Senior Denel management will feel easier about the State-owned defence and technology conglomerate’s presence at next week Defence Services Asia (DSA) exhibition in Malaysia.
This is mainly because Public Enterprises Minister Gordhan this week announced a new board under instruction to turn the ailing state-owned entity (SOE) around. He was reported as saying Denel had a positive run in the past but it deteriorated significantly because of bad decisions. Former Airports company chief executive Monhla Hlala and former SAA chair Cheryl Carolous as well as a former Denel board member, Zoli Kunene, and retired soldier turned military ombud Temba Matanzima are among those named as board members by Gordhan.
The DSA exhibition opens in Kuala Lumpur on Monday and according to chief executive Zwelakhe Ntshepe will be another opportunity for Denel to show off “its world class range of product and capabilities”.
“South East Asia is an important market for Denel with significant potential for growth. We have well-established relationships with a number of countries and regional defence manufacturers and are pursuing major opportunities expected to open up soon,” he said ahead of the exhibition, expected to be attended by senior defence representatives from 55 countries.
“Many countries in the Asia-Pacific region are re-equipping defence forces in response to changes in the regional security environment. Denel has identified opportunities for business growth in Thailand, Indonesia, Vietnam, Brunei, Myanmar, the Philippines, Bangladesh and Singapore.
“Our capabilities in landward defence, artillery and armoured vehicles are well-known in the region because of our long and strong relationship with the Malaysian defence industry.
“We will also focus our proven capabilities in missile technology, especially the Umkhonto surface-to-air missile system for deployment in both the landward and maritime environments,” Ntshepe said.
Denel has been active in Malaysia for 16 years. Its primary contract is for the supply of 177 modular turrets to be fitted onto 8X8 armoured vehicles for the Malaysian army. The R4-billion contract is the largest export contract in Denel’s history to date.
Denel Land Systems manufactures the turrets in partnership with Malaysian company, DRB-HICOM Defence Technologies (Deftech). The final delivery of turrets is scheduled for 2020.
The contract forms part of Malaysia’s economic enhancement programme contributing to the establishment of production, assembly and testing facilities in the country. Denel manufactures the bulk of the system components such as guns and sights with assembly and testing of turrets done in Malaysia.
In addition to the turrets Denel has supplied G5 155mm artillery and ammunition, 81mm long range mortars and NTW20 anti-materiel rifles to the Malaysian army and SS77 machine guns to the country’s navy.
Ntshepe said the Malaysian contract demonstrated how defence contracts can be catalysts for co-operation in other areas of economic activity. Subsequent to its signing, Denel concluded a memorandum of understanding for co-operation in the aeronautics sector while doors have opened for South African research institutions and the private sector to explore opportunities in technologies relating to cyber security, advance manufacturing, urban logistics and renewable energy.
“This is a model we can extend to other countries in South East Asia and we plan on using DSA 2018 as a platform for further growth,” he said.
Denel will exhibit at the South African national pavilion at DSA 2018 together with Armscor and the CSIR. The turret systems will form part of the Deftech stand at DSA, which finishes on Wednesday.
There was no indication from Denel as to whether any of the newly appointed board members will be travelling to Malaysia for DSA.