Denel, Africa’s Largest Weapons Manufacturer Signs Massive Contract

Denel’s Badger fighting vehicle

South Africa’s Denel has signed a 340 million euro (R3.5 billion) contract with Malaysia to supply a range of turret and integrated weapon systems to be fitted onto 8 X 8 armoured infantry fighting vehicles. The deal has been several years in the making.

Zwelakhe Ntshepe, the Group Executive Business Development and Corporate Affairs of Denel, says this is the largest export contract in the company’s history and will result in a significant cash injection and job creation in the local industry. The turrets will be exported to Malaysia over a seven year period – with the first consignment ready for delivery this coming January.

Ntshepe says the final negotiations with Malaysia were concluded at the recent Defence Services Asia Exhibition held in Kuala Lumpur, together with their local partners DRB-Hicom (Deftech).

Denel Land Systems (DLS) CE Stephan Burger says his company will be responsible for a number of strategic components that have been designed and developed at its campus in Lyttelton:
·         69 x two man turrets fitted with the South African GI30 30mm main gun.
·         54 x missile turrets equipped with the GI30 30mm gun and Denel Dynamics Ingwe anti-tank missile system. The order also includes the supply of 216 laser-guided Ingwe missiles.
.         54 x remote control weapons systems.

Burger says the production of the first consignment of turrets is on schedule and will be delivered in January 2013 for trials by the Malaysian Army. The turrets and weapon systems will be integrated on the Malaysian Army’s new 8 X 8 vehicles which are based on the Pars armoured vehicle platforms from the Turkish company, FNSS.

Through the contract Denel is participating in the Malaysian Economic Enhancement programme which entails the production and assembly of the turrets in Malaysia.  The agreement provides a platform to transfer weapon system integration technology to Deftech in order to create a sustainable capability in Malaysia. Burger adds the contract opens the door to future industry cooperation between the two countries including on-going maintenance and future upgrades of the turrets.

Ntshepe reminds the manufacturing of the turret systems grew out of DLS’s development of the Badger infantry combat vehicle on behalf of the South African Army. The Badger, he says, meets the requirements of a modern army involved in both high-intensity warfare and peacekeeping operations and will replace the 30-year old Ratel as the mainstay of the mechanised infantry force.

Denel in a statement adds the Malaysian contract strengthens DLS’s reputation as a strategic hub of innovation and advanced manufacturing capabilities on the African continent. It will enable the company to retain skilled and highly-skilled engineers and artisans and attract a new generations of innovators.

Riaz Saloojee, the Denel Group Chief Executive says “I am excited by this contract as it confirms Denel’s position as a global player in the defence manufacturing industry and will lead to a growing interest from the international community in the quality and range of products and services produced by us.”

Deftech earmarked Denel as its technology partner in April 2010. The New Strait Times in Singapore at the time reported Deftech would build 257 of the 8×8 vehicles for eight billion Malaysian ringit or 3.436 billion Singapore dollars (about ZAR18.5 billion). Malaysian Minister of Defence Abdullah Bin Ahmad Badawi on April 20, 2010, handed over a Letter of Intent (LoI) to Deftech for the supply of vehicles at a ceremony at the 12th Defence Services Asia (DSA) Expo in Kuala Lumpur. Denel, in a media statement, at the time, said the letter served to confirm Malaysia’s intention to buy the vehicle over seven year period. Other technology partners selected for the programme include FNSS from Turkey for the PARS vehicle and Sapura Thales Electronics (STE) for the communication equipment on the vehicles.

Denel added Deftech “in turn handed over a LoI to Denel as a technology partner for the joint manufacture of turrets and for the systems integration of the programme.