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South Africa's booming defense industry

From Diana Magnay, CNN
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The Matador is the latest mine protection vehicle to be developed in South Africa
  • Ivor Ichikowitz is founder of Paramount Group, an African supplier of military hardware
  • He says there is 'a great opportunity in the private sector to base itself in South Africa'
  • The country has become a major exporter of military hardware

CNN's Marketplace Africa offers viewers a unique window into African business on and off the continent. This week the show interviews Ivor Ichikowitz, founder of Paramount Group, a leading defense and aerospace company in South Africa.

Watch the show on Wednesdays 1845, Fridays 0045, Saturdays 0715, Sundays 0615 (all times GMT).

Pretoria, South Africa (CNN) -- Ivor Ichikowitz has been at the forefront of South Africa's booming defense industry over the past 15 years.

His company is the largest privately-owned defense contractor in the country, supplying military hardware and security support to governments and their agencies for peace-keeping, defense and internal security, mostly on the African continent.

Ichikowitz launched Paramount in 1994, the year South Africa's apartheid regime fell.

"We were born at the same time as the new South Africa and, as a result, our vision has been to very much to track that of South Africa as it's developed and taken its place in Africa," Ichikowitz said.

The South African entrepreneur took CNN on a tour of a military testing ground near Pretoria where his company, Paramount Group, is putting its commanding mine-protected vehicles, dubbed Matador, through their paces.

"This is a complete clean sheet design that has the highest levels of mine protection in the world today. We have very high levels of side blast protection to defeat improvised explosive devices. And everything has been proven not just on the basis of vehicle survivability," Ichikowitz told CNN.

We're here because we have the best skills, the best expertise and the best environment to run a global business.
--Ivor Ichikowitz

The vehicle, which is designed to withstand triple anti-tank landmines, can be configured to perform a number of different functions -- troop carrier, ambulance, command or infantry fighting vehicle. This means that armies can deploy with one basic vehicle in the fleet, making maintenance and repair much easier and more efficient.

Ichikowitz, a South African of Lithuanian origin, says the company knows what's going to happen when the vehicle hits a triple anti-tank landmine as well as who's going to get hurt and where.

"Everyone will survive and by chance the vehicle will also survive. This vehicle is field repairable and can be put back into operation within four or five hours of having hit a triple anti-tank landmine blast," he said of the $600,000 vehicle.

South Africa's military industry grew largely because the country was forced to make its own military equipment when the international community imposed sanctions on the apartheid regime.

Before the fall of apartheid, its defense industry was mainly focused on battling the wars that kept the African National Congress (ANC) out of power.

The country's most infamous mine-protected vehicle -- Casspir -- became a hated symbol of apartheid repression throughout the 1980s when it was used for crowd and riot control.

But the advent of democracy in 1994 prompted the liberation of the defense industry which opened it up to several private contractors.

Since then, South Africa has become a major exporter of military hardware. According to the Stockholm International Peace Research Institute, the country was the world's 17th largest arms explorer in the period between 2004 and 2008, while over the decade 2000-2009 its military spending increased in real terms by 40 percent.

In 2008, it sold more than $2.5 billion worth of equipment, munitions and other components to 96 countries, according to a report by the New York Times.

The country has strict arms control legislation in place but its export regime comes often under attack, with critics arguing that military exports continue to end up in the wrong hands.

Still, security analysts say African peace-keeping missions are better supplied from within the private sector than through donor aid.

"We've just seen with the mission in Darfur -- the international community provided that mission with over 1000 vehicles. You know what happened with those vehicles? They were all written off. Because when the mission was finished all these vehicles were basically donated to the African Union with no logistical support packages. So when the vehicle breaks down there's no support," Henri Boshoff, of the Institute for Security Studies, told CNN.

"In my opinion, private initiatives -- like South African companies selling armed vehicles to Senegal -- they sell it with a package, with logistical backup and spare parts. And that is better for an army than donor equipment."

Back at Paramount's innovation center, the company is gearing up to deliver two major orders. Ichikowitz says the company doesn't do business with the South African government but says there couldn't be a better place to do business from.

"We're here because we have the best skills, the best expertise and the best environment to run a global business. And we think there's a great opportunity in the private sector to base itself in South Africa, work in Africa, work globally.

"It's a great place to live, it's a great place to work and we have some incredible people."

Teo Kermeliotis contributed to this report.