Denel

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.{{cite web|publisher=Peter Batchelor (International Development Research Centre) |date=26 November 2006 |title=Conversion: The Case of Denel |url=http://www.idrc.ca/fr/ev-68072-201-1-DO_TOPIC.html |url-status=dead |archive-url=https://web.archive.org/web/20061124154514/http://www.idrc.ca/fr/ev-68072-201-1-DO_TOPIC.html |archive-date=24 November 2006 }}

Denel has developed a number of notable products, such as:

• The Rooivalk attack helicopter.
• The Atlas Oryx utility helicopter.
• The Umkhonto vertical launched air defence missile.
• Mokopa 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 technology.
• 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, EADS 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,{{cite web |title=What went wrong with Rooivalk? |url=http://www.engineeringnews.co.za/article.php?a_id=110041 |url-status=dead |archive-url=https://web.archive.org/web/20070717201322/http://www.engineeringnews.co.za/article.php?a_id=110041 |archive-date=July 17, 2007}} 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.

In 2009 and 2010, RheinMetall Denel, a Denel subsidiary, advertised artisan training programmes and study bursaries which excluded white applicants, but relented after a meeting with trade union Solidarity.{{cite news |title=Whites to qualify for Denel bursaries |url=https://www.news24.com/News24/Whites-to-qualify-for-Denel-bursaries-20100504 |access-date=2 March 2022 |agency=News24 |publisher=news24.com |date=4 May 2010}}

The following divisions form part of Denel

• Denel Aeronautics incorporating Denel Technical Academy.
• Denel Dynamics
• Denel Industrial Properties
• Denel Integrated Systems and Maritime
• Denel Land Systems
• Denel Mechem
• Denel Overberg Test Range
• Denel PMP
• Denel Vehicle Systems

Companies part-owned by Denel.{{cite web|url=http://www.denel.co.za/our-business/associated-companies |title=Associated Companies | Denel SOC Ltd |publisher=Denel.co.za |date=1 September 2008 |access-date=29 September 2015}}

• Hensoldt (PTY) Ltd owns 70% and Denel holds 30% of the shares
• Rheinmetall Denel Munition owns 51% and Denel holds 49% of the shares
• Barij Dynamics (Barij) owns 51% and Denel holds 49% of the shares{{cite web |url=http://www.lmt.co.za/profile.html |title=Company Profile |publisher=LMT |access-date=29 September 2015 |url-status=dead |archive-url=https://web.archive.org/web/20150721032343/http://www.lmt.co.za/profile.html |archive-date=21 July 2015 }}

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.{{Cite web|url=https://mg.co.za/article/2004-09-08-denel-at-doorstep-of-bankruptcy/|title=Denel 'at doorstep of bankruptcy'|last=Pressly|first=Donwald|date=8 September 2004|website=The M&G Online|language=en|access-date=2019-08-03}} State capture (2011/12 to 2017) had a debilitating effect on Denel and consequently the country's defence capability.{{cite news |last1= Cornelissen |first1=Christel |title=Net een uit vier lugmagvliegtuie 'diensbaar' |url=https://maroelamedia.co.za/nuus/sa-nuus/net-een-uit-vier-lugmagvliegtuie-diensbaar/ |access-date=18 February 2022 |agency=Maroela Media |publisher=maroela.co.za |date=18 February 2022}}{{cite news |last1=Staff Writer |title=Only a fraction of South Africa's airforce is operational right now |url= https://businesstech.co.za/news/government/559636/only-a-fraction-of-south-africas-airforce-is-operational-right-now/ |access-date= 20 February 2022 |agency=BusinessTech |publisher=businesstech.co.za |date=17 February 2022}}{{cite news |last1=Gibson |first1=Erika |title=The defence force is seriously wounded, and state capture of Denel played a big role |url= https://www.timeslive.co.za/sunday-times/opinion-and-analysis/opinion/2022-02-06-the-defence-force-is-seriously-wounded-and-state-capture-of-denel-played-a-big-role/ |access-date=2 March 2022 |agency=TimesLive |publisher=timeslive.co.za |date=6 February 2022}} The Zondo Commission placed the blame specifically on the 2015 board of directors, who almost immediately after their appointment started to implement a slew of poor decisions which brought Denel to its knees.{{cite news |last1=AmaShabalala |first1=Mawande |title=Khumbudzo Ntshavheni in Zondo's firing line over Denel dismissals |url=https://www.timeslive.co.za/politics/2022-02-02-khumbudzo-ntshavheni-in-zondos-firing-line-over-denel-dismissals/ |access-date=4 March 2022 |work=Politics |agency=TimesLive |publisher=timeslive.co.za |date=2 February 2022}}

In 2016, it was revealed that Denel had entered into a controversial single source supplier deal for ten years with VR Laser.{{Cite web |url= https://www.businesslive.co.za/bd/national/2016-02-16-denel-and-gupta-venture-illegal/ |title=BusinessLIVE |last=Paton|first=Carol|date=16 February 2016|website=BusinessLIVE|language=en-ZA|access-date=2019-08-03}}{{Cite web |url=https://www.defenceweb.co.za/industry/industry-industry/denel-asia-could-be-unlawful/|title=Denel Asia could be unlawful |date=17 February 2016 |website=defenceWeb|language=en-ZA|access-date=2019-08-03}} 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.{{Cite web|url=https://city-press.news24.com/News/severe-crisis-denel-urgently-needs-partnership-to-survive-20181130|title='Severe crisis': Denel urgently needs partnership to survive |last1=Bavier |first1=Joe |last2=Alex |date=30 November 2018 |website=CityPress|language=en|access-date=2019-08-03|last3=Winning|first3=er|last4=Reuters}} This led to Denel not being able to pay staff and company pensioners.{{Cite web|url=https://www.engineeringnews.co.za/article/denels-liquidity-crisis-plunges-employees-into-new-financial-crisis-2019-07-12|title=Denel's liquidity crisis plunges employees into new financial crisis |last=Liedtke |first=Simone |date=12 July 2019|website=Engineering News|access-date=2019-08-03}} 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.{{Cite web|url=https://www.defenceweb.co.za/industry/industry-industry/outa-charges-denel-board-chairman-with-corruption/ |title= OUTA charges Denel board chairman with corruption|date=4 September 2017|website=defenceWeb|language=en-ZA|access-date=2019-08-03}} In March 2019 Denel representatives gave testimony to the Zondo Commission about the company's deal with the Gupta owned VR Laser.{{Cite web |url= https://www.defenceweb.co.za/featured/denel-at-the-zondo-commission/ |title=Denel at the Zondo Commission|date=18 March 2019 |website=defenceWeb |language=en-ZA|access-date=2019-08-03}} 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.{{Cite web|url=https://www.timeslive.co.za/news/south-africa/2019-07-31-denel-is-going-after-bosses-to-get-back-misspent-money/|title=Denel is going after bosses to get back 'misspent' money|date=31 July 2019 |website= TimesLIVE|language=en-ZA}}

From May 2020 through to January 2022 some of their employees were not paid, or were only paid a part of their salary, despite being expected to report for duty every day.{{cite news |last1=Larkin |first1=Philippa |title=Denel ordered to pay R90m to Solidarity members or face asset seizure |url=https://www.iol.co.za/business-report/economy/denel-ordered-to-pay-r90m-to-solidarity-members-or-face-asset-seizure-4c9aa765-21d5-4f5a-81b8-dae4d2cba1bc |access-date=2 March 2022 |agency=IOL |publisher=iol.co.za |date=25 February 2022}} The state owned company's financial troubles continued into 2021, when in April Denel Land Systems stopped paying its employees their salaries.{{Cite web |title=Denel Land Systems unable to pay April salaries |last=Martin |first=Guy |work=defenceWeb |date=19 April 2021 |access-date=20 April 2021 |url= https://www.defenceweb.co.za/featured/denel-land-systems-unable-to-pay-april-salaries/ |quote=}} Union UASA started legal proceedings in 2020 to recoup its members' salaries, while Solidarity achieved a victory in the Johannesburg Labour Court in February 2022, when Denel was ordered to pay out R90 million by March 8. Denel did not comply however, prompting Solidarity to seize its bank accounts, which facilitated the full payout by July.{{cite web |last1=Solidariteit Nuuskantoor |title=Oorwinning – Solidariteit wen armdruk teen staatsinstelling Denel |url=https://solidariteit.co.za/oorwinning-solidariteit-wen-armdruk-teen-staatsinstelling-denel/ |website=Solidariteit |publisher=solidariteit.co.za |date =31 July 2022 |access-date=7 August 2022}} Solidarity also vowed to bring to book those responsible for the supposed "fund mismanagement and looting". Finance Minister Enoch Godongwana announced in his 2022 budget address that the National Treasury had assigned Denel R3 billion in bailouts for the 2021/22 financial year. Despite bank guarantees by the government, Denel lost out on a R6 billion missiles deal (2022-2024) with Egypt, when South African banks cited ethical concerns and refused to extend a loan.{{cite news |last1=Ginindza |first1=Banele |title=Denel loses missiles deal after banks turn a deaf ear |url=https://www.iol.co.za/business-report/companies/denel-loses-missiles-deal-after-banks-turn-a-deaf-ear-00e8faf3-fe37-43a1-9ced-606a7a3b247a |access-date=20 March 2022 |agency=IOL |publisher=iol.co.za |date=2 March 2022}}

{{Commons category}}

{{Portal|Companies}}

• {{official website|http://www.denel.co.za}}

{{Atlas/Denel aircraft}}

{{Denel}}

{{National Key Points navbox}}

{{authority control}}

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