SOUTH African state-owned defence group Denel says it will refocus its ordnance unit to counter a shrinking global arms market and hopes a partnership with BAE Systems will give it access to NATO markets. Acting Ordnance group executive director Louis Dirker said the world market for military small arms had contracted to a tenth of what it was in the past decade. BAE Systems, chosen as one of the preferred equity partners for Denel’s divisions, will take up a stake in the ordnance business before the end of March, 2001. The size of the stake is still to be negotiated. ”It is important for ordnance to have an international partner to have access to NATO and other first world markets, and improve the security of supply,” he said. Denel’s ordnance division – valued at R1.2bn and with orders of close to one billion rand over the next five years – produces small arms, ammunition and artillery systems. – Reuters