Saab Grintek Defence looks to grow African business


After swallowing some tough medicine in 2012, the last year has been positive for South African security and defence company Saab Grintek Defence.

When former Gripen test-pilot Magnus Lewis-Olsson took over in January 2012 as Saab South Africa’s CEO, he found a company in trouble: unprofitable and in dire need of restructuring.

During the 2011 financial year, Saab South Africa employed 1,064 staff members and had a turnover of R1.4 billion, with exports accounting for 60% of the turnover.

With the restructuring completed, the staff compliment is less than 900, but Lewis-Olsson says that Saab Grintek Defence (SGD) is now “doing very well.”

SGD forms the major component of Saab South Africa’s operations, designing, developing and producing advanced military technology for domestic use and export.

Lewis-Olsson spoke to defenceWeb after a Saab Enhancing Maritime Domain Awareness presentation to South African Navy and Air Force personnel in Cape Town last week.

Project specialists briefed the guests on the various systems entering service in the other arms of the South African National Defence Force (SANDF) or that which would prove beneficial to the Navy and the maritime surveillance capabilities of the Air Force.

These ranged from the TactiCall interactive VOIP communication system, HF transmitters and the integration of the civilian maritime Automatic Identification System (AIS) system into military command and control systems.

Saab Grintek Defence is an industry leader with their Naval Laser Warning System, in addition to the popular land vehicle LEDS (Land Electronic Defence System) which appears to be selling well. The briefing concluded with virtual demonstrations of the Skeldar VTOL surveillance UAV and the Saab MSA340 maritime surveillance aircraft the company is proposing to the SAAF under Project Amanzi.

However, of greatest interest must be the Chaka tactical C2 (Command & Control) support software, including the Impi blue-force tracker. According to Cobus Valentine, the Command & Control main specialist, Chaka is the only tool currently used by the SANDF to provide ‘jointness.’ Chaka is already in use by the SA Army, Air Force, SA Military Health Service, Special Forces and Joint Operations, with the SA Navy in the process of evaluating the system. The Impi is used by the Special Forces and has been installed on SAAF C-130 transports and the Rooivalk and Oryx helicopters.

A civilianised version of TactiCall, known as SAFE, is being marketed to the police and security industry as a cost-effective software controlled communication system which can be installed in their vehicles.

Whilst South Africa is an important market for Saab Grintek Defence, exports still make up the majority of its sales. This is evident as the company recently won the Department of Trade and Industry Exporter Award for the second year running at the annual South Africa Premier Business Awards.

Popular exports have been the CIDAS (Compact Integrated Defensive Aids Suite) and IDAS (Integrated Defence Aids Suite) EW self-protection systems for airborne platforms. Customers include India and Malaysia and countries in Europe and the Middle-East. A civilian version known as CAMPS (Civil Aircraft Missile Protection System) is the only product that is allowed at civilian airports.

The company is looking at increasing its African footprint. The South African office is also responsible for marketing the global Saab product catalogue to sub-Saharan Africa. This brings about its own difficulties, as the company only deals directly with governments and each sale must be sanctioned by both the South African National Conventional Arms Control Committee (NCACC) and its Swedish counterpart.

Despite the challenges of small budgets and informal acquisition processes in most African countries, Saab Grintek Defence has identified a number of potential markets and is actively pursuing them before their Western competitors start sniffing around. Key focus areas include products related to self-defence, civil security and surveillance.

To this end, Saab has just opened an office in Botswana, in addition to South African and Kenyan offices.

Besides selling defensive and offensive systems, Saab South Africa also provides support services to the United Nations. A third-party maintenance facility is operated in Mogadishu, Somalia, servicing approximately 2,200 UN vehicles. Included in this total are a number of South African produced Ratel infantry fighting vehicles that the UN operates.

The Swedish company is also looking at supporting the UN with security and surveillance solutions.

Another side of Saab South Africa’s business is Saab Grintek Technologies (SGT) which mainly operates as an integrator of telecoms products to the commercial telecommunications industry in South Africa and sub-Saharan Africa. Ultimate holding company SAAB AB of Sweden is in the process of selling their effective 66.5% interest in Saab Grintek Technologies to Imbani Holdings as SGT is not a part of Saab’s core business and they only acquired the business as a result of the acquisition of the South African Grintek Group between 2004 and 2007.

Saab’s interest in South Africa arose as a result of the 1999 arms acquisition, in which South Africa purchased 26 Gripen fighters. Saab Grintek Defence is now the largest Saab subsidiary outside of Sweden and, as Lewis-Olsson noted, it is still growing.

Looking back, Lewis-Olsson says that many people thought Saab would leave South Africa as a result of the restructuring. “It wasn’t like that,” he says, “It was just that we had to become profitable. It was a painful year, but the pain is gone now.”
“If you look at the state of affairs after the defence procurement in 1999, we are the only foreign company that is still here. We have all the BEE ownership and we do create jobs,” he proudly added.

Looking to the future, Lewis-Olsson acknowledged that Saab needed to enhance its value chain. “We make the product but leave it to other people to get the certification,” he explained. He said that he’d like to bring this aspect into the South African operations in order to reduce any time lags and uncertainties with the customer.

Indeed, Lewis-Olsson is adamant that Saab Grintek Defence is growing. “At least we’re on a very good trajectory which is really good, mainly thanks to our exports,” he added. As Lewis-Olsson concludes, “Hopefully South Africa will be good to Saab. We are definitely here to stay.”