Deputy Speaker, the Denel entity that benefits from offset obligations resulting from aircraft procurement by state entities and agencies is Denel Aerostructures. It uses high technology and manufacturing capabilities to design, produce and assemble complex metal and composite aircraft structures. Denel Aerostructures has established itself as a competitive design and development house for complex aerostructures such as wing-to-fuselage fairing. Any new offset obligations provide the company with the opportunity to leverage its proven capabilities for more sustained work packages with more global original equipment manufacturers.
As a Tier 1 supplier to original equipment manufacturers, OEMs, Denel Aerostructures is able to crowd in the participation and certification of the local aerospace and manufacturing sectors in the execution of work packages. This would, in the long term, allow for the localisation of certain capabilities by domestic companies which could then supply them to these OEMs. Therefore, the department will ensure that Denel is given all the necessary support required to access additional work packages in those areas where it has the necessary capacity to deliver competitively.
Aerospace is one of the sectors that generate industrial technology and the development of high end technical skills necessary to drive economic development. Denel Aerostructures is the largest aerostructures company in South Africa. It is strategically positioned to be one of the key drivers of the government's industrial development and advance manufacturing policies and strategies. The strategic economic benefit from the investment in the aerospace sector is that it will assist local aerospace companies such as Denel Aerostructures to be imbedded in the supply chains of global aerospace original equipment manufacturers.
The strategic and repeat aircraft fleet procurements enable Denel Aerostructures as a Tier 1 supplier of global OEMs to draw in the participation of the local aerospace and manufacturing sectors and thus fulfil the policy objectives of government of building the manufacturing sector through localisation.
The Department of Trade and Industry, through the National Industrial Participation Programme, and the Armaments Corporation of South Africa, Armscor, through the Defence Industrial Participation Programme, direct and monitor the fulfilment of offset obligations. Denel Aerostructures is not the only beneficiary of offset obligations that will flow from the fleet procurements by the aforementioned state companies and institutions. Local aerospace companies in the private sector benefited in the past and stand to benefit from the anticipated procurements.
The Department of Trade and Industry is in the process of forging aerospace sector-specific development plans with the aim of ensuring that the offset obligations are directed to those niche areas in which the local industry could reasonably establish some level of global competitiveness. These measures by the Department of Trade and Industry will give the government localisation strategy added influence with regard to the local aerospace sector. Thank you.