Denel Presentation to NCOP

Agenda

S A Defence Industry Denel Profile Divisions & Products Challenges/ResponsesGender Equity Racial Inequalities Employment & Skills Development

Question and Answer

MINISTER OFDEFENCE

ARMSCOR

•PROCUREMENT•MARKETING SUPPORT

SECRETARY OF DEFENCE

•POLICY•BUDGETS•CONTROL

NATIONAL DEFENCE FORCE

•ARMY•NAVY•AIR FORCE•MEDICAL

PRIVATE INDUSTRY

•AEROSUD •AFRICAN DEFENCE SYSTEMS (ADS)•ALTECH•AMS•ATE•ALVIS OMC•GRINTEK•IST•M-TEK•LOG-TEK•PLESSEY•REUNERT

•Others

MINISTER OFPUBLIC

ENTERPRISES

•DESIGN•DEVELOP•MANUFACTURE•SUPPORT•MARKETING

SA Defence Industry

Denel Profile (1)

Support Functions: Chief of Staff

Aerospace Systems

Engineering

Denel Optronics

Aircraft Logistics

M anufacturing

OTB: Test Range

DENEL AEROSPACE

Systems

Am m o: Sm all / M ed

Am m o: Large

Pyrotec / Expl.

M ine Action

DENEL LAND SYSTEMS

Properties

SPP: Soybean Pr

Irenco: E lectr / P las

Dendustri

IT Interest

COM M ERCIAL & IT

CEO

Denel Profile (2)

•Eleven military type factories –Aerospace –Land Systems

•Non-military fields –IT, Property–Food, –Electronics and Plastics

•Original Equipment Manufacturer•Staffing: 10 400 employees

Denel Manufacturing Plants

Aerospace Division

Missiles & guided weapons

OTB multi-purpose test range

Aircraft parts manufacture / maintenance / refurbishment

Helmet sighting systems

UAVs / observation systems

Target drones

Rooivalk attack helicopter

Land Systems Division

Aerospace

Artillery systems: 155mm & 105mm long range

Artillery propellant charges & projectiles

Infantry weapons

Small / medium calibre ammunition

Plant manufacture

Commercial and IT Division

•Denel Properties (Pty) Limited•Dendustri – Aluminium Components• Irenco – Electronic & Plastic injection •SPP – Soya-based Protein-rich foodstuffs• IT Interests – Cosource, Arrivia.kom, Sybase •Densecure – In-house Insurance company

Denel Challenges & Responses

Human Resources Challenges andDenel Responses

• Gender Equity• Racial Equality

• Skills Development• Unemployment

7995

2751

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

5500

6000

6500

7000

7500

8000

MALE FEMALE

(74,4%)

(25,6%)

Gender

Gender Equity

Level 2002/2003 2003/2004

Exco 2/11 18 % 2/10 20 %

GM’s Corporate 0/0 0 % 2/17 12 %

GM’s Divisions 2/9 11 % 2/7 28 %

Division Management 7/83 8 % 19/108 17 %

Gender EquityDenel Responses

• The company is targeting women in all recruitment processes

• Bursary recruitment process also targets female students• Currently women make up 25,6 % of our employees• Still very few women pursue technical careers

996

2341

764

1310

934

14557

4199

0

400

800

1200

1600

2000

2400

2800

3200

3600

4000

4400

WHITE MALE WHITEFEMALE

AFRICANMALE

AFRICANFEMALE

COL MALE COL FEMALE ASIAN MALE ASIANFEMALE

(39,1%)

(9,3%)

(21,8%)

(7,1%)

(12,2%)

(1,3%) (0,5%)

(8,7%)

Race

Racial Equality

Level 2002/2003 2003/2004

Exco 4/11 36 % 6/10 60 %

GM’s Corporate 4/17 24 % 7/17 41 %

GM’s Divisions 4/9 44 % 5/7 71 %

Division Management 27/83 33 % 47/108 43 %

Racial EqualityDenel Responses

Full compliance with Employment Equity Act

EE forums active - unions & management

Recruitment processes are biased towards HDI’s in technical positions, eg. Engineers and technicians

Skills

1 4.5 5.6 0.8

13.2

49.7

18

7.2

Senior Management Management Engineers Scientists

Technicians Artisans Support Services Operational Support

49,7%

18%

7,2% 1% 4,5% 5,6%0,8%

13,2%

Denel Youth FoundationTraining Programme (DYFTP)

Bridging programme (Grade 12) to improve: Maths Science English Language literacy

600 students have been trained

– many graduated with degrees – a large number have been placed within Denel

DYFTP currently has 450 learners, 35% are female

GET SET Programme

Prepares secondary school girls to embark on:(based in Tembisa) Science Engineering Technology based careers 140 grade 10 – 12 girls (Saturday classes & experience at Denel)

Programme to be expanded10 learners from rural areas in each province will receive support in:

Maths English Science Life Skills

Outreach Programmes

Sediba Teacher Development Project– Grade 12 Maths and Science teacher and learner skills in Potchefstroom– Programme to be extended nationally – new CSI focus

Bursaries– Long-term requirements of Denel– Core business areas in engineering, technology and scientific fields– Bursaries worth R7,8 million were awarded last year

This year, Denel employed 73 bursary students

Skills Development

Denel Centre for Learning and Development: The School of Business LeadershipThe School of Aerospace The School of Land Systems

Skills Development Projects • Through eight sector education and training authorities• Focus on Engineers, Scientists and Technicians• External training within South Africa• External training in Nepad countries

Management Training

• Management Development for Aerospace Group –STTP Saab-Gripen Programme

• Corporate Finance Course for Senior Managers • Strategic Marketing Course • TOPP – Chartered Accountant Training –1 White Female, 1 Coloured Male, 2 African Males

Operational Training

• Project Management - Wits Aeronautical and Engineering School

• Graduate Diploma in Engineering (GDE) - Wits Engineering School – Denel artisans with experience but without tertiary qualifications

• Project Management - Institute for Aeronautics and Space (IAS) – Denel employees trained in Toulouse, France

Skills Transfer Programme

SAAB Aerospace in Sweden and Denel Aviation

Historically-disadvantaged employees trained in world-class technology.

Consists of a comprehensive design and development centre Skilled personnel trained in further international aerospace work Supports further development of the Gripen Fighter Aircraft Transfer of skills in a vast number of engineering, manufacturing, flight

testing and management processes employed by SAAB.

In the past 3 years, 23 engineers have been trained, 11 are black.

Skills Training in SA

Advanced Aircraft and Type training (1 260 employees from 52 companies): Aircraft engine courses Airframe courses Maintenance courses

Denel Apprentice School (180 students from private companies- AMOSA) 43 previously disadvantaged individuals 7 women 96 sponsored by Denel – 67 blacks and 4 women.

Apprentices are trained for 4 years, including on-the-job-training

Skills Training in NEPAD countries

Country Number Trained Aspect of training

Kenya 20 King Air aircraft – engine, airframe, maintenance

Uganda 6 Engine airframe and avionics

Botswana 20 Engine and airframe

Zambia 8 Civil aircraft regulations

Gas turbines, airframes

Namibia 5 CAR, jet engines, airframes

Angola 4 General

Zimbabwe 10 Generic courses

Swaziland 9 Advanced training, aircraft maintenance

UnemploymentDenel Response

Youth Development Programme• DOD students• Auditor General• Denel

Social Plan• Training for retrenched employees• SMME support programmes

Outreach Programmes• Communities trained to create own employment• Needlework project in Swartklip

Conclusion

Competitiveness of SA Defence Industry Denel is a strategic state asset – SANDF competitiveness Strong and competitive global markets Innovation

Human capital provisioning strategy (Critical skills):

Attract Develop Retain

Question and Answer