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| News Archive |

- Denel lands biggest contract in its history
- Denel launches Missile deal in Brazil
- Denel Mechem shows contraband detection system
- Denel appoints Monwabisi as new CEO of Munitions
- Denel announces results for year ended 31 march 2006
- Denel shows its wares to cape town visitors at AAD 2006
- Denel intends to wow cape town visitors at AAD 2006
- SAAB and Denel Create New International Aerostructures Player in South Africa
- Denel's Head Office relocates to Centurion
- Relocation of the Denel Head Office
- Denel configures NTW-20 AMR to 20x110 HS
- Government recapitalises first phase for Denel
- Denel establishes a partnership in Middle East
- Denel signs major orders
- Denel makes a hit with artillery technology in USA

Denel lands biggest contract in its history


Denel Land Systems, a subsidiary of Denel (Pty) Ltd, has just been awarded a contract by Armscor to develop the South African Army's new generation infantry combat vehicle. This was announced in Parliament by Minister of Public Enterprises, Mr Alec Erwin during his Budget Vote speech today (17 May 2007) and confirmed by Denel's Group Chief Executive Officer, Mr Shaun Liebenberg in a briefing to Parliamentary media correspondents.

The multi-billion Rand contract that was three years in the making signifies a tremendous boost to local industry and the South African economy in general.

The contract - popularly referred to by its Armscor designation, Project 'Hoefyster' - for more than 250 infantry combat vehicles (ICV) for the South African National Defence Force (SANDF) is arguably the largest contract Denel has landed in its 16-year history.

Group Chief Executive Officer, Shaun Liebenburg said: "We are exceedingly pleased to have been selected as prime contractor on this very important programme, more so as it indicates the SANDF and Armscor's confidence in the local defence industry's capabilities. South African companies will deliver more than 70% of the total value of the contract."

A contract of this magnitude entails enormous project management skill and resources over many years. Armscor will be placing phased orders on Denel Land Systems (DLS) over a ten year period as the milestones are achieved towards final delivery to the Army of five variants of the ICV system.

As prime contractor Denel will be required to manage a supply chain of scores of local subcontractors, including SMME and BEE companies, all of which stand to have guaranteed business for the next 10 years, some with follow-on support work after delivery.

"Whilst recognising the huge challenge to execute a contract this big, I'm fully confident Denel Land Systems can manage it well," said Shaun Liebenberg. "This is the company that produced hundreds of the renowned South African G5 and G6 artillery systems, sold internationally, and that supplied the combat turret and weapons systems on the unmatched Rooikat armoured fighting vehicle."

Denel's proposal to meet Armscor's tender requirement of a new generation combat vehicle for the SANDF was based on a Finnish Patria platform with a turret designed by Denel Land Systems. Five variants of the combat vehicle will be required, i.e. Command, Mortar, Missile, Section and Fire Support vehicles.

With the turret being the heart of the system, Denel engineers will have their work cut out to design the five variants. According to Denel Land Systems, they are not off-the-shelf items. Whereas the future Command variant will be equipped with intricate network communications and battlefield awareness systems, the others carry a variety of weapons systems.

Several Denel businesses, along with numerous other specialist suppliers, will provide required systems for the turrets. Denel Dynamics' proven Ingwe long-range anti-armour missile is destined for the Missile variant. Whilst DLS has already started working on the weapons systems, including an indigenous 30mm cannon and a sophisticated mortar to be integrated in the turret, Denel Munitions will supply the ammunition and mortar bombs.

Denel as main contractor would involve numerous South African defence companies and subcontractors, like BAE Systems' South African subsidiary Land Systems OMC. The actual vehicle will be locally built under a Patria license.

"The awarding of this contract is a clear example of very high level alignment to meet South Africa's defence needs," said Shaun Liebenberg. "Our Department of Public Enterprises and the Department of Defence, along with Armscor and the SANDF, all cooperated admirably to bring us to this point. But importantly, for Denel a new chapter has been written. This Armscor contract puts Denel Land Systems on the road to sustainability."

Denel's macro strategy for the turnaround of the company started some 19 months ago and has already shown very good progress. Based on transformation and people, the five-strategy calls for:

  • Securing "privileged access" for the local defence industry - not only Denel - to a minimum portion of defence spend by the Department of Defence;
  • Partnering with state agencies to align planning and obtain "political support";
  • Focus on growing commercial viable businesses in Denel;
  • Secure equity partners with major global and local industry players; and
  • Raise capabilities and productivity to world-class levels.
Project 'Hoefyster' signifies a significant acquisition programme that essentially underwrites all the pillars of Denel's macro strategy. Not only does this large defence contract support and give a much-needed injection to local industry, but it also sustains the commercial viability of the businesses, notably Denel Land Systems. Importantly, it will drive the capability of the Denel and other local companies to operate at world-class standards and international best practice.

This contract for the new generation infantry combat vehicle is meant to slot into the SA Army's Vision 2020, announced earlier this year by Chief of the SA Army, Lt-Gen. Solly Shoke. The vision would determine the Army's future direction and also influence what equipment it would acquire.

In the first indication of major changes in the way the Army operates, two field divisions - one mechanised and one motorized - as well as a Special Operations Brigade, are likely to be established, with the new generation ICV being very much part of this structure.

The Army's new-motorised division will largely be used for peacekeeping abroad and local security operations at home within South Africa, while the mechanised division will be the Army's iron fist as an all-arms force of infantry, tanks and artillery, backed up with adequate supply troops.

"I foresee tremendous opportunities and further spin-offs to be realised through this contract, mainly for young technicians and engineering students who wish to make a career in the defence-related industry. This contract will contribute immensely to skills development and training, which are very much part of the Deputy President's Joint Initiative for Priority Skills Acquisition (JIPSA) programme," Shaun Liebenberg concluded.

More on the New Generation Infantry Combat Vehicle:
The ICV to be acquired under the Hoefyster programme is an 8X8 wheeled vehicle in the 25 ton class, equipped with various turret and on-board options to provide infantry troops with motorised transport and protection.

The 8X8 configuration gives the vehicle optimal mobility over the roughest terrain, ensuring that the infantry can enter and withdraw from conflict areas with the minimum exposure and maximum survivability.

The vehicle continues the South African Land Forces' doctrine of equal mobility through the use of wheeled vehicles, which are ideally adapted to African terrain. South Africa was a pioneer of equal mobility using wheels, as evidenced by the renowned G6 self-propelled artillery system, the Rooikat armoured fighting vehicle and the Ratel ICV - which is now to be replaced with the new generation ICV.

The five variants of the system will provide an integrated motorised combat capability.

Enquiries:Joe Makhafola
Tel.:(012) 671-2804
Mobile: 082 888 8966
Email:joem@denel.co.za

Sam J Basch
Tel.:(+27-12) 671-2804
Mobile: (+27) 82-881-3696
Email:samb@denel.co.za

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Denel launches Missile deal in Brazil


Denel Dynamics, a subsidiary of Denel (Pty) Ltd, launched the latest generation of A-Darter Air-to-Air missile programme to be developed by and for both the South African National Defence Force and Brazilian Air Force.

Denel Dynamics is the missiles and unmanned aerial vehicles division of Denel.

The launch took place during the Latin American Aerospace and Defence exhibition, which ended on the 20 April 2007 in Brazil.

The co-development of the missile between South Africa and Brazil not only brings much needed skills, training, technology transfer to the country and, but also reinforces the South-South cooperation initiated by President Mbeki and his counterpart.

Already ten Brazilian Air Force members are working at the Denel Dynamics plant on the programme, and they will be supplemented by a further twenty people from the Brazilian defence companies.

The A-Darter missile is vitally important to the aerospace cluster in equipping the aircraft of both air forces.

The A-Darter missile will guarantee a credible deterrent for the South African Air Force and will maintain and expand the local capabilities in this field over the next fifteen years.

Current contracts exceed R1 billion in total and future export contracts are expected to add another R2 billion over this fifteen-year period, adding to the sustainability and viability of the Denel Dynamics division of Denel (Pty) Ltd.

One of Denel's macro strategy is to secure privileged access to a guaranteed minimum portion of South Africa's defence development and procurement spend, to this end, this contract will have a very positive spin-off for local defence companies.

At least 200 engineers will be required over the duration of the contract. Already there are signs that increasing numbers of young engineers are being attracted to Denel, specifically to be part of leading edge technological projects such as that offered by the A-Darter development contract. Acting on behalf of the South African National Defence Force, a contract was signed by Armscor on the co-development of the missile.

Enquiries: Mr Joe Makhafola
Tel.: (012) 671-2739
Fax: (012) 671-2793
Cell: 082 8888 966
Email: joem@denel.co.za

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Denel Mechem shows contraband detection system


Denel demonstrated its innovative explosives and drug detection system to the media and interested security forces.

MECHEM, (Pty) Ltd, a wholly subsidiary of Denel, is a pioneer and leader in odour and trace detection of explosives and contraband.

Mechem Explosives and Drug Detection System (MEDDS) is ideal for reinforcing security at airports, harbours and border posts or any other area requiring additional security.

The system, which was researched and developed by MECHEM in South Africa, utilises odour collection filters to capture the particles of explosives and contraband. These particles are then analysed with the use of highly trained dogs in a clinically controlled environment.

Some odours successfully detected by MEDDS include all types of drugs, weapons and ammunition, explosives, animal products such as ivory and rhino.

MECHEM has now established itself as a world leader in Mine Action operations and is presently one of the largest UN Mine Action Contractors in the world.

The technique can go a long way in solving crime and the smuggling of illegal goods in South Africa.

Enquiries:
Joe Makhafola
Corporate Communications
Tel : 012 671 2739
Mobile: 082 8888 966
Email : joem@denel.co.za

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Denel appoints Monwabisi as new CEO of Munitions


Monwabisi Kalawe has been appointed the new CEO of Denel Munitions with effect from 1 December.

Kalawe left Mvelaphanda before joining Denel. He brings with him a vast experience in business management.

The Natal University engineer spent about seven years in the aviation industry managing all the commercial airports in South Africa with the exception of O.R. Tambo International.

Coupled with an MBA from University of Cape Town, Kalawe is excited to be joining Denel particularly at the time of implementing its turnaround strategy. .

Kalawe believes that there are prospects for success because there is a market that requires the state of the art products that Denel make.

"I have always enjoyed leading and actively contributing towards business turnaround situations and this opportunity provides exactly that.

The Denel Leadership has taken the time to brief me properly about the challenges and great opportunities that face the Denel business. I am therefore ready and willing to make my contribution in turning this business around," he says.

Kalawe's experience in process improvement, process optimization, product rationalization and commercial background should come handy in adding to the new commercial focus that the new Denel leadership introduced.

Since he has been with the company, he could not but marvel at the commitment and talent that Denel has. This is based on interaction that he had with senior management, both from a technical specialist talent and overall business management perspective.

Kalawe is married to a medical doctor. He is blessed with two kids, a boy and a girl.

Enquiries: .
Mr Joe Makhafola
Tel.: (012) 671-2739
Fax: (012) 671-2793
Cell: 082 8888 966
Email: joem@denel.co.za;

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Denel announces results for year ended 31 march 2006


At Denel's Annual General Meeting that took place in Pretoria today (19 October) the Chief Executive Officer, Mr Shaun Liebenberg, announced that the Group posted a net loss of R1,377.4 million (2005: R1,560.7 million loss) on gross revenues of R2,730.7 million (2005: R3,610.6 million).

According to Shaun Liebenberg the major contributors to the financial performance during the year were mainly the failure to achieve the sales target, increase in provision for contract losses, provision for restructuring, high interest costs and low production at certain plants resulting in an under recovery of labour.

Importantly Denel has regained solvency with the Denel Group's capital and reserves, depleted in previous years, being restored to R600 million during the 2005/2006 financial year. This resulted from:
  • The Government's first phase recapitalisation of R2 billion in March 2006. Denel issued 447 394 324 ordinary Class "A" shares (R1.00 each) at a premium of R1, 552.7 million; and
  • The impact of IFRS implementation, more specifically the revaluation and review of the useful lives of property, plant and equipment.


"The total re-engineering of Denel is now well under way, and although a lot remains to be done, I'm confident we've set in motion a process to drive internal improvements across all business units," Liebenberg said. "We've taken a hard look at viability in each business, including potential for partnering, and also improvements in processes, cost reductions and new skills. We're clearly on the road to improved fortunes."

Notable was the progress in unbundling Denel into eight to ten independent legal entities. This process has paved the way for the introduction of new executive management and critically the appointment of skilled financial staff in all business units.

With a view to improve internal audit in Denel, a reputable firm of external auditors (PricewaterhouseCoopers) was appointed with effect from 1 April 2006 to undertake the internal audit function. Steps have also been taken to strengthen corporate governance, especially where the Group still fell short on certain PFMA requirements.

The Board of Directors noted the Group managed to reduce operating costs from R1,557.4 million to R1,155.1 million compared to the previous year. Denel's gross loss was impacted an additional provision of R515 million for contract risks and losses, an under recovery of labour by R150 million due to low production at certain plants and a provision of R59 million for restructuring in terms of its macro strategy.

The aggressive implementation of Denel's macro strategy over the past year resulted in Denel being able to report significant progress on several fronts. Bearing in mind the negative impact non-core operations have had on Denel's financial situation in past years, much progress has been made to date to dispose of non-core assets, proceeds of which will total an estimated R450 million. The remainder would be sold in the next financial year. In addition, Denel is in the process of selling some of its vacant land.

The six-pillar macro strategy (actually five pillars standing on the foundation stone of Transformation and People) relates to:
  • Secure "privileged access" (to South Africa's defence spend);
  • Engage state agencies;
  • Evaluate commercial viability (fix or exit) of business entities;
  • Create equity based relationships / formal alliance partners;
  • Raise productivity and capabilities to world-class standards.


"Regular defence procurement workshops are held involving the Departments of Public Enterprises and Defence, Armscor, as well as Trade & Industry, Science & Technology and the local defence industry as a whole - not only Denel," explained Liebenberg. "This has led to a greater transparency and understanding of the Department of Defence's requirements and has greatly improved cooperation among all participants on system tenders and support from state agencies."

In this process Denel hopes to align Defence acquisition with the defence-related industry's capacity, thus reducing the under recovery industry is suffering at present. Significantly Minister of Defence, Mr Mosiuoa Lekota, alluded to this cooperation and "privileged access" in his opening address at the Africa Aerospace & Defence exhibition in Cape Town last month:

"The alignment of defence acquisition policy is critical to support the development of the local Defence Related Industries. Acquisition policy should be linked to capital expenditure planning and technology strategy and transfer...," Minister Lekota said. "Thus the changing roles of the South African National Defence Force (SANDF) need to be fully understood by the domestic industry. In turn the local defence related industry requires forward information on what the SANDF will purchase to plan production accordingly," concluded Minister Lekota.

Likewise, Denel achieved concrete results in the area of equity partnerships. During the year under review potential partners and strategic alliances have been identified, one of which was formally signed subsequent to year-end. That involved the creation of a new South African aerostructures company in which Saab of Sweden is holding 20 per cent equity with the remainder held by Denel.

Denel has also signed the terms of agreement with renowned German electro-optics firm, Carl Zeiss, to acquire a majority holding (70%) in Denel's Optronics business. Negotiations with other local and international defence companies are still under way to conclude partnerships for some of its other businesses in the near future.

These equity partnerships will lead to the introduction of much needed management capability, world-class processes and technology, access to markets and a contribution to R&D. "Importantly these partnerships are linked to strong IP protection to ensure the South African Government remains in control of its intellectual assets," Liebenberg said.

"The Board is of the view that the successful implementation of the revised strategy is the key to unlocking the business value and returning the Group to profitability," Denel's Chairman, Dr Sibusiso Sibisi said. "It is the Board's view that the past year has been challenging, yet a clear vision exists to turn Denel into a sustainable enterprise in the next few years. Therefore, Denel would still need the continued and valued support of all its stakeholders, in particular its shareholder, the Government," Dr Sibisi concluded.

In an effort to further strengthen Denel, three additional members were announced for the Board of Directors. Mr Zoli Kunene, Chairman of Kunene Technologies (and Saab Grintek) and Mr Lew Jones, former head of Plessey and Tellumat, join as non-executive directors, while Denel's new Group Chief Financial Officer, Mr Talib Sadik, becomes an executive director.

Minister of Public Enterprises, Mr Alec Erwin, representing the Shareholder at the AGM said: "I'm pleased to acknowledge a glimmer of an upturn in Denel which frankly, is ahead of my expectations. Especially pleasing is the very important relationship with the Department of Defence and the impact this is having on South Africa's defence related industry in general." The Minister said it was vital for Denel to continue monitoring its revenue lines, to increase sales and to align its resources to build on the good progress of the past year.

Denel Annual Report 2006

For enquiries contact: Mr Sam J Basch / Joe Makhafola
Tel.: (012) 671-2804 / 671-2937
Mobile: 082-881-3696 / 082-888-8966
Email: samb@denel.co.za / joem@denel.co.za

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Denel shows its wares to cape town visitors at AAD 2006




The Denel Group is showcasing some of its world-class defence and aerospace systems at the AAD 2006 exhibition starting at Air Force Base Ysterplaat in Cape Town next week (20 to 24 September).

"With AAD 2006 now taking place in Cape Town, our clients and stakeholders there are likely to see for the first time - and at first hand - our indigenously developed products for which Denel is renowned," explained Shaun Liebenberg, Denel's chief executive officer.

A strong drawcard will be the Denel developed Rooivalk attack helicopter on static display outside Hall 5. Being in service now with the South African Air Force (SAAF) the Rooivalk is also part of the daily flying display at Ysterplaat.

It is envisaged some of the SAAF's latest acquisitions, notably the Agusta A109 light utility helicopter (LUH), the Hawk lead-in fighter trainer and the Gripen advanced fighter jet will be main attractions at the show. Denel is an industrial partner in these programmes, having built large fuselage structures for these aircraft and also doing final assembly of the A109 helicopter and Hawk.

Denel Aerostructures, in which Saab has recently acquired an equity stake, will show its activities relating to the design and manufacture of large structures for the A400M military transport aircraft in which South Africa is a partner.

Inside Hall 5 Denel will show visitors its range of sophisticated missiles and precision-guided weapons. These include the Ingwe and Mokopa anti-tank missiles to the heavy Umkhonto IR surface-to-air missile, now part of shipborne air defence systems for the South African Navy's Meko class light frigates and the Finnish Navy's new Hamina and Hameenma class patrol vessels.

Last month the South African Police Services (SAPS) awarded Denel Optronics a contract for the supply of Goshawk 350 airborne surveillance systems for the SAPS helicopters.

To illustrate the Goshawk 350's crime prevention capabilities, Denel and the SAPS will each have a display screen in Halls 5 and 7 respectively showing live footage from the SAPS helicopter patrolling over Cape Town.

Denel Optronics will also showcase their laser rangefinder and target acquisition equipment, like the innovative Eagle-Eye, as well as helmet-mounted sighting and tracking systems. Pilots of the Gripen and Eurofighter-Typhoon jet fighters use these systems from Denel which was also evaluated for the modern French Rafale jet fighter.

As far as land systems are concerned, Denel will show the Patria MCV (Modular Combat Vehicle) it is proposing for the South Africa Army's new generation infantry combat vehicle. The Finnish developed vehicle is the fitted with a Denel developed turret.

Infantry weapons on the Denel exhibition will be long range mortar systems and machineguns (some of which have been exported in quantity) and assault rifles, including a radically different new 20mm weapon for which Denel is developing the ammunition.

"We want our Cape Town guests to see Denel's world leading systems, notably artillery and Unmanned Aerial Vehicles, some of which have been exported and are operational in foreign lands," Liebenberg said.

"Denel has international partnerships on numerous programmes, including artillery ammunition which several NATO nations are considering for their forces. It is time for South Africans in Cape Town to see the level of our technology and what we have achieved," Shaun Liebenberg concluded.

Enquiries:
Sam J Basch / Joe Makhafola
Tel.: (+2712) 671-2804 / 671-2739
Mobile: (+27) 82-881-3696
Email: samb@denel.co.za
samb@denel.co.za / joem@denel.co.za

Denel intends to wow cape town visitors at AAD 2006


The Denel Group is showcasing some of its world-class defence and aerospace systems at the AAD 2006 exhibition starting at Air Force Base Ysterplaat in Cape Town next week (20 to 24 September).

"With AAD 2006 now taking place in Cape Town, our clients and stakeholders there are likely to see for the first time - and at first hand - our indigenously developed products for which Denel is renowned," explained Shaun Liebenberg, Denel's chief executive officer.

A strong drawcard will be the Denel developed Rooivalk attack helicopter on static display outside Hall 5. Being in service now with the South African Air Force (SAAF) the Rooivalk is also part of the daily flying display at Ysterplaat.

It is envisaged some of the SAAF's latest acquisitions, notably the Agusta A109 light utility helicopter (LUH), the Hawk lead-in fighter trainer and the Gripen advanced fighter jet will be main attractions at the show. Denel is an industrial partner in these programmes, having built large fuselage structures for these aircraft and also doing final assembly of the A109 helicopter and Hawk.

Denel Aerostructures, in which Saab has recently acquired an equity stake, will show its activities relating to the design and manufacture of large structures for the A400M military transport aircraft in which South Africa is a partner.

Inside Hall 5 Denel will show visitors its range of sophisticated missiles and precision-guided weapons. These include the Ingwe and Mokopa anti-tank missiles to the heavy Umkhonto IR surface-to-air missile, now part of shipborne air defence systems for the South African and Finnish navy vessels.

Last month, just before AAD 2006, the South African Police Services (SAPS) awarded Denel Optronics a contract for the supply of Goshawk 350 airborne surveillance systems for the SAPS helicopters.

To illustrate the Goshawk 350's crime prevention capabilities, Denel and the SAPS will each have a display screen in Halls 5 and 7 respectively showing live footage from the SAPS helicopter patrolling over Cape Town.

Denel Optronics will also showcase their laser rangefinder and target acquisition equipment, like the innovative Eagle-Eye, as well as helmet-mounted sighting and tracking systems. Pilots of the Gripen and Eurofighter-Typhoon jet fighters use these systems from Denel which was also evaluated in the French Rafale.

As far as land systems are concerned, Denel will show the Patria MCV (Modular Combat Vehicle) it is proposing for the South Africa Army's new generation infantry combat vehicle. The Finnish developed vehicle is the fitted with a Denel developed turret.

Infantry weapons on the Denel exhibition will be long range mortar systems and machineguns (some of which have been exported in quantity) and assault rifles, including a new 20mm weapon for which Denel is developing the ammunition.

"We want our Cape Town guests to see Denel's world leading systems, notably artillery and Unmanned Aerial Vehicles which are operational in foreign lands," Liebenberg said. "Denel has international partnerships on numerous programmes, including artillery ammunition which several NATO nations are considering for their forces. It is time for South Africans in Cape Town to see the level of our technology and what we have achieved," Shaun Liebenberg concluded.

Enquiries:
Sam J Basch / Joe Makhafola
Tel.: (+2712) 671-2804
Mobile: (+27) 82-881-3696
Email: samb@denel.co.za

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SAAB and Denel Create New International Aerostructures Player in South Africa


Saab AB of Sweden and South Africa's Denel have agreed to create a new aerostructures company in South Africa which will compete on international markets for design, manufacturing, and assembly orders in the civil and defence aerostructures fields.

Denel Aviation's aerostructures unit contributes its new and existing capital equipment, current client base, and design and manufacturing skills to the partnership. Saab Aerostructures' provides skills and experience in transformation, marketing, and management, its international reputation for producing quality on time and to cost, and its global customer relationships.

The new South African aerostructures company is the first newly formed partnership to emerge from state-owned aerospace and defence manufacturer Denel's restructuring process. Saab assumes responsibility for the running and performance of the new entity.

At a ceremony in Stockholm today agreements were signed by Minister of Public Enterprises Alec Erwin on behalf of the South African government, as well as by Denel CEO Shaun Liebenberg and Saab's CEO Åke Svensson. They include agreements on the establishment, management, and shareholding structure of the new company, whose name will be announced in the near future.

Saab provides an investment of R 66-million over the first two years, ongoing skills and technology transfers, as well as management and market access. Denel will invest proportionately to its ownership. The new aerostructures company will initially be 20% owned by Saab and 80% by Denel.

It will begin operations with about 600 staff from Denel Aviation and will be led through the transformation process by a team of specialists deployed from Saab Aerostructures in Sweden. The turnover will initially be approximately R 200-million and is expected to grow significantly over the first years.

"South Africa has made a clear choice in favour of the retention, consolidation, and long-term future of our aerospace industry. The task now is to build on our existing assets and skills in creating a viable international industry participant capable of sustaining long-term involvement in the commercial and defence aerospace sector," said Minister Erwin following the signing.

"As the recipient of significant investment by South African taxpayers over several decades, and as the custodian of many of the country's high technologies and skills, Denel is at the core of our effort to grow the contribution of the aerospace industry to our economy and to meeting South Africa's development goals. I am very pleased that we have been able to find in Saab the right partner to join us in transforming and growing our aerostructures capacity," said Erwin.

Following many years of significant investment in its own transformation from a single-client supplier, Swedish-listed Saab is today an established participant in the international aerostructures industry, successfully managing significant contracts with Airbus and Boeing both as supplier and risk sharing partner. Its task will be to establish the new company as a competent and profitable African partner in the global aerostructures business.

"It is an honour for Denel to be associated with Saab in this venture which will see South Africa's aerospace capabilities slot into the global aerospace business environment," said Liebenberg. "The aerostructures company we are creating today will bring together the best contribution from each partner, for the benefit of both, in line with the change strategy we adopted last year to return Denel to sustainable profitability."

Saab's partnership with Denel in the new aerostructures business is the latest move within the Swedish company's acquisitions strategy aimed at expanding its presence in aerospace, high technology, and defence beyond Sweden's borders. Saab will initially take a minority shareholding in the new company.

"This partnership not only represents a very good business opportunity for Saab as we expand our aerostructures design and manufacturing capacity while creating synergies in procurement, marketing, and other areas. It is also another milestone as we consolidate our relationships and expand our presence in our second home market, South Africa, and in the southern hemisphere as a whole," said Svensson.

"Our South African partners bring great skills, the potential to be a lower cost supplier, and a tremendous will to participate in the global aerostructures market. We will build on that spirit while contributing our own skills, experience, and market reach in creating synergies and a new entity which can positively benefit our shareholders and the South African economy," said Svensson.

Saab's transformation model agreed with Denel will see the deployment of a number of specialists from shopfloor level up to the new CEO of the aerostructures company, which will initially be based at Denel Aviation's facility at Johannesburg International Airport. The model is specifically designed to lead and assist employees across the company in actively participating in rapidly improving skills and knowledge levels, and in positively influencing corporate culture, time, cost, and quality management systems.

Besides employees deployed on two and three year contracts to South Africa, Saab will also provide specialists on shorter term secondments to assist in technology and skills transfers to the new aerostructures company. Groups of South African employees will spend time working with and learning from their colleagues at Saab Aerostructures' Linköping factory. The new company's structure mirrors that of Saab Aerostructures, which assumes a support obligation for its South African counterpart.

The new South African aerostructures company will be responsible for delivering on Denel's current contracts with a number of international aerospace manufacturers. Its current order book includes work on the Gripen, Airbus A400M, Agusta, and Hawk programs for the South African Air Force, as well as for Boeing. At the same time, a significant marketing effort is already underway to attract new civilian and defence aerospace business.

The South African government has recognised the significance to the development of the country's aerospace industry of the deployment of hard skills, technologies, and marketing expertise to the new company through Industrial Participation credits to Saab of up to $2.4-billion, based on the actual performance of the new aerostructures company.

The formation of the new company is subject to the completion of certain approvals, including those related to the competition authorities.

Further Inquiries:

Denel
Sam Basch: +27 82 881 3696

Saab South Africa
Stephen Laufer: +27 83 444 2739

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Denel's Head Office relocates to Centurion


Later this week, starting 21 April, Denel's Head Office is being relocated from its premises in Erasmuskloof to Centurion.

With effect of 24 April 2006 Denel corporate office staff would be occupying an existing office block at Denel's Irene Campus on Nelmapius Drive in Centurion. The offices, previously used by Denel's Kentron division, later renamed Denel Aerospace Systems (DAS), were refurbished to accommodate some 80 staff members in an open-plan environment.

In keeping with its comprehensive restructuring strategy Denel has disposed of the Erasmuskloof buildings and reduced its corporate office staff complement from some 150 last year.

A new entrance with separate security clearance was added in light of the National Key Points Act applicable to the DAS facilities where most of Denel's dynamics systems and optronics are based.

This relocation brings about a change in some contact details, although existing email and postal addresses remain unchanged. These are as follows:

Postal Address: PO Box 8322, Centurion, 0046
Head Office telephone (switchboard) : (012) 671-2700 - (International +27)
Fax number (general) : (012) 671-2793
All stakeholders are advised to amend current records on Denel accordingly.

Enquiries:
Ms Priya Pillay
Denel Corporate Communication
(+27-12) 428-0764 (until 21 April ONLY)
priyap@denel.co.za

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Relocation of the Denel Head Office


Denel would like to inform all stake holders that the Denel Head Office, currently located at Kasteel Park, Jochemus Street, Erasmuskloof, Pretoria, will be relocated to the Denel Aerospace Systems facility at Nelmapius Street, Irene, effective Monday 24 April 2006.

New Switchboard Number + 27 12 671 2700
New Fax Number + 27 12 671 2793 (General Number)

All existing e-mail addresses remain the same.

The postal address for the Denel Head Office remains unchanged:
P O Box 8322
Centurion
0046

Denel would like to apologise for any inconvenience caused. The existing office will close on Friday April 21, 2006 and reopen in the new premises on Monday 24 April, 2006.



For further information please contact Denel Corporate Affairs on the following numbers.

Priya Pillay
+27 12 428 0674
+27 82 888 8966

Lady Keebine
+27 12 428 0657
+27 83 678 1675

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Denel configures NTW-20 AMR to 20x110 HS


14 March 2006

South Africa's Denel Group has improved its successful NTW-20 Anti Materiel Rifle with a reconfiguration to handle most variants of 20x110 HS ammunition.

Originally designed for 20x82mm ammunition (with a quick-change function to fire 14.5x114mm rounds), the NTW-20 in the 20x110HS configuration now affords clients a significantly wider benefit.

The 20x110 HS round possesses excellent characteristics in terms of muzzle velocity and explosive payload. This ensures an improvement in the maximum operational range (up to 1500m) and terminal effect. This round is also available from numerous sources internationally in new generation configurations.

Changes to the weapon include upgrades to the recoil and feed system, trigger box and an accurately calibrated bullet drop compensator (BDC) suitable to this round.

The 20x110mm ammunition range comprises HEI, HEIT, SAPHEI, and AP rounds with a muzzle velocity of 820 m/sec, as well as PRAC and PRACT rounds.

The NTW-20 AMR, weighing 31.5 kg unloaded, is a two-man weapon which is normally fired in the prone position, ensuring maximum stability for long range shooting.

It has an 8 x 56 power telescope with parallax adjustment, fitted to a quick-release mounting with integral bullet-drop compensation. The sight is mounted to give 250mm eye relief, thus providing the optimum combination of situational awareness, target acquisition and accurate aiming.


NTW-20 Anti Materiel Rifle


The weapon is bolt action, with manual feeding through the ejection port. It can be completely field stripped with no tools other than a round of ammunition, which is used as a tool for removing the barrel.

The NTW-20 Anti Materiel Rifle can be mounted on Denel's new purpose built buffered and damped vehicle mount. This mount has been designed and manufactured to suit the needs of long-range accurate single shot fire from weapons such as the NTW-20 AMR.

Dampers in the mount control the free movement of the weapon during aim. These can be quickly regulated to allow rapid slewing of the weapon.

The combination of the NTW-20 AMR and the vehicle mount provides the user with a highly versatile and powerful payload rifle which, due to its mobility, can be deployed in any number of scenarios.

For further details please contact:

Sam J Basch
Group Manager: Corporate Communication
Tel.: (+27-12) 428-0704
Mobile: (+27) 82-881-3696
Email: samb@denel.co.za

Clive Nicoll
Programme Manager: NTW-20 AMR
Denel Land Systems, Lyttelton
Tel : (+27 12) 620-3122
Fax : (+27 12) 664-0172
Mobile : (+27 83) 326 1948
Email : cliven@liw.denel.co.za;

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Government recapitalises first phase for Denel


February 2006

Further to the Minister of Finance's budgetary appropriation for the first phase recapitalisation of Denel, as is shown in his budget today, I wish to thank the Government for its firm support in this manner.

It is clear Government is committed to Denel's objective to get on an even keel in a phased approach towards returning South Africa's aerospace and defence asset to sustainable profitability.

I'm particularly pleased the National Treasury has afforded Denel an opportunity over the past months to outline the company's macro strategy. In extensive briefings to our other stakeholders, notably the Parliamentary Portfolio Committees on Public Enterprises and Defence, I've received full support.

We still have a long road ahead to complete the roll out of the strategy, yet I'm confident the appropriation will carry us through the first phase of Denel's restructuring, notably exiting the non-profitable businesses, attracting equity partnerships and building world-class capacity.

I wish to thank Minister Alec Erwin and his Cabinet colleagues, as well as the Departments of Public Enterprises and Defence for their assistance to secure this important funding.

ISSUED BY: Mr Shaun Liebenberg, Denel Chief Executive Officer

Enquiries:

Ms Priya Pillay
Manager: Corporate Communication
Email: priyap@denel.co.za

Or

Mr Sam Basch
Tel.: (+27-12) 428-0704
Fax: (+27-12) 428-0783
Email: samb@denel.co.za

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Denel establishes a partnership in Middle East


25 January 2006

In a move to strengthen its existing business links in the Middle East, Denel is forming a partnership with United Arab Emirates commercial company, International Golden Group (IGG).

Agreement was reached in Pretoria today (25 January) between Mr Fadel al Kabi, IGG CEO, and Mr Shaun Liebenberg, Denel CEO, to form a joint venture company called Denel Middle East with base in Abu Dhabi.

"We have been working with Denel for some time now, during which time IGG demonstrated its ability to bring business to Denel," explained Mr Al Kabi. "IGG is a leading group in the UAE, which enables us to assist Denel in expanding its business in the country."

According to Shaun Liebenberg the partnership with IGG is a further demonstration of its rolling out his macro strategy to turn around the company's fortunes.

"The agreement we reached with IGG today is the first step to formalising the joint venture company," Liebenberg said. "Denel Middle East will therefore become the hub for the promotion of our existing programmes and projects in the UAE and a clear sign of the good cooperation between Denel and our valued client in the UAE."

Denel's business in the UAE covers both land systems products, notably artillery, and aerospace systems. Apart from ammunition, it has a long-term contract with the UAE Armed Forces for the maintenance of artillery systems.

Enquiries:

Sam J Basch
Denel Corporate Communication
(012) 428-0704
samb@denel.co.za;

Denel Land Systems Lyttelton
(012) 620-3405
bastiaanv@liw.denel.co.za

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Denel signs major orders


13 December 2005

Of late all the hard work Denel has put into its products is finally paying dividends. These last few months have been quite successful months for Denel with the signing of contracts at Denel's Pretoria Metal Pressings (PMP) division and the Naschem division.

Denel's PMP has just received a R36 million order from BAE Land Systems for the delivery of 129 million brass cups. These cups are the first process in the manufacturing of ammunition. In September 2001, PMP achieved a major breakthrough by clinching a 5-year rolling contract with BAE Systems. This order is the fifth annual one under the main contract.

According to Mr Carel Wolhuter, General Manager of PMP, an excellent relationship was maintained with BAE Systems over the past few years, and that they see PMP as a reliable supplier.

Mr Chris Isaacs of BAES Land Systems, who visited PMP for the annual Supervisory Team Meeting between the two companies, acknowledged that PMP's products are of excellent quality. Negotiations are in progress to extend the relationship between PMP and BAES Land Systems for a further five years.

This excellent news is coupled with further positive news that Denel's Naschem division has just received a R30 million multi year order from the SANDF, for the upgrading of their mortar ammunition in stock. Naschem's negotiations with the SANDF on this upgrading programme commenced during the last half of 2005.

The first delivery, to the value of R10 million, will take place at the end of February 2006, with a final delivery to take place by the end of October 2006. According to Mr Dennis Schoeman, acting General Manager of Naschem, this order was made possible due to excellent relations maintained between the company and the SANDF, and Denel's track record as a reputable supplier.

Since this is only one of many orders received by Naschem from the SANDF for the upgrading of ammunition, the company is confident that we will win future orders due to our excellent product and services.

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Denel makes a hit with artillery technology in USA


12 December 2005

At a demonstration in the United States last month Denel scored high with its 105mm light artillery ammunition and turret mounted on the LAV III (Stryker) vehicle built by US company General Dynamics Land Systems (GDLS).

Most senior US Artillery decision makers, including Maj Gen M Ralston, new Commandant of the US Army Field Artillery Centre, attended the demonstration held at the Fort Sill Military Base in the USA on 15 and 16 November 2005.

"This programme started with a teaming agreement in July 2003 with GDLS to customise the Denel Land Systems Light Experimental Ordnance (LEO) 105mm artillery ballistic system for various requirements in the USA and Canadian Armies, the USA Marine Corps, and other potential customers," explained Bastiaan Verhoek, executive manager at Denel Land Systems. "With this demonstration Denel and GDLS proved the success of the prototype Self Propelled (SP) 105mm artillery system and Denel's pre-formed fragmentation ammunition."

Major challenges facing the joint Denel-GDLS team in the run-up to the demonstration were to integrate the system with the USA Inertial Navigation Unit and its Towed Artillery Digitised Fire Control System.

Denel's newly developed Uni-Modular artillery Charge System for 105mm guns proved equally successful during the Fort Sill demonstration.

At the same time, Denel's 105mm Pre-formed Fragmentation projectile was also subjected to a comparative test with natural fragmentation ammunition. Although non-US military personnel were not allowed to be present at this arena test, the results were most impressive, according to unofficial information.

It would seem that Denel's pre-formed fragmentation ammunition showed its terminal effect to be two and a half times that of the natural fragmentation ammunition.

According to Verhoek, this project resulted from the US Army's stated requirement for an indirect fire support capability for its Interim Stryker Brigade Combat Teams, for which the US House of Representatives passed a bill during May 2003.

Denel Land Systems Lyttelton built a turret around its 105mm LEO system which was integrated on the GDLS LAV-III vehicle in Canada during February 2004.

The system was then formally launched at the AUSA Conference in Fort Lauderdale, Florida in March 2004 and subsequently tested at a facility on the Eglin Air Force Base, USA. After a demonstration at the US Army Field Artillery Centre at Fort Sill in April 2004, the system was exhibited at several exhibitions and conferences in the USA and Canada.

"Since embarking on this project only some two year's ago, we have come full-circle in showing the superior artillery capability residing in Denel and its US partner," Verhoek said. "I'm proud of the Denel Land Systems Team, supported by two South African Army officers, who contributed significantly to a demonstration that undoubtedly exceeded expectations."

Enquiries:

Sam J Basch
Denel Corporate Communication
(012) 428-0704
samb@denel.co.za;

Denel Land Systems Lyttelton
(012) 620-3318
francoisd@liw.denel.co.za

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