Denel, the State-owned defence and technology conglomerate now a Defence and Military Veterans Ministry responsibility, is “quite confident” of recovery as it exits what a statement has as “a challenging period in its history”.
Centurion headquartered Denel issued a statement on Thursday 27 November noting, among others, it is currently busy with “a critical turnaround to optimise operations, bolster delivery capacity and rebuild trust among industry partners, employees, organised labour, suppliers and end-users within the defence sector”.
Restructuring of Denel and finalisation of its move to Minister Angie Motshekga’s sphere of responsibility in April shows “encouraging results” according to the statement.
The statement follows an October Denel presentation to Parliament’s Portfolio Committee on Defence and Military Veterans (PCDMV) where its corporate plan was explained as going to improve operational efficiency, restore lost capabilities and secure new revenue sources through technology partnerships and export growth. The plan projected revenue growth to nearly R3 billion by 2028 from R1.3 billion in the 2023/24 financial year.
The now completed move to Motshekga’s ministry started when SOEs (State-owned Enterprises) resorting in the then Department of Public Enterprises (DPE) were moved – by proclamation – in August 2024 as an interim until they could be accommodated in suitable line management departments to Minister in The Presidency Khumbudzo Ntshavheni. The transfer to the Department of Defence and Military Veterans (DoDMV) became effective on 31 March this year.
This week’s Denel statement points to “significant support” from the “new shareholder” enabling it to “integrate more fully into the broader defence community and benefit from stronger backing to capture a growing share of the international defence market and grow our [Denel’s] footprint”.
It also refers to the 2025 annual report – at the time of publication not available on the Denel website, where the “newest” one is for 2020 – which “reflects the progress we are making on our journey of transformation”. Going further it appears the report contains information on how Denel is “stabilising our core business strengths and repositioning Denel as a trusted provider of vital defence capabilities.”
The statement lists six “strategic success factors” vital to securing Denel. They are a healthy order book; prioritising programme delivery; ensuring availability of adequate working capital; strengthening ethical leadership and “a robust governance culture”; upgrading infrastructure and strengthening controls to deliver accurate and credible financial data; as well as addressing internal control deficiencies to regain stakeholder confidence and support.
All senior Denel management positions are, the statement has it, filled with “top minds in specialised fields such as engineering, financial management and auditing, strategic management and business development”.
Denel’s poor record with the Auditor General will be past tense as it is working with Tsakani Maluleke and her personnel on “comprehensive remedial actions” including re-establishing a strong internal audit capability. A wide-ranging fraud and corruption prevention strategy which meets international standards, including lifestyle audits for senior management and executives, is in place as another control as is “embedding a new culture that will enable us to fully address our audit outcomes”.
The initiatives, the Denel statement maintains, fortify the conglomerate’s position, ensuring relevance and sustainability in “a rapidly changing global defence and technology environment”.
“Denel’s vital role in the safeguarding of South Africa’s sovereign defence capabilities cannot be overstated. It remains a cornerstone of national security, providing the country with control over advanced technologies, systems and platforms necessary for operational readiness and strategic independence,” the company said.
