Aerospace and defence sector identifies viable investments

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The South African aerospace and defence sector has identified a number of commercially viable investments over the next five years, with firms open to discussions on how to realise them with the support of the state.

Combined investments of R4.65 billion would generate a potential market of R66.7 billion and create nearly 7 000 direct jobs, according to the 2020 Aerospace and Defence Masterplan.

The special mission aircraft market is worth R1.5 billion a year and South Africa could capture R15 billion of this, creating 450 direct jobs in the process. Investment of R150 million would be required to double production. Investment would include upgrading the Civil Aviation Authority (CAA) certification process, acquiring South African Air Force flight test support and generating marketing support.

Investment in armoured vehicles could create 300 direct jobs. For an investment of R500 million, production could be doubled for R1 billion market potential.

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A R1.2 billion investment in maritime maintenance, repair and overhaul (MRO) and manufacturing, defence technology development and subsystem manufacturing could see 500 direct and 2 000 downstream jobs created.

A R150 million investment in missiles could create 2 500 jobs – market potential is R6 billion while the current market is R900 million a year.

A R1.5 billion investment in artillery could create 1 400 jobs and tap into a potential R11.8 billion market. Similarly, a R1 billion investment in mortars could create 800 jobs and a R50 million investment in 40 mm ammunition could create 120 and tap into a R4 billion market. Spending R100 million on plant engineering could create 900 jobs and tap into an R8.9 billion market, particularly in the Middle East, Hungary, Egypt and Indonesia.

The Aerospace and Defence Masterplan said private sector entities believe these investments will prove commercially viable in an enabling environment over the next five years, and the relevant firms are open to discussion as to how these investment opportunities can be realised with the support of the State.

Furthermore, the Masterplan believes South African intellectual property can be commercialised and quoted a 2016 study by Armscor that showed that the then portfolio of IP was worth more than R400 billion if industrialised. This could create at least 10 000 direct jobs and 40 000 indirect jobs.

For more on this subject, consider attending the SAAMDEC/defenceWeb Aerospace and Defence Masterplan webinar on 25 May.



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