Saab-Denel joint venture will be an African growth hub
September 22, 2006
By AUDREY D’ ANGELO and BLOOMBERG
Cape Town and Johannesburg - Saab's aircraft parts joint venture with defence parastatal Denel, valued at R350 million, would be used as a hub for expansion into the rest of Africa, the maker of the Gripen jet fighter said yesterday.
Saab will own 20 percent and contribute R66 million, with Denel owning the rest.
Kenth-Ake Jonsson, Saab's executive vice-president, said the Swedish firm had planned more investment here and regarded South Africa as "a second home market".
The venture will make air frames for the Airbus A400M military transport aircraft and other components. It will employ 600 people and will initially have a turnover of R200 million.
There were more than 2 000 people working under Saab management in South Africa, Jonsson said. Saab agreed to invest and create jobs in the country in exchange for being awarded contracts to supply Gripens to South Africa's air force.
Denel is entering into partnerships to restore profitability after four years of losses, which reached R1.6 billion in 2004/05.
In a separate accord signed yesterday, Denel and other local companies and universities agreed to co-operate with Airbus in new aerospace and technology research. The deal was signed by the departments of science and technology and trade and industry.
Phil Mjwara, the department of science and technology director-general, said the agreement was "vital in developing and safeguarding South Africa's competence in the various fields associated with aerospace and aeronautics".
Denel and Pretoria-based aerospace firm Aerosud were already benefiting from co-operation with Airbus.
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