CAV Annual Report 2021

“SUPPORT THE GROWTH OF THE AEROSPACE, DEFENCE AND ADVANCED MANUFACTURING INDUSTRIES”

These trends highlight some immediate opportunities for the South African A&D industry such as: • The opportunity for South Africa to become a supplier country to the world A&D OEMs. The South African A&D industry is ranked 40th in a geographic assessment of manufacturing attractiveness by PwC 6 , above countries such as Turkey (41st), Saudi Arabia (45th) and Brazil (53rd). The attractiveness of South Africa as an investment destination for A&D players opens the opportunity to attract international OEMs and Tier 1 suppliers to CAV, • The increased demand for air traffic in Africa increases the demand for MRO and maintenance of aircraft at a suitable destination on the continent. South Africa is ideally positioned with its good infrastructure and skills base to provide such a service to several African airlines. The strategic plan of CAV is therefore also focussed on the establishment of supporting infrastructure (runway access) to MRO companies wishing to establish in South Africa, • The increased use of digital technologies, such as blockchain and Additive Manufacturing, artificial intel- ligence, virtual reality and other visualisation technologies creates an opportunity for CAV to reach out to high technology start-ups and create an enabling environment for these companies to engage with the OEM suppliers and MRO companies in the local and international A&D industries, and • The introduction of new technologies in manufacturing (e.g. AM) and digitalisation (e.g. VR and autonomous platforms, cyber security etc.) could be an opportunity for CAV to establish the high tech industrial park to support the industry by providing support for high bandwidth communication using broadband fibre optic network, incubation centres for high technology start-ups and conference and training facilities geared to support high tech entrepreneurs and engineers, IT specialists and material scientists. Challenges of the South African Aerospace and Defence Industry The previously mentioned Aerospace Industry Sector Development Plan (the AISDP) is characterised by specific challenges that will be addressed in the formulation of a

future strategy for the CAV. The development of CAV Landside and Airside facilities and services will allow CAV to capitalise on some challenges that are mentioned below: • The SA market for aerospace services is too limited to offer marketable justification for the existence of a SA industry, and the industry must thus position itself for global participation. The most accessible clients, and those that are best accessed through the Industrial Participation strategy of the dtic , are the major aerospace OEMs, • The OEMs are all attempting to reduce costs and to simplify their supply chain logistics through outsourcing functions that are niche and do not have an economic justification to retain them to the SMMEs . The SMME-type companies could successfully establish direct supply to these OEMs by physical positioning themselves closer to the OEMs and share supply chain logistics, thus rationalising the establishment of an industrial park such as the CAV, • The aerospace industry is characterised by the necessity for most stringent regulatory controls , mainly because of safety standards. Global supply requires of supplier’s major investment in quality and process approvals and specialist training. The costs of such approvals sometimes act as a barrier for smaller companies operating in isolation, • The aerospace industry is exceedingly dependent upon specialized competencies. These competencies are strongly dependent upon track record and established experience base. It is not realistic to base a strategy upon new entrants to immediately acquire the core competency necessary for participation in the higher tiers of supply. Core competency is historically presently vested in a few existing companies, not all of which can presently be considered B-BBEE-compliant, hence the need to support and create such SMMEs and B-BBEE compliant companies to achieve broadening economic participation and equity in the sector, • The industry is competing in the international arena and for it to be able to make inroads in this global industry, the local industry requires an Industrial Park Development of scale that should be able to allow a supplier competing in the local industry to market itself as an international role player,

6 https://www.pwc.com/us/en/industrial-products/publications/assets/ pwc-aerospace-manufacturing-attractiveness-rankings-2019.pdf

CENTURION AEROSPACE VILLAGE NPC I ANNUAL REPORT I 2020/21

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