Supply Chain Opportunities

Global supplier of world-class defence products and solutions 1 VISION

The credible State Owned South African strategic partner • Contribute to the socio economic imperatives of for innovative Defence, Security and related technology Government such as: solutions. - Job creation, Skills development and social investment. PURPOSE - Enhancing the local technology and manufacturing base. - Supplier development. As a values driven SOC, Denel’s purpose is to: - Exploiting commercial use of technology. • Supply the RSA defence & security environment with - Foreign policy and regional security objectives . strategic technology capability, products, services, and support. • Be a responsible corporate citizen to ensure: - Good governance, and sustainability. • Leverage indigenous capability to access selected - Transformation and employee well being. export markets.

2 Denel Supply Chain Table Of Contents

Overview of Denel 4

Foreword by the Denel Group CEO 6

Foreword by the Group Supply Chain Executive 7

Denel Aviation 8

Denel Aerostructures (SOC) Ltd 9

Denel Dynamics 10

Denel Overberg Test Range 11

Denel Land Systems 12

Denel Mechem 13

Denel PMP 14

Denel Industrial Properties 15

LMT Products (Pty) Ltd 16

Supply Chain Management 17 Denel Group of South Africa

Denel SOC Ltd is a state-owned commercially-driven company and strategic partner for innovative defence, security and related technology solutions. It groups together several defence and aerospace divisions and associated companies. Denel provides turn-key solutions of investment; Irene Campus: Ltd – Denel 49% defence equipment to its clients by - Enhancing the local technology • Denel Corporate Office – • Turbomeca Africa (Pty) Ltd – designing, developing, integrating and manufacturing base; including Denel Industrial Denel 49% and supporting artillery, munitions, - Supplier development; Properties and LMT Products • Tawazun Dynamics LLC - 49% missiles, aerostructures, aircraft main- - Exploiting commercial use of (Pty) Ltd tenance, unmanned aerial vehicle technology; and • Denel Dynamics including Denel To serve its customers with cost- systems and optical payloads based - Foreign policy and regional Integrated Systems Solutions and effective and quality solutions in the on high-end technology. security objectives. Spaceteq in Somerset West military aerospace, landward and maritime defence environments, Its defence capabilities date back more Denel is a holding company, wholly Lyttelton Campus: Denel is constantly extending its than 70 years when some of Denel’s owned by its shareholder, the South • Denel Land Systems global footprint through partnerships first manufacturing plants were estab- African Government. The associated • Denel Mechem and collaborative ventures. It is lished. Between the Denel divisions businesses in the Denel Group have committed to ensuring that its there is a collective experience of over equity partnerships with major Kempton Park Campus: divisions and associated companies 200 years. international companies in the • Denel Aviation – including Denel grow to provide the best possible airmotive, aerostructures, electro- Technical Academy solutions to their customers, both Denel’s purpose is to: optics and munitions fields. • Denel Aerostructures locally and abroad. • Supply South Africa’s defence and security environment with Denel is managed as one, integrated Western Cape Campus: Contact details: strategic technology capability, business, it has an executive • Denel Overberg Test Range Corporate Communications products, services and support; management team responsible Tel: +27 12 671 2700 • Leverage indigenous capability for daily operations, reporting to Pretoria West Campus: Email: [email protected] to access selected export an independent Board of Directors • Denel Pretoria Metal Pressings Website: www.denel.co.za markets; appointed by the South African (PMP) • Contribute to the socio-econom- Government through the Minister of ic imperatives of Government Public Enterprises. Its core operating Associated companies: such as: divisions are clustered according to • Cassidian Optronics (Pty) Ltd – - Job creation, skills geographical location and similarity Denel 30% development and social of business. • Rheinmetall Denel Munition (Pty) NAME DESCRIPTION SHAREHOLDING

Denel Aviation Aircraft maintenance, repair and overhaul (MRO), Denel 100% upgrades, system integration, aircraft operation & flight test

Denel Aerostructures Metallic and composite aerostructure compo- Denel 100% (SOC) Ltd nents, sub-assemblies and special processes

Denel Dynamics Missiles, guided weapons, UAVS, Space technol- Denel 100% ogy and Integrated Systems Solutions

Denel Overberg Test Range Multi-purpose test range Denel 100%

Denel Land Systems Land systems equipment and systems integra- Denel 100% tor, including “Badger” new generation infantry combat vehicle project

Denel Mechem Mine action, contraband detection, specialised Denel 100% vehicles and field services

Denel PMP Small and medium calibre ammunition, brass Denel 100% products, detonics, power cartridges and mining drill bits

Rheinmetall Denel Munition Medium and large calibre munitions, rocket and Equity partnership with (Pty) Ltd missile subsystems, grenades and forging business Rheinmetall (Denel 49%).

Cassidian Optronics (Pty) Ltd Optronics Equity partnership with Cassidian Optronics (Denel 30%)

Turbomeca Africa Manufacturing of aircraft gearboxes and mainte- Denel 49%, remainder held by (Pty) Ltd nance & repair of aero engines. Turbomeca (France), part of Safran Group

Tawazun Dynamics LLC Supplier of precision guided minitions Denel 49% remainder held by Tawazun 5 Foreword by the Group Supply Chain Executive

Through its supply chain processes Denel demonstrates job creation, skills development and the creation its commitment to support South Africa’s developmental of an entrepreneurial culture. We are proud of the objectives by increasing our spending on historically growth and achievements of many of the historically disadvantaged suppliers and promoting the objectives of disadvantaged suppliers to the group whose work we broad-based black economic empowerment. continue to showcase.

The transformation of the supplier base is a key imperative Various communication interventions have been for a number of Denel’s stakeholders and, under the implemented to raise awareness about the wide range direction of the Board, management is pursuing a number and scope of enterprise opportunities that are available of supply chain initiatives designed to benefit the company within the Denel Group often in partnership with the but also grow local economic sectors. Department of Public Enterprises.

In recent years we have put in place firm systems, Denel is looking forward to seeing people from our structures, and governance processes to ensure the incubation interventions converted to partners in development of core competencies within the group business and skilled participants in our supply chain and strengthen the company’s ability to cast its net wider when looking for partners within the local industry. Dennis Mlambo Group Supply Chain Executive Through this approach we create a solid and sustainable base of emerging entrepreneurs to feed into Denel’s local activities. The experience gained by working closely with a mature company such as Denel can be utilised by our suppliers to grow their own enterprises and thus contribute to the country’s surge towards

7 Denel Aviation

As an aviation maintenance, repair and overhaul (MRO), and upgrade programmes on the SAAF’s C130 and Oryx upgrades and systems integration company, Denel Aviation helicopter fleets and maintenance support for the South has served the South African Air Force (SAAF) as a strategic African Police Services Eurocopter Bo105 and AS350 partner for 50 years. (Squirrel) helicopters.

With its well-established capabilities in the upgrade, Supply Chain Opportunities: servicing and overhaul of aircraft, as well as aircraft • Aircraft parts : components and spares systems and related equipment. Denel Aviation is a • Engineering services : Manufactured Parts prominent participant in the local and international rotary • Electronics and fixed-wing aircraft markets. • Logistics / Shipping • Electrical parts Denel Aviation is formally accredited as a Lockheed Martin service centre, the only one in Africa and one of nine • Fuel and gas Hercules C-130 airframe support centres in the world. • Aircraft Spray painting • Tooling With an eye on supporting the aircraft platforms in the • Personal Protective Equipment SAAF and the greater Sub Saharan Africa , Denel Aviation works closely with original equipment manufacturers For more information visit www.denelaviation.co.za (OEM) such as Airbus Helicopters, Russian Helicopters, Lockheed Martin, as well as AgustaWestland, Saab and BAE Systems. It has played a major role in the modification Denel Aerostructures

Situated within the core of the Ekurhuleni Aerotropolis, Denel • Plant maintenance equipment Aerostructures’ world-class facility specialises in advanced • Machine tools and accessories manufacturing of complex aerostructures, making them a • Supply of chemicals recognised leader in the African aerospace field industry. • Test equipment • Oils and lubricants As the first company in Africa to be NADCAP accredited • Electrical spares and consumables across multiple technology disciplines in Africa, Denel • Mechanical spares and consumables Aerostructures’ reputation extends internationally to customers like Airbus. For more information visit www.denelaerostructures.com Supply Chain Opportunities: • Aluminium machined parts • Titanium machined parts • Stainless steel machined parts • Industrial machine maintenance • Aluminium plates • Laser and Water jet cutting • Band saw cutting • Jigs, Tools and Fixtures

99 Denel Dynamics

Denel Dynamics has proved itself as an innovative • Gear Cutting/Fine Precision Machining leader in advanced systems technology. Its core • Laser Cutting, Sheet Metal and Welding business covers tactical missiles, precision guided • Machining and Grinding Production Suppliers weapons, Unmanned Aerial Vehicles (UAVS), integrated • Mechanical Bought-outs systems and Space solutions. • Hydraulics • Plastic, Rubber, Foam Supply Chain Opportunities: • Springs and fasteners Electronic/Optics • Electronic Design, Development, Product Commercial Supply • Labels • Electrical Bought-outs • Commercial Hardware • Looms • Measuring Instruments • Printed Circuit Boards and Assemblies • Bare Printed Circuit Boards For more information visit www.deneldynamics.co.za Mechanical • Castings/Extrusions/Forgings • Composites • Non Destructive Testing Labs Denel Overberg Test Range

Located near the southernmost point of Africa, Denel Supply Chain Opportunities: Overberg Test Range is a versatile Test Range specialising · Electronic components and spares in in-flight systems performance measurements for the · Electronic subsystem maintenance local and international aerospace industries. · Test and measuring instruments · Electrical spares and consumables Denel Overberg Test Range’s spectrum of services · Mechanical spares and consumables ranges from tests of short-range guided munitions · Infrastructure maintenance and upgrade for land, sea and air combat, to evaluation of modern stand-off weapons and aviation systems. In addition, the Test Range can provide mobile telemetry launch support services at remote sites almost anywhere For more information visit www.denelotr.co.za around the world.

Whilst its primary business goal is to meet the strategic flight test requirements of South Africa’s military industrial users, the Test Range has built an enviable reputation with numerous international clients. Denel Land Systems

Denel Land Systems (DLS) is a landward defence systems Supply Chain Opportunities: business and is also positioning itself to participate in the • Mechanical precision machining parts vehicle business. It primarily serves the South African Na- • Springs tional Defence Force (SANDF) and international customers • Fasteners as a system designer and integrator, as well as subsystem • Laser Cutting and Fabrication supplier for artillery, rapid-fire medium-calibre weapons • Electrical & Mechanical Components and combat vehicle systems. • Connectors & Wires • Sub Assembly Components The division’s main activities, including the supply of key • Canvases products and services, are as follows: • Welded Structures • Utilising its high-end technology and engineer- • Plastic Tubing Components ing capabilities to take complex systems and/ • Packaging boxes and Inserts or products through their entire life-cycle, from • Hydraulic components conceptualisation to production. • Steel Boxes • Providing product and logistic support, including qualification, maintenance, upgrades and eventual decommissioning, as required. For more information visit www.denellandsystems.co.za Denel Mechem

Mechem, a global leader in creating a safer world • Laser Cutting and Fabrication through providing continuous quality explosive • Electrical & Mechanical Components remnants of war clearance solutions, specialised ca- • Connectors & Wires nine products and services, mine protected vehicles, • Sub Assembly Components ancillary equipment, related skills development and • Canvases field services. • Welded Structures • Plastic Tubing Components Supply Chain Opportunities: • Packaging boxes and Inserts • Hydraulic components • Mechanical precision machining parts • Steel Boxes • Springs • Fasteners For more information visit www.mechemdemining.com Denel PMP

Denel Pretoria Metal Pressings, popularly known as PMP, Metals is an integrated manufacturer of small- and medium- • Brass calibre ammunition, brass products, detonics, power • Copper wire unbaled cartridges and mining drill-bits. PMP is based in • Copper scrap Pretoria West. • Copper high purity • Lead billets Supply Chain Opportunities: • Zinc sable ignots Chemicals • Zinc high purity rg • Lead nitrate • Non ferrous metals • Barium nitrate • Sulphuric acid Production Materials • Cleaning chemicals • Steel bars • Citric acid • Aluminium bars • Strontium nitrate • Strip steel • Barium peroxide • Lead tubes • Magnesium powder • Sodium hydroxide • Coal For more information visit www.pmp.co.za Denel Industrial Properties

Denel Industrial Properties (DeniProp) was established in Supply Chain Opportunities: 2004 for the centralised management of the real estate • Professional services (Engineering) portfolio of Denel. Its main goals are to maintain and • Maintenance Management enhance the value of property-related assets and to • Facility management optimise rental revenue for Denel. • Project Management • Civil and Construction Solutions Denel Industrial Properties offers an extended • Horticultural and Landscaping range of Facility Management (FM) services • Security Services including plant and reticulation system • Hospitality Services maintenance, estate management, security, • Consumable and related services catering, cleaning, waste management, industrial health and fire fighting services are provided to, or For more information visit www.denelproperties.co.za managed on behalf of tenants. LTM Products (Pty) Ltd

LMT offers protected mobility services and products to Supply Chain Opportunities • Driveline local and international clients in the defence and security Supply of Material • Electrical industries. These services and products include design and • Armoured Steel • Turret integrated with weapon development, manufacturing and after sales support of • Ferrous and Non-Ferrous Metals • Hydraulics and Pneumatics complete systems, sub systems and components. Services • Wheels, Rim, Tyre and Run Flats integrated. • Engineering • Seats Exports consist of approximately 90% of turnover, • Upholstery and Trimming • Cooling by Radiator and Air-condition mostly to the Middle East and Europe. LMT’s ‘flat-floor’ • Cutting by Laser, Plasma and Waterjet. • Fasteners solution for landmine protected vehicles was also the • Bending and Sandblasting • Integrated Bearings and Seals first of such a design that went into serial production. • Painting and Protective Solutions Validation and Testing Services LMT is also the main contractor to the SA Army Fabrication of components on various levels of assembly Packing, Preservation, Packaging and Marking for the Gecko Products System, used as a rapid Manufacture and Integration Services of Recycle of Material deployment logistic vehicle by the Parachute complete systems. Regiment. LMT is responsible, through its dealer For more information visit www.lmt.co.za network, for repair, maintenance and upgrade System Supply activities of the 106 strong vehicle fleet. • Vehicle • Add on Armour Supply Chain Management

HIGHLIGHTS

• Local spend of 71% vs 70% target;

• Black-owned spend increases from 8% to 10% of total spend of which 21% is spent on black woman-owned companies;

• Recognised B-BBEE spend of 79% vs 70% target in codes; and

Denel through its supply chain activities is committed to: • Increased number of ED beneficiaries Ethical business dealings, South Africa’s economic growth, increased spend from 58 to 76. on Black suppliers as part of Black economic empowerment, reduction in unemployment and poverty, focused development of eligible Black suppliers, with a specific focus on emerging Black SMMEs and increased support for locally manufactured products.

The Denel policy framework aims to meet the PPPFA and B-BBEE Codes of Good Practice and imperatives devised by the National Treasury and the dti within the latitude grated to State Owned Companies by the Minister of Public Enterprises. To ensure sound delegation of authority and the composition of supply chain committees. The Group has set targets to improve preferential procurement and measure the progress against its transformation programme. Transformation of the supplier base is a key imperative for a number of Denel’s stakeholders and management under the leadership of the Board. 18 Notes Corporate communications Tel: +27 12 671 2700 Email: [email protected] Website: www.denel.co.za

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