Denel has acquired a majority stake in a local vehicle engineering and manufacturing company, LMT Holdings, strengthening its position as a leading systems supplier and manufacturer in landward defence and the armoured vehicle market.
“We now have the ability to design and manufacture complete vehicle systems to meet the requirements of our primary client, the SA Army, and compete successfully in the export market,” said Riaz Saloojee, the Group Chief Executive of Denel SOC.
In terms of the new structure, Denel will be a 51% shareholder in LMT Holdings with the remainder of the shares belonging to Pamodzi Investment Holdings (29%) and the founding members of LMT (20%). LMT and its design and manufacturing facilities in Waltloo will become part of Denel’s specialist landward defence cluster which also includes Denel Land Systems and Denel Mechem.
An announcement on the transaction for Denel was made today by Saloojee at the Africa Aerospace and Defence Exhibition (AAD2012) at the Air Force Base Waterkloof.
Saloojee said the new company will combine Denel Land Systems’ proven capabilities as a defence systems integrator and manufacturer of high-firepower products with LMT’s strengths in terms of ballistic and landmine protection and design and production of vehicle platforms. “Our partnership with Pamodzi will strengthen our access to existing and new markets as well as B-BBEE and SMME empowerment in the SA Defence Industry”.
“This provides us with a complete vehicle capability – combining all the required elements of mobility, firepower, and protection,” he said.
The Chief Financial Officer (CFO) of Pamodzi Investment Holdings, Sindi Dlamini said, “We are excited about this new venture as it lends itself to the type of projects that Pamodzi favours. Pamodzi is always keen on projects that not only keep shareholders happy but those that benefit the broader society. This particular project will address and support some of our governments’ key priorities such as skills transfer, transformation as well as youth empowerment. Pamodzi is delighted to form part of this historic milestone that will bring about fruitful partnerships that involve both the private and public sector.”
LMT Holdings is a privately-owned engineering and manufacturing company established in 1999. It adds to the Denel Group a capacity for mine-protected vehicles, hulls and cabs as well as product testing, simulations, maintenance and support of products.
“LMT is looking forward to a prosperous future with our new shareholders and will benefit from the entrepreneurial culture from Pamodzi and the long and proud history of Denel. The capabilities of LMT in the fields of protection and mobility will enhance the firepower and systems integration capabilities already well entrenched in Denel Land Systems, thereby positioning Denel for participation in the supply of land vehicle systems in South Africa, the rest of Africa and the Middle East, said Dr Stefan Nell, the CEO of LMT.
LMT has partnered with Denel Land Systems (DLS) in the past in manufacturing of vehicle platforms for mine-protected vehicles such as the well-known Casspir. It also contributes to the partnership between DLS and Finnish manufacturer, Patria, to localise and customise by adding key unique features, such as the unique LMT flat floor landmine protection system, to the new generation Badger infantry combat vehicle, which will meet the requirements of the SA Army.
Stephan Burger, the CEO of Denel Land Systems, said the company is responsible for the design, development and production of the Badger as part of the Army’s Project Hoefyster. The testing of prototypes (engineering development models) of the Badger, that meets all the requirements of the SA Army, has already started and the company is ready to start with the production phase pending a decision to proceed with full production.
The unique feature of the Badger is a modular turret integrated on a common platform. Five turret variants are being developed by DLS. These turrets are fitted to an 8X8 mechanised Infantry vehicle designed by Patria and manufactured locally in South Africa under licence. This provides for a family of vehicles. The industrialisation and production of the Badger will be done in South Africa creating an estimated 2 000 jobs and benefiting more than 100 subcontractors in the supply chain.
“Our acquisition of LMT means that we will in future be able to manufacture and supply through-life support for the complete Badger, locally – with LMT responsible for the vehicle and turret hulls and DLS providing the system integration,” said Saloojee.
“This will strengthen Denel’s local and international standing as a company that can provide comprehensive and total solutions for the defence requirements of the SANDF and our growing list of international clients.”
Saloojee said Denel’s new strategic capabilities will put it in a much stronger position to provide full South African solutions for the other future equipment acquisitions identified by the SA Army – most notably armoured personnel carriers (Project Sapula) and logistical trucks (Project Vistula).
“Through the LMT transaction, Denel has confirmed its commitment to develop and grow the South African defence industry and the acquisition has strengthened our position as a strategic incubator of high-tech skills and a leader in innovative technology. It also created a new platform for Denel to involve B-BBEE partners and eventually the development of SMME supplier companies,” said Saloojee.