Reports say Johannesburg-based Paramount Group, Africa's largest privately held defence and aerospace company and one of the top defence manufacturers in South Africa, is predicting strong sales growth following the launch of its revolutionary armoured vehicle which is taking the defence market by storm.

The prediction comes as the company concludes a number of recent contracts to sell mine protected vehicles to prominent African states – and puts Asia, Eastern Europe and South America firmly in its sights for growth. Paramount Group already works with 22 defence forces around the world.

A statement to AfricaNews said the company has seen 20% sales growth year on year over the last five years and doubling of its workforce in the last 12 months to respond to new orders for its mine resistant vehicles for peacekeeping and internal security operations.

As part of its expansion plans Paramount Group recently bought a 30% stake in top South African communications company, Emcom Wireless Ltd, which provides mission critical communications equipment. This investment will allow Paramount Group to adapt to the growing African market for UN peacekeeping vehicles which require high tech communications in order to operate effectively with multi-national forces.

Last year, the company also bought a 19% stake in Aerosud, South Africa’s largest independent aerospace company, which manufactures parts for Airbus and Boeing including fuel supply systems and wing and fuselage components.

Strong demand

Ivor Ichikowitz, Executive Chairman of the Paramount Group, said: “We are predicting this growth on the back of very strong demand from African countries and existing demand from current clients across the world. We recently launched a revolutionary new armoured fighting vehicle called Mbombe and we expect foreign sales to increase dramatically.”

The growth of Paramount Group comes as African and global military spending continues to rise, despite the global economic downturn. African defence spending – dominated by Nigeria, South Africa, Angola, Algeria and Morocco – has increased by $4.1 billion since 2007 to £27.7 billion in 2009.i Defence spending outside of Africa has risen even more sharply – especially in key markets such as South Asia which saw a 10.9% budget increase in 2009.

Ivor Ichikowitz went on to say: “The reason Paramount Group is benefiting from this growth – unlike some of our other continental competitors – is because we have the technical understanding to produce world class vehicles and are willing to share that knowledge. We also offer a range of flexible financing packages, focused turnkey solutions and ongoing technical support to our clients, all of which are specifically tailored to less developed nations.

“Last month we launched a six wheeled infantry fighting vehicle called Mbombe. We have already experienced a strong level of interest from various governments because it is a world class product that incorporates highly advanced features that outflank the big Western manufacturers, but at a price more suited to developing nations.

Ivor Ichikowitz argues that this growth in demand is good for South Africa: “The reality is that a strong domestic defence industry stimulates innovation, provides employment in highly paid jobs and contributes significantly to government tax receipts. This is why I view Paramount Group as an African asset, because it invests in its people and African technology – and more importantly – is keen to share this knowledge with other African countries.

“Ultimately, the growing defence market has helped African defence companies expand, manufacture more technologically sophisticated products and challenge the dominant global manufacturers for international contracts. For example, we are now being invited into tender competitions in the West, Asia and Middle East that we would never have been allowed to bid for in the past.

“These changes are positive for Paramount Group and Africa. Traditionally Africa has been stuck on the sidelines of the global defence market, but innovations such as Mbombe are allowing South Africa to compete for contracts that we’re traditionally ‘off limits’ to all but the big Western companies.

Source: Africanews