Milestone for Denel’s Malaysia contract


Denel is delivering the hundredth modular armoured vehicle turret to the Malaysian armed forces in terms of a multi-billion rand export contract.

“This is a historic and significant achievement and again demonstrates leadership in landward defence and Denel’s capacity to produce advanced technology systems for local and international markets,” Mxolisi Makhatini, Denel Landward chief executive, said.

The 342 million Euro contract is the largest export contract in Denel’s history.

South Africa’s small and medium defence manufacturers are among the largest beneficiaries of the contract, as Denel had to procure millions of rands worth of equipment and services domestically to meet contractual obligations. “At a time when the local economy is contracting, the direct benefit to the local defence industry underlies Denel’s importance to the South African manufacturing industry and its position as a productive national asset contributing to export revenue and manufacturing sector jobs,” Denel said in a statement on Thursday.

“We are proud of what we have achieved in Malaysia. Despite Denel’s constrained liquidity position and significant changes the organisation is undergoing, we remain focused and delivered the 100th of 122 turrets to our client as per specification and schedule and executed 98% of offset obligations to date. We have an excellent working relationship with our Malaysian partners and intend to build on this to explore further export opportunities in emerging markets,” he said.

In terms of the contract, Denel Land Systems will supply 177 modular turrets in four variants for fitting onto Malaysian AV8 vehicles and 216 laser-guided Ingwe anti-tank missiles.

The contract deliverables are 69 armoured fighting vehicle turrets fitted with GI30 30mm cannons; 54 missile turrets with combined GI30 cannons and Ingwe missiles; and 54 remotely-operated weapon systems.

Makhatini said the Malaysian contract is a breakthrough for Denel as it established turret manufacturing outside South Africa based on local design and intellectual property. The variants were developed to meet client specific requirements. This includes utilisation in tropical jungle conditions.

The contract requires the integration of products from 13 original equipment manufacturers (OEMs).

“Denel has contributed to technology transfer, capability and vendor development as well as skills transfer to ensure it meets contractual obligations. Throughout the delivery process we have been able to uphold the high standards, product quality and professionalism Denel is renowned for,” he said.

Makhatini is confident successes on the AV8-project will raise Denel’s profile in international defence markets, especially the Asia-Pacific region, and will strengthen its ability to win new contracts for landward defence products.