From the Desk of the CEO

On behalf of the Armscor management and employees, I would like to take this opportunity to congratulate Ms Thandi Modise in her appointment as the Minister of Defence and Military Veterans. We trust in her leadership and guidance to take the defence industry forward. As Armscor, we wish to affirm our support and commitment to the Minister and the Department at large.

We welcome the unqualified audit outcomes received by Armscor from the Auditor-General of South Africa. This comes amid concerns raised by the Auditor General Ms Tsakani Maluleke in her comprehensive audit outcome report in March 2021 regarding the situation at the state-owned entities. In her report it was indicated that about 21 state-owned entities disclosed significant doubt in financial statements about their ability to continue operating as a going concern.

Armscor attributes these results to sound financial management and adherence to the principle of good governance. On the same vein, we thank management and employees for their commitment and diligence in delivering to the mandate of the organisation. We will continue to improve the risk and compliance modalities to ensure good governance while also improving financial and operational efficiencies.

In the period under review, Armscor Board has approved the commercialisation strategy for implementation. This strategy seeks to mitigate the negative impact of the declining defence budget and to reposition Armscor as a sustainable organisation. It will serve as a guide in ensuring that Armscor tap into a commercial market to achieve its revenue generating objectives. There are products that have been identified as ready for the market such as beach barrier system, vistanet and ultrasonic broken rail detector system. We will intensify our engagements with suitable partners both in the public and private sectors to offer key solutions.

It is important to bear in mind that even with the commercialisation strategy, as Armscor, we will continue supporting the South African National Defence Force in executing its mandate. It is our obligation to provide them with state-of-the-art defence materiél required to provide safety and security for South Africa, its citizens and the continent.

Armscor is open to engaging and collaborating with industry players who are keen on exploiting our intellectual properties (IPs). The organisation is managing a portfolio of the Department of Defence IP emanating from Armscor’s mandate of acquisition of defence materiél and managing technology projects. The aim is to collaborate with relevant entities to commercially exploit these IPs and thus generate additional revenue in response to the declining defence budget. Revenue generated from these collaborations will be used to fund technology development in order to maintain the South African defence’s strategic and sovereign capabilities.

We remain optimistic as the vaccination drive picks up the momentum that things will soon get back to normal. Even though it is not going to be easy, we believe that we will come out of these difficult times stronger, determined, focussed and transformed. The revitalisation or recovery plan of the defence sector and the economy at large will require collective efforts. As Armscor we will avail ourselves for such progressive engagements. In the meantime we shall keep on sanitising, wearing our masks and maintaining social distancing.

Stay safe.

Adv. Solomzi Mbada

CEO

Acting CEO Advocate Solomzi Mbada