Kazakhstan, South Africa Bolster Defense Ties

South African defense and aerospace equipment manufacturer Paramount Group (Land Systems Unit) and the Kazakhstan Engineering JSC group have struck a deal to build armored personnel carriers (APCs) annually at an upgraded plant in the Kazakh capital Astana.

The deal marks a giant leap in the development of Kazakhstan-South African defense and trade ties, which already cover the production and collaborative marketing of strategic minerals, technology exchanges, machine production and oil procurement for South Africa.

It also gives Kazakhstan the capacity to produce and maintain armored military vehicles for the local and regional export markets. The two countries have also collaborated in space research programs, a development that resulted in the launch of the SumbandilaSat, South Africa’s second micro-satellite from Kazakhstan in September 2009.

The deal also marks an expansion of South African defense equipment manufacturers into the Central and South East Asian markets where Paramount Group has already struck co-production deals in India, Azerbaijan and the United Arab Emirates.

The project will be executed at an upgraded production facility owned by the Kazakhstan Engineering Distribution group. The facility is already undergoing refurbishment work which will lead to the start of production in late 2015.

The full range of wheeled, armored fighting vehicles to be produced at the factory has already been tested successfully in Kazakhstan. The partnership will build 120 to 360 military and non-military vehicles a year.

Kazakh Defense Minister Adilbek Dzhaksybekov presided over the event marking the start of the plant upgrade in Astana. The deal was signed in November 2013. However, the total cost of the deal has not been disclosed.

He praised the defense cooperation agreement with the Paramount Group as a major step in upgrading the capacity of the local defense industry to support the development and equipment needs of the armed forces.

Production is expected to start at the end of 2015. The deal is a 50-50 business venture involving the Paramount Group and a fusion of two state-owned Kazakh defense firms — Kazakhstan Engineering JSC and LLC Kazakhstan Engineering Distribution. The deal also covers the maintenance of the military vehicles.

In a statement posted on the company website, Paramount Group CEO Ivor Ichikowitz said: “It is a great privilege for Paramount Group to have been selected as the strategic partner to Kazakhstan Engineering Distribution for the establishment of this landmark facility in Kazakhstan. This is a very important milestone in the strengthening of ties between Kazakhstan and South Africa.

“It is our intention to establish a fully fledged armored vehicle and land forces manufacturing facility to engage not only in manufacturing but also in research and development, for the production of an indigenous range of products that are ideally suited to Kazakhstan and other markets in the region.

“We believe that this strategic collaboration and our investment will support the industrial development of the country and boost the high-tech defense and aerospace industry,” Ichikowitz said.

The new production factory in Astana will also produce civilian buses, create at least 150 local jobs and result in the training of at least 50 Kazakh engineers in various defense equipment production disciplines.

Speaking at the ground breaking ceremony in Astana, Business Development Director of Paramount Group Miles Chambers said the project will result in the transfer of new technology, skills and job creation.

“We will participate in the development of Kazakhstan’s defense capabilities through transfer of technology and investment of our own funds. We believe that this is the first of several similar projects where we will be able to collaborate with local partners,” Chambers said.

According to the cooperation agreement, the factory will produce and maintain wheeled armored fighting vehicles for the Kazakh defense forces and the wider East European and Asian regional markets where the Paramount Group has already delivered 30 Marauder and 30 Matador armored vehicles to the Army of Azerbaijan.

Work to be undertaken at the plant will include cutting and welding armor plates, and vehicle assembly. Dzhaksybekov said the factory should be supplying 80 percent of the Army’s armored vehicles by 2020. [via]