Fighter projects reap windfall

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BAE Systems and Saab delivered over $5 billion in additional economic activity to SA.SA`s purchase of Hawk advanced jet trainer and Gripen fighter aircraft to modernise its air force has resulted in BAE Systems and Saab delivering over $5 billion in new, additional economic activity to South Africa.

The two companies are obliged to provide “offsets” worth $8.7 billion for the 1999 purchase of 24 Hawk and 28 Gripen (later reduced to 26) for $2.2 billion. The entire obligation is on target to be fulfilled by April 2012.

“We have met all of our DIP and NIP milestones,” said BAE Systems executive VP for SA John Williamson.

“With more than $1.2 billion of investments brought to the table, we are now one of South Africa`s biggest facilitators and providers of new direct foreign investment,” he added, in comments made at last week`s Africa Aerospace and Defence show, in Cape Town. “In overall terms, achievement of new economic activity is running at $5.3 billion and is well ahead of schedule.

In its most recent Industrial Participation reports to Parliament, the DTI confirmed that BAE Systems and Saab had achieved more than 100% of their joint investment target, a press statement released at the show added.

It also described their NIP projects` success in generating new export revenue streams for the economy, skills development, technology transfers and the promotion of broad-based black economic empowerment, as well as small and medium-sized enterprises.

To date, more than 75 South African companies are partners in BAE Systems-Saab`s projects, which are categorised as:

Defence Industrial Participation (DIP); which involves the delivery of $1.5-billion of new economic activity into the aerospace and defence sectors.

National Industrial Participation (NIP) comprises $7.2 billion of new economic benefits derived primarily from manufacturing-for-export ventures in various civil sectors. These include, among others, the heavy engineering, mining and minerals, forestry and timber, automotive, agriculture, tourism, medical research, biotechnology and IT sectors.

“In keeping our commitment to South Africa, we have focused our energy and resources on establishing sustainable business primarily in the manufacturing for export sectors,” Williamson added.

“Signalling the strength of our commitment, BAE Systems now directly employs over 1 000 people in SA, which we regard as a home market,” added Williamson. Similarly, Saab employs over 1 000 people in its South African-based businesses.

Examples of BAE Systems and Saab Industrial Participation projects:

* Manufacture of Hawk tailplanes, airbrakes and flaps (Denel)
* Final assembly of Hawk (Denel)
* Manufacture of Gripen centre and rear fuselage sub-assemblies and stores pylons (Denel)
* Production of Eurofighter-Typhoon components (Aerosud)
* Manufacture of Airbus wing components (Aerosud)
* Design, development, production and integration of Hawk Navigation & Weapons System (ATE)
* Design, development, production and integration of Hawk Health Usage Monitoring System, Cockpit Voice Recorders, Digital Flight Data Recorders and Engine Life Recorders (AMS, now trading as Saab-Grintek Avitronics)
* Design, development, production and integration of Helmet Tracking systems for Eurofighter-Typhoon and Gripen (Denel Optronics, now trading as Carl Zeiss Optronics)
* Expansion of Durban factory and construction of new tyre factory in Ladysmith (Dunlop Tyres International)
* Rescue, consolidation and turnaround of former Mondi`s Sabie timber plantations and sawmills (Global Forest Products, recently acquired by JSE-listed Yorkor)
* Establishment of SA`s first platinum jewellery factory in Cape Town (Silplat)
* Construction of a ferrochrome plant at Buffelsfontein, North-West (International Ferro Metals)
* Funding for research into new gold refining processes (Mintek)
* Establishment of a new gold refinery at Virginia, Free State (Harmony Gold & Mintek)
* Creation of a Gold Loan scheme for jewellers (with AngloGoldAshanti, Standard Bank & Rand Refinery)
* Establishment of a dental prosthetics manufacturing facility near Johannesburg (Gemco)
* Financing for acquisition of a floating dry dock ship repair facility at Durban harbour (Elgin Brown & Hamer)
* Exports of South African-manufactured electricity transformers to the US (ABB-Powertech)
* Saab acquisition of Grintek group of companies (Saab-Grintek)
* Saab investment in Denel Aerostructures (now Denel-Saab Aerostructures)
* BAE Systems acquisition of Alvis-OMC and Gear Ratio (Land Systems South Africa)
* Export of more than 2 000 South African-designed and built RG-31 armoured vehicles for North America customers to replace less capable vehicles



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