European aircraft manufacturer Airbus has signed a memorandum of understanding with the two South African firms in what was hailed as a boost for the local aviation industry.
A day before the Africa Aerospace and Defence 2014 exhibition and show Denel Aerostructures and Aerosud signed a landmark collaborative agreement with Airbus that aims to strengthen the competitiveness of South Africa’s aerospace industry and allow it to bid for more work packages from global manufacturers.
Under the new relationship, the three companies will jointly develop industrial projects which will enable the South African companies to jointly bid for larger scale manufacturing work packages on Airbus commercial airliner programmes than they have been able to secure independently of each other.
“What we sign here is not a single order or a short term result, it is a roadmap to develop the industry over the next ten years. The agreement covers the joint bidding of contracts and the development of niche technology which should make South Africa a key destination not just for the aerospace industry but research and development as well,” said Simon Ward, Airbus Vice President International Cooperation.
“Since 2005 Airbus has committed R4 billion in work packages and research projects to South Africa,” continued Ward.
Most of Denel Aerostructures’ activities are directed towards A400M component production. The company recently received additional work packages to make ISO container locks and tailplane components for the A400M
Aerosud produces components for Airbus’ civil range, including the A320 and A350, as well as the military A400M while most of Denel Aerostructures’ activities are directed towards A400M component production. The company recently received additional work packages to make ISO container locks and tailplane components for the A400M as Airbus continues to expand its industrial footprint in the country.
The agreement will also see the three partners identify and develop research and development projects aimed at giving South Africa’s aerospace industry a unique and competitive advantage as part of its long-term development strategy. Airbus already has many research programmes in place with South African institutions like the CSIR and universities.
“This new approach is in line with the National Development Plan, and further supports Denel’s business strategy as it opens the door for us to participate on the world’s most modern and successful commercial airliners, while at the same time reducing our dependency on military programmes,” said Ismail Dockrat, CEO of Denel Aerostructures.
“Aerostructures wants to be Airbus’ supplier of choice for its aircraft like the A320, A330, A350 and A380,” said Dockrat.
Dockrat said the signing of the agreement marks a major step forward for the South African aerospace industry and is another vote of confidence as South Africa is broadly acknowledged as having one of a few aerospace industries outside Europe that can provide critical aircraft parts.
“The new work that may flow from this agreement will inevitably lead to the growth of the broader manufacturing sector and enable our two companies to bring in smaller companies into our supply chain. We are most certain this alliance will bring jobs, skills, growth and enterprise to South Africa.”
Denel is also ready to produce components for the future maritime surveillance and light transport aircraft that will be acquired for the South African Air Force (SAAF).
Although the agreement is with Airbus, Dockrat said that “Everybody in the industry recognises that the company has to compete as well as collaborate and that Airbus accepts we will do business with other companies.”
“By working together under this new alliance, Aerosud Aviation and Denel Aerostructures will be able to take on larger work packages that are mutually viable, economically sustainable and with lower risk. Until now our separate structures and economies of scale have never permitted this. We are highly complementary operations. There is very little competition between us. This meant that the two South African companies, one state owned and the other a private sector company are in a good position to form an alliance,” said Aerosud Holdings Chairman Dr Paul Potgieter.
Aerosud currently makes around 1.4 million aircraft parts a year with a turnover of $65 million but this is set to grow to $100 million in the next few years.
“Today Airbus forms a very large portion of our manufacturing portfolio,” he said, as Aerosud delivers 40 shipsets a month on all contracts and Airbus A400M work amounts to nearly 40% of its contracts.
Aerosud has been increasing both production capacity and offering new capabilities to meet demand and compete for new contracts. Part of the expansion process was to invest in a CFRTP press for making plastic parts. Future investment will be in digital manufacturing and additive layer manufacturing, expanding its manufacturing facility in Pretoria and adding new CNC equipment.
Aerosud is also involved in the first pilot laser additive manufacturing plant that uses titanium powder to produce parts, with the CSIR. It is envisaged that the pilot plant will start producing components in the near future.