SOUTH AFRICA'S DEFENCE

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Denel

Global Supplier of World-Class Defence Products and Solutions

Why it worked

The video effectively uses historical context and statistics to illustrate a significant economic shift, making the topic of revitalizing South Africa's defense industry relevant and engaging for a business-minded audience.

Summary

The video discusses the decline of South Africa's defense industry from its peak in 1990, with a significant drop in companies and employment. It highlights that the government is now seeking private partners and investors, specifically mentioning Denel, to help revitalize the industry.

Structure

1Introduction to the decline of South Africa's defense industry
2Statistics on the shrinking industry and employment
3Government's shift towards seeking private partnerships
4Denel's search for investors and modernization efforts
5

Original caption

Rebuilding SA’s Defence Industry 🇿🇦 South Africa’s defence industry has shrunk dramatically from its 1990 peak, but government now appears to be opening the door to private partners and investors. With Denel looking for support and ministers calling for closer collaboration, the move reflects a broader shift - using private-sector muscle to help rebuild strategic industries that have fallen into decline. #businessbagel #SouthAfrica #business #military #pretoria

More from @businessbagel

Product placement

Denel: South Africa's state-owned defence company. It is looking for private partners and investors to help modernise part of its Pretoria Metal Pressings business. Its presence is visual (logo on building, missiles, aircraft) and spoken. Removing it would change what happens in the video as it is the central subject of the latter half of the video. Eskom: A state-owned company. It merely appears as a visual example of a state-owned company undergoing private sector participation. Removing it would not change what happens in the video. Transnet: A state-owned company. It merely appears as a visual example of a state-owned company undergoing private sector participation. Removing it would not change what happens in the video.

Call to action

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On-screen text

SOUTH AFRICA'S DEFENCE INDUSTRY WAS ONCE ONE OF THE COUNTRY'S BIGGEST INDUSTRIAL SUCCESS STORIES. I MEAN IN 1990, AFRICA. WHILE THE DEFENCE BUDGET HAD BEEN R26.2-BILLION IN 1989/90, IT HAD FALLEN TO R850-MILLION BY 2018; DEFENCE RESEARCH AND DEVELOPMENT SPENDING HAD FALLEN FROM R6.1-BILLION TO R500- MILLION OVER THE SAME PERIOD (THESE FIGURES WERE IN CONSTANT TERMS). THE SADI HAD CONTRACTED FROM ABOUT 3 000 COMPANIES, EMPLOYING 130 000 PEOPLE, TO TODAY'S 600-ODD, EMPLOYING SOME 13 000 PEOPLE. AROUND 3,000 COMPANIES AND EMPLOYED ROUGHLY 130,000 PEOPLE. TODAY, THAT HAS REPORTEDLY SHRUNK TO AROUND 600 COMPANIES AND 13,000 JOBS AS GOVERNMENT STEADILY REDUCED LOCAL DEFENCE SPENDING AND RESEARCH FUNDING, LEAVING MANY OF THESE COMPANIES TO RELY ON EXPORTS TO SURVIVE. NOW, GOVERNMENT APPEARS TO BE CHANGING COURSE. SO DENEL, WHICH IS SOUTH AFRICA'S STATE OWNED DEFENCE COMPANY, IS LOOKING FOR PRIVATE PARTNERS AND INVESTORS TO HELP MODERNISE PART OF ITS PRETORA METAL PRESSINGS BUSINESS. WHILE TRADE MINISTER PARKS TAU GREATHER COLLABORATION BETWEEN GOVERNMENTS AND PRIVATE COMPANIES TO HELP REBUILD THE DEFENCE INDUSTRY. IN OTHER WORDS, AFTER TRIPPING OVER ITS OWN FEET FOR YEARS, OPENING THE DOOR FOR PRIVATE COMPANIES AND INVESTORS TO HELP BRING ONE OF SOUTH STRATEGIC INDUSTRIES BACK TO LIFE. NOW, SOME OF YOU WOULD ON THIS BROADER SHIFT. WE'VE ALREADY SEEN GREATER PRIVATE SECTOR PARTICIPATION AT STATE OWNED COMPANIES LIKE ESKOM AND TRANSNET. THE DEFENCE INDUSTRY COULD BE NEXT. IT SUGGESTS THAT INCREASINGLY SEES PRIVATE BUSINESSES NOT AS AN ALTERNATIVE TO THE STATE, BUT AS AN ESSENTIAL PARTNER FOR REBUILDING INDUSTRIES THAT HAVE FALLEN INTO DECLINE. FOR MORE SOUTH AFRICAN NEWS, SUBSCRIBE.

Transcript

South Africa's defence industry was once one of the country's biggest industrial success stories. I mean in 1990, Africa. While the defence budget had been R26.2-billion in 1989/90, it had fallen to R850-million by 2018; defence research and development spending had fallen from R6.1-billion to R500-million over the same period (these figures were in constant terms). The SADI had contracted from about 3 000 companies, employing 130 000 people, to today's 600-odd, employing some 13 000 people. Around 3,000 companies and employed roughly 130,000 people. Today, that has reportedly shrunk to around 600 companies and 13,000 jobs as government steadily reduced local defence spending and research funding, leaving many of these companies to rely on exports to survive. Now, government appears to be changing course. So Denel, which is South Africa's state owned defence company, is looking for private partners and investors to help modernise part of its Pretoria Metal Pressings business. While Trade Minister Parks Tau called for greater collaboration between governments and private companies to help rebuild the defence industry. In other words, after tripping over its own feet for years, opening the door for private companies and investors to help bring one of South strategic industries back to life. Now, some of you would on this broader shift. We've already seen greater private sector participation at state owned companies like Eskom and Transnet. The defence industry could be next. It suggests that increasingly sees private businesses not as an alternative to the state, but as an essential partner for rebuilding industries that have fallen into decline. For more South African news, subscribe.