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R/€ = 16.62 Change: -0.01
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Denel announces last phase of offset programme for Malaysia

24th May 2019 BY: Rebecca Campbell
Creamer Media Senior Deputy Editor

South African’s State-owned defence industrial group Denel has announced that it has launched its tenth and last offset project for Malaysia, which is being provided in return for the South East Asian country’s order for armoured vehicle gun turrets and integrated weapons systems for armoured fighting vehicles (AFVs). The AV8 contract is the biggest export contract in Denel’s history and the group’s offset obligations total €342-million.

The South African turrets and weapons are being fitted to the Malaysian Army’s new 8 × 8 wheeled AV8 Gempita AFVs, which are based on the Turkish Pars AFV family. (‘Gempita’ means thunder.) The AFV will have about 12 variants and an initial 257 have been ordered, of which more than 118 have reportedly been delivered.

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Denel is providing 69 two-man LCT-30 turrets armed with its GI-30 30 mm cannon plus a 7.62 mm machine gun for the AFV30 variant, and 54 LCT-30 turrets armed with four of its Ingwe antitank missiles in addition to the 30 mm cannon for the antitank variant. It is also supplying 54 remotely controlled weapons stations. This comes to a total of 177 turrets and weapons stations, and the deal reportedly also includes 216 Ingwe missiles.

The latest and last of the offset programmes will see South Africa’s Council for Scientific and Industrial Research (CSIR) provide courses for personnel from the Malaysian armed forces and an internship for a senior researcher from the National Defence University of Malaysia (NDUM). The first of these courses has already been held, and was attended by 34 specialists from the Malaysian armed forces and academia. It was focused on radio frequency and microwave principles in electronic warfare.

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The CSIR will also act as a consultancy for the NDUM to help the latter set up an electronic defence centre of excellence. This programme, with the CSIR, is expected to be concluded during 2021, at which point Denel plans to have delivered 100% of its offset obligations.

“This serves as an example of what can be achieved with well-designed offset programmes,” affirmed Denel Group CE Danie du Toit. “The experience gained can contribute towards similar future projects to benefit the broader industry in South Africa and open doors for other defence and manufacturing companies to gain footholds in the Malaysian and regional markets.”

The turrets are assembled in Malaysia from components supplied from South Africa. The turrets were originally designed and developed for the Badger infantry fighting vehicle, which has been developed to re-equip the South African Army’s mechanised infantry units. (The Badger is itself derived from the Finnish Patria AMV AFV.)

Denel was originally awarded the contract in 2012. The deal also included a provision requiring Denel to transfer weapon systems integration technology to Malaysia.

“The collaboration will deepen the cooperation on technology and research between South Africa and Malaysia,” he highlighted. “The experience we gained on the AV8 offset programme will benefit Denel in future initiatives and can contribute to the promotion of the broader South African defence and manufacturing industries.” 

EDITED BY: Martin Zhuwakinyu Creamer Media Senior Deputy Editor
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