Source: The Wall Street Journal
Paramount Group and Aerosud Holdings will unveil their Ahrlac attack-and-surveillance plane, above, in South Africa on Tuesday.
Two South African companies are attempting to elbow their way into the global defense market with an unusual new aircraft developed on home soil.
Paramount Group and Aerosud Holdings Ltd. on Tuesday will unveil the Ahrlac, a compact plane that they say merges the capabilities of a drone, an attack helicopter and surveillance aircraft.
« There’s nothing like it in the marketplace, » says Paul Potgieter, managing director of closely held Aerosud.
The Ahrlac—short for Advanced High Performance Reconnaissance Light Aircraft—aims to fill a niche left by less-versatile and more-expensive rivals. Most countries on the continent rely on modified cargo planes or turboprop fighters for surveillance work, but the Ahrlac is a multipurpose alternative that’s marketed for perform military and civilian reconnaissance. It will cater to African governments involved in combat, peacekeeping and humanitarian work, he says.
Aerosud and Paramount executives decline to reveal the Ahrlac’s price but say it will be one-third to one-half the cost of Boeing Co.’s Apache attack helicopter. The Apache sells for about $20 million, according to the U.S. Congressional Budget Office.
The project will test whether a relatively small player such as South Africa can join a market with the likes of the U.S. and China. To revive a moribund industry, South African defense companies say they are pitching products that are simpler and less expensive than those built in the West.
Paramount Group Chairman Ivor Ichikowitz envisioned the Ahrlac after decades as a motorcycle distributor and arms salesman. The burly 45-year-old, born in South Africa to Lithuanian parents, says he realized « the future of peacekeeping and defense in Africa was going to be airborne. »
Paramount and Aerosud say the Ahrlac’s is designed for police, border patrols and forestry agencies—not just defense ministries. They also see potential sales in Asia, Latin America and Eastern Europe. Paramount and Aerosud say they have received interest from potential customers but decline to say from whom.
Governments in Africa contend with huge distances, unsecured borders and bad roads. Most lack funding for advanced Western jet and helicopter technology. So Paramount aimed to create an aircraft « that would do 80% of what a helicopter did but at a fraction of the cost, » Mr. Ichikowitz says.
The two-person Ahrlac has a bulbous cockpit and a simple propeller mounted at the rear, allowing an unobstructed view for reconnaissance. The plane can fly fast or slow and stay airborne for up to seven hours on a tank of fuel. It will be manufactured just outside Johannesburg at Aerosud’s complex of low brick buildings in Centurion, where the company also makes wing components, seats and galleys for Boeing and the Airbus unit of European Aeronautic Defence & Space Co. Test flights are scheduled to begin in six months and production, as early as 2013. The budget for development and certification was $200 million, Mr. Ichikowitz says.
Once it rolls out, the Ahrlac will become one of the first aircraft to be produced in Africa since South Africa’s Armscor Defence Institutes (Pty.) Ltd. developed the Roivaalk attack helicopter in the 1980s.
Under an apartheid regime that lasted into the 1990s, South Africa built a muscular arms industry to survive United Nations sanctions. As South Africa went to war in neighboring Namibia and Angola, South African defense companies developed blast-resistant trucks and a precursor to the armored vehicles that carried U.S. troops in Afghanistan and Iraq.
But under President Nelson Mandela, a democratic South Africa slashed defense spending, sending the domestic arms industry into decline. The defense budget plummeted to $2.66 billion in 1997 from $5.1 billion in 1990, according to the Stockholm International Peace Research Institute. Many of South Africa’s best engineers emigrated and joined foreign manufacturers.
South Africa’s defense industry could be poised for resurgence. The country’s defense minister is lobbying to overhaul the armed forces, in part by buying new equipment aimed at border security and piracy rather than ground wars. Defense Minister Lindiwe Sisul says she expects to seek an increase to the roughly $4 billion spent in the fiscal year that ended in March.
Seeking customers among African governments will allow Paramount and Aerosud to sidestep some competition from Western arms contractors, who largely steer clear of the smaller African markets.
« We have adapted, » says Shane George, an export manager at the state-owned Armaments Corporation of South Africa Ltd., which is in charge of purchasing for the government and for selling surplus government arms abroad.
Paramount started by outfitting peacekeeping missions in Africa. In 2005 the company joined with Aerosud to refurbish and service fleets of Dassault Aviation SA’s Mirage III and F-1 jets for Gabon and Republic of Congo. In 2008, Paramount bought a 19% stake in Aerosud. Work on the Ahrlac began a year later.
Paramount’s Mr. Ichikowitz has also persuaded a group of émigrés to return and work for him. « We’ve made this as much a South African project as possible, » Mr. Ichikowitz says. Designing vehicles and aircraft from scratch, he says, helped ensure that « the remaining skill and expertise we had on the continent wasn’t eroded. »
By Patrick McGroarty in Centurion, South africa and Daniels Michaels in Brussels