The new chairman and board of directors are turning Armscor into an entity that appears to want to nurture and grow the local defence industry and provide the military with value for money products.
Proof of this comes in a statement issued this week that indicates the state’s defence acquisition agency had by the end of January paid R4.5 billion of its total projected cash flow of R8.2 billion to the defence industry for the current financial year.
“The remainder is expected to be paid during February and March,” General Manager: Marketing And Business Development, Lulu Mzili, said.
Chairman Johannes Mudimu, a former SA Navy Chief, said Armscor was not a regulator of the local defence industry. “It is an equal partner in ensuring the SA National Defence Force (SANDF) is allowed to deliver on its mandate,” he said in reference to equipping the country’s military with the right equipment at the right price and at the right time.
This approach saw Mudimu and his co-directors last year visit Armscor facilities across the country and engage with AMD (the SA Aerospace, Maritime and Defence Industries Association). They went to Gerotek, the Institute for Maritime Technology, Protechnik Laboratories, the Dockyard at Simon’s Town and others.
A follow-up meeting with AMD was held this week which Mzili said was further evidence of both parties’ commitment to ensuring the SANDF’s requirements were met in time and on time.
Armscor and AMD met last July and a decision was taken to focus on improving efficiencies to the benefit of South Africa military personnel.
Mudimu said the latest Armscor/AMD meeting “took stock of progress made and shared developments on Armscor’s strategic direction as well as the overall performance of the South African defence industry”.
Armscor has indicated two important naval projects – for the acquisition of a new hydrographic vessel and three inshore and three offshore patrol vessels – will reach tender stage this year.
A bidders’ conference on the SAS Protea hydrographic replacement took place in Simon’s Town last year with 12 shipyards, half of them South African, present. The tender to build a new hydrographic vessel as well as supply two inshore survey motorboats and a survey boat closes on April 24.
Tenders for Project Biro, for the supply of six patrol vessels (three inshore and three offshore), close on June 30 and follow a bidders’ conference that will take place from March 25 to 27.
The additions to South Africa’s naval power are in line with the Presidential initiative Operation Phakisa to make the ocean economy a greater part of the national economy.
Another project now underway is to supply the SA Army with a new infantry fighting vehicle under Project Hoefyster. Although it was started long before Mudimu and his new team took over leadership of Armscor, they speeded up the contractual and documentation process which enabled a started to be made with building of the 238 Badger vehicles by Denel Land Systems last year. The final vehicles are set to be delivered in 2022.
Armscor has also undertaken to enhance internal processes by placing multi-year contracts and finalising its medium term requirements for consumables for single source contractors. This will enable efficient planning to be undertaken by industry and improve cash flow timelines, Mzili said.
“The corporation will also terminate its mandatory 25% BEE equity shareholding with more emphasis going to all BEE elements,” she said adding Armscor and the local defence industry “have resolved” more needs to be done to support and nurture new entrants to the sector.
“This includes SMMEs and other initiatives in supplier and skills developments as well as focussing on the youth, women and military veterans.”