Johannesburg - A fortnight ago, one of the biggest defence companies on the continent was formed. That’s defence companies as a whole, not private-owned or state-owned, but any defence company.
It didn’t receive a huge amount of coverage, perhaps because the industry isn’t a big story in a country more worried about service delivery as it approaches the 20th anniversary of its liberation from the total onslaught.
Or perhaps it was because Denel, the state-owned defence company, had put on a dog and pony show just days before, promising that it had turned the corner and stopped being a massive drain on taxpayers’ funds.
The new company was forged through the “business rescue” of the bankrupt ATE South Africa by the privately owned Paramount Group.
The little-known ATE is one of the country’s oldest and most established aerospace companies.
More to the point, it’s the only local company that can keep the South African Air Force’s Hawk fleet in the air, and the Rooivalk and Oryx chopper squadrons operational.
It’s a company that specialises in what is known as mission systems in aircraft, particularly Russian aircraft and aircraft formerly used by the SAAF, which are now used in countries like Brazil and China and in the Middle East.
It was rescued by a company that needs little introduction – a company that got one of its military spec armoured cars on to Top Gear, with presenter Richard Hammond driving it through central Joburg and right through derelict buildings in Newtown before trying to blow it up and failing. Hammond did blow a civilian Hummer to smithereens, though.
Only a fortnight ago, another one of its ilk was in the Saturday Star, bedecked with models in high heels as a publicity stunt for a burlesque show.
It’s these bizarre paradoxes that are reflected within Ivor Ichikowitz, Paramount’s founder.
The burly 47-year-old is a self-proclaimed pacifist who entered the murky world of defence armed only with a speech and drama degree from Wits, youthful idealism and a dollop of chutzpah in the late 1980s.
His Damascene conversion began in Rwanda, speaking to Paul Kagame just after the genocide of the Great Lakes had been halted. He had become conscientised at Wits and joined the ANC in exile after leaving varsity.
“Kagame said he needed an army and equipment to ensure that nobody could ever do this again. He had no money, the Rwandan government had no money. I came back to South Africa and found old SA Defence Force equipment that was being sold off, spoke to bankers, made the deals and within weeks, he had the kind of tools he needed to ensure stability,” Ichikowitz remembers.
From that inauspicious start, Paramount is South Africa’s biggest private defence contractor today, with a range of defence technologies including armoured vehicles, all locally designed and exported all over the world, particularly the Middle East, to police forces and armies.
The latest armoured vehicle addition is the Mbombe, a six-wheeled vehicle system that can be adapted to operate at the one end of the spectrum as an ambulance and at the other end as a lethal armoured fighting vehicle carrying a section of infantry. And with its 30mm auto cannon, it’s bigger and more deadly than the SANDF’s 6x6 Ratel fleet.
Paramount operates in 30 countries, bringing a range of defence and peacekeeping solutions, establishing entire bases, from tents to cutlery, water and power supplies and even running prisons.
In between, Ichikowitz’s other arm, TransAfrica Holdings, which emerged from the family business in Springs, owns mines, farms, upmarket tourism venues and even the Build-a-Bear franchise.
The one thing he is not, he insists, from his office eyrie on Sandton Drive, down the road from the US consulate-general and overlooking Sandton City, is a gunrunner or arms dealer.
It’s something that rankled him for a long time until an epiphany one day.
“A journalist on a local newspaper said to me: ‘Ivor, do you know how difficult it is to get Ichikowitz into a headline?’” he laughs.
If you want guns, or more correctly weapons systems, mounted on your Paramount vehicles, Ichikowitz’s people will source them for you from other arms manufacturers. It’s one of the reasons, he believes, why the South African defence industry should work together as a national asset rather than competing.
Paramount has never had to compete for a share of the national defence budget, like Denel has had to, so it’s gone off and developed as it has, picking up interesting offshoots of what were once core South African defence projects, like the old Mirage capability of the air force.
When the SAAF decided to get rid of them, Ichikowitz picked them up and now runs maintenance crews and teaches pilots from foreign air forces how to become fighter pilots with former SAAF top guns in Polokwane.
He’s also got the engineers who can maintain the former Soviet Mi-17 and Mi-24 helicopter gunships.
But Paramount doesn’t just maintain ageing aircraft, it has also developed a uniquely South African aircraft, the ARHLAC, a propeller-driven two-seater aircraft intended for reconnaissance and light attack – ideal for smaller armies.
In fact, that’s one of Ichikowitz’s driving ambitions, creating turnkey solutions, particularly in Africa, from an entire peacekeeping operation on the ground, complete with tents, supplies, armoured vehicles and even training, to providing air forces and even little navies.
“When you look at the early 1990s, Africa was split apart by civil wars and conflict. These days, it’s down to two or three dotted around the continent.
“That’s because countries are able to defend themselves and because of that they’re stable,” he says.
Defence, though, has a bad name, not because of apartheid, but because of post-apartheid’s most toxic legacy – the arms deal scandal.
Ironically, the SANDF was left with an ever-diminishing budget to even operate the new equipment that had been acquired, while being saddled with more external responsibilities in Africa, particularly in peacekeeping.
“Our defence industry is a national asset,” Ichikowitz says.
“With South Africa becoming a fully-fledged member of Brics, it is imperative that we enter a new phase of industrialisation.
“The development of home-grown technology, skills and manufacturing capabilities is crucial if we are to capitalise on the world’s appetite to do business in our region and the huge potential for intra-African and intra-Brics trade.”
What terrifies him, though, is that the average age of his own technical staff is starting to creep up to about 60.
Training of the next generation, one that is reflective of the broader South African population, is critical, but also dependent on high-end maths and science skills.
If Paramount hadn’t stepped in to buy ATE, South Africa could have lost even more critical skills.
“The alternative would have been for the company to go into liquidation, or for a foreign company to acquire the business.
“This would have meant the loss of a highly specialised strategic capability to South Africa and the continent for ever – including the ability to maintain the avionics on the Hawks and the Oryx helicopters and the mission control system on the Rooivalk attack helicopters.”
The only downside now is that all of a sudden the reconstituted company will now be competing for a piece of the local defence budget, particularly in the market for unmanned aerial vehicles, or drones.
The upside is that the output will constitute half the local industry’s annual exports.
Ichikowitz is confident that there’s room for all under the umbrella of South Africa Inc, working as a cohesive and competitive whole – for the benefit not just of shareholders, but of the country, too.
There’s little reason to doubt the entrepreneur, whose only misstep in the past 20 years appears to have been his foray into the Gauteng Lions Rugby franchise.
He shakes his head at that one. It cost him money – he won’t say how much – but what hurt him more was the lost opportunity.
“We (his partner Robert Gumede of Gijima) really wanted to make a difference. We wanted to transform the game for ever for the better for the whole country, right here in the heart of the country.”
He felt the brunt of the entrenched racism at Ellis Park first-hand. It was yet another paradox.
Most of his senior technical defence staff are white, middle-aged and Afrikaans – people you would imagine would be stereotypical rugby fans – and yet they’re the ones helping him transform the face of the industry in South Africa and Africa.
The journey that had begun with his own conservative upbringing in the white working-class town of Springs all those years ago had come full circle.
* Kevin Ritchie is deputy editor of The Star.