SA has strong base for aerospace technology

It is a foundation government is eager to build on.

At the core of government's efforts to promote the aerospace industry is the aerospace industry support initiative (AISI) launched by the department of trade & industry (DTI) in 2005. Fully funded by government, AISI is managed by the Council for Scientific & Industrial Research (CSIR).

The initiative's overall objective is to integrate SA's aerospace industry with global markets, says AISI programme manager Marié Botha. "To its advantage SA's aerospace industry already has a strong engineering and technology base," she adds.

"SA has world-class aerospace technology and research facilities," says Desmond Barker, competency area manager, aeronautics at the CSIR. Facilities include the largest wind tunnels in the southern hemisphere.

Much of SA's aerospace strengths lie in state-owned Denel. "Denel Aerostructures is well established and remains at the forefront of aerospace technology," says Denel group CEO Riaz Saloojee. He points to the division's close involvement with Airbus's A400 military transport aircraft for which it designed and is building complex components.

"Airbus and Boeing are also looking at placing more work with us in the civil aircraft segment." Denel Aerostructures, Saloojee says, recently reached an agreement with Italian aircraft manufacturer Alenia Aermacchi that will enable Denel to manufacture and assemble some parts.

In the aircraft maintenance sector Saloojee says Denel Aviation has become the preferred service provider in Africa for aircraft manufactured by Russian firms Irkut and Russian Helicopters, as well as Ukrainian firm Antonov These developments are all part of Denel's strategy to grow export revenues. "Things are just starting to happen for us."

To build on the industry's strengths, Botha says AISI has two key areas of involvement which together absorb 60%-70% of the initiative's annual investment spend. "The first is industrialisation of research and development that has produced viable concepts," she says. "One key focus area is composite aircraft components where we are trying to become a big player. The other main objective is to assist the industry get processes and procedures up to world standards."

Ensuring that world standards are met involves obtaining the international AS9100 and ISO9001 certifications specifically designed to cover aerospace companies. "You can't do business with international aerospace companies without certification," Botha says.

AISI is also striving to provide small and medium-sized companies in the aerospace industry with greater exposure to the global market. A recent success, says Botha, was the Africa Aerospace & Defence Exhibition held in September at the Waterkloof Air Force Base at which 35 firms received support to exhibit.

Providing an additional boost to the aerospace industry, the programme contributed to the establishment of the Centurion Aerospace Village, a manufacturing cluster with direct access to the Waterkloof airbase, says Botha. The project team is also working closely with the National Aerospace Centre (NAC) hosted by the University of the Witwatersrand, she adds. The NAC co-ordinates efforts of five universities to promote human capital development and support a bursary programme and training initiatives.

What the industry has lacked is coordination, says Barker. This problem, it is hoped, will come to an end with the DTI's announcement in September of the formation of the Joint Aerospace Steering Committee.

Barker says the committee will be made up of representatives from treasury, the DTI, the department of science & technology and the defence department. There are also two representatives from the industry and one each from the CSIR and universities.

One of the steering committee's tasks will be to review the industry's performance annually. "Until now everyone has been doing their own thing," says Barker. "The committee will ensure all industry R&D efforts are aligned and that there is no costly overlap."

Another task of the committee will be to identify and establish two flagship projects for the industry annually. A possible flagship project, says Barker, could be to build an aircraft specifically for African conditions.

SA, he says, is also making solid progress in the design and manufacture of unmanned aerial vehicles (UAVs). "Unmanned is the way the world is going," he says.

Saloojee agrees. "Denel has had UAV products flying for over 15 years. Not many countries have the UAV capability we have."

Defence analyst Helmoed Heitman is thinking even bigger. He believes SA's main flagship product should be the Rooivalk helicopter developed and manufactured by Denel. The Rooivalk, says Heitman, is better than the US's legendary Apache attack helicopter but has failed to secure foreign orders because too few are in service with the SA Air Force (SAAF).

"The SAAF has 11 in service and one which is unserviceable at present due to damage," says Heitman. SA would have to spend about R5bn to get 24 into service, a number that would make the Rooivalk a real contender in the global arms market.

Heitman is not alone in thinking big. In the department of defence's draft consultative defence review published in April this year it is suggested that a local manufacturing capability could be developed to meet the SAAF's medium- to long-term requirements for combat support and medium transport helicopters.

Rowland Chute, chairman of Daliff Precision Engineering, has a word of advice for would-be aerospace entrepreneurs. "Entry into the aerospace industry is not simple," says Chute. "Entry costs are extremely high and time-consuming. It took us seven years to achieve certification." Daliff Precision Engineering produces aluminium and titanium components for the industry.

Chute says participating in the industry also demands having the most advanced machinery and software and complying with "incredible security". For example, he says all metal used to produce components is tracked from the time it leaves the foundry all the way through the production process. "If a component fails even 30 years down the line, it must be traceable," he says.

Nor is aerospace a quick route to big profits. "It's a tough industry," says Paul Potgieter, CEO of Aerosud, which manufactures 1m components annually for companies such as Airbus and Boeing. "Margins are thin and the industry is starting to feel the global economic pinch."

Potgieter says there is another factor to consider: a volatile currency. "In our experience it is the toughest challenge we face. It makes business planning difficult."

The SA industry is also facing increasing pressure to remain competitive, says Chute. "Just four years ago we were more cost-competitive than our counterparts in the UK and the US," he says. "But far higher wage increases and inflation in SA have eroded that advantage."

Another problem faced by the industry is that foreign aircraft manufacturers demand a fixed price for five years, says Chute. "Component manufacturers in the US and Europe are prepared to do this because they are operating in a low wage, low-inflation environment," he says. "But for the SA industry, it has made it difficult to stay competitive."

Perhaps the rand's recent weakness, if sustained, will provide the industry with a competitive boost. But does SA's aerospace industry have a bright long term future? "It depends heavily on the political will to drive the initiatives now in place," says Barker.

Source: Financial Mail