Minister of Public Enterprises Malusi Gigaba has highlighted exports as a key area of growth potential for Denel, SA's largest arms manufacturer.
Gigaba was speaking at the parastatal's annual results presentation on Wednesday, where Denel reported a net profit for the first time since 2001. This was despite the fact that revenue shrunk by 10%, resulting in more than four hundred job losses.
“We are concerned that the lack of revenue growth will put additional pressure on jobs and job creation at Denel. Hence it is essential that new export contracts are secured,” Gigaba said.
Group CEO Talib Sadik said that Denel had secured about five billion rand worth of export contracts and that this included the largest export order secured in Denel's history. Sadik was reluctant to provide further information on the export order and said that details would be revealed at a later stage.
While some of these contracts included the Middle East and the Far East, Denel made it explicitly clear that none of the contracts included Libya.
Zwelakhe Ntshepe, the group executive for business development and corporate affairs, said: “We have not been selling to Libya. Libya is a closed market to us.” Sadik also added that the National Conventional Arms Control Committee would never grant approval for a contract with a country in conflict.
The export contracts are in line with Denel's strategy of ensuring that profit is sustainable by exploring new markets to generate revenue.
“This is the road to change the performance of Denel going forward,” Ntshepe said. - I-Net Bridge