Come mid-February, the chief executive’s office at the Denel campus in Irene, Centurion, will have a permanent occupant for the first time in over three years.
Tsepo Monaheng, currently chief executive of State-owned forestry company, SAFCOL, was selected as the most suitable candidate to head up the ailing defence and technology conglomerate. Minister Pravin Gordhan’s Public Enterprises Ministry said in December when naming Monaheng as Denel Group number one, the Denel chief executive search “attracted 67 responses”, with 14 meeting the necessary criteria. The last full-time Denel Group CEO was Danie du Toit, who resigned in August 2020 just short of two years in office. Subsequently, interim CEOs have included Talib Sadik, William Hlokoane and Michael Kgobe.
Monaheng is no stranger to defence technology, having previously been at the helm of Denel Dynamics, whose core business, as per the Denel Group website, includes tactical missiles, precision guided weapons, unmanned aerial vehicle systems and space solutions.
Of his appointment, Gordhan is reported as saying it “underscores our commitment as government to put Denel on a firm strategic path as we reposition the company to expand”.
Taking the “strategic path” concept further is Democratic Alliance (DA) shadow public enterprises minister Mimmy Gondwe. She has eight priorities which should all be given urgent and ongoing attention, starting with ensuring Denel annual and financial statements are brought up to date. “Denel has not submitted annual financial statements since the 2019/20 financial year,” she noted.
Gondwe elaborated on her priorities for the new man in charge to defenceWeb.
“Denel still has not stabilised financially despite being on the receiving end of a number of capital injections including the R3.4 billion allocation it recently received from National Treasury (NT) as well as the nearly R1 billion from the Denel Medical Benefit Trust (DMBT).”
Restructuring and re-positioning must be finalised and once implemented will see Denel move from six operating units to four, covering land, air, guided weapons and integrated systems.
Gondwe further wants the Denel turnaround plan implemented. “It is primarily aimed at securing the existing customer base but my concern is Denel requiring R2.2 billion to fully implement the plan.”
Identifying alternative and new revenue streams also has to be on Monaheng’s agenda. Here she sees local business as well as international export opportunities bolstering an order book that stood at R23.5 billion in 2016 and currently is “worth a mere R8.8 billion”.
Divesting itself of non-core assets “used by Rheinmetall Denel Munition (RDM) and Hensoldt” also has to happen as has re-establishing “a proper balance of skills in its staff complement”. This is important in view of “the large scale exodus of personnel” over a period of time. Denel, according to Gondwe, went from a personnel strength of 4 932 in 2016 to “just” 1 670 last year.
Her final priority for Monaheng will no doubt endear her to the powers that be at the SA Army.
Gondwe wants the new CEO to “restart Project Hoefyster [a replacement for the ageing Ratel infantry fighting vehicle] which has been on pause for the past five years”.