SA defence industry worth R12 billion a year


Aerospace, Maritime and Defence Industries Association (AMD) executive director Simphiwe Hamilton says the South African defence industry currently has yearly sales of R12 billion, currently housed some 16 000 high-tech jobs.

He was speaking at a Denel Dynamics (DD) media day yesterday. The figures are just marginally up on the 2005 totals, when AMD reported industry turnover of R10.1 billion (Denel: 39% of total) and 15 024 employees of whom 50% were then black, 26% were female and 55% were Denel employees.

According to a 2005 AMD study, there were then some 74 companies in the sector, ranging from the state-owned Denel, then with a turn-over of R3 billion (now R3.5 billion) through various multinationals to about 60 Small Medium and Micro Enterprises (SMMEs) and some 17 Broad-based Black Economic Empowered businesses (B-BBEEs). The study noted that only nineteen countries had substantial domestic defence industries and only about seven have the same or better capabilities in the missile field.

At the time, about 81% of the industry was in private hands and 12.4% was black-owned with 22.7% foreign-held. Product segmentation was 49.8% electronics, 18.1% plating and 15.8% logistics. R881 million was being spent on research and development (49.2% company funds) by 1614 R&D personnel. According to the AMD study, the defence industry then contributed 0.56% to national Gross Domestic Product (GDP) and 3.42% to manufacturing GDP. Exports amounted to some R4.3 billion.

DD yesterday estimated that its business activities supported some 3 000 high-tech jobs while missiles-related revenue by the company and its subcontractors amount to R700 million a year. CE Jan Wessels told journalists it has been agreed within government that SA should retain its indigenous missiles capability, which is relatively unique in the developing world.