Rheinmetall Denel Munition (RDM) will invest R550-million over the next three years to modernise its production facilities to the latest standards, introduce state-of-the-art processes and to increase its capacity, company CEO Norbert Schulze informed Engineering News Online. “We will likely recruit another 200 workers,” he also said.
RDM is 51%-owned by Germany’s Rheinmetall AG and 49% by South Africa’s Denel SOC, both of which are defence industrial groups (although Rheinmetall is also active in the automotive components sector). Rheinmetall is a private sector enterprise and Denel is State-owned.
“We are a South African company, despite our financial ownership by a German group,” he points out. “We have only two Germans in the company; all our other people are South Africans. We have facilities on four sites in South Africa, which we are constantly upgrading and modernising. These investments remain in South Africa and we cannot move them out of the country.”
RDM was created in 2008 when the then South African government decided to sell a majority stake in Denel’s loss-making pyrotechnics business (shells, bombs, grenades, rocket motors and missile warheads) to a strategic partner. Rheinmetall was the successful bidder. The German group subsequently made major investments into its new, South African, subsidiary.
“That decision has benefitted the country, benefitted the economy, created 2 000 direct jobs and 10 000 indirect jobs among our suppliers,” highlighted Schulze. “We buy nearly everything in South Africa; nothing is imported.”
RDM pays about R50-million in dividends every year, half of which goes to Rheinmetall in Germany and half to Denel. But the company also reinvests about R200-million every year into its activities and infrastructure in South Africa, including training and development as well as product enhancements and innovation.
“Relations with Denel, our minority shareholder, are excellent,” he observed. “They leave us to get on with our job and we have very good relations with Denel’s businesses, such as Denel PMP, Denel Land Systems and Denel Dynamics.”