Delegates Direct - Press and Media

By: Delegates Direct  11-11-2011


Published 21/09/2008 - Sunday Times

Gunning for Big Sales with Bulletproof Bling

Fishnet stockings and fun are part of the sales strategy, writes Andrew Donaldson .

Defence and security contractor Paramount Group executive chairman Ivor Ichikowitz likes to have a good time. Especially at arms shows, which, he believes, are usually quite boring events. So he gives them a little pizzazz, a little oomph, a bit of that old showbiz sizzle.

This week, Ichikowitz was at the Africa  Aerospace  and Defence 2008, the trade exhibition at the Ysterplaat air force base in Cape Town, where he unveiled the Maverick, a new police armoured personnel carrier. To this end, he threw in a bunch of babes in fishnets and camouflage hotpants and got them to hang around a Smart car decked out for the occasion with mounted 40mm grenade launchers ("Just what you need for Jo'burg traffic," was an oft-heard comment), a pair of killer blondes in leather jumpsuits and spiky boots toting assault rifles, several top-of-the-range Aston Martins, another stunner tarted up as a Moulin Rouge-type showgirl spinning a wheel of fortune and handing out iPods to prizewinners, casino chips and poker guards scattered about the place, smoke machines and - just in case no one got the point - a sound system blasting out John Barry's James Bond Theme.

God knows what the heavily braided foreign generalissimos, defence ministers and visiting government agents in lumpy suits and cheap sunglasses made of all this schtick. This "play-play" stuff seemed unseemly when, just around the corner, the Chinese were hawking missile systems that could "disintegrate hostile enemies in cities" at the flick of a switch.

But Ichikowitz, who turns 42 later this month, could not give a hoot."The important thing in our business," he told me, "is that, if we're not having fun, then we don't do it. We're not a stuffy bunch here." Indeed. But what, exactly, is Paramount's business? Why, nothing less than the creation of a new and wholly unique South African defence industry.

This, at least, is what Ichikowitz offered in our interview aboard his blinged-up Boeing 727.

This was the other thing. Most exhibitors at AAD 2008 arrived at Ysterplaat by car. Ichikowitz brought along his huge jet and his Aston Martins and, who knows, maybe a fleet of other limos as well. But it was the jet that intrigued. Word was that the organisers weren't exactly thrilled at the Boeing, it being so big and all, and space being at a premium.

Ichikowitz joked that a deal was made with the exhibitors next door - they would swap all their little bitty aeroplanes for the 727 if he could park it here. "It was good negotiation," he did allow. "But, as you can imagine, it cost us a fortune to get this here, so the show's organisers are probably sympathetic."

And it is an impressive toy. I was told by one Paramount employee that it was one of the last 727s to be built by Boeing, which would make it about 25 years old. But it had not been flown that often - its previous owner had been some hapless West African despot fallen on hard times - and was practically good as new. Its luxury interior certainly was new. Which may explain why, before entering its beech and walnut-panelled interior, visitors had to cover their shoes with paper slippers.

"The SA defence industry," Ichikowitz began, "has always punched above its weight."

GUNS AND BABES: Ivor Ichikowitz, Executive Chairman of Paramount Group, extolls the virtues of the
Maverick, a new police armoured personnel carrier, at the opening of the Africa Aerospace and Defence Air Show at the Ysterplaat military base in Cape Town (Picture: Ambrose Peters)

Despite this, it lost focus in the mid-1990s and fell into some disarray in the confusion over Denel's involvement with the state and disillusionment at Armscor.

There was the Rooivalk helicopter fiasco. As Ichikowitz put it, "We started believing our own propaganda. We started trying to sell major systems into first-world markets. When you sell a major system like Rooivalk, a customer who's going to spend $20-million a copy wants to know that you're going to be in business in 20 years to look after it."

Despite the world-class capability, there never had been a local contractor who could convince a "first-world customer" that it would "be around for 20 years to keep that system operational".

So, a niche was found for Paramount.

"We identified that there were many developing markets that desperately needed defence capabilities, desperately needed policing capabilities, but more importantly needed peacekeeping capabilities because there's a lot of talk about African solutions to African problems.

"A lot of the peacekeeping missions were African peacekeeping missions but nobody was taking care of finding a way to resource these governments to actually meet their commitments in these missions.

"And that's where Paramount stepped in. Not only in terms of helping to identify what equipment they needed, but also supplying their equipment, supporting it over its lifecycle and, very importantly, providing the finance to allow the systems to exist as full systems."

The message here, Ichikowitz suggested, is that the local defence industry is reinventing itself. "Organisations like Paramount are actually creating another level to the defence industry, a level that is harnessing SA ingenuity, if you like, to resource developing countries that are not top of the agenda to the major international contractors. BAE Systems really doesn't want to do business in Rwanda. It's a headache."

Paramount, he continued, was "for a long while a systems integrator". Basically, it took a lot of stuff made by other manufacturers, stuck it in a package and sold it. "We never owned our own technology and we never manufactured our own product."

After significant investment into research and development that has now changed. "The range of armoured vehicles that we're launching now is part of a land forces system which Paramount now owns 100%," he said.

Most local contractors would "regurgitate" product year after year because "the defence budget always came from Armscor".

In 1994 that money stopped coming. So the research stopped.

But, according to Ichikowitz, Paramount was never a beneficiary of those research grants. It had its own research and development money.

"Those vehicles you see out there? They're all brand-new, clean-sheet design technologies. We looked for the best that the world had to offer, and really, by chance, the best the world had to offer was still in SA.

"And that's a very valid point, because everybody thinks that SA has lost this ability. And when you, as a SA national or SA-based organisation come to the realisation that the world is your oyster, that you can go wherever you want to in the world and that the best the world has to offer in this particular field still happens to be in SA, that's bloody exciting."

The information in this article was current at 08 Nov 2011