Ministry seals RM4.27b Deftech deal

AWV 8x8 PRODUCTION: RM100m to expand Pekan and Nilai plants

DRB-HICOM'S Defence Technologies Sdn Bhd (Deftech) has begun production for 257 units of 8x8 armoured wheeled vehicles (AWV) for the army, with delivery of the first batch in five years' time.

Defence Minister Datuk Seri Dr Ahmad Zahid Hamidi yesterday said Deftech would develop, manufacture, supply and deliver 12 variants of the AWV over a span of 13 years through collaboration with Turkey's FNSS Savunma Sistemleri AS.

"The AWV deal has benefitted local defence industries leading to over 100 vendors clinching various contracts," he said at the Mahsuri International Exhibition Centre.

Zahid said the Deftech deal with the Defence Ministry was worth RM4.27 billion.

FNSS is a joint venture between British-based BAE Systems Inc, the world's biggest arms group, and Turkey's Nurol Holdings.

DefTech is already spending about RM100 million to expand its plants in Pekan and Nilai to cater to the production of the AWVs.

Codenamed AV-8 8x8 due to its eight-by-eight wheel configuration, the AWV and its 12 variants would be Malaysia's first such indigenous family of armoured vehicles following the transfer of advanced defence technologies and patterns to Deftech, of which Deftech will own its first intellectual property rights on them.

The AV-8 is based loosely on the Adnan armoured combat vehicle which recently saw action in Lahad Datu. It is a longer vehicle, one variant of which will be carrying 120mm mortars, whereas the mortar variant of the Adnan carries 80mm mortars.

Zahid said the success of events like the Langkawi International Maritime and Aerospace (Lima) and Defence Services Asia (DSA) exhibitions had created spin-offs for numerous local companies, creating over 50,000 jobs since 1991.

"I am proud to note that nearly 50 per cent of these companies consist of retired armed forces officers and other ranks who have become successful entrepreneurs."

On another note, Zahid said that Boustead Heavy Industries had won a RM47.4 million contract to maintain six Eurocopter AS555 Fennec helicopters for the Royal Malaysian Navy.

On Lima, Zahid said that it would continue to be staged in the idyllic island of Langkawi and would continue to be relevant as it exhibits the latest products and services at each series.

"Lima will continue to be an attraction as it has led to the collaboration of new technologies and spun-off new businesses, especially for the Malaysian Defence and Security Technology Park in Sungkai, Perak."

As for Lima '13, Zahid said there were 1,022 business-to-business meetings until Thursday and had drawn nearly 40,000 trade visitors.

Lima opened it doors to the public yesterday and ends today.

source New Straits Times

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AV8, AV8, Where Art Thou?

SHAH ALAM: Regular commenter Yinchet sent this comment late yesterday : “Seem like Av8 prototype will be dsiplayed at the Army’s 80th anniversary celebrations.


One of the two sealed pattern configuration pictured most probably at Port Dickson

Yes, the picture above is one of two Sealed Pattern Vehicles – the example abve is armed with the 25mm one man turret the same one fitted to the Adnan IFV – are in Malaysia for for end user trials. Ironically in answers to questions ahead of Army Day, I was told that the two vehicles will be transported back to Malaysia “very soon”. I was satisfied initially but when Dzirhan twitted that the AV8s was in town, I had to check further.

True enough, upon checks I was told that the sealed pattern vehicles were already in Shah Alam (Deftech plant in Section 15, Shah Alam) and would be taken to Port Dickson just in time for the 80th Army parade (to be held on March 2).

What is a sealed pattern vehicle? I could be wrong but I believed that it meant that the AV8 would be ready for a full rate of production. Some minor tweaks will be done after the end user trials but basically the two vehicles will be the basis of the AV8 for future to come.

The IFV version of the AV8 armed with the Denel 30mm turret (with and without ATGM) I am told are being prepared in South Africa so perhaps we will able to see it in the near future.

Regular readers of the blog will remember that I am not a fan of the AV8 project. I had stated before that its too expensive. Some say I am wrong about this but I believed that the Army – allocated with some RM1.5 Billion of operational allocation and RM1 Billion development (procurement) allocation annually – cannot afford the AV8, a project with a ceiling price of around RM7.65 Billion.

Supporters will say that the AV8 project is viable as payment will be spread out for next 10 years but that will leave the Army with some RM600 million for other things. I understand that the Army need to recapitalise its armoured vehicle fleet as mentioned below but we are staring at an allocation “black hole” – one that will cripple the service faster than the AV8 can be put into service.

Lack of funds figured strongly when Army Chief Jen Zulkifli Zainal Abidin met with reporters on Monday for the Army Day interview. Basically he said the Army – is at the right size at the moment – requirements will be met depending on the government’s financial. He did not want to mention specifically their wish list but from answers to my email questions ahead of the interview,we get more inkling to the Army plans.

Anyways Happy Army Day!

Q/A for Army Day

1. What is the status of the AV8 project status? I understand that TD is updating the final prototype configuration AV8? Why this prototype is not finished before the end of 2012 as reported before? (Answer By Branch P & P)

The implementation of this programme is ccording to schedule and complete work process. The 2 Sealed Pattern vehicles are also performing well in Ankara. All the work on the final configuration is being implemented in Ankara. Indeed, there is a slight change to the vehicle delivery schedule as the Sealed Pattern vehicles due to technical problems but it had been addressed and thevehicle is expected to arrive in Malaysia in the near future.

2. Future Soldier System. What is the status of this project? Is TD is looking for a new partner for Sapura to expedite the completion of the system? (Answer By Tim Future Soldier)

The project is being implemented according to plan and Sapura is continuing to be responsible for completing the system.

3. Has all TD infantry units received the M4 carbine? Has the carbine been delivered to other units started? (Answer By Branch OPLAT)

The distribution of the ​​M4 Carbine are being carried out to a number of units of select formations and Special Forces units as well as to members of UN mission. Distribution of the carbine to all units will be implemented gradually upon the delivery of the carbine.

4. What is the status of other projects such as the replacement of the 155mm and 105mm artillery pieces? Will procurement be made ​​in the near future? (Answer By Jab Artillery)

For now there are no plans to change the 105mmcannon Pack Howitzer and 155mm cannon G5 MK III as the two pieces are still relevant and performing well. The artillery pieces are also very efficient, easily moved, easy maintenance and spare parts are also easily available.

5. Airod has proposed the Pay By The Hour system for the use of Nuri helicopters for TD Air Unit. Has TD agreed to the systme. If yes how long will be the contract and how many units and flying hours will be allocated? (Answer by Jab PUTD)

System Pay By The Hour is one method that had been adopted by other countries to the maintenance of aircraft, especially aircraft used for training.. In Malaysia, Airod Sdn Bhd have been providing this service to the ATM. However, the method does not involve flight operations tasks. Airod proposal is yet to be decided as the TD is studying feasibility of the system if Nuri is provided to TD.

6. TD has sent several pilots to operate attack helicopters, especially the Tiger helicopter in France. Is the attack helicopter procurement programme going to take place.? Is it still on the list to purchase 10MP TD?(Answer By Jab PUTD)

The pilot attachment programme appears to have had a positive effect on pilots of the Army especially for the Tiger Helicopter pilot detachment.. I believe the programme will be continued. TD also intends to have attack helicopters however the purchase depends on the financial position of the government. Yes the attack helicopters remained in the TD 10MP wish-list.

7. Recapitalisation of Sibmas and Condor. Is TD planning to replace these vehicles. Will AV8 replace all the vehicles? So far AV8 contracted number is much less than the units Condor and Sibmas in service, will TD buy more AV8 to replace the retired vehicles on one to one basis 1? (Answer by Branch P & P)

For your information, the Condor and Sibmas will be obsolete in a few more years. The two armored vehicles also have reached the maximum life span of its economic use. The current AV8 procurement programme is to replace the Sibmas and Condor.

By Marhalim Abas - Malaysian Defence

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Denel has signed a Euro 340 million (R3.5 billion) contract with Malaysia to supply a range of turret and integrated weapon systems to be fitted onto 8X8 armoured vehicles.

Denel Signs R3.5 Billion Manufacturing Deal With Malaysia

Zwelakhe Ntshepe, the Group Executive Business Development and Corporate Affairs of Denel, says this is the largest export contract in the company’s history and will result in a significant cash injection and job creation in the local industry.

The turrets will be exported to Malaysia over a seven year period – with the first consignment ready for delivery in January 2013.

Mr Ntshepe says the final negotiations with Malaysia were concluded at the recent Defence Services Asia Exhibition held in Kuala Lumpur, together with our local partners DRB-Hicom (Deftech), our partner in Malaysia.

The CEO of Denel Land Systems (DLS), Stephan Burger, says his company will be responsible for a number of strategic components that have been designed and developed at its campus in Lyttelton:

• 69 x two man turrets fitted with the South African GI30 30mm main gun.
• 54 x missile turrets equipped with the GI30 30mm gun and South African Ingwe anti-tank missile system. The order also includes the supply of 216 laser-guided Ingwe missiles manufactured by Denel Dynamics.
• 54 x Remote control weapons systems.

Mr Burger says the production of the first consignment of turrets is on schedule and will be delivered in January 2013 for trials by the Malaysian Army.

The turrets and weapon systems will be integrated on the Malaysian Army’s 8 X 8 vehicles which are based on the Pars armoured vehicle platforms from the Turkish company, FNSS.

Through the contract Denel is participating in the Malaysian Economic Enhancement programme which entails the production and assembly of the turrets in Malaysia. The agreement provides a platform to transfer weapon system integration technology to Deftech in order to create a sustainable capability in Malaysia.

Mr Burger says the contract opens the door to future industry cooperation between the two countries including on-going maintenance and future upgrades of the turrets.

Mr Ntshepe says the manufacturing of the turret systems grew out of DLS’s development of the Badger infantry combat vehicle on behalf of the South African Army. The Badger meets the requirements of a modern army involved in both high-intensity warfare and peacekeeping operations and will replace the 30-year old Ratel as the mainstay of the mechanised infantry force.

The Malaysian contract strengthens DLS’s reputation as a strategic hub of innovation and advanced manufacturing capabilities on the African continent. It will enable the company to retain skilled and highly-skilled engineers and artisans and attract a new generations of innovators.

Denel Land Systems, a company in the Denel SOC group is a defence system house for landward mobility and firepower solutions. Its primary focus is to provide products to the SANDF but it also serves international customers as a technology partner, system integrator and subsystem supplier.

DLS is best known for its development of the G5 (towed) and G6 (self-propelled) guns, the world’s leading 155 mm artillery systems. The G5 is currently in service in Malaysia.

Mr Burger says DLS “has a unique balance of technologies and engineering capabilities,” to take complex systems or products through their entire lifecycle, from conceptualisation to production.

Riaz Saloojee, the Group Chief Executive says “I am excited by this contract as it confirms Denel’s position as a global player in the defence manufacturing industry and will lead to a growing interest from the international community in the quality and range of products and services produced by us.”

source Army Guide

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BAE Systems Inc.`s FNSS Joint Venture Receives $559 Million Award from DEFTECH to Provide AV-8 Vehicles for the Malaysian Armed Forces

ARLINGTON, Virginia -- FNSS of Turkey, a joint venture between BAE Systems, Inc. and Nurol Holding of Turkey, has received and signed a $559 million letter of offer and acceptance (LOA) from DEFTECH of Malaysia for the design, development and manufacture of 257 DEFTECH AV-8 8x8 wheeled armored vehicles and Integrated Logistics Support for the Malaysian Armed Forces.

The vehicle, to be manufactured by DEFTECH in Malaysia, is based on the FNSS-designed PARS 8x8 multi-purpose, multi-mission, wheeled armored vehicle. The vehicle will be redesigned by FNSS and DEFTECH engineers specifically to meet the requirements of the Malaysian customer.

“This effort will not only benefit the Malaysian Army, but will also further develop the indigenous capability in Malaysia,” said John Kelly, vice president of exports and international business for BAE Systems’ Land & Armaments sector. “BAE Systems, Inc. actively looks to support FNSS in its ambition to market its land vehicle expertise globally.”

Malaysia’s AV-8 8x8 armoured wheeled vehicle program involves the local design, development and manufacture of the vehicle, as well as the integrated logistic support. FNSS will provide the technical assistance and technology transfer to enable DEFTECH to produce the vehicles in Malaysia. The AV-8 will be Malaysia’s first indigenous 8x8 armored wheeled vehicle family consisting of 12 variants, for use by the Malaysian Army.

“This project builds on the already successful industrial partnership with DEFTECH, our long term industrial partner in Malaysia. We look forward to supporting DEFTECH on this challenging program and making it another success story in Malaysia,” said Nail Kurt, General Manager and CEO of FNSS. “FNSS is committed to providing the means for DEFTECH to realize the goal of developing an 8x8 Wheeled Armored Vehicle Family (AV8) to meet the Malaysia Armed Forces requirements. The project is based on putting in place the infrastructure to design, develop, produce and maintain a family of 8x8 Wheeled Armored Vehicles.”

FNSS and DEFTECH previously delivered 211 ADNAN Armored Combat Vehicles (ACV) and 8 120mm ACV Mortar Carriers to the Malaysian Army and are now about to complete the deliveries of 48 additional ADNAN ACVs under a separate contract.

source : army guide

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Modernising Malaysia

With the country's military role adapting and expanding, DMJ reflects on Malaysia's procurement plans for a new generation of armoured vehicles… 

Malaysia has recently taken a significant step on the path to the creation of a fully export-capable defence industry by nominating local company DRB-Hicom Defence Technologies (Deftech) to undertake the prototype development of the Malaysian Army's new AV8 8x8 wheeled armoured carriers.

The new programme was officially announced on the opening day of the Defence Services Asia (DSA) exhibition in Kuala Lumpur in April, at which Defence Minister Dato Seri Ahmad Zahid Hamidi said that a contract for up to 257 vehicles would be signed within 12 months of successful trials of the prototype. The total cost is due to be in the region of $2.5bn, with the Ministry of Defence explaining that the contract would cover the entire development and through life costs of 12 APC variants, including a command and control vehicle, an anti-tank weapons carrier, and an anti-aircraft weapon carrier.

In a novel financing initiative, the procurement costs are not being met directly from the ministry's development budget but are due to come from investment by the armed force's retirement fund, Lembaga Tabung Angkatan Tentara (LTAT). The fund will be repaid through an Islamic-based financial instrument to be issued by the government.1

The vehicles will be built at Deftech's manufacturing division at Pehan in Pehang State, a facility in which Deftech has invested up to $22m since its founding in 2001. In a move to stimulate industrial growth, Deftech proposes to subcontract some of the manufacturing to companies across Malaysia's regions, with Sapura Thales Electronics (STE) being the preferred integrator of electronics system. The company will also be working with international partners. It is proposed that the APC variant will be equipped with a two-man turret to be developed and supplied by Denel (Pty) Ltd, the largest defence manufacturer in South Africa.

The AV8 will be based on the successful Pars (Anatolian Leopard) APC family that was developed by Turkish company FNSS, in collaboration with the General Purpose Vehicles (GPV) in the United States, which produced the initial design. FNSS has worked with the Malaysian Defence Ministry in a previous procurement, having supplied 259 ACV-300 armoured combat vehicles in a 2002-2005 programme; the Turkish company also worked with Deftech, the facility where the vehicles were assembled.

The Pars APC was first introduced in 2005 to fulfil both a Turkish Land Forces and an export requirement. It has a modular capability allowing for a variety of weapon fits, including external mounts. As well as being configured in the 8x8 form favoured by Malaysia, Pars has also been made available as a 4x4, 6x6, or 10x10.

In its 8x8 configuration the vehicle carries a crew of two to 12 fully equipped troops. When not employed as a personnel carrier, Pars is also able to transport up to eight tonnes of storage and equipment. It is capable of amphibious operation without prior preparation and features a hydro pneumatic suspension system that enables the vehicle to adjust its ground clearance electronically. All Pars vehicles are designed to be airlifted by a C17, and will fit inside the A400M.

The adaptability and modularity of the Pars design will provide the Malaysian Armed Forces with a vehicle that extends its capabilities in ground operations in one procurement programme. It will also go some way to meeting Malaysia's current defence needs, which envisages a greater emphasis on fulfilling international peacekeeping responsibilities and addressing conventional threats – as opposed to the counter-insurgency operations that characterised its land warfare policy in the 20th Century.

1www.malaysiandefence.com/?cat=89

source Defence Management

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