04 February 2014 by Kim Helfrich - defenceWeb

More proof, if ever it was needed, that the South African defence industry cannot be viable without a strong export market comes from Rheinmetall Denel Munition (RDM).

Chief executive Norbert Schulze told defenceWeb the company, working from four locations in South Africa, last year exported 70% by value of its products.

“Our current order book shows 90% of production will be exported this year. This is in addition to us being the sole supplier to the SA National Defence Force (SANDF) of 105 and 155 [mm] artillery munitions, aircraft bombs, naval ammunition as well as armour and various mortars.”

Rheinmetall Waffe Munition GmbH of Germany is the 51% majority shareholder in the South African company with State-owned defence industry conglomerate Denel the other shareholder.

Schulze is actively exploring further export opportunities and this saw RDM recently open an office in Russia and work with the United Kingdom Ministry of Defence, the Dutch defence authorities and NATO.

The decision to establish a presence in Russia follows South Africa becoming one of the four BRICS member countries and he is confident there is a place for South African made munitions in the Russian defence sector.

With the need to keep exports strong, both from the point of view of keeping production facilities going as well as profitability, RDM has been working with the British and Dutch military authorities to obtain approval for a number of its products.

“We are confident of gaining the stamp of approval from the MoD by mid-year and this will open the door to another market,” Schulze said.

These will be in addition to the 30 countries where RDM is already doing business and Schulze also has plans to make the company a player in the central Asian and South American markets.

“We have targeted South America as a priority for 2014,” he said, adding RDM would continue to offer both its products and services to Africa.

“Africa is our continent and we want to keep it that way as well as keeping the SANDF as our number one customer.”

Apart from keeping up its supply to the South African military machine, Schulze plans to add the SA Police Service to RDM’s client list. He is confident this will see locally produced rubber bullets, flash-bangs and teargas being used by police.

Apart from steel forgings cast at its Boksburg facility that are used by Rheinmetall subsidiaries worldwide, RDM also supplies fellow Denel Group company PMP with military grade powder for its range of small calibre ammunition.

“Explosives and propellants are another area RDM is looking to grow and we currently have a staff complement of 80 working in our rocket section.”

As with other defence industry companies in South Africa, RDM has had to invest in people.

“We start identifying the right people while they are still at high school as our scientists and engineers of the future. The RDM Academy has been set up specifically with this in mind and part of its brief is to ‘search for bright youngsters’.”

Schulze is aiming at having 10 of the right young people in the Academy a year because it’s “the only way to go. The type of people we need one doesn’t find on the market”.

In the last financial year RDM employed 1 630 people. Schulze sees this growing and then settling at around the 1 700 mark with the RDM Academy bringing the right people to the company to keep it on the right side of future financial statements.