Denel to aggressively re-enter MPV market

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Denel subsidiary Mechem is to re-enter the mine-protected vehicle market after concentrating on demining in recent years.   
Denel says in its most recent annual report that Mechem expects a decline in demining funding in the near term and has therefore decided to diversify its income stream.   
 
“Whilst a downward trend is predicted in de-mining funding in the short to medium term, Mechem is confident it would sustain its business into the medium term.
“Mechem has therefore made the strategic decision to diversify its business into the detection of contraband, using the unique ‘Mechem Explosives and Drug Detection System` and to revive its capability in the field of MPVs. However, clearing battle areas and the explosive remnants of war is still very relevant and will continue to be a focus area in future.”
“… traditionally a very small entity within the erstwhile Denel group, it has proven to be a business with unique and strong capabilities in the global market over the recent years. Mechem is acknowledged to be one of the largest de-mining companies in the world and arguably the largest UN [United Nations] contractor for de-mining services,” the annual report adds.
“During the year, Mechem successfully conducted de-mining operations in support of UN peacekeeping operations in Sudan, Eritrea and the Democratic Republic of Congo. Its contribution in Sudan was substantially expanded by foreign donor funds.
Mechem last month won a one year contract valued at US$2.4 million with US partner DynCorp International to develop a humanitarian Quick Reaction Force to respond to urgent situations requiring the removal or mitigation of explosive remnants of war and other conventional weapons.
Follow-on contracts from the US Department of State`s Office of Weapons Removal and Abatement are likely and a Mechem press release said the project had a “combined potential value of US$12.5 million.”
MPV
The report adds that Mechem delivered six re-manufactured Mamba MPVs to African Union (AU) peacekeeping forces earlier this year.
Mechem was established in the late 1960s as the defence research unit of the Council for Scientific and Industrial Research (CSIR) to provide the then South African Defence Force (SADF) with mechanical and chemical technology solutions.
The unit was transferred to Armscor in 1988 and became part of the Denel Group in 1992.
Long led by the charismatic Dr Vernon Joynt, Mechem helped invent the MPV and most notably designed and developed the Casspir for the SA Police (SAP). The word “Casspir” is an anagram of CSIR and SAP.
Mechem last month also announced it has secured a further order “for 60 of these vehicles for the peacekeeping forces of the African Union” in conjunction with ELW Global Ltd and N4 Trucks.
The MPV market is fiercely contested with at least 20 SA companies designing, manufacturing, remanufacturing or otherwise restoring these vehicles. A slew of foreign companies have also entered the business since 2004 when the US-led coalitions fighting insurgents in Iraq and Afghanistan discovered the need for such vehicles. 



The SA Army currently has a requirement to replace several hundred Mamba and Casspir MPVs as partof itsProject Sepula programme.