Pretoria Metal Pressings (PMP), a division of the Denel Group, has won another R93 million order for ammunition components from Global Combat Systems Munitions, a unit of BAE Systems in the United Kingdom.
The Pretoria-based PMP began manufacturing brass cups and discs for BAE Systems in 2001, and has since supplied more than 2.4 billion components in more than 350 weekly shipments. Brass cups and discs are the basic components from which small and medium calibre ammunition are manufactured.
“This latest follow-on order is for the deliveries in 2011,” says PMP CE Carel Wolhuter. “In addition to ensuring the retention of skills and jobs at PMP’s brass plant, this export contract also increases PMP’s foreign exchange earnings”.
PMP’s successful partnership with BAE Systems is a fruit of the UK company’s activities in fulfilling its Industrial Participation offset obligation tied to South Africa’s purchase of Hawk and Gripen aircraft for the S A Air Force.
The South African-manufactured brass components are shipped weekly to Global Combat Systems Munitions at Radway Green in England in 40 to 60 ton batches.
Global Combat Systems Munitions’ Procurement Director, Mark McIntyre said “PMP has proven to be a reliable and strategic supplier in a business where on-time deliveries and the highest quality of manufacturing standards are absolutely critical. BAE Systems is also excited that its offset partnership activities with the Denel Group and others have been a catalyst for positive change and development in South Africa’s defence industry”.
Denel CE Talib Sadik congratulated PMP and BAE Systems on finalising the follow-up contract. He says that it is a further milestone in ensuring stable financial performance by PMP, and ensures the retention of close to 200 jobs at PMP’s Brass Plant.
Denel’s 2010 Annual Report credits PMP with a staff of 1311 and turnover of R626 million for the year-to-March, up from R601 million the year before. Net profit was R27 million from a net loss of R25 million the year before. The report also noted negotiations were in progress to sign up the company to 2017, which would earn PMP approximately R1.2 billion.
PMP also reported that after 13 years of “insignificant sales”, the South African National efence Force was now also again purchasing munitions. Orders for the year to March 2010 amounted to R130 million with the target for current financial year standing at R160 million.