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Armscor committed to supporting local SMMEs

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Armscor committed to supporting local SMMEs

Photo by Reuters

19th May 2016

By: Keith Campbell
Creamer Media Senior Deputy Editor

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South African defence acquisition and disposal, research and development agency Armscor chairperson, retired Vice Admiral Refiloe Mudimu, has pledged the organisation's support for local small, medium-sized and microenterprises (SMMEs), especially black-owned ones, seeking to enter the defence sector. "Armscor . . . stands ready to assist in any way."

He was addressing the Armscor Supplier Open Day in Centurion, south of Pretoria, on Thursday. "We have called this meeting to know what we can do to help you," he said.

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He highlighted that Armscor harnessed the capabilities of South African companies, including SMMEs, to meet the requirements of the South African National Defence Force and in support of United Nations peacekeeping missions. The agency was aware that SMMEs often have great difficulty in obtaining the financing they need to enable them to enter the defence sector. "Armscor is exploring the modalities of a defence industry fund."

To further support local SMMEs, Armscor requires its major suppliers to report every year on how much subcontract work they give to SMMEs. However, the agency faces a regulatory minefield in its efforts to support SMMEs. Well-meaning regulation is actually hampering transformation in the defence industry. One of the objectives with the Defence Industry Charter now being developed is to solve this problem, as well as to promote black empowerment in the sector.

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The organisation is also responsible for the administration of defence offsets from overseas major equipment suppliers. "Armscor ensures that black companies benefit," affirmed Mudimu. The agency is also seeking to widen the supplier base in geographical terms, beyond Gauteng.

However, SMMEs must meet Armscor requirements. Too many do not. While many often respond to requests for proposals, few actually respond to the actual tender and even fewer qualify for consideration by the agency. Mudimu cited the example of a current Armscor tender, for which 32 local companies tendered but only one of them met all of Armscor's requirements. "This has to change!"

"You [SMMEs] and us must be a team that writes a new chapter for our company, country, Africa and the world," urged Mudimu. "As an entity, we can only do so much. . .  We cannot fail ourselves. We cannot fail our people, our country."

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