Aerosud, one of SA's largest aerospace companies, will invest R100m in a project to double production capacity, partly in anticipation of a large flow of orders.

The company, which designs and manufactures components for civilian and military aircraft, has also acquired land next to its factory to set up an "aviation village", where suppliers will be located.

MD Paul Potgieter said this week that the company was "faced with huge growth opportunities". He was speaking at the launch of Aerospace SA Network, an initiative to enhance relations between government, business and other parties.

Government has targeted the aerospace industry for intervention to turn it into the boom industry that government helped the automotive industry become.

Potgieter said his company would need 300-400 new employees, a large number of whom would have to be highly skilled. Part of the investment programme, which starts next month, will go towards the establishment of a training and innovation centre.

Aerosud's revenue had increased four-fold in the past five years and production facilities were now quite congested, said Potgieter.

He attributed much of the growth to government's industrial participation policy. In terms of the policy, foreign winners of large South African government contracts have to invest in SA.

The company secured contracts to supply components to Boeing and Airbus, among other companies, under the offset policy. Last year, the company also entered into a strategic partnership agreement with BAE Systems, which the South African company expected to stimulate contracts worth about R2bn.

Aerosud also expected to benefit significantly from government's mooted purchase of eight A400M aircraft from Airbus Military.

Potgieter said three of nine potential contracts related to the Airbus Military deal had already been secured.

He said Airbus Military had assessed Aerosud's facilities and found them to be good enough to produce components for the new A400M aircraft, which was not yet in commercial production.

Aerosud said it was on the verge of announcing a substantial black empowerment deal, which had been widely expected to be announced late last year.

Potgieter said the company, which already has a 10% black shareholding, said it would push its black shareholding up to 27% with the deal. The company is expected to announce the deal in the next few weeks.

With acknowledgements to Carli Lourens and the Business Day.