State-owned defence industry conglomerate Denel is extending its footprint in the Asia/Pacific region with the establishment of a joint venture company in Hong Kong.
Denel Asia is a partnership between Denel and VR Laser, a company with 20 years of experience in South Africa’s defence and defence technology sectors, according to a Denel statement.
According to Zwelakhe Ntshepe, Denel acting chief executive, opportunities are opening up in Asian countries where defence budgets are increasing.
“This is an important region for Denel to expand its business and find new markets for our products, especially in the artillery, armoured vehicle, missile and unmanned aerial vehicle (UAV) fields,” he said.
Research shows nations in the Asia/pacific region will be responsible for more than half of defence procurement outside the United States by 2018.
“We need a foothold in the region and the establishment of Denel Asia with headquarters in Hong Kong will give us a strong presence and the ability to pursue opportunities,” he said.
India, Singapore, Cambodia, Indonesia, Pakistan, Vietnam and the Philippines – countries that, according to Denel, have all announced intentions of new defence acquisitions – will be on the receiving end of Denel Asia’s marketing attention.
VR Laser chief executive Peter van der Merwe is on record as saying he welcomes the opportunity to work with Denel and make inroads into a new regional market.
“Denel is a trusted name in the defence sector globally as one of the top 100 defence industry companies. VR Laser has expertise in defence technology and an understanding of defence markets in south-east Asia,” he said.
The partnership gives Denel access to VR Laser’s capabilities in fabrication, production and support of armoured vehicles. This will be combined with that of Denel to improve strengths in both design and systems integration of armoured vehicles.
Stephan Burger, divisional chief executive of Denel Land Systems (DLS) said the Asia-Pacific market was a key region for Denel to market products and grow its order book. Denel Land Systems is supplying billions of rands worth of turrets for Malaysia’s armoured vehicles while Denel Dynamics is supplying missiles to the country.
Joint ventures where partners have the ability to penetrate new markets are seen as a vital component of continued success for Denel. A similar joint venture with the Tawazun Group in the United Arab Emirates (UAE) saw Tawazun Dynamics brought into being. This UAE-based company manufactures Al Tariq strap-on bomb kits for international clients.
Ntshepe said Denel Asia was “a bold step” for the South African government owned defence company