SOUTH%20AFRICAN%20AEROSPACE%20MARITIME%20AND%20DEFENCE%20INDUSTRIES%20ASSOCIATION%20(AMD)

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AMD BRIEFING TO THE PORTFOLIO COMMITTEE ON
DEFENCE 2 NOV 04

• SOUTH AFRICAN AEROSPACE MARITIME AND DEFENCE
  INDUSTRIES ASSOCIATION (AMD)

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CONTENTS

• INTRODUCTION
• ROLE PLAYERS AND THEIR PERSPECTIVES
• SIZE AND SHAPE OF THE SADRI
• CHALLENGES

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ROLE-PLAYER PERSPECTIVES

• SADRI shareholders need growth and profit,
  whilst accepting their social responsibility
• Denel Sustainability and transformation
• The dti Stimulation of SA industrial base
• DFA Mutual support for foreign initiatives
• DoD Turnkey systems at lowest cost operational
  and logistic support -- peace and war maintain
  essential technologies, capabilities and
  capacities
• Continued

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ROLE-PLAYER PERSPECTIVES, CONT

• Armscor Manage DoD acquisition contracts ensure
  that SADRI performs within contract.
• Arms Control Authorities (NCACC NPC)
  Responsible operations and trade in armament
  Post 9/11 concerns
• Summary
• Satisfy essential DoD requirements
• Sustainable profitability of industries

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THE SOUTH AFRICAN DEFENCE RELATED INDUSTRIES

• The South African Defence Related Industries
  (DRI) are
• Companies in the public and private sector
• That provide products and services to security
  forces.
• The DRI forms one of the strategic industrial
  sectors of the South African economy

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SA AEROSPACE, MARITIME AND DEFENCE INDUSTRIES
ASSOCIATION (AMD)

• AMD is the representative association for
  companies from the DRI.
• AMD represents the collective interest of its
  members.
• AMD as an association strives to ensure a
  sustainable and responsible South African Defence
  Related Industry.
• AMD members elect the Board of Directors to
  direct the activities of AMD.
• The Board ensures that AMD is managed by its
  members for its members.
• The dti and the DoD recognise AMD as the
  Industry Association representing the interests
  of the SADRI.
• AMD is self-funded by its members

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AMD CONSTITUENCY

• Representation
• Represents 90 of defence related business in
  South Africa
• Represents 97 of all defence related exporters

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MEMBERSHIP

• 44 Members
• Big Six (Denel, Grintek, ATE, Reutech, African
  Defence Systems and BAE Systems Land Systems OMC)
• Armscor
• Small and Medium enterprises (29)
• Historically disadvantaged enterprises (5)
• International memberships (BAE Systems-RSA
  Boeing International Corporation-Africa).

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AMD MEMBER COMPANIES

• STATE OWNED
• Denel (17 units)
• Armscor
• CSIR - Defencetek

• ASSOCIATE MEMBERS
• BAE SYSTEMS
• BOEING AFRICA

• HDI/BEE
• Lechabile Quality Systems
• FBS
• Kgorong Investment
• Bohlabela Wheels
• Emzansi Eng Consultants

• JSE LISTED
• Grintek
• Tellumat
• Reutech
• IST Dynamics

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ESTIMATED SIZE OF THE SADRI (2003)

• Turnover
• Defence-Electronics Rm 4.2
• Rest of the SADRI Rm 2.8
• Total SADRI Rm 7.0
• SADRI Exports Rm 3.7
• Total Personnel 15 300

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SADRI PERSONNEL

• Black White
• Directors 31 115
• Senior Managers 52 300
• Middle Managers 156 1201
• Junior Managers 559 1937
• Skilled personnel 5148 4692
• Unskilled personnel 1050 61
• Total 6996 8306
• Equity ownership, share of economic benefits
  20 (ave)
• Preferential procurement from BEE firms 16
  (ave)

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SA DEFENCE INDUSTRYSHARE OF DEFENCE TURNOVER
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DEFENCE EXPORTS 2002
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DoD REQUIREMENTS

• Support to SANDFs operational and logistic
  capability, both in times of peace and war
• Support of the SANDF to remain strategically
  independent in their expanding responsibilities
  on the continent (AU, Standby Force,
  Peacekeeping, NEPAD, etc)
• Unaffordable to subsidise retention of strategic
  capabilities and technologies within the local
  industrial base
• Therefore focus on Export to
• Achieve economies of scale.
• Be internationally competitive.
• Expand the export base through international
  cooperative ventures.

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CAPABILITIES

• Upgrades and life-extensions of major systems
• World class artillery systems and mine protection
• Air defence systems
• Armoured vehicles
• Air-to-air missiles
• Air-to-ground weapons
• Unmanned Aerial Vehicles (UAVs)
• Radar systems
• Command, control, communications, computers,
  intelligence, reconnaissance and surveillance
  (C4IRS).
• Electronic warfare systems Air, Land and Sea

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CAPABILITIES (Cont)

• Combat suites for ships and armoured vehicles
• Avionic suites for military aircraft
• Submarine periscopes
• Simulation, war gaming and training systems
• Sensors and signal processing
• Gun Turrets
• Laser rangers and designators

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CAPABILITIES(Cont)

• Systems Engineering and Program Management
• Geographic Information Management
• Quality and Configuration Management
• Logistics engineering, documentation and
  Integrated Logistics Support
•       

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MAIN CHALLENGES FACING INDUSTRY

• Ensuring sustainability of SADRI by complementing
  local sales with export
• Ensuring more coordinated government support
• In export promotion
• In R D and Human Resource Development
• Joint strategic planning, in a government/industry
  partnership

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MAIN CHALLENGES FACING INDUSTRY (CONTINUED)

• Developing and retaining essential industrial
  capabilities, capacities and technologies to meet
  the requirements of the DoD, through efficient
  utilisation of all available resources.
• Responsible operations and trade in armaments,
  while enabling optimum commercial business
• Develop industry to become more price,
  performance and schedule competitive
• Adapting the SADRI to support the requirements
  caused by the expanding role of the SANDF in
  Africa.

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MAIN CHALLENGES FACING INDUSTRY (CONTINUED)

• Creating more industrial opportunities through
  outsourcing and in doing so, to make the
  industry more accessible to small and medium
  companies.
• Developing a new source of PDI technical human
  resources, aligned with the technology programs.
• Developing and Implementing the SADRI BEE
  Charter.
• Consolidating and growing globalisation successes
  of the SADRI.
• Ensuring sustainability for the SADRI after the
  SDPs.

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Thank you for your attention
Questions?