The current sorry state of Denel will change if Armscor chief executive Solomzi Mbada is to be believed.
He devotes part of his “From the Desk of the CEO” column in the latest Armscor newsletter to the travails of the State-owned defence and technology conglomerate, writing “intervention measures” by Minister Pravin Gordhan’s Department of Public Enterprises (DPE) are “welcomed”.
“Bringing Denel back to its former capacity and any intervention aimed at improving the situation is a win for the defence industry as a whole. Discussions are at an advanced stage among Armscor, Denel and DPE on the most effective model.
“Denel holds South Africa’s sovereign and strategic capabilities hence a need for organisations such as Armscor to collaborate and provide the necessary support. We trust turnaround strategies currently in place at Denel will yield positive results,” the top Armscor man maintains.
With September and the 2022 Africa Aerospace and Defence (AAD) exhibition on track for Air Force Base (AFB) Waterkloof after a COVID-19 enforced absence, Mbada sees “the return of Denel” to the exhibition as “a turning point in stabilising the organisation”. AAD will run from 21 to 25 September at the Centurion base, known as the SA Air Force (SAAF) centre of transport excellence.
His observations come weeks after acting Denel chief executive William Hlakoane said restructuring the SOE (State-owned enterprise) would save R240 million a year. He plans to turn Denel into a two division operation rather than the six operating units it currently comprises.
He told defenceWeb the six Denel divisions did not share resources with duplication and overlaps common. Hlakoane sees the “new Denel” being leaner and an organisation where resources and services will be shared.
The new Denel divisions will be engineering and manufacturing/maintenance with unprofitable divisions and entities “exited or transferred”.
Armscor, according to Mbada, is mandated to support other government departments as illustrated by a service level agreement (SLA) between the State-owned defence acquisition agency and the SA Police Service (SAPS).
“The agreement entails among others acquisition and procurement services to achieve synergy across Security Cluster departments. Ongoing projects include disposal of obsolete landward and aeronautical platforms and other ancillaries.
“Through-life-cycle support and maintenance management services on new and existing platforms are part of the offer to the SAPS to ensure service readiness in an efficient and effective manner.
“This collaboration among state departments/agencies seeks to exploit Armscor capabilities for the benefit of the whole country while ensuring sustainability of the agencies concerned. We have started with an exercise to review our processes to be more effective given an ever-changing external environment. This will enable us to be relevant and responsive to client needs,” Mbada writes.