The full design, development and production capability of the South African Defence Industry (SADI) was established over a roughly 30-year period leading into the 1990s. The sector started contracting from the beginning of the 1990s due to the government scaling down defence funding. The result is that like many industrial capabilities in the country, the SADI faces recruitment and personnel retention challenges because of a shrinking local defence spend. In this difficult environment, there remain pockets of excellence. Survival is based on diversifying solutions to cover the dual use application of technology, as well as exploiting export opportunities for high quality, value for money solutions.
The article, Procure to Export, suggests prioritising exportability, while promoting local capability development for use in local South African National Defence Force (SANDF) and security applications. The questions are then broadly 1.) what capabilities remain in South Africa; 2.) where they are located; and 3.) can South Africa empower sectoral clusters, or Virtual Sector Development Zones (SDEZs) to realise national benefits.
This image provides a high-level representation of the capability and location.
Virtual SDEZs can be linked to SANDF functional areas 1) Sensing (ISR); 2) Control (C5); 3) Force Projection (Mobility); 4) Affect (Firepower); 5) Sustain (Support); and 6) Protect (Protection). The DTIC can be approached for Virtual SDEZ but offering companies with SEZ equivalent benefits of 1.) corporate tax set at 15% or as the government may determine to incentivise the industry; 2.) building allowances; 3.) Employment incentives; 4.) VAT, customs and excise duty relief; and 5.) ‘Greenfield’ tax allowances.
If the SANDF is designated as an export client as per the Defence Industry Strategy of 2020 recommendation, it would have the benefit of ‘cleaning up’ the defence budget by making clear the actual expenditure on equipment and systems by stripping out the VAT and the various relevant customs and excise duties, for instance on imported components and sub-assemblies.
The heart of modern warfare is moving into the sensing, command & control, cyber and electromagnetic domains. The SADI’s capability is resilient and well distributed in these sectors.
There are sensor solution hubs in the Western Cape (WC) and Gauteng. The names Hensoldt SA and Reunert Applied Electronics are synonymous with world-class integrated sensor system solutions. They are offset with multiple companies focusing on sensor niches. Think of over twenty (20) small companies like Fimm Tech (radars), Shock EOS (EO systems), or Sysdel (EW systems). The sensor solutions are generally dual-use systems used in commercial applications that expand the business case for these entities beyond the limited military market.
The C5I domain (Command, Control, Communication, Computing, Cyber and Intelligence) is critical for any country wanting to maintain a strategic capability in situational awareness to understand the battlespace, exchange information, and make and/or communicate decisions in real time in a contested electromagnetic domain. C5I solutions are well established with around fifty C5I entities spread across Gauteng, Western Cape and Kwa Zulu Natal (KZN). The likes of GC2T (Command & Control), Cybicom Atlas Defence (Command & Control), iNkwazi (Control), Rapid Mobile (Command & Communication), Reutech Communications, Etion Create (Computing & Situational Awareness), Symbiant (Computing/Displays) and Protoclea (Cyber & Intelligence) started as small development entities for defence technology but expanding into multiple applications, while maintaining defence solutions.
The Space domain is central to modern warfighting. Space based capabilities provide secure data relays and satellite communications. The key battlefield edge is more towards satellite-based intelligence, surveillance and reconnaissance (ISR), and the Positioning, Navigation and Timing functions required to complete the C5ISR integrated capability for near real-time, accurate and effective targeting.
The South African space hub is in the Western Cape, with the University of Stellenbosch engineering department providing a steady stream of resources, as well as the historic SunSat programme. According to Deputy Minister of Trade, Industry and Competition, Andrew Whitfield, 20% of all satellites in circulation have a component manufactured in South Africa. This includes around fifteen manufacturers of existing space payload solutions or components like AAC Space Africa, Dragonfly Aerospace, New Space Systems and SCS Aerospace Group. The manufacturing capability is offset with over fifteen companies, mostly based in Gauteng, providing Geographic Information System (GIS) related data processing capabilities.
The fighting force capability can be mapped to the functions of projecting the force (mobility) and providing an effect (fire power). These capabilities are generally grouped together per arm of service, but there is potential overlap with the fire power sub-systems.
The Armoured and Support Vehicle segment, or to use the ADG Mobility slogan, Protected Mobility, is the epitome of resilience. There are over fifteen vehicle OEM’s and over ten fighting vehicle turret/weapon system/artillery system suppliers making an impact from exports alone. The SANDF/Armscor has not procured fighting or support vehicles in significant numbers in the last three decades. When they do, the project (Hoefyster) is based on a foreign platform (Patria) that could have been designed locally for export. There should be no reason for the SANDF to still be operating Mambas and Casspirs that are over 40 years old, when external countries and organisations see value in SADI solutions. The SADI still has a good design and development capability in this sector. Output can be increased with national support.
The Naval Patrol and Fire Power manufacturing capability is still in place. SADI entities can provide vessel solutions to protect our Exclusive Economic Zone (EEZ). This is important as South Africa is a maritime nation. Over 98% of SA trade by volume, or alternatively, 80% of trade by value (±R300 billion per month) is by sea. The Cape of Good Hope maritime route is a key asset in global trade. Yet, the SA Navy receives an allocation of ±R5 billion per year. What is needed is an arrangement similar to other maritime nations that cater for an ‘always on’ supply line for shipbuilding to reduce delays in delivering new ships, and reduce ‘running on’ ageing, unserviced platforms. There is a need that can support a Southern African Development Community (SADC) patrol and littoral operation fleet build and maintenance capabilities in the Western Cape region. There is a capability to meet blue water force requirements to project naval capabilities with larger Offshore Patrol Vessels, Research Vessels, Support Vessels and even a Landing Helicopter Dock. This naval build programme alone has the potential of providing up to 30 000 jobs based on the company Robertson & Caine providing 10 000 jobs building market leading catamarans.
The SADI has a history in providing Close Air Support. The Rooivalk provides a most notable impact in this area. The Rooivalk is not alone: Paramount Group with the Mwari aircraft and Flash multi-platform mission systems provide capabilities not available in many countries. This is then complimented by weapon system developments in the missile and bombs domain. The design & development capability is offset with a world-class flight test and flight test training capability. Smaller aircraft manufacturers also add to the project capability when fitted with sensor suites.
Unmanned Solutions have expanded over time in South Africa. The SANDF was one of the first nations to embrace the potential of the Unmanned Air Vehicle (UAV), with the introduction of the Seeker system in the late 1980s. The current Ukraine conflict has highlighted the benefit of unmanned solutions and a shift to greater use of autonomy and Artificial Intelligence (AI). Unmanned solutions are providing low-cost alternatives to missiles or torpedoes. All the sub-system elements of an unmanned system are available in the SADI supply chain. There are over fifteen UAV product solution suppliers in South Africa with solutions from <15kg mini-UAVs to Class III Medium Altitude Long Endurance UAVs.
Land based unmanned vehicles have been available for over 15 years, with the B-Cat 6×6 vehicle mounted with a Reutech Rogue weapon system previously demonstrated when international company MilRem Robotics was not yet started. Legacy Marine has entered the maritime market with the development of an unmanned surface vessel (USV) that incorporates the latest autonomy and AI capability, with the option for incorporating a weapon system when operated in conjunction with manned solutions. The Western Cape government, with support of Wesgro, is leading the way in promoting unmanned technology by looking to establish a drone/UAV hub within the Saldanha SEZ.
The last area that is explored is the often-overlooked Support and Protection elements of mission functionality. These are critical elements needed for the functioning of a deployed force.
The starting point in the support supply line is the need to supply Munitions. The two major suppliers in this area are Rheinmetall Denel Munition (RDM) supplying larger ammunition, and PMP offer smaller calibre rounds.
Maintenance, Repair & Overhaul (MRO) is available for the systems offered by local and international suppliers. This covers all aspects of air, cyber, land and sea. While the SANDF is currently operating on a doctrine that aligns with conventional warfare support, the SADI is available to support all SANDF prime mission equipment.
Field Deployment and Engineering Services solutions are available from various SADI suppliers. This is an area that has a high dual-use application and are not restricted under arms trade regulations. This is a unique product range in that there is the opportunity for suppliers to build and operate the equipment on behalf of the defence force.
Simulation and Training solutions are available from five solution suppliers covering the air, land and sea domains, but also providing wargaming capabilities to ready the force prior to deployment. The simulation solution suppliers, Thoroughtec Simulation and 5DT, have exploited the dual use nature of their configurable simulators to expand into the construction, mining and firefighting markets. They have also expanded their offerings into the big data analysis and AI applications. These are examples of how defence can be the seed for entrepreneurial dual use applications.
Protection Systems can be seen as solutions that merge sense and effect elements for the protection of a force. Protection can be as complex as the integrated Ground Based Air Defence System (GBADS), a Land Electronic Defence System (LEDS), Active Protection System (APS), an Integrated Coastal Surveillance System or a Maritime Mine Warfare System or as basic as ceramic armour solutions for protecting personnel or mobility solutions. The element that is needed into the future is a Cyberspace Defence capability, both defensive and offensive. There are a small number of cyber defence related entities, but the focus is currently more toward commercial applications than defence applications.
In closing, nothing suggests that defence sector export flows will slow down but think of its impacts if the SADI were to increase exports with local procurement added.
The SADI has the core elements that would be required to meet future SANDF needs in a Special Operations Force type application. If only the SANDF received a half decent budget, South Africa could leverage local manufacturing capability for the benefit of the whole country. These solutions could be promoted into the international market, where the SADI regularly supplies to over 100 countries each year. The export volume can be increased with focused government support.
Can it be that South Africa has become comfortable with mediocrity, even with failure of its defence capability?
Written by James Kerr, Orion Consulting CC, which provides Market Entry Strategy and Bid & Proposal services to the Aerospace & Defence related industry and assists international SME mission system product suppliers to gain traction in South Africa.
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