|
|
|
|
|
|
|
|
|
|
South African Minister Of Public Enterprises on Denel's 2000/2001 Financial Results. |
|
|
|
(Source : Denel Group ; issued July 9, 2001)
|
|
|
|
 Speaking Notes: Mr. Jeff Radebe, South African Minister Of Public Enterprises,
on the Occasion of Release of Denel's Audited 2000/2001 Financial Results.
Monday, July 9, 2001
Ladies and Gentlemen:
When we released Denel's audited financial results last year, I said that the company had made significant strides in the previous year. At the time, indications were that this important State-owned Enterprise (SOE) was leveling out of the bottom of the trough.
What we are seeing today is a definite turnaround, with Denel showing a profit after some years of negative results. For this I wish to thank the Board of Directors, the Executive Management Committee and all the staff at Denel for their individual and joint contributions. They make us proud.
There is much of which the Government as the shareholder - and I in particular - can be proud of.
Denel remains one of South Africa's technology powerhouses. Some of its niche developments, such as integrated artillery systems and unmanned aerial vehicles, laser rangefinders, guidance and observations systems, and many other products, have found ready export markets, notably also in the developed world and NATO countries.
This is no mean feat, considering the highly competitive environment in which Denel operates. Although the military market is a declining one, both domestically and internationally, Denel succeeded in increasing its gross revenue by a substantial margin. At the same time, it reversed the net loss incurred in the previous year.
Significantly, however, it managed to increase export sales by some 8 per cent to R1,6 billion. Thus exports during this year constitute 46 per cent of Denel's total sales.
The figures have to be analysed also in the context of Denel's improvement in cost management and improved financial control.
I find this of particular importance given the Government's priority on business efficiency in the SOE's, broadening of their contribution to the overall development of South Africa, among others through export earnings, and assisting with Government's policies to further Africa's economic revival. This should be seen in the President's vision of MAP.
As a high-technology industry, and a broad-based one to boot, Denel occupies a special place in Government's initiatives for public enterprises. Earlier this year, for instance, Denel's IT capabilities were consolidated with those of Eskom and Transnet, to form a consolidated Information Technology company, called Arivia.kom, which is set to become a very competent IT force in the local and foreign markets. Although Denel retains only some 23 per cent shareholding in the new entity, it will impact positively on its profitability.
In order to streamline its business activities, Denel managed to exit some of its non-core and non-profitable businesses during the year under the review. One of the most recent, is the R&D capabilities of Mechem, sold to the CSIR, although Mechem's landmine clearance capabilities are retained within Denel for Government contracts of humanitarian nature.
On the issue of humanitarian aid: Denel contributed maintenance and spares for the aircraft and helicopters that flew rescue missions during the Mozambique floods.
Some of these internal restructuring programmes that have not yet been finalized, mainly pertaining to the Vektor, Datam and others, will add to Denel's competitiveness and efficiency.
On the question of restructuring programmes involving Denel, you are likely to be fully aware that Government has announced the preferred Strategic Equity Partners. In the case of Denel's Aerospace and Ordnance Groups, we have signed Letters of Intent with BAE Systems and Snecma/Turbomeca of France, the latter expected to take a majority stake in Denel's Airmotive division.
As the negotiations are currently still under way, in which details are being worked out, we expect the process to reach a conclusion later this year, probably around October.
Denel has made great strides in transformation and corporate social investment programmes. I was pleased to learn of the number of technicians and engineers from the historically disadvantaged communities being trained in the aviation environment. Some long-term training is also offered by BAE/Saab in Sweden (on the Gripen fighter) and by AgustaWestland in Italy (for the Agusta A109 helicopter). This is indicative of the spin-offs from South Africa's defence acquisitions through the DIP and NIP programmes.
In addition, Denel itself has spent a substantial amount on skills and technology training, bursaries, and bridging programmes; all aimed at retaining technology for our country and contributing to the human resource development of all our people.
On top of Denel's good results this year, one has to take account of increased spending on Research and Development. This is to ensure that we stay abreast of the increasingly sophisticated technologies in the aerospace and defence environment. Denel's investment in this area is meant to dovetail with that of our existing and new partners, as it becomes more difficult to fund such development individually.
Still, our indigenously developed systems have had impressive success during the year. Here I refer to items like the G5 artillery guns recently ordered by Malaysia, the Mokopa anti-armour missiles test launched successfully from the Rooivalk, the Ingwe missile, Seeker UAV and Skua high speed target drone sold abroad, as well as the modular artillery charges bought by a second NATO country, namely Denmark.
During the year we also launched on the market the new Assegai series of artillery ammunition. Not to mention the commercial market, where our PMP division's hunting ammunition found success in the USA and the SPP soya protein manufacturing facility in Potchefstroom was commissioned to full production.
These are but a sample of Denel's successes this year.
Whereas our local defence-related industry in the past operated in a secretive fashion, I feel proud to say that our new democratic Government has put in place the necessary systems and counter-balances to ensure that it now operates in a transparent and responsible manner.
Denel's success in achieving export orders whilst tightening controls and building an efficient, streamlined business, is to be lauded. We in Government wish to commend its efforts, and we will give all necessary political and moral support to its marketing efforts worldwide.
Once again, my thanks to everyone who contributed in whatever measure to the success of Denel and by extension South Africa itself. I want to express a word of special thanks to past Board members and immediate past Chairman, Ian Deetlefs, under whose directorship this report is still published. Your work is appreciated. Finally, allow me a moment to wish the incoming Board members under Chairman Sandile Zungu all the best in their new - and challenging - positions.
Thank you Â
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
