SA backs aerospace industry
16 April 2004
The government says it is committed to developing the fledgling aerospace industry in South Africa - in the way that it has helped the country's motor industry out of the starting blocks.
South Africa's strategy for aerospace industry growth - traditionally considered a difficult sector to enter - is to encourage international partnerships with overseas aircraft manufacturers in the component sub-system repair and maintenance area.
R110m super-alloys plant
The industry was recently bolstered by the announcement of a R110-million Anglovaal Mining (Avmin) investment in a new plant to produce super-alloy metals for Rolls-Royce engines.
The plant, at Pelindaba outside Pretoria, is expected to produce 4 000 tons of the super-strong steel within three years, mostly for export, with potential earnings of R750-million a year for South African Airways (SAA), Business Day reports.
The project forms part of offset deals linked to arms and aircraft purchases by the government and SAA.
Two Malaysian contracts for Grintek
Defence technology group Grintek also announced recently that it had secured two contracts with the Malaysian government.
ThisDay reports that Avitronics, a joint venture between Grintek and Saab of Sweden, has been awarded the first phase of a contract to supply Malaysia with 18 multi-sensor warning systems for its new Sukhoi fighter aircraft.
The first and second phases of the order are valued at over US$20-million, or R134-million, with the first phase starting immediately.
According to ThisDay, Grintek subsidiary Grintek Aviation Systems will also be supplying and installing instrument landing equipment to a civilian airport in Malaysia.
The two deals follow numerous negotiations between the two countries, helped by President Thabo Mbeki's visit to Malaysia last year.
New aircraft
purchases 'have already paid for themselves'
ThisDay also reported recently that South Africa's multi-billion-dollar purchases of jet fighters and trainer aircraft from BAE Systems have already paid for themselves through offset investments in the manufacturing sector and export sales.
BAE says it expects to achieve a R14.8-billion milestone in investments, exports and sales in 2004. "We have undertaken to deliver a significant economic benefit to the country", BAE executive director Bernard Collier told ThisDay. "What we've done now is, instead of words, we've proven it with action."
The aerospace industry has proved a difficult nut to crack for newcomers - even when they've had the financial clout.
Avmin's Rick Menell says it has been looking for projects for the past six years to add value to minerals before they are exported. He told Business Day that the value of the nickel-based alloys could be multiplied by a factor of seven following the new investment.
Menell added, however, that the market is "closed", with accreditation very hard to achieve without a partner.
Regional maintenance hub
South Africa is increasingly becoming important as a regional hub for maintenance repair organisations serving operators flying in sub-Saharan Africa.
During 2000-2005, capital expenditure by the Airports Company South Africa (ACSA), a state-owned corporation and the largest airport operator in South Africa, is projected to be US$234-million.
Several commercially run regional airports, some of which have international status, are sources for airport projects. Many local airport developers are also looking to fund the upgrading of existing smaller airports, and to turn them into more competitive international facilities.
SouthAfrica.info reporter
