Johannesburg - Denel, the state-owned arms manufacturing company, has won a R796 million tender to supply the SA National Defence Force with a hi-tech radar sensor to meet its ground-based air defence systems requirements.

The three-year contract was entered into with Armscor, the state arms procurement agency, on Friday.

Max Sisulu, the deputy chief executive of Denel, said the hi-tech equipment, called the Local Warning Segment, heralded new skills development and technology opportunities for the local defence-related industry, especially the smaller players.

"This programme will provide the SA National Defence Force with a sophisticated yet cost-effective system, aimed at improving South Africa's air defenses," said Sisulu.

In terms of the contract, provision had also been made for local defence industrial participation and workshare from the international firms involved.

Sisulu said Denel had started negotiating with both local and foreign subsystems suppliers.

Through this contract Denel was bringing together local defence companies and black empowerment groups.

These included ADS (a subsidiary of Thales), Grintek Communications, Reunert Radar Systems, Cybersin and Logtek Engineering Solution, along with global companies like BAE Systems and Alenia Marconi Systems.

Sisulu said the long-term plan for the company was to export the new equipment, since only a few countries were able to package the hi-tech programme.

Commenting on the involvement of empowerment groups in the aerospace industry, Sisulu said: "It (the deal) will allow us to expand on our affirmative procurement and local small, medium and microenterprises programmes, as both Denel as prime contractor and our subcontractors will involve previously disadvantaged groups in many of the subsystem contracts."

With acknowledgement to the Business Report.