Pretoria - Aerosud, the privately owned aircraft components and aerostructure producer, has been awarded a R137.7 million contract by global aerospace and defence group BAE Systems to produce components for one of the most advanced combat aircraft.

The contract is to run over six and half years and involves the manufacture of 3 500 parts and minor assemblies for the Eurofighter Typhoon, Europe's largest defence contract.

The contract is part of the industrial participation programme, in which beneficiaries of the multibillion-rand arms deal committed to stimulate economic activity through investments. BAE Systems is a supplier in South Africa's arms procurement programme.

The award of this contract to Aerosud follows the formation of a strategic industrial alliance with Aerosud in September 2004.

Mike O'Callaghan, the chief executive of BAE Systems South Africa, said this partnership acted as a catalyst for growth in South Africa's aerospace industry.

Paul Potgieter, Aerosud's managing director, said the contract illustrated BAE Systems' ability to deliver new export business opportunities to the South African industry.

He said Aerosud was increasingly recognised as a leader in the South African industry and was working towards delivering all the required components on time. "This new order … adds to our credibility and supports our ambition to become established as a strong, reliable and credible supplier of niche services and products in an increasingly competitive global market."

Aerosud, which is based in Centurion, designs, manufactures and supplies aircraft upgrades, structural components and interior furnishings for a wide variety of civil and military aircraft. Established in the early 1990s, it was initially positioned as a supplier to southern African customers.

The new alliance involved investments in local skills and technology. Along with the first export orders for wing components from South Africa for the Airbus A320, these investments were valued at R650 million. BAE Systems said it would try to position Aerosud to receive more than R500 million of additional business.

Potgieter said in November that Aerosud's growth had been significantly boosted by the department of trade and industry's industrial participation policy, which provided the company with "a window of opportunity" to compete for contracts with international competitors.

Last year Aerosud increased its black economic empowerment shareholding to 28 percent when Phatsima Aviation, whose chairman is Herman Mashaba, the founder of hair products firm Black Like Me, acquired a 20 percent stake.

With acknowledgement to Roy Cokayne and Business Report.