Denel SOC Ltd is a South African state-owned aerospace
and military technology
conglomerate established in 1992.
It was created when the manufacturing subsidiaries
were split off in order for Armscor to become the procurement agency for South African Defence Force
), now known as the South African National Defence Force
), and the manufacturing divisions were grouped together under Denel as divisions
. The company had been experiencing major financial problems since 2015 and in 2021 it was announced in Parliament that Denel was on the brink of insolvency. The company stated that its woes were due to declining local defence budgets, weakened relationships with key customers and suppliers, the inability to retain or attract skilled personnel, ongoing salary disputes and a Fitch ratings
Denel was established as a state-owned industrial company under the Department of Public Enterprises in April 1992. It inherited most of Armscor's production and research facilities, and over 15,000 employees. At the time of its formation, Denel restructured and reorganised the former Armscor subsidiaries into a number of divisions and subsidiaries within five industrial groups: systems, manufacturing, aerospace, informatics, and properties and engineering services.
Denel has developed a number of notable products, such as:
* The Rooivalk
* The Atlas Oryx
* The Umkhonto
vertical launched air defence missile.
tandem warhead anti-tank guided missile
, with a range of 10 km.
* Together with Gerald Bull
, the G6
self-propelled howitzer and G5
towed howitzer, the longest ranged guns in their class worldwide, supported with base bleed
, VLAP and the advanced fuzing
* The 5th generation A-Darter air-to-air missile
, currently in the final phases of development.
The Overberg Test Range
is used for advanced aerial testing of missiles by Denel and other clients such as NASA
and BAE Systems
Though Denel's market share
is increasing, it still has not signed significant international contracts that will bring a real market return for its investments in development and research costs. In 2006, Denel signed a contract with the Finnish Navy
for the Umkhonto air defence missile
; this was a significant step, since it was the first significant sale to a western nation. The Swedish defence force was also interested in the Umkhonto missile, but due to budget constraints had to put its purchase on hold.
Although Denel has comparable quality products, at lower prices, it has struggled to attract buyers, with the Rooivalk
attack helicopter being a prime example of this. After being developed at a cost of R1 billion,
no sales were made as the contract from Turkey
for $2 billion was lost. The development of the Rooivalk, which could be Denel's most profitable project, also threatens to result in its largest loss ever.
The following divisions form part of Denel
incorporating Denel Technical Academy
*Denel Industrial Properties
*Denel Integrated Systems and Maritime
*Denel Land Systems
*Denel Overberg Test Range
*Denel Vehicle Systems
Companies part-owned by Denel.
*Airbus DS Optronics
(Airbus Defence and Space
owns 70% and Denel holds 30% of the shares)
*Rheinmetall Denel Munition
holds 51% and Denel holds 49% of the shares)
owns 51% and Denel holds 49% of the shares)
(Denel holds 51% of the shares)
In 2004 Denel CEO Victor Moche informed parliament that the company was near bankruptcy after suffering a loss in the financial year 2003/4 of R358 million contributing to a mounting company debt of R1 billion. This was blamed on a lack of access to foreign markets and not being able to secure domestic arms procurement contracts.
In 2016 it was revealed that Denel had entered into a controversial single source supplier deal for ten years with VR Laser.
The deal was controversial due to the generous terms of the contract and because VR Laser was owned by the Gupta family
which had close ties to then South African president Jacob Zuma
This contributed to Denel incurring a loss, the first in eight years, amounting to R1.7 billion putting the company in financial difficulty. This led to Denel not being able to pay staff and company pensioners. In 2017 the civil society
group Organisation Undoing Tax Abuse (OUTA)
(OUTA) stated that it had laid corruption charges against the company's chairman Daniel Mantsha. In March 2019 Denel representatives gave testimony to the Zondo Commission
about the company's deal with the Gupta owned VR Laser.
Department of Public Enterprises Acting Director-General stated that the deal resulted in up to R3 billion in lost revenue for Denel.
Following the conclusion of forensic investigations into allegations of corruption in Denel the company announced in July 2019 that it would seek to recoup misspent money by pursuing civil and criminal action against former company executives.
Category:Aerospace companies of South Africa
Category:Defence companies of South Africa
Category:Government-owned companies of South Africa
Category:Technology companies established in 1992
Category:Manufacturing companies established in 1992
Category:1992 establishments in South Africa