Investment forms part of BAE Systems' and Saab's offset-project commitment

GLOBAL Forest Products, a consortium consisting of BAE Systems and Saab, the Global Environment Fund and Mondi, is to pump about R570m into a forestry and lumber industry at Sabie, Mpumalanga, over the next few years as part of the strategic defence package offsets.

The announcement yesterday prompted Defence Minister Mosiuoa Lekota to say government was satisfied about the pace of developments as "we are moving ahead of schedule about the amount of work done so far".

The export-orientated venture is set to generate more than R5bn in exports over the next 10 years and is part of BAE Systems' and Saab's commitment to invest R57bn in offset projects over 11 years, coinciding with the delivery of the Hawks and Gripen aircraft for the SA National Defence Force. The contract for the supply of the aircraft is part of government's arms procurement package.

The lumber plant at Sabie, according to Lekota, was about to be closed down as Mondi was unable to operate it at a profit. It was then that BAE Systems approached US-based Global Environmental Fund, an international management firm, to come to the party and rescued the plant.

Lekota said the partnership did "fall from heaven (because) it is the result of a carefully thought-out strategy linking some very necessary purchases for our national defence force to an international commitment to strengthen our economy".

"Today we are looking at very concrete benefits. This is one very concrete example of our policy at work. All of us have been aware of the criticisms the opponents of our strategy have been making in recent months."

Bernard Collier, GM of the national industrial participation programme at BAE Systems and Saab, said the companies were "absolutely" committed to fulfilling their contractual obligations to SA.

"Our reputation and much of our future global business depends on our being able to show the world how we are delivering on our commitment in SA," said Collier.

Meanwhile, Rear-Adml K≖k Verster's term as acting armaments acquisitions chief was extended yesterday until an inquiry into Shamin "Chippy" Shaik was completed. Defence secretary January Masilela disclosed this in an interview yesterday.

Defence force sources described Verster, a weapons systems director in the SA National Defence Force, as "a very private person". He was the first senior defence force figure to criticise publicly SA's overall approach towards the armaments acquisition process.

With acknowledgement to Xolani Xundu, Bonile Ngqiyaza and Business Day.