Denel’s Malaysian turret contract offsets are all systems go

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A contract to supply turrets and integrated weapon systems to the Malaysian Defence Force includes an innovative offset programme which is now delivering results for Denel and Malaysia.

The project to supply Malaysia with equipment for its new generation AV8 armoured vehicles is the largest ever in Denel’s history, the State-owned defence and technology conglomerate said in a statement on Friday. Offset agreements in the education, research and technology fields are integral to the contract. A function noting the success of Denel and the CSIR, was held last week at the National Defence University of Malaysia.

“This serves as an example of what can be achieved with well-designed offset programmes. Experience gained can contribute to similar future projects to benefit South African industry in the broadest sense and open doors for other defence and manufacturing companies in the Malaysian and regional markets,” Denel Group chief executive Danie du Toit said.

Denel expects to deliver 100% of its offset obligations in terms of the Malaysia contract when the project ends in 2021. Nine of 10 projects are underway and the tenth was launched during a function at the National Defence University.

It will see the CSIR presenting courses to Malaysian Armed Forces members and makes provision for a senior university researcher as an intern. The inaugural radio frequency and microwave principles in electronic warfare course saw 34 experts from the Malaysian armed forces and the academic community attend. The offset programme also makes provision for consultancy services from the South African research and development organisation. This will see a centre for excellence in electronic defence capability established at the university.

“The collaboration will strengthen technology and research co-operation between South Africa and Malaysia. The experience gained on this offset programme will benefit Denel in future,” Du Toit said.

The AV8 Gempita (Thunder) series is produced by Malaysia’s DefTech and based on the Turkish FNSS Pars. A dozen different variants are being produced for the Malaysian Army. This includes the IFV25 variant fitted with an FNSS Sharpshooter turret with a 25 mm ATK M242 cannon and FN MAG 7.62 mm machinegun. The AFV30 variant features the Denel Land Systems LCT-30 turret with GI30 30 mm cannon and FN MAG machinegun while the AFV30 ATGM variant has the LCT-30 turret with two Ingwe missiles.

Of the 257 AV8 vehicles on order, 46 will be in IFV25 configuration, 69 will be in AFV30 configuration and 54 will be anti-tank variants. The Malaysian order includes the supply of 216 laser-guided Ingwe missiles.

The first 12 IFV25 versions were delivered in December 2014. It appears the anti-tank versions were delivered from late 2016 but deliveries have been delayed due to financial issues in Malaysia.

Denel’s most recent annual report, for the 2017/18 financial year, states during the year under review Denel “achieved major milestones with the AV8 programme with delivery to the Malaysian client of LCT30 light combat turrets, anti-tank guided-weapon turrets (ATGW) and remote-controlled weapon station turret (RCWS) systems. To date 56 of the contracted systems – out of 122 – has been delivered to the end user and some deployed in operations.”



Denel  was awarded the contract from Malaysia to develop, manufacture, supply, deliver and commission turrets for the AV8 8×8 armoured fighting vehicles in 2011. The base value of the Malaysian contract is R3.7 billion.