In its presentation to the Parliamentary Portfolio Committee on Defence and Military Veterans, embattled State-owned defence industrial group Denel highlighted the importance to its future of developing strategic partnerships and collaborations (including access to funding), and of undertaking research and development (R&D).

Partnerships, of various types and at different levels, would be a way of gaining access to markets, funding, innovation and technology. The different levels could be government to government, company to company, business division to business division, all the way down to the project/capability level. Strategic partnerships could take the form of joint ventures (JVs), contracting partnerships, marketing agreements, “smart partnerships” and public-private partnerships (PPPs). Denel reported that it was currently developing, with National Treasury, a PPP framework that it could use.

The group reported that it would establish a Partnerships Review Committee and identified a number of partnerships, of varying types, that it hoped to achieve. These included partnering with other government agencies, such as the Industrial Development Corporation, to gain access to development and industrial funding; formalising Denel’s relationship with the Council for Scientific and Industrial Research; and achieving a partnership with the South African defence industry as a sector. Further, it hoped to develop strategic partnerships and JVs to access technology, funding and markets, for mutual benefit. In particular, it sought partnerships for ammunition manufacturer Denel PMP, Denel Aerospace, and Denel Space.

The group highlighted that it needed to continuously carry out R&D, to keep its product range current and meet rapidly evolving customer requirements (driven by the swiftly evolving combat developments in contemporary conflicts). R&D was also essential to develop new products, allowing product diversification.

R&D and partnerships came together in the four areas in which Denel was focusing, for product development and diversification. The first of these was fixed-wing and rotary-wing aircraft maintenance, repair and overhaul, of both existing and new aircraft, through strengthening existing partnerships, such as that with Lockheed Martin of the US, or creating new partnerships, such as with Embraer of Brazil. The next was technology work in the uncrewed air vehicle (UAV) sector, for both rotary-wing UAVs and “transitioning” (vertical to horizontal flight) UAVs. The third area was space capabilities, including the design and manufacture of low Earth orbit satellites. And fourth, the development of missiles, using the company’s existing missile “building blocks”.  

The group admitted that it still suffered from significant challenges. These included funding issues, burdensome legacy programmes, infrastructure that was aging and even failing, and vulnerability to cyberattack. It assured the committee that the necessary mitigation and correction programmes were under way or were being developed.