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Sep 26 2008

Denel slips into Top 100

Published by at 9:32 pm under Companies

First published on my old blog on 13/8/2008. 

Denel made it onto the magazine Flight Global’s list of Top 100 aerospace manufacturers in the world, based on the previous year’s turnover. But only just – in 100th position. 

Once again, all the familiar names are at the top of this year’s list: Boeing, Airbus, Bombardier, Cessna and Gulfstream. 

Journalist Niall O’Keeffe interviewed outgoing CEO of Denel Shaun Liebenberg about the achievement. Here is what was said, and published on the Flightglobal website:

“Hit hard by cuts in defence spending, South African equipment manufacturer Denel is pursuing a long-term recovery plan focused on rationalisation and industry collaboration. Its appearance in the Top 100 (aerospace manufacturers in the world) – albeit at number 100 – suggests these measures are bearing fruit,” Liebenberg said.

The state-owned company was created in April 1992 as part of a major defence industry restructuring. It inherited most of the manufacturing and research facilities of the Armaments Development and Production Corporation (Armscor). It also inherited the South African National Defence Force as a major customer. 

However, a less fortunate inheritance lay in what former chief executive Shaun Liebenberg termed “a subsidy culture”. Efforts to transform this into a “commercial” culture are ongoing, he said.

Stand-alone business units include:

* Denel Aviation 
* Denel Saab Aerostructures 
* missile manufacturer Denel Dynamics Defence Land Systems
* Denel Munitions and 
* Mechem, which provides landmine removal and contraband detection services.

- In 2001 a 51% stake in Denel’s aero-engines business was sold to Safran.

- A subsequent collaboration drive saw Denel sell a 40% stake in its unmanned air vehicle business to Advanced Technologies & Engineering.

- A 51% stake in Denel Munitions was sold to Rheinmetall Defence and

- A 70% stake in its optronics business to Carl Zeiss.

- The aerostructures business rebranded after Saab took a 20% stake.

Aero-engines apart, these divestments were led by Liebenberg, who on 1 July became Rheinmetall Defence’s head of international business development. 

Having cut losses by more than 60% between fiscal year 2006 and FY2007, he leaves new chief executive Talib Sadik with a tough act to follow, concluded Flightglobal.

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