S E C O N D Q U A R T E R

2013

The successstory continues

Good governance

Denel Grouph i g h l i g h t s

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Editor’s NoteIt is always a pleasure to be the bearer of

good news. In this issue of Insights we detail

our successes over the last year leading up to

the release of the annual results on 22 July

which showed that Denel posted a profit for

the third consecutive year. South Africans

have a lot to be proud of in the success story

Denel has become. In the words of Group

CEO Riaz Saloojee, it is our time to shine.

The company is increasingly in the headlines

not only for its exceptional services and

products but also for its sincere and ongoing

efforts to reverse the critical skills shortage in the

country and to provide opportunities for youth

development.

Denel is also making efforts to reclaim its

position as a leading hub of research and

development, despite a challenging business

environment. In this issue of Insights we give you

more news on a company that continues to

grow in stature as a vibrant sustainable business

and an industry leader.

Vuyelwa Qinga

Group Communications Manager

The Denel success story just keeps going on saysCEO Riaz Saloojee

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Denel’s annual results for the 2012–13 financialyears show a profit for the third consecutive year;demonstrating our growth as a state-ownedcompany and increasing our reputation as aprofitable and sustainable business. Denel hasnow entered a trajectory of sustained growth.

In the financial year under review, there has been a10% improvement in revenue, a feat that can beattributed to a 34% growth in exports – fromR1 329 bn to R1 783 bn. This was particularlywithin the missile and landward defence businesses.

We have also managed to grow the company’sexport revenue in all of our key target markets, mostnotably in Africa, the Middle East, Asia-Pacific andSouth America. Local revenue amounts to 55%(R2 135 bn) of the total revenue.

The net profit for the year has grown to R71m as aresult of the increase in revenue, the restructuring ofthe company and a wide range of cost-savinginitiatives. This included the integration of 11businesses into six divisions.

The operating expenditure has decreased from 27%to 24% of revenue, but the results continue to beaffected by the interest on external borrowings andthe financial losses posted by Denel Aerostructures.Operational savings and new contracts signed havecontributed to a significant reduction in the lossesincurred.

During the financial year, we successfully restructuredthe short-term debt of R1 185 bn to a combinationof short-term debt, three-year and five-year bonds tomitigate liquidity risks.

The company’s financial performance and ourprospects for growth were recognised in thefinancial markets through an over-subscription on theDenel bond issue. Fitch Ratings revised the Denellong-term rating from negative to stable, a verypositive achievement for the company consideringthe downgrades experienced by other companiesand institutions during this period.

Parallel to developing defence products andsolutions for global markets, internally, Denel hascreated an environment that attracts and retains skillsthat are critical not only to our business, but to thecountry. During the year under review, we havemade a number of strategic appointments tostrengthen the senior management of the companywhile also meeting our objectives for transformationand succession planning.

These positive results, the newly concluded andabout to be concluded contracts of R22 bn billion,which will be executed over the next 7–10 years,will contribute to our sustainability. In addition, wehave a significant order pipeline that will enable usto grow the business in both local and internationalmarkets.

As a key player in the global aerospace anddefence landscape, Denel has earned aninternational reputation in a number of niche areas.These include guided missiles, global civil andrelated aviation and aerospace sector, and artillerysystems, to mention just a few. Our capability indesign, development, and manufacturing is world-class, with technologies and products competinghead-on with leading international competitors.

In support of our country’s national developmentalpriorities, we have a number of youth, artisan,internship, apprenticeship and bursaryprogrammes. At least R46 m was spent in skillsdevelopment in engineering and technologicaldisciplines within the 2012/13 financial year.During the same period, R10 m was spent on YouthDevelopment.

Two-hundred-and-fifty apprentices and 827 learnersbenefitted from these programmes

Our key technologies and capabilities includeartillery systems, UAVs, missiles, ammunition,advanced aircraft composite technologies, Rooivalkcombat helicopter, aircraft maintenance repair andoverhaul, military vehicles and turrets, electro-opticalsystems (in submarine periscopes), landmineclearance and a multi-purpose test range facility. Thetotal R&D spend amounted to R528 m.

� Chairman of the Denel Board, Mr Zoli Kunene with theGroup CEO, Mr Riaz Saloojee.

� The Minister of Public Enterprises, Mr Malusi Gigaba. � Dignitaries viewing Denel's products.

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SIGNIFICANT PROJECTSAmong the key projects that Denel was responsiblefor during the 2012/13 financial year, are:

• Successful completion of humanitarian deminingoperations and the disposal of remnants of warin South Sudan, the Democratic Republic of theCongo, Senegal, Libya, Angola andMozambique.

• Successful UAV surveillance service to SANPARKSin the Kruger National Park in support of anti-rhino poaching activities

• Progressing the final development andqualification of the A-Darter, 5th generation air-to-air missile in collaboration with our industrypartners in Brazil and locally. The success of thisproject provides the benchmark and foundationfor future technology collaboration among theBRICS nations.

• Initiating the development of the future-orientatedMarlin missile project, aimed at establishing acommon platform for long-range all weather air-to-air and surface-to-air defence capabilities.Denel is extremely appreciative of the close andstrategic collaboration between Denel, theSANDF, Department of Defence and Armscor onprogrammes like this.

• Concluding the development phase of theSANDF’s Project Hoefyster to deliver a world-class infantry combat vehicle, the Badger, whichwill meet the requirements of a modern defence

force. To date, more than 100 local sub-contractors are actively involved in thisprogramme and this impact will spread acrossthe wider manufacturing sector once the greenlight has been given for the production order,which is sometime this year.

• We delivered the final Rooivalk combat supporthelicopter to the SA Air Force, reaching a majormilestone in a project which bears testimony tothe capability, skills and innovation that SouthAfrica can offer to the world.

• Established a joint venture with TawazunHoldings, a company owned by the governmentof the United Arab Emirates, for themanufacturing of guided munitions. Locally, Denelacquired LMT to strengthen our capacity in thelandward vehicle market.

• Opened a Centre of Excellence at Denel Aviationduring the recent BRICS Summit, which willprovide extensive maintenance, repair andoverhaul services to aircraft manufactured byRussian Helicopters. This initiative has beensingled out as one of the first tangible resultsflowing from South Africa’s participation in theBRICS alliance.

• Participated successfully at the Africa Aerospaceand Defence Exhibition in Tshwane andmaintained a strong marketing presence at anumber of global industry events, including inBrazil, Paris, Turkey, Malaysia and the UnitedKingdom.

FUTURE PERSPECTIVESAn analysis of Denel’s five-year budget cycleindicates that there will be significant revenuegrowth over the medium term, and that thecompany will continue to be profitable andsustainable into the foreseeable future.

Our strategy is focused on significantlygrowing revenue, optimising costs andefficiencies, strengthening the balance sheet,transformation and modernising technology.The planned growth is backed by expectedgrowth in our traditional markets, stronggovernment support and strategicpartnerships.

As our national defence force is becomingmore involved in international peace-keepingmissions in Africa, Denel remain committed tosupporting our forces with leading edgetechnologies and products. This includes thefields of observation, command and control,and other systems to enhance inter-operability. In short, we will be there whenand where the SANDF needs us!

We expect important local projects in thefields of infantry combat vehicles, expandedground-based air defence systems (GBADS),and the acquisition of aircraft for maritimereconnaissance which are currently in thepipeline will receive the green light in thecoming year.

With regards to the African continent, Denelwill intensify our commitment through anoptimised product and service offering aswell as long-term collaboration rather thanselling. We are already seeing the success ofthis strategy.

Our success in all these endeavours willmake Denel profitable on a sustainable basis.I am positive about the future of Denel in lightof the order pipeline, the successfultransformation of our business, the quality ofthe human resources available to ourcompany, and the industrial partnerships wehave forged locally and internationally. Thepositive progress we have made during theyear leads me to believe that Denel iscertainly on a positive growth trajectory. It isindeed our time to shine for South Africa,Africa and the developing world.

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Denel at Turkish defence showDenel went on show at the annualInternational Defence Industry Fair(IDEF) held in Istanbul, Turkey from7–10 May.

Riaz Saloojee, the CEO of Denel,said IDEF presented a strongopportunity for Denel to market itsproducts and services to potentialclients in key target markets of theMiddle East, Northern Africa andSouth East Asia.South Africa andTurkey enjoy strong diplomatic andtrade relations and both countries aremembers of the G-20 group of major

economies. Its strategic positionbetween Europe and the Middle Eastprovides Denel with significantmarketing opportunities.

“Turkey has an advanced defencemanufacturing industry similar to SouthAfrica and we also share nationalindustrial development goals,” saidSaloojee.

Both Denel Aerostructures and TurkishAerospace Industries (TAI)manufacture key parts of the A400M,the world’s most advanced militaryairlifter produced by Airbus Military.

Denel gains recognitionfor good governance

Denel was once again recognised for excellence in reporting at theannual Nkonki State-Owned Company (SOC) Integrated ReportingAwards ceremony held in Rosebank, Johannesburg.

This is a great achievement in recognition of the steps Denel has taken toimprove the quality of financial reporting and ensuring that the companyhas mature corporate governance in line with best practice.

Denel's 2011/12 annual report received an award for being in the topfive overall for excellence in corporate integrated reporting. In addition,the company received awards for the reports in the "Governing ofStakeholder Relationships" category and the "Governance of Risk"category. The company ranked well on the other rated categories.

These awards were launched last year, where Denel also featured fairlyprominently. During October 2012, Denel was also recognised as thebest governed SOC by the Centre for Corporate Governance of theUniversity of Stellenbosch. These awards or recognitions for excellenceare taken seriously by the company and Denel is committed to improvingits reporting as well as maintaining transparency.

The Nkonki Research on Schedule 2 state-owned companies wasconducted in order to understand how SOCs have embracedcomprehensive reporting expected in terms of Integrated Reporting intheir audited annual or integrated reports. “In a nutshell, the purposeof the research is to gain insights into state-owned companiesintegrated reporting trends and to recognise and celebrate excellencefor those state-owned companies that are taking the commendablelead in integrated reporting in South Africa,” said Sindi Zilwa, (CEO)Nkonki Inc.

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South Africa conjures up support for hi-tech collaborationMissile innovator, Denel Dynamics, unveiled itsMarlin All-Weather Air Defence Missiletechnology development programme at the 9thbiennial LAAD Defence and Security InternationalExhibition which was held in Rio de Janeiro,Brazil from 9–12 April.

The success of the A-Darter joint development air-to-air missile project with Brazil has laid the foundationfor further defence collaboration programmes. Inconcept it is a multi-force (navy, army and air force)application missile where synergy is achieved due

to common subsystems. Currently, South Africa isinvesting in risk reduction technology activities,potentially leading to a missile demonstrator.Funding from a second party would elevate thistechnology establishment effort into a full-scale jointdevelopment programme. With that comes skillsgrowth and industry job opportunity for both parties.

The outcome of collaboration on Marlin will be aBeyond Visual Range (BVR) missile for the two airforces and an All-Weather Surface-to-Air Missile(SAM) for the two navies and armies. This type of

initiative is supported by IBSA and other bi-lateralinitiatives between RSA and Brazil.

The performance of the missiles from the Marlinprogramme is expected to be in the latestgeneration class relevant to each type. A BVRmissile is typically used in conjunction with anSRAAM (e.g. A-Darter) on a fighter aircraft, wherethe BVR provides a larger stand-off distance and thehighly agile SRAAM is used for close combat. TheMarlin All-Weather SAM will have a much largerrange than the typical Infra-Red SAMs.

New appointmentsThese are the new appointments to key positions in the Denel Group. Theseappointments are in line with Denel’s objectives to fast-track transformation,employment equity, skills development and succession planning.

• Vuyelwa Qinga has been appointed as the new Group CommunicationsManager. Vuyelwa comes to Denel from the Ministry of Higher Education andTraining. She brings with her a wealth of experience in the communicationsenvironment.

• Colin Singarum is the new Senior Executive Business Development: Americas& Europe. He has moved up the ranks from Denel Aerostructures and hisappointment will enable Denel to accelerate its efforts to penetrate newmarkets and clients for its products and services.

• Zizikazi Mlokoti has been transferred from Denel Technical Academy to theposition of Group CSI Manager. She will be responsible for Corporate SocialInvestment across the group as Denel moves towards integrating theseinitiatives and implementing the Denel flagship CSI project.

• Natasha Davies is the new Group Executive: HR and Transformation. Davieshas worked at Denel since September 2007.

• Two senior appointments have been made at Denel PMP. Veronica Qezu isthe new HR Executive Manager and Victor Khasapane will be responsiblefor Business Development as the Executive Manager.

� Nosiviwe Mapisa-Nqakula, Minister of Defence, visited the Denel stand at the LAAD exhibition.

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Brightest learners attend youth campA hundred of the best performing learners inGrade 10 and 11 in Free State schools wereinvited to a youth camp held in the Denel hostelfrom 23-28 June.

The Youth Month initiative was a partnershipbetween the MEC of the Department of EconomicDevelopment Tourism & Environmental Affairs in theFree State, DoD, DPE and all SOCs.

The purpose of the camp was to expose learners tothe real world of the workplace and to show themthe workings of SOCs and the career opportunities

they offer. It was also to promote nation-building and

patriotism.

Bulelani Magwanishe,Deputy Minister of Public

Enterprises and Mosebenzi Zwane, MEC of the

Department of Economic Development Tourism and

Environmental Affairs in the Free State both attended

the welcoming ceremony held at Denel on 23 June.

Riaz Saloojee, Group CEO of Denel said he hoped

the camp would be a great learning opportunity for

the teenagers.

He urged the learners, “the future leaders”, to taketheir studies seriously: “There are very few jobs inDenel that do not require a strong high schoolbackground in mathematics, science andtechnology. Our company is able to produce highlysophisticated defence and security products becausewe are able to attract the best and the brightest ofstudents,” he said.

The learners were able to do site visits to SOCs suchas Telkom, Transnet and SAA and Denel where theywere exposed to new skill levels.

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Group highlightsDENEL AVIATION (DAv)

• Denel Aviation has expanded its facilities forRussian Helicopters to now also includeoverhaul and upgrade work. An agreementbetween Denel and the Russian state-ownedcorporation, Oboronprom, was signed at theParis Air Show.

The new agreement will enable the company toperform the entire range of maintenance, repairand overhaul services to the Mi-8/17 series ofcommercial and military helicopters which are inwide use across Africa. The two companiesopened a Centre of Excellence to do this workduring the Brics Summit in March.

Africa has a significant fleet of Mi-8/17helicopters that need qualified and professionalmaintenance.

• DAv handed over the Puma 414 aircraft to ahigh level delegation from the Kenyan AirForce at the Kempton Park campus.

Major-General Otieno, the Chief of the KenyaAir Force, who officially received the aircraft,said it passed its flight test and P4 inspection.

“We have received a lot of support from Denelin the past and their co-operation is muchappreciated,” he said.

The Kenya Air Force technical team was at DAvfor the past 12 months to undergo on-the-jobpractical and theoretical technical training whilsttheir aircraft was being serviced.

Abdul Carim , Deputy CEO of DAv, said Denelhad enjoyed a 17- year partnership with theKenya Air Force.

“We have recently been accredited as an MROfor Russian Helicopters and this will enable us tobe of further assistance to the Kenya Air Force,”he said.

The relationship between Denel Aviation andKenya Air Force dates back to 1996. Apartfrom work on the Puma 415, DAv hascompleted work on seven Puma P4s.

• High school learners from Tshwane wereurged to consider careers in aviation andengineering disciplines during a visit to theannual air show at Air Force Base Zwartkopon 11 May.

Denel Aviation hosted some 90 learners fromschools in Atteridgeville and Mamelodi andprovided them with a tour of the modern andvintage aircraft on show as well as informationon career and study opportunities the companyhas to offer.

The Zwartkop event, organised by the SA AirForce Museum, is one of the largest air shows inthe country and annually draws more than50 000 aviation enthusiasts to watch the flyingdisplays and visit the industry-related exhibitions.

The young audience had an opportunity towatch Denel’s iconic product, the Rooivalkcombat support helicopter, from up close and

observed the wide-ranging collection of aircrafton display at the SAAF Museum.

Elelwani Mainganye, the communicationsconsultant at Denel Aviation, gave the youngvisitors an overview of the company and invitedthem to apply for bursaries to study at the DenelTechnical Academy.

• More than 70 young girls toured the KemptonPark campus as part of an ongoing campaignby both Denel Aviation and Aerostructures toget more women into the aviation industry.

This time it was the Cell C Take a Girl Child toWork Day, held on 30 May, which presentedyet another opportunity to showcase the aviationindustry and the career opportunities it offers.

Most of the learners who attended were from theReiger Park and Etwatwa high schools and therest were children of staff members. The girlswere given a glimpse into the traditionally malestronghold with tours of the facilities and talks onthe aviation industry.

Abdul Carim, DAv Deputy CEO and Maj. Gen.Otieno, Kenyan Air Force Commander.

Getting down to the nitty gritty – learners find outwhat it takes to follow a career in aviation.

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Group highlights continued ...

DENEL AEROSTRUCTURES (DAe)

• A third multi-million contract for themanufacturing of critical parts for the AirbusA400M strategic airlifter has been awarded toDenel Aerostructures.

The ‘ribs, spars and sword’ form the insidestructure of the aircraft’s very distinctive verticaltail plane.

Riaz Saloojee, the Group Chief Executive Officerof Denel, said the approximate R157 m contractover a period of eight years demonstrates theconfidence of major international companies inthe design and manufacturing capabilities of thelocal aerospace industry.

“We have proven ourselves to be a reliable andinnovative top tier supplier to one of the mostsophisticated aircraft manufacturing programmesin the world. Airbus’s decision to place a thirdmajor order with Denel shows satisfaction withthe quality of our design, our manufacturingprocesses and our ability to deliver on time andwithin budget.”

Ismail Dockrat, the CEO of Denel Aerostructures(DAe) said the new contract “places the companyat the core of the global aerospacemanufacturing industry.”

The vertical tail plane is a flight critical part of anaircraft of the size of the A400M and contributes toits unique ability to land and take off carryingpayloads in excess of 35 000 kg.

Dockrat said the new order also confirms thatSouth Africa is at the forefront of global trends touse composite materials for high-techmanufacturing. The aerospace sector isleading the move away from metallic structurestowards advanced materials which offer superiorproperties such as durability, hardness, elasticityand high strength-to-weight ratios.

• Denel Aerostructures has made significantinvestments in a composite facility in which it isable to manufacture products ranging fromsimple aircraft parts to complex main rotorblades for helicopters.

The raw carbon fibre material is bonded,moulded, heated and machined into the requiredshape.

“The Government, in its Aerospace SectorDevelopment Plan, recognises the immensepotential of the composite sector, noting that itwill be dominant in aerospace going forwardand should be integral to future businessplanning,” said Dockrat.

• The company hosted global delegates to theAirports City Conference and Exhibition (ACE)in Ekurhuleni from 24-26 April where it wasable to showcase its high-tech manufacturingcapabilities.

More than 800 delegates from across the worldattended the three-day conference which washeld in Africa for the first time. The conferencefocused on the prospects of developingEkurhuleni into an Aerotropolis, or airport city, inthe future. Dockrat said the company stronglysupports the growth of an Aerotropolis asenvisaged by the City of Ekurhuleni and theGauteng provincial government.

Some 240 VIP delegates to the conferencevisited the Denel Campus in Kempton Park on 24April as part of an extended tour that alsoincluded the O R Tambo International Airport.

The idea behind an Aerotropolis is to utilise anairport as an engine for economic growth thatdrives the development of the commercial andindustrial sectors.

DENEL DYNAMICS

• As part of the ongoing commitment byTawazun Holdings to build local defencemanufacturing capabilities, UAE Nationalemployees from Tawazun Dynamics LLC, theAbu Dhabi-based precision-guided munitionsmanufacturer, have undergone intensivespecialist training in South Africa.

The UAE National employees underwent aneight-month training course on manufacturingassembly and integration of precision-guidedsystems for conventional air munitions.

The programme was designed to equip thetechnicians with all the necessary skills toassemble and integrate Tawazun Dynamics’sflagship product, the ‘Al Tariq’ system, throughnine different modules.

Hamad Al Marar, General Manager of TawazunDynamics, said: “Capability building andknowledge transfer efforts are two of the criticalfoundation pillars needed to allow TawazunDynamics to realise its potential.

”Our aspiration to build a globally leadingspecialist business in its field goes hand-in-handwith our desire to build a local workforce withworld-class expertise and standards.

“Through the right partnerships and application,we aim to support the development of a younggeneration of Emirati professionals who have thetechnical skills needed to contend in the globaldefence industry,as well as provide the UAE witha strong base of national industry experts whowill help to lead and inspire the generationswhich follow.”

The A400M’s distinctive vertical tail plane.

Students from Tawazun Dynamics pictured with theAl-Tariq system.

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Group highlights continued ...

Reflecting on his experience, one of theTawazun Dynamics trainees, Mohamed AlBlooshi, said: “This training was a great learningopportunity and we found the work environmentto be extremely engaging and motivational. Thecourses were truly comprehensive and helpeddevelop our skills on a professional as well ason a personal level.”

• Denel Dynamics Engineering Academy ofLearning (EAL) continues to participate incareer fairs and exhibitions across SouthAfrica to ensure that South Africa’s brightestminds are attracted to choosing a career withinthe company through bursaries, internshipsand vacation work.

The ability to innovate cutting edge, globallycompetitive, technologically advanced productsand services is an essential quality that willpropel the growth of local business into the future.

The EAL aims to develop and grow younggraduates to enable them to be productive in asshort a time as possible. This is achieved byassigning each graduate a formal mentor,providing training courses conducted byexperienced Denel Dynamics staff, and externalcourses where applicable and assign a ProductDevelopment Project (Intern Project).

The first career fair of many for 2013 was theUniversity of the Witwatersrand Career Fair,which was held on 18 April at East Campus –

Senate House. The EAL team were on hand tointeract with students and give them an all-roundcareer information session.

• Since May 2012, work has been underway onthe new Tawazun Dynamics production facility.

Following the Approval from Sheikh Mohamedbin Zayed Al-Nahyan, Crown Prince of AbuDhabi and the Deputy Supreme Commander ofthe UAE Armed Forces on 10 February where thefacility received the country’s highest approval,continuous work on the facility has taken place.

The facility now has multiple completed workstations and storage areas. Tawazun Dynamicshas also completed training with the first batch oftrainees on Basic English skills.

• In a role modelling campaign, young DenelDynamics employees are giving up their freetime to help learners find careers in science,engineering and technology.

The role modelling project is the South AfricanAgency for Science and TechnologyAdvancement’s (SAASTA’S)contribution towardsrecognition of professionals who excel in thecritical areas of mathematics, science andtechnology.

The project exposes learners to people withcareers in Science, Engineering and Technology(SET) with the aim of providing learners with roleappropriate models and mentors.

Learners normally meet and interact with at leastfour role models with different careers at each ofthe interventions. Role modelling was initiated in2005 by the South African Women in Scienceand Engineering (SAWISE) committee in

collaboration with SAASTA to recognise womenin science and engineering and to encourageand inspire girl learners to follow careers in SET.

The aim is to expose learners to careeropportunities, to increase the number of learnerschoosing science and mathematics as subjectsand to encourage them to take up related careersas well as offering scholarships/grants toexceptionally smart students.

Assigned role models monitor the progress of thestudents throughout the year and assist thestudents academically.

MECHEM

• Mechem won a contract with the KenyanDefence Force for the supplying and training ofdogs as well as the training of SANDFmembers as Explosive Detection Dog Handlers.

The Kenyan Defence Force requested that onlySpringer Spaniels and Labradors be supplied soMechem imported these from Ireland. The dogsall arrived safely at OR Tambo on the 3 May.

The first imprinting stage started at the MechemDog Unit. Two instructors and 12 dogs were sentto Nairobi during the week of the 19 May,where training began.

DENEL LAND SYSTEMS (DLS)

• DLS is currently, under project African Warrior,upgrading the SA Army’s R4 assault rifle toenhance its capabilities in order to meet therequirements of the modern dismountedsoldier.

This upgrade is a small part of the bigger SAArmy’s Warrior programme to enhance the totalcapability of the new Integrated Infantry Soldierprogramme.

The R4 assault rifle has been produced by DenelLand Systems for the SANDF over the last thirtyyear and more than four hundred thousand ofthese weapons have been delivered up to 1997.

In order to reduce the technical risk of theupgrade to the R4 assault rifle, DLS has designedits own unique modular Picatinni rail system.

Current Denel Dynamics Bursars visiting the EAL

team.

Tawazun Dynamics management with the first

batch of trainees who received certificates of

completion for the Basic English skills training

course.

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Group highlights continued ...

These designs are aimed at establishing amodular weapon system that requires the leastamount of modifications to the basic R4 assaultrifle and all the attachments will beinterchangeable between the variants.

The upgrade to the R4 assault rifle will render itcomparable with modern assault rifles allowingthe SA Army to meet the requirements of themodern battlefield and furthermore it will extendthe life of the R4 for another twenty to thirtyyears.

It will also support DLS to make its small armsbusiness sustainable in order to meet theSANDF’s strategic requirements for such acardinal capability.

• The DLS Mentoring for Success (M4S) Groupwas involved in a project to introduce the‘Mini-Chess Programme’ to Philena PrimarySchool in Olievenhoutbosch.

This programme uses chess to teach learnersabout maths and science. It was designed byMarisa van der Merwe who won the accoladeof Shoprite/Checkers “Woman of the Year” in

the educators category. In order to raise funds,the M4S Group hosted a competition with aprize of a chess set.

The M4S Group is in partnership with DLS aspart of a Structured Mentoring Programme(SMP).

DENEL OVERBERG TEST RANGE

• The Test Range supported two global satellitelaunches recently. Two telemetry specialistsfrom Denel Overberg Test Range and theirmobile telemetry station successfully supportedthe second launch of the VEGA launch vehicle(VV02) while deployed in Northern FrenchGuiana on 7 May.

Leon Korkie and Deon van der Hovenassembled the mobile telemetry station on site,integrated it with the French Space Agencytelemetry kit and participated in the qualificationof the telemetry network before supporting theactual mission. The mobile telemetry station ofthe Test Range provided key coverage for thepowered phase of the ascent of the launchvehicle from shortly after launch, from theGuiana Space Centre near Kourou, until itdisappeared over the horizon in the north.

The second mobile telemetry station of the TestRange was deployed and prepared by HermanSteenkamp and Nico du Plessis at Invercargill inNew Zealand during March 2013.

On 5 and 6 June, Leon Korkie and HermanSteenkamp flawlessly supported the fourth launchof the Automatic Transfer Vehicle (ATV4: Albert

Einstein) from Kourou on an Ariane 5 ES Launchvehicle.

The launch of the Albert Einstein space vehiclewith a mass of more than 20 metric tons was arecord-setting heavy-lift mission for Ariane Space.It docked with the International Space Station on15 June after a 10 day period of free flight.Japie Venter, Project Manager for these stations,remarked: “This is also a record for us, becauseit is the first time that two Denel Overberg TestRange mobile telemetry stations successfullysupported two different missions on oppositesides of the world.” Both missions werecontracted by the French Space Agency (CNES)under a current umbrella agreement.

• The Test Range has invested in units which willbe used to condition ammunition.

Market research indicated that such a capabilitywill attract more clients to the Test Range. At theend of May, Denel Overberg Test Range tookownership of two conditioning units, a cold anda hot/ambient unit.

DLS team after testing the R4 rifle.

DLS introduced the Mini-Chess Programme to

Philena Primary School.

Herman Steenkamp, Gilles Sonny (Telespazio –

Kourou), Robin McNeill (Venture Southland – New

Zealand) and Leon Korkie, celebrating the

successful support of the fourth Automatic

Transfer Vehicle (ATV4) launch.

Denel Overberg Test Range’s mobile telemetry

station’s antenna at the deployment site in French

Guiana where it provided key coverage during the

second launch of the Vega launch vehicle.

The new cold and hot / ambient units the Test

Range obtained to satisfy the requirements of

clients, enabling the Range to deliver a more

comprehensive service.

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Group highlights continued ...

This will enable the Test Range to provide a morecomprehensive service for the testing of artillery,mortars, naval and various other ammunitions orsub-munitions.

They are designed to condition, for example, upto twenty 155mm artillery rounds including thecharge, which enables the firing of fortyconditioned 155mm rounds per day.

A complete history of the conditioningtemperature can be recorded with the use oftemperature data loggers. The effective operationof the units allows the required temperatures to beobtained in less than one hour from the time ofswitching on. As the units are mobile they can beused at various locations which allow forflexibility when executing a test.

• The Test Range hosted a group of matriclearners in a three-day motivational andleadership camp that gave them a glimpse intoan exciting high tech world.

The Grade 12 learners from Peak ViewSecondary School, a feeder school for thepreviously disadvantaged communities ofKhayelitsha, Langa, Gugulethu and Bridgetown,were housed at Die Herberg hotel - anexperience few will forget.

“Thank you for serving three meals and providinga comfortable stay, as many of our learners comefrom impoverished communities and are not usedto such luxuries,“ wrote one of the teachers,Mr M Lutta in a thank-you letter.“

The 48 learners, teachers and service providers –a group of 61 – were given presentations andallowed to visit the control room of the TestRange, something that few South Africans willever see.

The visit took place during the weekend of 13April after a request from Me Connie September,then a member of parliament’s PortfolioCommittee on Public Enterprises.

She had visited the Test Range in November lastyear and had been so impressed with the facilitythat she had asked if they could host the Grade12 learners. Principal Oswald de Villiersdescribed the visit as “the most exciting weekendof the learners’ lives”.

He said that the presentations by Abrie van derWalt, CEO of Denel Overberg Test Range had“opened their eyes” and revealed a whole newworld of exciting possibilities for the learners.De Villiers said the invitation demonstrates thepositive attitude of Denel towards communityupliftment and its unselfish commitment to theyouth – tomorrow’s leaders.

PRETORIA METAL PRESSINGS (PMP)

• On 15 April PMP again reached the onemillion milestone for man-hours worked withouta lost-time injury. The previous incident tookplace on 1 November 2012. It takes up to165 days to reach this milestone. PMP’sprevious record, reached in March 2012, is2,4 million hours. This achievement can onlybe attributed to a ‘safety first’culture that eachemployee exercises.

• PMP mentored mechanical engineeringstudent, Elana in her final year project at theUniversity of Pretoria.

Kruger approached PMP Metallurgical Lab forhelp with her project on mechanical testing ofengineering polymers.

Thabo Meletse, physical metallurgist at PMP whohas a Masters Degree in Polymers, guided Elanathrough the experimental procedure, samplepreparation, set-up of apparatus, execution ofexperiments and then discussed results and theenhanced knowledge and understanding of theproperties and capabilities of engineering plasticshe had learned.

Elana was one of the top 20 students (out of180) who received distinctions for their project.

• Thirteen new imported machines have beeninstalled and commissioned at Denel PMP toboost the company’s production of mediumcalibre 30mm X 173 ammunition.

The new Computer Numerically Controlled(CNC) machines will be able to manufacture upto 500 of the medium calibre rounds a day,meeting the requirements of the SANDF forProject Hoefyster, says the CEO of PMP,Phaladi Petje.

“This is a major step forward for PMP as itmodernises our medium-calibre productionprocesses and strengthens our capacity to deliverzero defect products of the highest quality to ourclients in the SANDF,” says Petje.

The development of the ammunition took placeparallel with the development of the 30mm

Abrie van der Walt, Chief Executive Officer of

Denel Overberg Test Range, addresses the

learners from Peak View Secondary School during

their visit to the Test Range.

Mechanical engineering student Elana Kruger was

mentored by PMP’s Thabo Meletse for her final

year project at the University of Pretoria.

13

Cam-gun for the Badger, done by Denel LandSystems. Two of the 8X8 Badger infantry combatvehicle variants will be equipped with 30mmcam-operated cannon. Hennie Vermaak,Manager: Medium-calibre Ammunition at PMP,says the requirements are to manufacture avolume of up to 100 000 rounds a year.

This target can now be achieved with theintroduction of the new CNC machines.The entireprojectile – that can consist of up to 20 parts – isnow cut, machined, surface-treated andinspected at the medium calibre plants where the13 CNC machines were installed.

“The machines enable us to speed up productionprocesses and meet the exceptionally highdemands for quality and accuracy required in themanufacturing of medium-calibre ammunition,”says Vermaak.

True to PMP’s commitment to produce ammunitionof the highest quality, each component of everyround is still hand-and-eye checked by humanquality controllers.

Phaladi says the commissioning of the newmachines will also enhance PMP’s capability toexport more medium-calibre ammunition andearn the company foreign exchange. A numberof other variations in the 30mm X 173 range arealso under development.

DENEL INDUSTRIAL PROPERTIES

• In what is possibly a first for the country,Denel Industrial Properties (Deniprop)rehabilitated an explosives and munitions sitein a complex and risky operation, which atone point involved sifting soil metre by metrewith the help of highly trained Mechemde-mining dogs.

Some of the old explosives and pyrotechnicalrounds were found up to 80 cm below theground at the proof range. Deniprop’schallenge started in 2008 when RheinmetallDenel Munition (RDM) leased this 513 hasite from Denel. The facility had to berelocated as a working entity to theSomerset West site. The relocation of the64 year old facility was driven by theRDM’s effort to consolidate the operationalfacilities on fewer sites.

The environmental studies that were done by Denelover the past 20 years indicated areas of possiblecontamination. Higher remediation levels areneeded for future residential areas.

The aim was to remediate the site in terms of currentlegislation and in line with a site characterisationstudy done prior to relocation of the facilities toSomerset West. Although the management andremediation of contaminated land is addressed inthe Waste Act, not all sections of the act have been

promulgated. In planning this process to remediatethe old factory, a detailed project plan was draftedwith the inputs of the regulators, environmentalconsultants and a small dedicated team of RDMlead by Dirk Kotze, a seasoned explosivestechnologist/manager.

During the remediation process, 220 contaminatedbuildings were burnt and demolished The buildingmaterial was then sorted and recycled. All steelmaterial was removed, roof trusses were recycled

� Philippi site 2008.

� Decontamintion of buildings and contaminated

wood and ducking.

� In some cases bulk burning was required.

Group highlights continued ...

� The area was cleaned and the soil sieved to

ensure that the area was clean.

� Quality assurance and sampling was done by WSP

(contracted environmental specialists).

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Group highlights continued ...

and asbestos roof material was relocated to ahazardous waste site.

The rest of the building material was crushed to beused as topping for the construction of roads.Probably a first for South Africa was theremediation of a test range (approx 25 ha) bymeans of mechanical excavation and the use of theMechem de-mining dogs.

As the cleanup on the test range involvedmechanical sieving to remove blind and strayammunition, the main challenge was, and still is,environmental conditions and mechanicalbreakdown of equipment.

Wet sand does not sieve easily and dry sand has atendency to blow away resulting in difficult workingconditions for the operators.

During the entire remediation project theCommunity Consultative Forum (CCF) formed partof the process. The latter consisted of communityleaders, council members and representatives of theauthorities. Special care was taken to ensure thatthe environment was preserved.

Property Portfolio Manager James Stewart said:“We are glad to report that we did not have anyammunition-related incidents or near misses duringthe entire remediation project and we thank ourLord for that.”

Areas where soil contamination was evident wereidentified by making use of historic records andhuman resources. Special actions were taken toremediate the areas where uncontrolled dumpinghad taken place.

After all composites were removed , the area wascleaned and the soil sieved to ensure that the areawas clean and soil samples were taken and testedto ensure that the soil area conforms to theremediation standards defined in the sitecharacterisation standards and the draft legislationfor cleanup of contaminated soil.

The Test Range was surveyed and demarcated into50 x 50 metre squares which had to be checked

for unexploded ordinances. The only way to cleanthe area was using mechanical excavators as theimpact area was heavily contaminated with metaldebris. Some of the ordinances were found up to800 mm below the ground.

Special care was taken to ensure that theenvironment was preserved. The project is nearingcompletion and Deniprop is presently negotiating tosell the entire site for housing developments,inclusive of a mixed development.

� Current status at the Test Range.

� Sieving done at the Test Range. � An air quality baseline was conducted.

� Remediation activities were explained during a site visit.