OWN CORRESPONDENT, Johannesburg | Wednesday 7.00pm
STATE arms manufacturer Denel announced on Wednesday it has signed a tri-party agreement to become a strategic supply partner to BAE Systems — one of the world’s largest aerospace and defence companies — and Saab, northern Europe’s leading high-technology company.
The agreement has the potential to generate more than R2,5-billion for Denel over the next 10 years.
Announcing the agreement, Denel acting CEO Flip Botha said that Denel has already started working on one of the two-tied supply packages. The first of these, worth R42-million, is for the design, development and production of Nato-standard stores pylons for the Gripen. A follow-on contract worth R240-million is envisaged for the manufacture and supply of pylons for at least 200 future export market Gripens. The second package, initially worth about R350-milllion, is for the production of rudders, ailerons and other components for the Avro RJ and RJX series of 70 – 100-seater jetliners.
Denel has been contracted to produce at least 18 rudder and aileron sets a year to meet the forecast demand for 150 new aircraft over the next nine years. The ministry has since last year been in exploratory talks with BAE Systems, which is widely expected to take up a 20% stake in Denel’s Aerospace division. BAE Systems, formerly known as British Aerospace, was awarded a contract to supply Hawk jet-trainers in 1998 and already has close ties with Denel.