Denel inks two big deals, detail sketchy

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Denel has signed two major defence deals since the end of its financial year in March, Minister of Public Enterprises Malusi Gigaba said yesterday. One of these is slated as the largest contract, in terms of value, ever awarded the company.

“The two significant export contracts in the Middle East and Far East signed recently. This is proof that the capabilities at Denel are world class,” he told journalists at a media event to announce the state arsenal’s new group CE, Riaz Salojee.

Details are sketchy but outgoing Denel CE Talib Sadik said one contract involved missile-maker Denel Dynamics and the other Denel Land Systems (DLS). He declined to go into further detail, citing client confidentiality agreements.

A clue as to the value as given in Denel’s annual report for the year to March 31, in which former chairman Dr Sibusiso Sibisi said the company was “particularly pleased that our marketing strategies and efforts are paying off, as contracts of about R5 billion have been concluded shortly after year-end.”

The New Strait Times newspaper in Singapore in April last year reported that Malaysian defence company DRB-Hicom Defence Technologies (Deftech) had earmarked Denel as its technology partner for systems integration and the joint manufacture of turrets and 30mm cannon for a new infantry fighting vehicle for the Malaysian Armed Forces.

Deftech had been contracted to build 257 of the 8×8 vehicles at a reported cost of eight billion Malaysian ringit (about ZAR18.5 billion in 2010). The design is based on the Turkish FNSS Pars (Anatolian Leopard). The value of the SA share of the work was not disclosed.

DLS CE Stephan Burger at the time said the deal was “also good news for the Denel group as the programme extends to other Denel business entities such as Denel Dynamics for the Ingwe Missiles and PMP for ammunition.”