Denel Dynamics and ITEAC Group, a Saudi company, recently signed a memorandum of understanding (MoU) to jointly market Denel’s Ingwe anti-tank missile to the Saudi armed forces.
According to defenceWeb, the MoU was signed on 16 September at the Africa Aerospace and Defence (AAD) air show and exhibition.
By partnering with ITEAC Group, Denel Dynamics is hoping to demonstrate its enthusiasm towards Saudi Arabia’s Vision 2030 objective of sourcing over 50% of defence acquisitions domestically. Should a sale come to fruition, ITEAC Group will manufacture (at least partly) the Ingwe missiles in Saudi Arabia.
Notes, Comments & Analysis:
The ZT3 Ingwe was developed in the 1980s and brought into South African military service in 1987. It is a laser-guided anti-tank missile (ATGM) capable of being deployed by infantry and usable from helicopters and armoured vehicles. The Ingwe ATGM has a range of 250 metres to 5,000 metres.
If successful, an Ingwe sale would be Denel Group’s first major sale to Saudi Arabia. Like its current deals with the United Arab Emirates, an Ingwe sale would function through a commercial offset and technology transfer agreement.
This would also be the South African defence industry’s second major sale to Saudi Arabia; in April 2016, a local munitions production site at al-Kharj built with the support of Rheinmetall Denel Munition (RDM) (which is 49% owned by Denel Group) under a $240 million U.S. sale.
Generous commercial offset clauses and flexible transfer-of-technology terms are a critical component of the South African defence industry’s drive to access lucrative overseas markets. Besides Denel Group and RDM, Paramount Group – South Africa’s largest private sector defence vendor – is also entering into very similar sorts of agreements in the Middle East and Central Asia.