Cash in on the SANDF

Finweek English Edition - - INSIDE - Marc Ash­ton marca@fin­week.co.za

BE­FORE YOU AC­CUSE ME of be­ing a war­mon­ger, hear me out.

There aren’t too many seg­ments in the econ­omy that have bud­geted to in­crease their an­nual spend by 15% to 20% over the next few years, but the South African Na­tional De­fence Force is one such in­sti­tu­tion.

As high­lighted on fin­week.com ear­lier this week, a quick look at the cur­rent an­nual report says that the De­part­ment of De­fence (DOD) has ap­plied to in­crease its an­nual spend from R34bn in the cur­rent year to R42bn by the end of 2015.

While South Africans may be cred­ited with be­ing “en­tre­pre­neur­ial” when it comes to the flow of guns and ve­hi­cles, we are not ad­vo­cat­ing an at­tempt to em­u­late Ni­cholas Cage when he played famed arms dealer Vik­tor Bout in the 2005 movie

Lord of War.

If you look at the ar­eas where the SANDF and the DOD are plan­ning to in­crease spend, you will no­tice that it in­volves in­vest­ment in pri­mar­ily Ad­min­is­tra­tion, Mil­i­tary Health, Em­ploy­ment and Gen­eral Sup­port Ser­vices. “Ad­min­is­tra­tion” is quite a broad seg­ment but some ideas of where the big­gest in­creases are likely to come from in­clude: Hu­man Re­sources – R454m to R666m Fi­nan­cial Ser­vices – R186m to R306m Of­fice Ac­com­mo­da­tion – R1.2m to R2.2m

Le­gal Ser­vices – R110m to R186m On the Mil­i­tary Health Front you will find: Mil­i­tary Health Train­ing Ca­pa­bil­ity

in­creases from R152m to R380m Mil­i­tary Health Prod­uct Sup­port Capa

bil­ity in­creases from R13m to R285m For sup­pli­ers who spe­cialise in lo­gis­tics and spe­cial­ist In­for­ma­tion Tech­nol­ogy of­fer­ings, you might want to look at what op­tions are avail­able for pri­vate con­trac­tors. Spend on joint lo­gis­tics ser­vices is ex­pected to grow from R1.6bn to R2.4bn while in­vest­ment in a man­age­ment in­for­ma­tion sys­tem (MIS) will in­crease from R960m to R1.1bn.

Prob­a­bly one of the juici­est ar­eas of spend ac­cord­ing to the DOD report is around fa­cil­ity up­grades. While “main­te­nance and re­pairs” are bud­geted to drop from R360m per an­num to around R73m, the “Re­ha­bil­i­ta­tion, Ren­o­va­tions and Re­fur­bish­ments” seg­ment will see a whop­ping in­crease with an­nual spend of R656m, R733m and R885m for the next three years re­spec­tively.

It might pay to start sub­tly plug­ging for busi­ness in and around lo­cal mil­i­tary in­stal­la­tions and find­ing out ex­actly what you need to do busi­ness with the SANDF if you are plan­ning to get on to its sup­plier data­base.

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