Denel Vehicle Systems has R1.5 billion in new orders


Denel Vehicle Systems (DVS), formerly BAE Systems Land Systems South Africa, has in the last several months received R1.5 billion in new business and is executing new contracts for RG31 armoured vehicles from a Middle Eastern country and N35 vehicles in collaboration with the UAE’s NIMR.

Johan Steyn, CEO of Denel Vehicle Systems, told defenceWeb that his company has, since becoming DVS at the end of April this year, been awarded R1.5 billion in contracts, primarily for the RG31 from the Middle East.

Steyn told defenceWeb that all vehicles will be delivered next year, starting from March. DVS at the moment is in the component procurement phase and will begin assembling early next year. Earlier this month DVS signed a R900 million contract to produce N35 (RG35) vehicles in collaboration with the UAE’s NIMR.

Steyn said it was business as usual for DVS since it was rebranded except it now supports the Denel mandate. DVS has not dropped any vehicles since the takeover by Denel, with the core lineup being the RG12, RG31, RG32, and RG21. Steyn said that there is still a huge market out there for the RG32 as it has been combat proven by NATO countries. He is confident of an RG32 follow-up order.

Locally, the company supplies gunner and commander sights for the South African Army’s new Badger infantry fighting vehicle manufactured by Denel Land Systems. He believes DVS can become increasingly involved in the Badger programme and Projects Sapula and Vistula when/if these become active. Steyn thought these programmes, to replace SA Army Casspirs, Mambas and trucks, would happen in time, maybe in the next five to ten years.
“Becoming part of Denel was the best thing that could have happened to our business”, Steyn explained to defenceWeb, as being part of Denel is good for the company’s branding. As a majority British owned company, BAE Systems Land Systems was limited in its sales by the United Kingdom government’s mandate – now sales are restricted by South African policy only. “For us as a business it is very easy working as part of Denel. We know the local environment.

Steyn said there was no competition between DVS and Denel Land Systems as the latter makes complete systems, such as artillery, while DVS specialises in vehicles. He acknowledged there was some overlap with Land Mobility Technologies (LMT) but said Denel now has the capacity to offer any client a whole range of customised vehicles from the Landward businesses within Denel.

Steyn cautioned that the current armoured vehicles market is tough and competition is stiff, as too many MRAPs (mine-resistant, armour protected vehicles) have been donated onto the market. He said DVS’s strengths are that their vehicles have been ordered by NATO countries like Sweden, Ireland and the United States (specifically the RG31 and RG32) and used in combat. Future trends indicate a move towards lighter protected vehicles and more affordable vehicles and this is where Denel Vehicle Systems is heading. MRAPs used to be the core focus of DVS but since the US withdrawal from Iraq and Afghanistan this big market has dried up with “massive decline in demand”.

Over the last decade, DVS’s biggest market share has come from export with some local business coming from Casspir, Samil and Mamba upgrades and Casspir and Mamba repairs. DVS division Denel Gear Ratio specialises in manufacturing items like axles (such as making Casspir axles under license), maintaining Rooikat and G6 power packs, refurbishing Casspir and Mamba axles, Olifant transmission systems etc. In addition, Gear Ratio does commercial work (50%), mainly for Bell trucks.

DVS division Denel Mechatronics (formerly Land Systems South Africa Dynamics) specialises in shooting training systems, turrets and also makes the LOCATS target drone.

At the moment the company makes the 30 mm Russian calibre Tactical Remote Turret and 7.62 mm Self Defence Remotely Operated turret. Development has been completed and these are just awaiting export orders. Steyn said he was confident of securing orders in the coming years for these turrets as there has been “a huge amount of interest, especially from countries that still use Russian ammunition.”

DVS’s Gear Ratio division also does some work for Transnet/Prasa, making components (gearwheels and pinions) for commercial trains.