales.

"We're not pushing armed systems right now to other countries. We understand there's a lot of interest in UAVs internationally ... (but) in terms of armed UAVs I think the administration is going to take its time to make sure that we have a policy that we're comfortable with."

General Atomics' export-variant Predator will have no "hard points" to attach missiles and would be deliberately engineered to make adding new weaponry impossible, the firm said last year.

Pace said he hoped the company would get approval to sell to more countries, especially in the Middle Eastern market, where he saw great potential. "We are talking to all of the Gulf (Arab) countries," he said.

KEEPING TABS "VERY IMPORTANT"

Sales are growing in the Middle East because having developed surveillance systems is fast becoming a requirement for all states, said Theodore Karasik, director of research at the Institute for Near East and Gulf Military Analysis.

"The region is still unstable, there are state actors and non-state actors that want to cause trouble, and being able to keep tabs on what's happening is very important."

The oil-rich, sparsely-populated Gulf Arab states are alarmed at the civil war in Syria, and want to ensure that popular uprisings in North Africa do not stir dissent at home.

The intentions of regional rival Iran, locked in a dispute with major powers over its nuclear program, are a perennial concern for the Gulf region's hereditary ruling families.

Controversy over the legality of drone strikes would have little impact on global appetite for UAVs, Karasik said.

"Don't forget the debate over UAVs is concentrated in the United States. Countries that want that capabililty over here will make their own decisions," he added.

The U.S. government has dramatically increased its use of drone aircraft abroad in recent years to target al Qaeda figures in far-flung places from Pakistan to Yemen. Britain and Israel have also carried out such attacks, and dozens more states are believed to possess the technology.

Targeted killings carried out by remotely piloted unmanned aircraft are controversial because of the risks to nearby civilians and because of their increasing frequency.

General Atomics' Pace said, however, that he didn't expect the controversy to have much impact on sales.

Missiles are "not a significant function of the aircraft and most of the people that are buying (are buying) for ISR and are going to keep buying," he said, referring to intelligence, surveillance and reconnaissance.

The surge in drone use has stirred debate in the United States about the transparency of lethal strikes and the powers of the president to order attacks on U.S. citizens overseas. A 2011 strike killed U.S.-born Anwar al-Awlaki, a recruiter and propagandist for al Qaeda's Yemen-based affiliate.

Pace said unmanned aircraft would have to be used responsibly, but that ultimately they would help to save lives compared to some of the older systems.

10 August 2011 by defenceWeb

Denel Dynamics’ latest unmanned air vehicle (UAV), the Seeker 400, is due to make its maiden flight in the first quarter of next year. This will be followed by flight tests leading to production for an unspecified client that “operated the Seeker I tactical UAV in the early 1990s.”

Two other countries which currently operate the Seeker II are also interested in the Seeker 400 because the new aircraft can be controlled by simply using their existing Seeker II control stations, the state arsenal says in a statement. “The decision by Denel to invest in this new product was mainly based on the global requirements for this capability. Based on the business case, Denel decided to fund the development from its balance sheet,” says Tsepo Monaheng, executive for Denel UAVS.

Although the USA and Israel dominate the global market, there is scope for South Africa to use local skills to create market-leading UAVs to a broad spectrum of countries - from developing to developed. This market is estimated at US $14 billion per annum, the company says in a statement. The South African UAV industry aims to capture in excess of 20% of this end of the market, the media release adds.

Simphiwe Hamilton, chairman of the South African UAV forum and executive director of the SA Aerospace, Maritime and Defence Industries Association in September 2009 said the South African unmanned aerial systems (UAS) industry was worth an estimated R400 million and is chasing annual business worth the same amount. The forum brings together SA UAV producers Denel Dynamics and ATE as well as research-and-development centres based at the Council for Scientific and Industrial Research and experts from the departments of Science and Technology as well as Trade and Industry. "It was estimated in 2005 that 200 full-time people employed in the wider South African industry would create a sustainable business turnover of around R200 million per year," Hamilton said.

The aircraft was displayed in mock-up form at the Africa Aerospace and Defence Show (AAD) 2010, in Cape Town in September last year. Though it utilises the Seeker II architectural design, Denel insists the Seeker 400 is a totally new aircraft. The Seeker 400 long-endurance tactical UAV (TUAV) is much larger and much more capable than the Seeker II and provides a variety of operational options, the company explains. It is deployable in most conditions, including taking off from an unprepared piece of land.

Monaheng describes the Seeker 400 as a “typical entry-level” long-endurance TUAV. It can stay in the air for 16 hours and can simultaneously operate two payloads. It currently has a maximum expected range of 250 km, the same as the Seeker II, because it will use only line-of-sight communications. This can be upgraded to satellite communications, which would allow it to operate at much greater ranges. With the use of the existing tactical ground station (TGS), the range may be extended to 750km.

The Seeker 400 flight test programme will run for most of 2012, and production should start by the end of the year.

Denel Dynamics plans, in due course, to add weapons to the Seeker 400, turning the aircraft into an armed reconnaissance platform. The prototype was recently displayed at the company’s 2011 ‘Show and Tell’ briefing in Centurion with a Mokopa precision-guided missile (PGM, also a Denel Dynamics product) under each wing. Last year, at AAD2010, Denel Dynamics exhibited a mock-up of the Impi, a 25kg hybrid of the business' existing Mokopa and Ingwe PGM. Denel Dynamics' Garsen Naidu said at the show the new missile concept “brings all our experience together”. The missile combines the Mokopa's seeker and laser guidance units with the Ingwe's multipurpose warhead and the Umkhonto short-range surface-to-air air defence missile's datalink. Like the Mokopa, the weapon has a 10km range. Impi is currently in its design phase and is a small, low-cost system designed specifically for operation on lightweight armed reconnaissance platforms, Naidu added. A number of countries have already expressed interest in an armed version of the UAV, Denel adds.

The Seeker 400 was originally conceived as an upgrade of the Seeker II but, as the project developed, the company realized that a totally new and larger aircraft would do better in the market. The retention of the name ‘Seeker’ also takes advantage of the Seeker II’s established brand.

The Seeker 400 programme schedule is on track. The medium-altitude, long-endurance (MALE) UAV project, the Bateleur, has not been abandoned but is currently on hold to allow for a focused development of the Seeker 400.

Globally, UAVS are becoming ever more important and more widely used. Although costs are coming down, UAVs are not necessarily cheaper or easier to operate than crewed aircraft – some top-of- the-range UAVs are very expensive, Denel says. But the fact that they have no human on board means they can be sent into high-risk environments and they can be kept aloft much longer than a conventional aircraft.

The availability of capable and affordable South African UAVs has obvious benefits for national security as well as crime fighting, disaster management, election monitoring and search-and-rescue, Denel says. UAVs are also utilised in the agricultural, mining, health and environmental sectors. Within the next five years UAVs will be used by a diversity of industries-- from policing poachers on land and coastlines or carrying test specimens from remote clinics to laboratories for analysis, to keeping an eye on livestock on farms. “This wide range of applications will open up lucrative parallel markets for international UAV players,” Denel adds.

Foreign experience in combat zones shows that the key service that UAVs provide to ground force commanders is live video coverage. This provides them with real time surveillance, intelligence and target acquisition as well as much better situational awareness. The French Army has reported that, in Afghanistan, UAVs have saved the lives of its soldiers and some 80% of its UAV missions are to protect its troops. Indeed, it is now known that one of the operators of the Seeker II has deployed these UAVs under UN command in a foreign country.