South Africa’s Paramount Group eyeing 7 defence contracts in Mena in 2019
Exclusive: defence company may finalise talks this year on production facilities in the Gulf
South Africa’s defence manufacturer Paramount Group expects to sign up to seven agreements this year with governments in the Gulf, Middle East and North Africa spanning air, land and naval equipment sales.
Regional customers have expressed interest in armoured vehicles, ship-building and aircraft modular weapon systems with some contracts signed and additional agreements to be finalised by year end, Paramount Group chairman Ivor Ichikowitz, told The National on Monday on the sidelines of Idex.
“In the next 10 months we’re anticipating between five and seven major signings on contracts that have been under negotiations for some time and that covers all our activities in air, land and sea,” he said.
Paramount, Africa's largest privately owned defence company, which makes military vehicles, aircraft, ships, and weapons systems signed a contract with the UAE government as launch customer for its Mbombe 4 armoured vehicles that are expected to enter service over the next six months, he said during the five-day defence expo.
Mena countries are a big focus for the company and much of its product development is based on specifications from clients in the region.
“We’ve seen a lot of our growth coming from Mena,” he said. “A lot of our product is evolving based on current operational requirements from the region.”
The company is seeing a marginal uptick in defence spending from the region following a downturn in the industry over the last five years, with Gulf customers more focused on better deals for maintenance and repairs amid geopolitical tensions.
“The Mena region today and specifically the Gulf is starting to become very value for money-focused,” he said. “Life-cycle cost is become the most important discussion topic because as governments are finding that they’re using their equipment in active combat, they have to start worrying about what this equipment costs to maintain and service.”
The current geopolitical situation has enhanced the prospects for the South African company to compete, he said.
“It’s allowed companies like us to shine,” he said. “We’re finding we’re in a more level playing field.”
Paramount is seeing “good progress” in its negotiations with Gulf customers, including UAE and Saudi Arabia, regarding setting up production facilities in their countries and expects to finalize those talks in 2019.
“Absolutely it remains a big focus for us, it’s a niche we’re able to fill, and we will continue to pursue that to conclusion,” he said. “We are talking to governments about all our capabilities.”
The shape of these deals would mostly feature joint ventures with governments to for concessions to build domestic production capabilities, he said.
Paramount is keen on working with Gulf customers on cyber-security and AI products, he said. “We’ve had a busy start to the year,” Mr Ichikowitz said.
Updated: February 20, 2019 05:15 AM