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Saudis interested in buying Denel – minister

Committee to consider merits of the potential deal, including human rights considerations.

Saudi Arabia has approached South Africa about taking a stake in struggling state-owned defence firm Denel, the African country’s foreign affairs minister Lindiwe Sisulu confirmed on Thursday.

“There have been overtures by Saudi Arabia to buy a stake in our ailing Denel. I do not know what the outcome of those negotiations will be when it gets to the NCACC (National Conventional Arms Control Committee),” she told a briefing.

The committee would consider the merits of the potential deal, including human rights considerations, she added.

Saudi Arabian Military Industries’ (SAMI) chief executive Andreas Schwer told Reuters last week that Saudi authorities were in talks about a possible stake in Denel.

South Africa’s defence industry once played a major role in its economy, but has suffered from the impact of a squeeze on defence spending globally and a weak home market.

Saudi Arabia is the world’s third largest defence spender behind the United States and China with an estimated military budget last year of nearly $70 billion. 

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Afica at its best. 1.Denel is bankrupt. Cannot pay its (overpaid) employees. 2. What is to be considered.3.Cannot believe SAr will be so stupid.

“defence industry once played a major role in its economy, but has suffered from the impact of a squeeze on defence spending globally” , but not on any stage in the world history has there been more wars and fighting going on at one time as now.

I think its more a problem of “products” and innovation or lack there off, that is the milling stone around Denel’s neck. We can not compete in the global “defence” market selling 1980 era technology.

The other question what do the Saudi’s want to gain? ….tough times for Yemen coming.

Yup, I thought the same. So called “squeeze on defence spending globally” cannot be accurate….spending has steadily increased as % of foreign countries GDP, since late 2000’s. USA has one of biggest % defence spend per GDP. Looked at various charts, and there’s no global defence spending squeeze I can see….so it must be local.

It seems it’s only Paramount Group (private co.) that has some product innovation of late, like the Mwari prop plane, and Mine Resistant Vehicles. On the other hand, Denel mainly doing maintenance contracts on aircraft like Rooivalk, Hawk, etc. Not aware of any new innovation coming from Denel. Much of our equipment is licence produced foreign hardware, or done in co-operation with foreign partner.

These days major-cost weapon system programs (like fighter jets & naval craft) are not completely designed & manuf from start to finish, in a single country. Costs simply too large for most countries. In practice, alliances are formed among various international component suppliers/designers/manufacturers, to share in cost & profit.

This is why the EFF decided to begin “expropriating” the assets of VBS bank without compensation. At the rate which the ANC is selling SA assets, there will be nothing left for the EFF to expropriate!

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