State arsenal Denel achieved clean internal and external audit reports for the financial year to March 2011. The state-owned company’s Annual Report was presented to Parliament earlier this week.
Group CEO Talib Sadik noted the company’s primary mandate is to provide strategic defence technology, products and services to the SANDF. In addition, it is also a catalyst for advanced manufacturing in the South African economy and contribute towards developing technology skills and to export products to improve our revenue.
“Denel is increasing its contribution to SA’s advanced manufacturing sector through job creation, promoting innovation, technical skills development and SMME development with more than R730 million in procurement orders placed on Level 1 to 5 suppliers last year, which is more than the total recognised B-BBEE spend in the whole of 2009/10,” he said. “We play a leading role in positioning SA, on the global platform, as a reliable and quality supplier of advanced manufactured goods and services” says Sadik. This is demonstrated in our significant export earnings and order pipeline, where over 75% of our pipeline is export related.
The company achieved a net profit of R111 million and generated positive cash of R178 million from its operations compared with R1.146 billion in 2006. Sadik adds Denel intends to grow its opportunity pipeline to R70 billion and ensure the conversion of at least R21 billion into confirmed orders over the next three years.
In the financial year to March 2011, Denel bought materials and services worth over R2 bilion from local suppliers including spending in excess of R800 million on research and development. Sadik says the collective Research and Development (R&D) projects in the Denel Group now exceeds R1.1 billion per annum including those of associated companies.
The manufacturing sector accounts for about 15% of South African GDP and provide 13.3% of jobs. Denel is a key contributor to this sector – especially in the areas of advanced manufacturing and high-end technology. Significant production is also outsourced to the local manufacturing sector, thus impacting directly on the wide industrial base of the country.
The broader Denel Group employs approximately 6500 employees including in excess of 600 specialist engineers and scientists, sustaining over 30 000 technical jobs in South Africa. Denel also provided work packages to a number of specialised locally based SMME engineering companies, as well as technical exposure/training opportunities to over 5 500 South African school learners and university students. “We are very pleased with our contribution to job creation and responding to our government’s call of creating five million jobs in five years as outlined in the New Growth Path,” says Sadik.
The defence and aerospace industry is a fertile ground for the development, training and employment of highly-skilled engineers, technicians and artisans. Many of these professionals subsequently contribute to key national infrastructure projects in transport, construction, power generation and advanced manufacturing.