South African arms company needs partners to survive – African Daily Voice

NEWSROOM (ADV) – The South African defense industry is facing a crisis as national arms manufacturer Denel struggles for its survival and the swift conclusion of equity partnerships is the only way to save it told Reuters one of the main defense officials.

Denel's woes are jeopardizing an industry that directly employs about 15,000 people and is one of the most advanced sectors of Africa's most advanced economy, "said Kevin Wakeford, CEO of Armscor.

Armscor is responsible for the purchase of military equipment for the South African Armed Forces. He also serves as guardian of intellectual property related to the defense of South Africa.

"The defense industry is the bridgehead for high-tech technical and technological jobs in the South African economy," Wakeford said. "We are at a point of inflection. If Denel collapses, these abilities could be lost forever. "

Denel is plagued by years of mismanagement and a vast scandal of traffic of influence that has led banks to suspend their lending business. It recorded a loss of R 1.7 billion ($ 125 million) – its first in eight years – during the year ended March.

Its cash crisis has resulted in delays in payment to suppliers and left some assembly lines unused. Many small companies producing subsystems and components for Denel products have fallen back.

"For us, the readiness of the South African National Defense Force is a top priority," Wakeford said. "The situation has never been as severe as today."

Saudi Arabia, the third largest country in the defense sector, has made contact with South Africa with the aim of creating a partnership with Denel as part of efforts to create its own defense sector. A source familiar with the offer said the bid (including the acquisition of Denel's joint venture with Germany's Rheinmetall) was worth around $ 1 billion.

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