Selling Defence Systems is Not a Cut and Dried Affair |
Publication | Business Day |
Date | 2002-09-20 |
Reporter | Jonathan Katzenellenbogen |
Web Link | www.bday.co.za |
If the Africa Aerospace and Defence 2002 exhibition at Waterkloof Air Force Base this week is about anything, it is about weapons manufacturers trying to boost sales.
Within the constraints of embargoes and their own countries' export restrictions, arms salesmen will sell to any country.
SA has been highly competitive in certain niche defence areas, such as artillery systems. Its major areas of export success have been in the Middle East and Asia, and it is trying hard to sell to more members of the North Atlantic Treaty Organisation (Nato).
Last year SA's defence-related exports totalled R1,7bn. Government has not broken this down on a regional basis, so the value of what has been sold to Nato members is not publicly available.
That R1,7bn is minute compared to the UK exports last year of about R75bn, which makes it the second largest arms seller after the US.
In theory, the offset and industrial participation requirements for European defence companies selling the arms package to SA should help boost SA's position in Nato. SA is buying Hawk fighter trainers from the UK and the Gripen multirole combat aircraft from a Swedish-UK consortium, and corvettes and submarines from Germany. But it is far from clear that increased sales into Nato will be forthcoming from the partnerships around the arms deal.
It may be early days yet, but a spokesman for Denel, the stateowned defence equipment manufacturer, says sales to Nato have been "very small".
One British defence export official says there could be some good news on the offset programme within the next six months. However, he does say that meeting the offset requirement has been "quite a significant challenge" and "has to be seen over the life of the entire program".
Tom Pawson, the director-general of the UK's Defence Export Services Organisation, says there are potentially good opportunities for SA sales into Nato. He says his government maintains "a most open defence market and we do genuinely buy on a competitive market".
He stresses that the opportunities both for offsets and exports will come through partnerships between US and SA firms, as local firms make a more cost effective product for world markets.
While not part of any offset program, Pawson points to the SA component in the UK Lynx helicopters that have been sold to Oman. But, as for selling SA's Rooivalk attack helicopter into Nato, he is not so sure.
Pawson says the new emphasis on rapidly deployable and sustainable quick response forces does not bode well for attack helicopters.
Denel is convinced its artillery systems can do well in Nato. The years of apartheid isolation and SA military doctrine, which calls for the aggressive use of long range artillery, led to heavy investment in research and development in the area.
SA has sold the Arachnida weapons management system to the UK. This helps artillery commanders do ballistics computations, as well as assist in command and control of their units in the field.
An SA-manufactured M90 propellant charge for artillery has been sold to the UK and Denmark.
At the moment Denel is trying to sell its recently released rocked-assisted 155mm rounds into Nato.
The rocket-assisted round can reach targets at a distance of 53km, compared to that of a normal round of 40km. And Denel says another of its155mm rounds in the Assegai series, also has potential in Nato because it is far more accurate than the standard rounds.
Denel recently sold a laser rangefinder to the UK and Irish armies. It is now trying to sell a long distance infrared camera system, called the Kenis, that can be used by military forces as well as law enforcement agencies, into Nato.
One Denel salesman says that as SA achieves increasing credibility in the international weapons market it will gain easier entry for niche products in markets around the world.
But one SA defence industry software developer believes it will continue to be extremely difficult to sell entire weapons systems to Nato members.
Nato, he says, will not release its standard for data transfer, which is also a software protocol and communications standard , to the outside world. In the absence of this, he says "we cannot produce an interoperable system". SA has developed its own standard.
With acknowledgements to Jonathan Katzenellenbogen and Business Day.