South African manufacturers benefited directly to the tune of R860 million from offset contracts from the navy's acquisition of four new frigate platforms, according to Arms-cor, the arms acquisition agency for the Department of Defence.

A platform is a frigate without combat systems.

ThyssenKrupp Marine Systems, one of the companies contracted in South Africa's multi-billion-rand arms deal, said the final accounting of the Defence Industrial Participation (DIP) showed that local companies had benefited immensely.

The DIP programme, referred to as offset, required defence manufacturers supplying South Africa within the Strategic Defence Acquisition Programme to source components and systems from local manufacturers. They would also assemble essential elements locally, and transfer skills and technologies to local partners while assisting local manufacturers to integrate into the global economy.

"The R854m obligation directly related to the frigate platforms has been essentially fulfilled," said Armscor's senior DIP manager, Brenzia Potgieter.

ThyssenKrupp Marine Systems' offset and business development manager, Ulrich Scheel, said the SAS Mendi was a good example of participation between Germany and South African suppliers. He said claims that offsets weren't effective were not true.

In September, Independent Democrats leader Patricia de Lille - who is vehemently opposed to the arms deal - said the figures in Armscor's annual report should not be taken seriously.

"(But) the truth is, it is working. Skills and technology transfer (will ensure) the maintaining of the ships for years to come. South Africa has got the skills to do so, to deliver such items. We know they did a good job because we are the ship builders and we are happy with what we get," said Scheel.

Andy Richter, who was ThyssenKrupp Marine Systems' technology transfer and logistics manager until September, said the country's defence manufacturers had a great opportunity to do business abroad.

"There are great business opportunities. South African companies can now export equipment like they've never done before," said Richter.

Among the small and large companies benefiting from the Frigate DIP contracts, creating and sustaining jobs, are DCD Dorbyl, Bennett's Engineering, Titanium Industries, Booyco Engineering, Siemens Pinetown and MTU Cape Town. The companies supplied elements of the frigates' electrical, diesel, hi-tech exhaust and integrated platform management systems, refrigeration and ventilation plants, gearboxes and hydraulic power units.

Besides supplying important elements of the South African frigates, local companies have also benefited under the DIP agreement through contracts to provide components for ships built for other navies.

Together, the companies have won additional business valued at almost R48.8m as a result of the quality of their work on the South African frigates, according to ThyssenKrupp.

babalo.ndenze@inl.co.za

With acknowledgements to Babalo Ndenze and Cape Times.