Denel creates a second international joint venture company

South Africa’s State-owned defence industrial group, Denel, has set up another international partnership, based in Hong Kong. This new subsidiary is Denel Asia and it is a joint venture (JV) with South African private sector company VR Laser.

“This is a vitally important region for Denel to expand its business and find new markets for our world-class products, especially in the fields of artillery, armoured vehicles, missiles and unmanned aerial vehicles,” affirmed Denel acting group CEO Zwelakhe Ntshepe. “We need a firm foothold in this region and the establishment of Denel Asia with its headquarters in Hong Kong will give us a strong presence and the ability to pursue opportunities that will soon arise.”

The target markets for the new company include Cambodia, India, Indonesia, Pakistan, the Philippines, Singapore and Vietnam. These have all stated that they will launch large new defence acquisition programmes, as well as increase their research and development (R&D) budgets, over the next four years.

The Asia-Pacific region as a whole is expected, by 2018, to be responsible for more than 50% of world defence procurement, excluding the US, as well as 66% of non-US defence R&D spending. Unsurprisingly, Denel regards the Asia-Pacific as a crucial area in which to win business.

Defence is one of the areas in which VR Laser operates and the company has more than 20 years experience in the sector in South Africa. It is also familiar with markets that Denel Asia will cover. “Denel is a trusted name in the global defence industry, as one of the top 100 industry companies in the world; VR Laser has expertise in defence technology and understanding of the South East Asian defence markets,” pointed out VR Laser CEO Peter van der Merwe.

As a result of the new partnership, Denel will also now be able to benefit from VR Laser’s significant armoured vehicle fabrication, production and support capabilities. These will now be added to Denel’s strong capabilities in design and systems integration.

“Denel Asia is a bold step into the future for Denel,” highlighted Ntshepe. “It will grow our reputation in the global defence industry and enable us to penetrate new markets in a rapidly growing region.”

Denel had previously set up a similar JV, Tawazun Dynamics, with the Tawazun Group of the United Arab Emirates. It produces Al Tariq precision-guided bomb kits.