IN FOCUS: AHRLAC: South Africa's first aircraft since apartheid could be platform for revitalised aero industry, says Paramount

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South Africa's first domestically-designed aircraft since the ill-fated Denel Rooivalk attack helicopter - conceived during apartheid to fight insurgents, but a subsequent flop in the export market - will take to the air early next year. The AHRLAC, which stands for advanced high-performance reconnaissance light aircraft, is a two-seat, single-engine pusher, and the programme has attracted much market interest throughout the world, according to the company behind it, Paramount.

Privately-owned Paramount is not your typical defence firm, and its founder and chairman Ivor Ichikowitz not your typical defence executive. With a background in theatre, Ichikowitz was a supporter of the African National Congress during the apartheid era, and founded Paramount in 1994 when he saw an opportunity to create a "solutions company" to exploit the country's niche expertise in security and defence technology once export markets opened to the rest of Africa. Now one of South Africa's most successful entrepreneurs, his interests include a game resort, mining companies and property.

ahrlac paramount

 Paramount

The AHRLAC can be configured for a reconnaissance or light attack role

The inspiration behind the AHRLAC came from Ichikowitz, who was dismayed that the country's ability to develop and engineer entire aircraft had been lost in the 1990s. "He felt South Africa had built its own attack ­helicopter and then moved to just being a parts manufacturer," says Paramount chief executive John Craig. "We had the competence, but no one had the courage of commitment." Ichikowitz and his collaborators - some of them engineers who had worked on the Rooivalk - did not want to design a "me-too" product, says Craig. "They knew too they couldn't design a replacement for the ­[Dassault] Mirage. They had to find a niche."

PRIVATELY FUNDED

The 3,800kg (8,370lb) maximum take-off weight ­AHRLAC - which can be configured for a reconnaissance or light attack role - is privately funded, apart from a "dribble of money" from the government's Industrial Development Corporation. "Paramount is carrying the risk on this. This is not a government project or a government dream," says Craig. Paramount's programme partner is another South African start-up, Aerosud, in which Paramount holds a sizeable stake. The company manufactures mainly composite parts for ­Airbus, Denel, Eurofighter and others, and the AHRLAC prototype has been built at the ­companies' shared aerospace innovation centre next to the ­Aerosud factory.

Craig maintains that the companies have been "very surprised about demand", adding: "We have a long line of potential customers and there is a good chance of signing up a ­customer by the time the aircraft flies." ­Although Africa and other developing countries are seen as the main market for AHRLAC, Craig says Paramount has been "approached by tier one countries - we can even say NATO countries - about selling the whole IP ­[intellectual property]."

Roughly 100 flights have been flown using a quarter-scale model. "Windtunnel work is complete, so we know the real thing will fly," says Craig. The company is hoping to have the aircraft certificated by the end of 2013, and Craig says it could be the "platform to establish a whole new industry in South Africa".

Paramount's land-based products make up 40% of revenues, and include a range of armoured vehicles. The company acquired 24 surplus Mirage F1s from the government five years ago, along with spares and simulators, when the air force transitioned to the Saab Gripen. It has re-sold some of the fighters to Congo-Brazzaville and Gabon, along with financing and full "turn key" support packages, including provision of pilot training in South Africa, maintenance and ground facilities.

Craig says Paramount's ambition is not to become a global defence contractor with the clout of the large players from the USA, Europe and elsewhere. Neither does it intend depending on the domestic customer. Indeed, notes Craig, by purchasing the surplus Mirages it ended up being a customer of Pretoria, rather than the other way around.

Instead, he adds, the focus is very much on small markets, mostly in Africa, many of them keen to develop security capabilities from a low- and sometimes almost non-existent base. "We believe we can build a successful business model based on that. On their own, these markets are too small to interest the big boys," says Craig. "But when you aggregate it, it becomes a very interesting business."