Aerospace and Defence Masterplan pillars for action set out industry goals and responsibilities

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The Aerospace and Defence Masterplan has developed a number of clear goals and plans of action for the stabilisation and development of the South African aerospace and defence industries, from doubling exports to establishing the Centurion Aerospace Village.

The first pillar of the Masterplan is increasing market access and this includes doubling South African defence exports. Under Programme one of the Masterplan stages, the goal is to increase export earnings to R13 billion by the end of 2025 by optimising existing capacity and supporting new products on the market. This includes reducing the export backlog through the National Conventional Arms Control Committee (NCACC), streamlining export processes, and reviewing the business case for light reconnaissance aircraft and determining the potential for support. The business case for small regional aircraft would also be reviewed.

Roleplayers in achieving this goal include the Directorate Conventional Arms Control, Aerospace, Maritime and Defence Industries Association, Commercial Aircraft Manufacturing Association of South Africa, Armscor, the South African Air Force, SA Civil Aviation Authority, Council for Scientific and Industrial Research, Department of Trade, Industry and Competition and Department of Public Enterprises. By mid- to late 2021, the Masterplan aims to have finalised NCACC issues and reviewed the light reconnaissance and small regional aircraft business cases.

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Programme two aims to further government-to-government marketing and help increase export earnings. It also aims to increase South African participation in global OEM (original equipment manufacturer) supply chains by 30% by the end of 2023, position South Africa as the regional centre of excellence for MRO (maintenance, repair and overhaul) and the supplier of choice for commercial UAV (unmanned aerial vehicle) manufacturing and piloting, and armoured vehicles.

This will entail marketing plans, briefing attaches and trade representatives, reviewing marketing activities, generating a list of international OEM contracts etc. A major marketing drive with marketing and action plans developed and implemented by Invest SA, Proudly South Africa, DTIC, AMD, CAMASA, CAAASA is expected by the end of August 2021.

Programme three aims to increase the budget for the Special Defence Account (SDA) between 2021 and 2025, and ensure critical MRO activities are maintained for the South African National Defence Force. Goals include funding essential maintenance and upgrade work and ensuring sovereign and strategic needs are met. This includes stabilising Denel and the local industry. A task team will engage with National Treasury on the defence budget.

Programme four covers the implementation of an African MRO hub and Centre of Excellence inside the OR Tambo special economic zone (SEZ). The goal is to build on South African strength in MRO to revitalise SAA Technical and the local industry; and attract extensive demand for South African based MRO. A business plan is expected by the end of 2021, with assistance from the SA Civil Aviation Authority.

Programme five aims to replace imports of selected products to achieve 100% local production by the end of 2022, to a minimum value of R3 billion import replacement. The goal is to ensure all products and services which can be made locally and which are procured by the State, are locally produced and procured, beginning with quick wins and where possible, scaling to support exports at the same time.

This will be achieved by reviewing existing procurement processes for state security entities, promoting local acquisition of things like small arms and ammunition, radios etc., and supporting the local production of UAVs. It is hoped a new procurement system will be approved by the beginning of 2022.

Programme six aims to implement at least two confirmed home build programmes and increase local build activity and improve Denel liquidity. Projects could include A-Darter missiles and Badger infantry fighting vehicles, both currently Denel projects. Activities would entail mitigating risk and investigating other sources of funding, possibly from the private sector.

Programme seven is implementing catalytic space programmes, specifically the upgrade of Houwtek and a possible telecommunications satellite procurement project. The DPE, Denel, Department of Science and Innovation and the South African National Space Agency will finalise the Houwtek transfer agreement and ensure successful handover.

Programme eight calls for the implementation of the Centurion Aerospace Village (CAV), which would increase the competitiveness of the local commercial aerospace manufacturing industry; initiate and fast track a South African commercial drone development and commercialisation programme; and increase local industry aeronautics industry participation in OEM supply chains.

Stakeholders include the DTI, Invest SA, Aerospace Industry Support Initiative, SACAA, Transport Education Training Authority and merSETA (Manufacturing, Engineering and Related Services Sector Education and Training Authority), Technology Innovation Agency, as well as The Innovation Hub Group, and including the Development Bank of Southern Africa, Industrial Development Corporation and possibly the Public Investment Corporation, with the objective of finalising the planning and implementation of the CAV by the end of 2023. One aim is to attract at least two OEMs and components suppliers to South Africa by means of extremely attractive investment and synergy packages by mid-2022.

Programme nine covers the implementation of funding and finance support mechanisms for the industry to ensure export sales and local production expansions have relevant funding and financing mechanisms available to support growth. This entails, amongst others, obtaining banking support for the industry, access to a guarantee system to meet customer requirements; government risk underwriting and consideration of an EXIM (export-import) bank option. Implementation is aimed for January 2022.

Programme ten aims to review South African intellectual property with a view to commercialisation and revenue generation. Processes are already underway with Armscor in this regard.

Several programmes are dedicated to human capital development and inclusion. Programme eleven aims to retain and develop advanced skills and job retention and growth in the aerospace and defence ecosystem.

Programme thirteen looks at the design and development of a South African Advanced Research Projects Agency (ARPA). A task team will investigate the United States’ Defence Advanced Research Projects Agency (DARPA) and UK ARPA models with a view to local adaptation and adoption.

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



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