SA defence industry needs to sell itself


The South African defence industry needs to sell itself, otherwise it risks becoming a dead duck, defence expert Helmoed Romer Heitman has cautioned.

Speaking to a recent South African Aerospace, Maritime and Defence Export Council (SAAMDEC) meeting, Heitman said the South African defence industry has long been known for its innovative, practical and affordable equipment, including frequency hopping radios, long range artillery, mine-protected vehicles and mine-detection vehicles. An added bonus is this equipment comes with no strings attached.

However, the industry is under threat, including from an underfunded South African National Defence Force (SANDF), which does not have the budget to acquire new equipment and in the absence of home country orders, this makes it harder to export. The declining defence budget also means less money for research and development and less funds for training, which limits the SANDF’s ability to demonstrate equipment (for example, some time ago a client was interested in artillery but the SA Army couldn’t demonstrate it due to a lack of ammunition).

Heitman also pointed out “woefully inadequate” government support for industry, with the Department of Defence, Department of International Relations and Cooperation (DIRCO) and Department of Trade and Industry (DTI) not doing nearly enough. “Why can’t the DTI give the South African defence industry the same support as the motor industry? Defence has better return on investment than the motor industry,” he said.

Another issue is that the industry has blown opportunities to partner with major manufacturers. For instance, Denel rebuffed an offer from MBDA to take a stake in Denel Dynamics some years ago, and also an offer by Rheinmetall to take a piece of Denel Land Systems. Similarly, the recent Saudi Arabian offers have not been acted on, and in the meantime skilled engineers are leaving for Saudi Arabia and the United Arab Emirates. Aselsan has, meanwhile, established offices in South Africa and hiring engineers locally.

Heitman did say there is good news for the local defence industry, with opportunities arising from the major powers competition the world is seeing; new technologies such as artificial intelligence; and the fact that major powers will be kept busy developing and manufacturing for their own forces and less interested in competing for small orders from countries needing simpler, more affordable and supportable equipment.

In Africa there are many opportunities for the supply of military equipment, especially with Islamic State in Mozambique, terrorism in Nigeria, Kenya and Somalia and piracy off the West Coast as well as instability and conflict in places like the Democratic Republic of Congo, Mali, Chad, Central African Republic and Niger.

To get out of the current impasse, Heitman maintains that Denel needs to be secured, which would best be done not through a bailout but by giving the SANDF funding to acquire equipment from Denel, which would in turn spill over into the rest of the industry. “This will provide new equipment to market internationally and assure future clients that South Africa is still in the defence equipment business.”

Another step in the right direction is for the Department of Defence to support exports. It would need to educate and train attaches so they know the capabilities of the industry and recognise opportunities. In the United States, for example, attaches are trained to look for sales opportunities.

Additional government support is needed for the industry, and this includes from the president, who should be the industry’s ‘salesman in chief’, with assistance from ministers. Where there are no defence attaches, DIRCO should train diplomats to support the defence industry.

In spite of stiff international competition, Heitman maintains that South Africa is still competitive in several niches, including a wide range of guided weapons (which makes it fairly unique globally), artillery (notably the unfinished LEO 105 mm), mine detection vehicles (the Husky has little competition), secure communications (that is ITAR-free), electronic warfare and radar (Reutech has sold radars to NATO member Norway).

The government needs to be educated on the return on investment from defence exports, with returns often many times that of the initial investment. For instance, Heitman points out that even though the R9 billion Rooivalk programme saw no exports of the helicopter, R18 billion worth of subsystems were exported, such as Mokopa missiles, and experience went into projects like the Square Kilometre Array and Ahrlac.

“The key point is the defence industry will always be a small part of the economy but it is a driver of technology and skills,” Heitman said. For it to succeed, it needs to promote itself far and wide as well as at home. “We’re not selling ourselves. If we don’t sell ourselves we’re dead ducks,” he warned.