Denel (Pty) Ltd2006-07-21 15:20:00
SAAB and Denel Create New International Aerostructures Player in South Africa
Saab AB of Sweden and South Africa's Denel have agreed to create a new aerostructures company in South Africa which will compete on international markets for design, manufacturing, and assembly orders in the civil and defence aerostructures fields.
Denel Aviation's aerostructures unit contributes its new and existing capital equipment, current client base, and design and manufacturing skills to the partnership. Saab Aerostructures' provides skills and experience in transformation, marketing, and management, its international reputation for producing quality on time and to cost, and its global customer relationships.
The new South African aerostructures company is the first newly formed partnership to emerge from state-owned aerospace and defence manufacturer Denel's restructuring process. Saab assumes responsibility for the running and performance of the new entity.
At a ceremony in Stockholm today agreements were signed by Minister of Public Enterprises Alec Erwin on behalf of the South African government, as well as by Denel CEO Shaun Liebenberg and Saab's CEO Ã…ke Svensson. They include agreements on the establishment, management, and shareholding structure of the new company, whose name will be announced in the near future.
Saab provides an investment of R 66-million over the first two years, ongoing skills and technology transfers, as well as management and market access. Denel will invest proportionately to its ownership. The new aerostructures company will initially be 20% owned by Saab and 80% by Denel.
It will begin operations with about 600 staff from Denel Aviation and will be led through the transformation process by a team of specialists deployed from Saab Aerostructures in Sweden. The turnover will initially be approximately R 200-million and is expected to grow significantly over the first years.
"South Africa has made a clear choice in favour of the retention, consolidation, and long-term future of our aerospace industry. The task now is to build on our existing assets and skills in creating a viable international industry participant capable of sustaining long-term involvement in the commercial and defence aerospace sector," said Minister Erwin following the signing.
"As the recipient of significant investment by South African taxpayers over several decades, and as the custodian of many of the country's high technologies and skills, Denel is at the core of our effort to grow the contribution of the aerospace industry to our economy and to meeting South Africa's development goals. I am very pleased that we have been able to find in Saab the right partner to join us in transforming and growing our aerostructures capacity," said Erwin.
Following many years of significant investment in its own transformation from a single-client supplier, Swedish-listed Saab is today an established participant in the international aerostructures industry, successfully managing significant contracts with Airbus and Boeing both as supplier and risk sharing partner. Its task will be to establish the new company as a competent and profitable African partner in the global aerostructures business.
"It is an honour for Denel to be associated with Saab in this venture which will see South Africa's aerospace capabilities slot into the global aerospace business environment," said Liebenberg. "The aerostructures company we are creating today will bring together the best contribution from each partner, for the benefit of both, in line with the change strategy we adopted last year to return Denel to sustainable profitability."
Saab's partnership with Denel in the new aerostructures business is the latest move within the Swedish company's acquisitions strategy aimed at expanding its presence in aerospace, high technology, and defence beyond Sweden's borders. Saab will initially take a minority shareholding in the new company.
"This partnership not only represents a very good business opportunity for Saab as we expand our aerostructures design and manufacturing capacity while creating synergies in procurement, marketing, and other areas. It is also another milestone as we consolidate our relationships and expand our presence in our second home market, South Africa, and in the southern hemisphere as a whole," said Svensson.
"Our South African partners bring great skills, the potential to be a lower cost supplier, and a tremendous will to participate in the global aerostructures market. We will build on that spirit while contributing our own skills, experience, and market reach in creating synergies and a new entity which can positively benefit our shareholders and the South African economy," said Svensson.
Saab's transformation model agreed with Denel will see the deployment of a number of specialists from shopfloor level up to the new CEO of the aerostructures company, which will initially be based at Denel Aviation's facility at Johannesburg International Airport. The model is specifically designed to lead and assist employees across the company in actively participating in rapidly improving skills and knowledge levels, and in positively influencing corporate culture, time, cost, and quality management systems.
Besides employees deployed on two and three year contracts to South Africa, Saab will also provide specialists on shorter term secondments to assist in technology and skills transfers to the new aerostructures company. Groups of South African employees will spend time working with and learning from their colleagues at Saab Aerostructures' Linköping factory. The new company's structure mirrors that of Saab Aerostructures, which assumes a support obligation for its South African counterpart.
The new South African aerostructures company will be responsible for delivering on Denel's current contracts with a number of international aerospace manufacturers. Its current order book includes work on the Gripen, Airbus A400M, Agusta, and Hawk programs for the South African Air Force, as well as for Boeing. At the same time, a significant marketing effort is already underway to attract new civilian and defence aerospace business.
The South African government has recognised the significance to the development of the country's aerospace industry of the deployment of hard skills, technologies, and marketing expertise to the new company through Industrial Participation credits to Saab of up to $2.4-billion, based on the actual performance of the new aerostructures company.
The formation of the new company is subject to the completion of certain approvals, including those related to the competition authorities.
Saab AB of Sweden and South Africa's Denel have agreed to create a new aerostructures company in South Africa which will compete on international markets for design, manufacturing, and assembly orders in the civil and defence aerostructures fields.
Denel Aviation's aerostructures unit contributes its new and existing capital equipment, current client base, and design and manufacturing skills to the partnership. Saab Aerostructures' provides skills and experience in transformation, marketing, and management, its international reputation for producing quality on time and to cost, and its global customer relationships.
The new South African aerostructures company is the first newly formed partnership to emerge from state-owned aerospace and defence manufacturer Denel's restructuring process. Saab assumes responsibility for the running and performance of the new entity.
At a ceremony in Stockholm today agreements were signed by Minister of Public Enterprises Alec Erwin on behalf of the South African government, as well as by Denel CEO Shaun Liebenberg and Saab's CEO Ã…ke Svensson. They include agreements on the establishment, management, and shareholding structure of the new company, whose name will be announced in the near future.
Saab provides an investment of R 66-million over the first two years, ongoing skills and technology transfers, as well as management and market access. Denel will invest proportionately to its ownership. The new aerostructures company will initially be 20% owned by Saab and 80% by Denel.
It will begin operations with about 600 staff from Denel Aviation and will be led through the transformation process by a team of specialists deployed from Saab Aerostructures in Sweden. The turnover will initially be approximately R 200-million and is expected to grow significantly over the first years.
"South Africa has made a clear choice in favour of the retention, consolidation, and long-term future of our aerospace industry. The task now is to build on our existing assets and skills in creating a viable international industry participant capable of sustaining long-term involvement in the commercial and defence aerospace sector," said Minister Erwin following the signing.
"As the recipient of significant investment by South African taxpayers over several decades, and as the custodian of many of the country's high technologies and skills, Denel is at the core of our effort to grow the contribution of the aerospace industry to our economy and to meeting South Africa's development goals. I am very pleased that we have been able to find in Saab the right partner to join us in transforming and growing our aerostructures capacity," said Erwin.
Following many years of significant investment in its own transformation from a single-client supplier, Swedish-listed Saab is today an established participant in the international aerostructures industry, successfully managing significant contracts with Airbus and Boeing both as supplier and risk sharing partner. Its task will be to establish the new company as a competent and profitable African partner in the global aerostructures business.
"It is an honour for Denel to be associated with Saab in this venture which will see South Africa's aerospace capabilities slot into the global aerospace business environment," said Liebenberg. "The aerostructures company we are creating today will bring together the best contribution from each partner, for the benefit of both, in line with the change strategy we adopted last year to return Denel to sustainable profitability."
Saab's partnership with Denel in the new aerostructures business is the latest move within the Swedish company's acquisitions strategy aimed at expanding its presence in aerospace, high technology, and defence beyond Sweden's borders. Saab will initially take a minority shareholding in the new company.
"This partnership not only represents a very good business opportunity for Saab as we expand our aerostructures design and manufacturing capacity while creating synergies in procurement, marketing, and other areas. It is also another milestone as we consolidate our relationships and expand our presence in our second home market, South Africa, and in the southern hemisphere as a whole," said Svensson.
"Our South African partners bring great skills, the potential to be a lower cost supplier, and a tremendous will to participate in the global aerostructures market. We will build on that spirit while contributing our own skills, experience, and market reach in creating synergies and a new entity which can positively benefit our shareholders and the South African economy," said Svensson.
Saab's transformation model agreed with Denel will see the deployment of a number of specialists from shopfloor level up to the new CEO of the aerostructures company, which will initially be based at Denel Aviation's facility at Johannesburg International Airport. The model is specifically designed to lead and assist employees across the company in actively participating in rapidly improving skills and knowledge levels, and in positively influencing corporate culture, time, cost, and quality management systems.
Besides employees deployed on two and three year contracts to South Africa, Saab will also provide specialists on shorter term secondments to assist in technology and skills transfers to the new aerostructures company. Groups of South African employees will spend time working with and learning from their colleagues at Saab Aerostructures' Linköping factory. The new company's structure mirrors that of Saab Aerostructures, which assumes a support obligation for its South African counterpart.
The new South African aerostructures company will be responsible for delivering on Denel's current contracts with a number of international aerospace manufacturers. Its current order book includes work on the Gripen, Airbus A400M, Agusta, and Hawk programs for the South African Air Force, as well as for Boeing. At the same time, a significant marketing effort is already underway to attract new civilian and defence aerospace business.
The South African government has recognised the significance to the development of the country's aerospace industry of the deployment of hard skills, technologies, and marketing expertise to the new company through Industrial Participation credits to Saab of up to $2.4-billion, based on the actual performance of the new aerostructures company.
The formation of the new company is subject to the completion of certain approvals, including those related to the competition authorities.
For more information contact:
PO Box 8322
Centurion
0046
South Africa
Tel: +27 12 671-2700
Fax: +27 12 671-2793
