Carl Zeiss Optronics buys Denel division

By Leon Engelbrecht, ITWeb senior writer

Johannesburg, 15 Mar 2007

Carl Zeiss Optronics, of Germany, is taking control of Denel Optronics, part of the ailing state arms company.

Carl Zeiss is taking a 70% holding in the business, with Denel retaining the other 30%. The companies are to recapitalise the entity, to be known as Carl Zeiss Optronics, to the value of R60 million, with the Germans putting up 70% of the money and Denel 30%.

The outlays will focus on new product development, new production facilities, dedicated international marketing campaigns and the establishment of international service centres, IT systems and project management tools.

Carl Zeiss has been involved in Denel Optronics for close to a decade, assisting the company in assembling periscopes for the SA Navy's three Type 209 submarines, as well as similar periscopes for the Greek and South Korean navies, as part of government's controversial multibillion-rand Strategic Defence Package.

Denel Optronics, previously known as Eloptro, did well under apartheid when it was the SA military's provider and maintainer of night vision equipment and gun sights. The end of the Cold War and the arrival of non-racial democracy in SA saw it fall on hard times.

The revitalised entity will be led by Kobus Viljoen, a South African who has been a senior member of the Carl Zeiss Optronics international sales team for some years, responsible until recently for Africa and South America. Viljoen will be supported by a "senior management team" deployed from Germany.

Tech, skills transfer

The business will compete internationally for the design, manufacturing and support of optical and opto-electronic systems, mainly in the civil security and defence fields, Denel Group CEO Shaun Liebenberg and Carl Zeiss CE Armin Breinig said at a signing ceremony in Centurion yesterday.

The company's current offerings include stabilised television turrets that can be fitted to helicopters and aircraft, and allows traffic and law enforcement authorities to follow vehicles or watch suspicious activities from afar.

"Besides employees from its German plants on long-term contracts to SA, Carl Zeiss Optronics will also provide specialists on shorter term secondments to assist in technology and skills transfers to the new company," said a media release. Carl Zeiss has also promised to "invest significantly in skills upgrades across the workforce in SA".

Based on these investments, the turnaround plan for the South African optronics unit foresees a significant rise in turnover within three years, in order to sustain highly skilled jobs and the company's technological capabilities.

Public enterprises minister Alec Erwin says SA has made a clear choice in favour of the retention, consolidation and long-term future of its defence and aerospace industries. "The task now is to build on our existing assets and skills in creating a viable international industry participant capable of sustaining long-term involvement in the civil security and defence optronics sectors.

"As the recipient of significant investment by South African taxpayers over several decades, and as the custodian of many of the country's high-technologies and skills, Denel is at the core of our effort to grow the contribution of hi-tech industries to our economy and to meeting SA's development goals," Erwin adds.