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Africa defence firm eyes China

Sanya - Africa's largest privately owned defence company, Paramount Group, sees China as an ideal market for its armoured vehicles and would like to manufacture in the country, its executive chairperson said on Wednesday.

Ivor Ichikowitz told Reuters that were China to experience internal unrest of the sort now convulsing the Middle East, it would not have the right equipment to pacify large crowds.

"Through the experience we've had in South Africa and elsewhere in Africa, we've come to learn that a lot of internal conflict that results in uncontrollable uprisings is as a result of governments rolling in the tanks," he said on the sidelines of a conference in the southern Chinese resort of Sanya.

"You try and control a riot with a tank, you're going to get a violent reaction. You bring in the big guns and people are going to want to throw the big guns back at you," he said.

"This is a very important doctrine consideration in a place like China. Right now, if China was faced with internal unrest, the only capability they have would be military capability - they'd have to roll in the tanks," Ichikowitz said.

While there have been no signs of Chinese taking to the streets in large numbers to protest against the government as they did in 1989, Beijing remains wary that unrest in the Middle East could prompt demonstrations closer to home.

"Tiananmen Square's now 20 years ago, and you could do that (then). Today you can't. Today that's just inciting trauma. We believe that there's a necessity in China to gear up with appropriate internal security equipment ... (which) matches the right level of protection for police and for riot control personnel without being overtly offensive," said Ichikowitz.

"This is not technology that's being developed in many places and it happens to be a really, really strong capability that Paramount has and that South Africa has."

China's spending on police and domestic surveillance will hit new heights this year, with "public security" outlays unveiled last month outstripping the defence budget for the first time as Beijing cracks down on protest calls.

Ichikowitz said numerous discussions with China over the past few years had not led to concrete agreements, but that he would still like to find a Chinese partner.

"We see a massive requirement for a number of our products, and we also see substantial opportunity for joint production. We've unfortunately not yet found a commercial modus operandi that is viable to both sides," he said.

"Once we do get involved in China we see it as a major potential base for third country exports."

Ichikowitz added that the company was on track to reach $1bn in turnover by 2015, a goal he told Reuters about last September, and may also look at an initial public offering down the line, though it is not yet at the stage of talking to banks.

"We are starting to look at a variety of opportunities around the world. We're certainly going to have to look at a capital-raising strategy at some point," he said.

"We would look at a dual-listing strategy. We would always look at a listing in Johannesburg ... We want to keep significant African control."
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