Mechem profits up for 2012, confirmed order book down


Mine clearing company Mechem’s turnover and earnings for the 2012 financial year are up compared to the previous year, reaching an all-time high, but the company’s confirmed order book has dropped by half.

Mechem’s earnings before interest and tax for the 2012 financial year ending March 31 amounted to R20 million, up slightly from R17 million the year before. Its turnover doubled from R151 million to R302 million, which is the highest in its history. According to Denel’s Annual Report 2012, Mechem’s export turnover for 2012 was R285 million, up from R149 million the year before.

Although the company’s financial performance was good over the last year, Mechem’s confirmed order book dropped from R131 million to R57 million for 2012, in line with the performance of most other Denel entities. However, earlier this year the company said it was being inundated with requests for proposals and quotations from various clients.

Mechem specialises in mine clearing, removing the explosive remnants of war (ERW), manufacturing mine protected vehicles (notably the Casspir Mk II, Mk IV and New Generation) and mine clearing equipment, and providing canine training and services (for explosives and drug detection). Through its Afrifoot programme, it manufactures and supplies of low-cost leg prostheses to landmine survivors.

Key highlights achieved by Mechem recently include the completion of various demining or mine clearing projects in Afghanistan, Sudan, the Democratic Republic of Congo, Angola and Mozambique and the delivery of large tracts of land and thousands of kilometres of roads clear of mines and other ERW.

For instance, in Sudan, Mechem cleared more than 9 050 km of road and removed 3 237 explosive items, including anti-tank and anti-personnel mines, in Sudan between February 2004 and November 2010.

Mechem is active in eleven African countries, including the DRC, where it has supported UN peacekeeping activities since 2003, Western Sahara and Somalia, where it works with the African Union. Mechem is the only African company accredited by the UN for landmine clearance, as the rest are based abroad. Since it started African operations in 1992, the company has not lost a single employee to a mining incident.

According to United Nations estimates, there are at least 110 million active mines scattered across the world, of which about 44 million have been planted on the African continent. In 2010 there were 4 200 victims of landmine’s effects – 11 people a day.

In April this year Mechem said it had cleared over 135 million square metres around the world and destroyed over 500 000 mines and UXO’s (unexploded ordnances) in support of United Nations or African Union peacekeeping operations.

Apart from demining work, Mechem is also involved in drug detection through its Mechem Explosives and Drug Detection System (MEDDS). Earlier this year, the company announced that its sniffer dogs uncovered a major drug smuggling operation in Benin after they found heroin hidden inside aircraft parts. The company has a contract to provide 40 sniffer dogs to the government of Benin, which employs them at ports and airfields to sniff out drugs and other illicit substances.

Apart from Benin, trained Mechem detection dogs have also been supplied to Namibia and South African game parks, where they have been successful in various large drug busts, as well as apprehending rhino poachers – bought dogs from Mechem to use in Mpumalanga and the Eastern Cape for tracking and protection work. Students from Mozambique, Egypt, Benin and Namibia have been trained in demining and dog handling related fields.

Yesterday Denel announced that, as part of its restructuring designed to create savings and increase efficiencies, the company’s landward defence businesses in Lyttelton, Denel Land Systems and Mechem, will be integrated into a single entity. The new structure was approved by the Board of Denel in June and the process is expected to be completed by the end of the year.