Paramount Group’s tailored solutions drive African defence industry
Stability is fundamental to any country aiming to attract investment, according to Ivor Ichikowitz, CEO of South Africa’s Paramount Group, which offers everything from systems technology to fighter pilot training. He tells Natasha Turak how aerospace and defence act as hi-tech incubators and drive the continent’s industrial development.
For CEO and founder Ivor Ichikowitz, it is somewhat daunting to see how far Paramount Group has come in the 22 years since its inception. The South Africa-based company was born in 1994 with one goal: to enable African countries to better defend themselves. Describing itself as “proudly African” and established during the advent of South Africa’s democracy, Paramount today is the largest aerospace and defence business in the southern hemisphere with 4000 employees across six countries – 80% of whom are on the continent of Africa.
“When we founded the company, there was a lot of optimism about Africa but the biggest hindrance to growth was security, a major deterrent to FDI. Post-Apartheid South Africa had a lot of technology expertise, which we wanted to turn to good to help other African countries build and protect their democratic institutions, and in turn improve FDI,” Mr Ichikowitz recalls. He notes that “the single most important factor in boosting an emerging economy is a stable state”.
In accordance with international compliance regulations, Paramount Group only works with governments in good standing with the UN and the international community, as well as with global industry partners such as Boeing and Airbus.
“Over the years, we have invested heavily in intellectual property to become the developers of our own innovation and solutions-driven technology company, which is what Paramount is today – a developer of systems and implementer on behalf of governments,” says Mr Ichikowitz.
Besides products, the privately owned company offers logistical support, fighter pilot training and maintenance and refurbishment for naval vessels and commercial craft.
Paramount offers full turnkey capabilities across the industry spectrum, developing ships, aircraft, armoured vehicles and systems integration. Working in 38 countries across Africa, the Middle East, South America, central Asia and eastern Europe, it aims to meet the individual needs of emerging market governments searching for more cost-effective ways to run their security apparatuses. The company’s flexible project finance plan enables governments to make payments over multiple budget years.
As global instability increases, so does demand, yet governments around the world are simultaneously cutting their defence budgets. Paramount thus develops products according to customers’ needs rather than first manufacturing and then marketing the defence equipment.
“There is a demand for land forces capabilities and armoured vehicles, and a very large demand for aerospace capabilities, especially the Mwari light reconnaissance aircraft,” says Mr Ichikowitz.
The Mwari, developed by Paramount to combine the features of a helicopter and reconnaissance plane and used for counter-insurgency, disaster relief and intelligence gathering, offers low acquisition costs and dramatically cuts the cost of air force missions.
Mobile production model
The biggest point of the company’s focus is its portable production model, by which manufacturing can be done in the customer’s own country. “Countries want more control over their own markets, so we kit the equipment for domestic production,” says Mr Ichikowitz.
“Our growth will come from partnerships and multiple factories around the world, but our focus and brain trust is in South Africa,” he continues. Ninety percent of manufacturing is in Africa, with the biggest portion of industrial capability in South Africa. “This is very close to my heart; I want to see Africa developed as a base for the aerospace and defence industry.”
This cannot happen without workforce development, of course, and Mr Ichikowitz attests to the difficulty of finding the required industry skills in many African countries. A critical part of the company’s plan, therefore, is identifying and training new entrants with the help of mentorship programmes, on-the-job training and local university partnerships.
“Aerospace and defence acts as an incubator for other hi-tech industries, and the future of Africa depends on the creation of not just jobs, but high-value jobs,” he says. “While there is an amazing amount of skill in the rest of Africa, many don’t have access to hi-tech industries so we are trying to absorb as many Africans as possible into this sector.”
As Paramount expands globally, it remains dedicated in its mission to strengthen Africa’s future as a commercial industrial base.
The fDi Report 2016
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