Reunert is a major JSE-listed electronics and electrical company, which besides its large distribution business (Panasonic, Nashua etc), it owns the very successful Circuit Breaker Industries and has a major interest in tele-communications through its control of fibre-optic and copper cable manufacturer ATC and its 40% share in Siemens Telecommunication.
Reunert is a major JSE-listed electronics and electrical company, which besides its large distribution business (Panasonic, Nashua etc), owns the very successful Circuit Breaker Industries and has a major interest in tele-communications through its control of fibre-optic and copper cable manufacturer ATC and its 40% share in Siemens Telecommunication.
With a staff complement of more than 4000 people and a turnover of more than R5 billion in 2002 it is a major player in the local electronics industry. In addition to the previously-mentioned interests, Reunert takes special pride from its involvement in its defence electronics business and this will be the focus of this particular review. In the last few years, Reunert has dramatically refocused its core business, withdrawing from the manufacture of armoured vehicles and selling off its stake in telephone manufacturer TEMSA. This refocus has proved very successful and the company again is on the acquisition trail. In 2002, Reunert, for the fifth consecutive year, recorded headline earnings per share growth in excess of 25%.
The four major companies that operate in the defence sector are Fuchs Electronics, Reutech Radar Systems, Reutech Defence Industries and Reutech Defence Logistics.
Fuchs
Fuchs Electronics (a name that has been around for many years) is a world leader in modern electronic fusing for all types of munitions and on average more than 90% of its revenue is generated from export sales to Europe, the Middle East, the Far East and South America. The company was established in the early 1960s and today is manufacturing its sixth generation of electronic time and proximity fuses with an extensive array of products that match virtually any ordnance system including smooth bore mortars, artillery, naval and rocket systems.
The company's premises is located in Alberton where some 300 people are employed. Using well-proven standard building blocks in terms of electronics allows the company to provide a rapid turnaround time in the design of fuses for new ammunition types and gun systems. All fuses are manufactured and qualified to a range of military and ISO standards. Besides its development focus on state-of-the-art products, value engineering allows use of commercially available components and off-the-shelf electronic devices that provide Fuchs with a competitive advantage. The calibres catered for range from the 76 mm standard naval weapon up to 220 mm rocket fuses and in this range is included the special fuses for 155 mm artillery weapons.
In addition to in-house manufacturing and direct sales, Fuchs has transferred its technology to selected customers, this including the installation and commissioning of the entire production line where required, or the capability for a specific fuse can be incorporated into an existing production facility.
Reutech Radar Systems
Reutech Radar Systems (RRS), located in Stellenbosch, is 55% owned by Reunert and 33% by the European Defence and Space Company, EADS (the latter buying into the local company as it had no tracking radar capability of its own). The Black Empowerment Company Kgorong Investment Holdings, holds the remaining 12%. RRS, which has a staff of some 100 people, specialises in ground-based and ship-borne radar systems.
A major recent success was the award to RRS of the contract to develop and manufacture the radar tracking systems for South Africa's new corvettes. Eight RTS 6400 optronics radar-tracking systems will eventually be delivered to the SA Navy and through EADS there will be good opportunities for export. The RTS 6400 was an entirely local development and incorporated on the X-Band radar pedestal are normal wide and narrow TV cameras as well as two dual field-of-view infrared cameras operating in the 3 to 5 and 8 to 12 micron spectral bands. The former camera was specially developed by Kentron for this specific application. A high repetition rate laser rangefinder is also part of the optronic system. The RTS 6400 is capable of detecting and tracking a fighter aircraft at a range in excess of 38 km while a missile will be detected at more than 21 km.
The history of RRS goes back to the 1980s and the company's experience in radar originates from its local manufacture under licence of the Alenia ATCR33 radar system for the SAAF. From this small beginning RRS has developed and manufactured a broad range of search and tracking radars to meet the needs of the SANDF.
Other systems in current production include the ESR220 2-D surveillance radar designed to provide early warning for mechanised troops. A number of these systems have already been delivered to the SANDF. The ESR220 is totally autonomous, being fitted to an 8 x 8 transporter, with the capability of being fully operational 10 minutes after arrival at the deployment site. 3D surveillance radar systems developed by RRS include the 150 km ESR360VX and the 200 km ESR360L. The technology incorporated in the latter has also been applied to a newer development, the 400 km extended range ESR380 air surveillance radar.
Although mainly involved in the defence sector the tracker used by the SALT telescope was also developed by RRS, and they were involved in the design, production and commissioning of the dome and structure drive and control systems.
Reutech Defence Industries
Reutech Defence Industries (RDI) is located in New Germany, KZN, and specialises in the development and manufacture of tactical airborne and ground-based communication systems as well as airborne weapon systems, a speciality being fusing. The company employs some 150 people and has been involved in the manufacture of tactical communications systems since 1968, becoming a key supplier to the SANDF. The diversification into air weapon systems came in 1972 as part of the government's import replacement programme at that time.
One of the company's latest products is the ACR500 multimode, multiband, digital U/VHF transceiver. This system makes use of high level tactical encryption technology together with frequency hopping to provide secure communications in hostile environments. The system will be used to equip the Hawk, Gripen and Augusta helicopters currently on order for the SAAF. The airborne system is complemented by the GBR500 U/VHF ground-based receiver intended for use in critical ground to air applications such as ATC.
Reutech Defence Logistics
The last company in Reunert's defence portfolio is Reutech Defence Logistics (RDL) which is located in Midrand and employs some 200 people. BEE partner Kgorong has a 30% equity stake. RDL is involved in weapon systems, radar and control and defence telecommunications. In terms of weapon systems RDL has been responsible for the development and manufacture of electric and fire control systems for naval weapons and armoured fighting vehicles, including the many upgrades to SA's main battle tanks for the last 25 years.
On the logistical support side this activity was established in 1988 with the specific objective of being able to satisfy the requirements of the SANDF and specifically to support the products manufactured within the Reunert group. Support is provided in such areas as telecoms, avionics, gun and fire control as well as total logistics management.
This series looks at some of the leading companies in the electronics industry in South Africa today. To simplify presentation and avoid perceptions that they are being 'rated' in any way, this coverage is being presented in alphabetical order. Do not miss the next issue of Dataweek where we look at the only commercial semiconductor manufacturing industry in Africa - no prizes for guessing - SAMES.
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