Saab fulfils Gripen offsets

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Saab has fulfilled its offsets obligations that came with the contract to supply 26 Gripen fighters to the South African Air Force.

“It’s been confirmed that we’ve met our obligations on both sides,” stated Saab head of Gripen export Eddy de la Motte. He added that over a thousand potential offset projects were received and considered, with more than 150 projects being implemented from April 2000.

The South African government, on behalf of the Air Force, ordered 26 Saab Gripen C and D advanced light fighter aircraft in 1999 as part of a “strategic defence package”. The Gripens were acquired together with 24 BAE Systems Hawk Mk 120 lead-in fighter trainers. At the time Treasury put the figure for the two types combined at R15.772 billion. Only in 2007 did separate figures emerge: R7.2 billion for the Hawk and R19.908 billion for Gripen.

As part of the contract, the two companies had a joint defence industrial participation (Dip) obligation of US$1.5 billion and a joint national industrial participation (Nip) obligation of US$8.7 billion.
“Over 75 South African companies partnered with Saab and BAE Systems on Nip and Dip projects,” De la Motte said on Sunday. “All Dip is now done, obligations discharged. All Nip is also now fully discharged.” “I believe that we exceeded our Dip and Nip obligations a bit,” Engineering News reported him as saying.

Saab said that the Gripen procurement resulted in the Swedish company investing as a strategic partner in Denel, to form Denel-Saab Aerostructures (DSA). Saab installed a state-of-the-art Design & Development Centre at Denel Aviation, enabling the manufacturing of Gripen components and subassemblies for Saab. Denel produces underwing and fuselage fairing stores pylons in addition to Central and Rear Fuselage sections for the entire Gripen programme. In June 2006, Saab and Denel formed a strategic equity partnership, with the Swedish group purchasing an initial 20% of Denel’s Aerostructures business.

In 2005, Saab acquired a major share in Grintek, a hi-tech communications, Electronic Counter Measures (ECM) and avionics business originally established to meet South Africa’s domestic requirements. In June 2008, Saab concluded a Black Economic Empowerment transaction with Imbani Amandaba, a 100% black-owned company whose members consist of investors from previously disadvantaged groups. The consortium has subscribed for 25% plus 1 share in Saab-Grintek Defence.

Various Dip programmes have resulted in the manufacturing in South Africa of Gripen main landing gear units and rear fuselages; the purchase of South African health and usage monitoring systems for Swedish Air Force helicopters, and the adoption of the Cobra Helmet Mounted Display system for the Gripen and Eurofighter Typhoon.

Saab said that by mid-2008, the Gripen shareholders’ activities had created over US$5 billion of new economic activity in South Africa. In total, Nip involved Sanip (a joint venture established to execute Saab and BAE Systems’ Nip obligations) bringing US$8.7 billion worth of economic benefits to South Africa. Examples of beneficiaries of Nip include Dunlop tyres (Durban and Ladysmith), Silplat platinum jewellery (Cape Town), Global Forest Projects (now York Timber), ABB (exporting South African-manufactured power station components to the US) and Atlas Copco (the manufacture of heavy mining equipment for export).

Nip activities were documented and monitored by the Department of Trade and Industry while Armscor approved and documented all Dip projects.

The first four two-seat Gripen Ds were delivered to South Africa on September 17, 2008. Delivery of the last four aircraft will take place shortly. They are currently in Sweden taking part in Exercise Lion Effort 2012, a tactical exercise intended to enhance interoperability between Gripen user countries. The last four SAAF Gripens are among 30 of the fighters from Sweden, Hungary and the Czech Republic. Lion Effort concludes on Thursday.