ARMSCOR BUILDING

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ARMSCOR BUILDING

SL9/IS1/ 30-7-99
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ARMSCOR RESULTS FOR FINANCIAL YEAR 2003/04
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THE ROLE OF ARMSCOR
MINISTER OF DEFENCE
MINISTER OF PUBLIC ENTERPRISES
DENEL
SANDF
SUPPLIERS
USERS
ARMSCOR
OTHER LOCAL SUPPLIERS
OTHER LOCAL CLIENTS
FOREIGN SUPPLIERS
FOREIGN CLIENTS
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THE FUNCTIONS OF ARMSCOR

1. To acquire and to procure defence
   matériel for the Department of Defence
2. To provide a quality assurance capability in
   support of the acquisition process
3. To dispose of excess, redundant, forfeited or
   surplus matériel of the South African
   National Defence Force

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THE FUNCTIONS OF ARMCOR

• 4. To support and maintain strategic and
  essential defence industrial capabilities,
  resources and technologies as determined by the
  Department of Defence
• 5. To render acquisition and procurement
  support to other organs of State or other
  sovereign states with the approval of the
  Minister.

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WHY DOES ARMSCOR EXISTS

• REASONS WHY WE NEED ARMSCOR
• Defence acquisition requires the application of
  engineering and science.
• Public service remuneration system cannot support
  the technical skills required by Armscor
• Public service management system will render
  Armscor ineffective (e.g. Dockyard).
• Independent decision making body always produces
  best objective results (civilian oversight).

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WHY DOES ARMSCOR EXISTS

• ARMSCORS RELATION WITH DENEL
• Up to 1992 Denel was the manufacturing capability
  of Armscor.
• Currently, Denel is one of the supplier to
  Armscor and the DoD.
• Armscor treats Denel like any other local
  supplier to the SANDF ( must be cost and product
  competitive)..

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CHALLENGES FACING ARMSCOR

• INADEQUATE FUNDING
• Transfer payment only funds about 61 of the
  operational budget of Armscor and thus creates
  the budget problems
• Problems due to Inadequate funding
• Employees salaries lag market
• Increased resignations
• Erosion of technical capabilities
• Inability to transform workforce
• Increased workload
• Inability to recapitalize organisation
• Additional income
• R30 million added to transfer payment.

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CHALLENGES FACING ARMSCOR

• LONG-TERM SOLUTIONS
• Significantly increase the transfer payment to
  cover entire Armscor budget
• Allow erosion of skills to the point where
  organisation is unable to function.
• Supplement transfer payment with additional
  income from commercial activities.
• ADOPTED SOLUTION
• Supplement transfer payment with additional
  income from commercial activities.

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ARMSCOR FUTURE STRATEGIES

• FINANCIAL OBJETIVES
• Sweating Armscors assets
• Technology commercialization
• Management of Simons Town Naval Dockyard
• Management of other DoD outsourced functions
  (stock sales, etc.).
• Acquisition Service for SADC and AU.
• Black Economic Empowerment spending.
• STAKEHOLDERS OBJECTIVE
• Stakeholder management strategy
• Corporate Social Investment
• Improve internal and external communication

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ARMSCOR FUTURE STRATEGIES

• INTERNAL IMPROVEMENT OBJECTIVES
• Benchmarking of Armscor Acquisition process.
• IT infrastructure renewal.
• Improvement of business risk, personnel risk and
  property security.
• Finalise the Armscor Act.
• HUMAN RESOURCE OBJECTIVES
• Affirmative Action implementation.
• Pay for performance market related
  remuneration.
• Workforce renewal plan.
• Training and development.
• Employee wellness programme

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STRATEGIC DEFENCE PARKAGES

• STRATEGIC DEFENCE PACKAGES
• Patrol Corvettes (type Meko A-200)
• 4 purchased
• 9 months delay due to faulty cabling
• All 4 ships (SAS Amatola, SAS Isandlwana, SAS
  Spioenkop SAS Mendi) delivered to SA contractor
• Currently fitted with combat Suite
• Commissioning into SA Navy starts May/June 2005
• Class 209 Mod 1400 Submarines
• 3 purchased
• One ship partially complete ready or sea
  trials
• 1st ship was delivered to the SA Navy in Germany
  around July 2005
• Crew currently being trained in Germany
• Other two ships currently being built will be
  completed in July 2006 and July 2007 respectively.

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ARMSCOR FUTURE STRATEGIES

• 3. MARITIME PATROL HELICOPTERS (Super Lynx)
• 4 helicopters purchased (contract sigend 14 Aug
  2003).
• Delivery of the helicopters is scheduled for
  June/July 2007.
• 4. LIGHT UTILITY HELICOPTERS (Agusta A109)
• 30 helicopters purchased
• 7 to be manufactured by Agusta in Italy.
• 23 are to be manufactured by Denel in SA
• 4 of the 7 are complete undergoing tests
• Agusta transferred technology manufacturing
  know-how to Denel
• Denel manufactured 3 of the helicopters.
• One of the 3 Denel helicopters started flying on
  7 September 2004.

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ARMSCOR FUTURE STRATEGIES

• 5. LEAD-IN FIGHTER TRAINER (HAWK)
• 24 purchased
• Denel manufacturing parts as part of DIP
• One aircraft in SA for test at TFDC
• 9 aircrafts are being assembled at Denel one
  completed
• Problems still encountered with qualification of
  the Rolls Royce Mk 951 Adour engine.
• 6. ADVANCED FIGHTER AIRCRAFT (Gripen)
• 19 single and 9 dual sitters purchased
• Denel manufacturing parts as part of DIP
• Manufacturing of first aircraft in Sweden has
  commenced.
• 1ST aircraft will be delivered in SA by mid 2006.
• The last aircraft will be delivered in early 2012.

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CONTAINERISED MEDICAL UNIT

• TEC has supplied various medical facilities to
  the South African National Defence Force. Various
  modules were supplied making up complete
  self-contained hospital facilities. These
  facilities include
• Sterilization
• X-ray
• Surgical Theatre
• Pathological Laboratory
• Wards(with 4 beds)
• Orthopaedic Units
• Ablution Units
• Physiotherapy Units

• Dentistry Units
• Incubator Units
• Intensive Care Units
• 27 units were supplied to Bosnia
  
  comprising 2 full operating
  theatres.
• One fully fledged theatre was also supplied to
  India.

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ARMSCOR PRESENTATION

• THE END
• THANK YOU