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An update on the state of the electronics industry in South Africa - Part I
28 January 2004, News

It is now some years since Dataweek first published a comprehensive review of the electronics industry in South Africa, and in that time much has obviously changed. This current review, which we are publishing over several issues of Dataweek, looks at a number of the leading players (large, medium and small) in the industry and is based on press reports, annual company reports where available and information available on the relevant websites. Obviously, only a limited number of companies can be covered but we believe that the major sectors of the local industry, including commercial, defence, security and automotive electronics, together with telecommunications, have been addressed.

To simplify presentation and avoid any perception that the companies have been 'rated' in any way, their coverage will be presented in alphabetical order.

AMS

In Part I we look at a company that today is known as Aerospace Monitoring and Systems (AMS). It was founded in 1984 under the name Analysis Management and Systems by a group of defence industry engineers. After a brief sojourn with Spescom as an equity partner (1998 to 2000) the company is again management-owned with a staff complement of some 80 people, of which more than 50% have technical qualifications.

AMS is a focused defence industry electronics company and at an early stage of its development it got involved in health and usage monitoring systems (HUMS) for all types of military aircraft, getting its first big opportunity with the development, manufacture and support of a comprehensive HUMS system for Denel Aviation's Rooivalk helicopter in a programme that ran from 1987.

While civilian aircraft operate regular steady-state flight conditions and critical parts are replaced after a defined number of flying hours, military aircraft performing even just training manoeuvres are much more highly stressed and need realtime information on the status of critical flight systems which is what HUMS provides. A HUMS system includes data acquisition units, cockpit voice and data recorders as well as sophisticated on-board and ground station software. The heart of a HUMS system is the data acquisition unit capable of handling hundreds of input signals (from the aircraft's systems and sub-systems, and including comprehensive engine data). The key success factor of a successful system lies in its ability to instantly process this vast amount of data and to provide an accurate and conclusive indication of the health and usage system of the aircraft (eg, if a flight sortie of two hours high-speed, low-level flying is required, the ground system would indicate what critical components might need to be replaced before take off).

Besides the Rooivalk, AMS has developed and manufactured HUMS systems for a wide variety of aircraft types including all versions of the C-130 (Hercules) transport aircraft as used by the SAAF, the unique turboprop version of the DC-3 (used locally for maritime surveillance), the BAE Hawk lead in fighter trainer, and the Augusta 109 helicopters that form part of the local defence acquisition programme. As the work undertaken by AMS forms a very important part of BAE's Defence Industrial Participation programme, all future Hawk aircraft for other buyers will be offered with the AMS system.

The value of this business for AMS is huge, as in addition to the 24 aircraft ordered by the SAAF, the Royal Air Force is expected to take 44 new Hawk aircraft into service before 2008, while India has committed itself to 66 aircraft. The AMS HUMS system is already operational on the 22 aircraft delivered to the NATO Flight Training Centre in Canada and the 33 aircraft being delivered to the Royal Australian Air Force.

While carrying out all of its own electronics and software development only a small part of the production takes place in-house. AMS outsources the majority of the basic electronic assembly work and it is here that the company sees its opportunity to satisfy its black empowerment commitments. Obviously, with such a critical aircraft system, AMS itself carries out the final testing and integration.

Although the supply of the HUMS system to the international market began as a DIP project, the record that AMS now has as a supplier to such giants as BAE and Thales speaks for itself and the local company is receiving orders from other countries and companies. AMS has also been selected by Thales to supply its systems to the Swedish Air Force, while during 2002 AMS received a contract to supply the HUMS for an unspecified fighter aircraft in a deal worth some three times its annual turnover at that time (or about R90 million). While AMS currently has only about a 1% share of the global HUMS market it believes that it can grow this to between 5 and 10% over the next few years.

It is interesting to note that while AMS was originally a more diversified manufacturer of avionics systems it was realised that it had to focus on a niche to become internationally competitive. This niche is the HUMS that currently contributes about 95% of sales, although the company still also produces its own military aircraft 'black boxes'.


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