Operational overview


Defence and allied electronics

The challenging market conditions experienced by Reutech during 2010 continued into the year under review, with governments cutting defence budgets in international markets and a number of anticipated manufacturing contracts being either delayed or cancelled altogether.

Performance indicators       2011  


Revenue   Rm     639,3     791,0  
Operating profit   Rm     48,7     60,6  
Total assets   Rm     355,7     659,7  
Capital expenditure   Rm     35,7     31,6  


Petrol & diesel consumption   litres     436 755     459 607  
  GJ     19 270     20 349  
Electricity consumption   kWh     5 093 818     5 277 569  
  GJ     18 338     18 999  
Water consumption   kilolitres     52 777     35 314  


Total number of employees       962     917  
Training spend   Rm     1,2     1,6  
Community investments   Rm     0,4     0,3  
Enterprise development spend   Rm     1,8     2,5  




Despite these setbacks, the business remained financially competent, achieving revenue of R693,3 million (2010: R791,0 million) and operating profit of R48,7 million (2010: R60,6 million), supported by significant cost reductions and the development of new products.

During the year, Reutech invested substantially in its ability to service alternative industries, including renewable energy and the manufacture of digital television receivers (set-top boxes), which are anticipated to contribute increasingly to revenue. Additionally, Reutech continued to research and develop new products and systems in its defence business in anticipation of an upturn in defence spending. Coupled with several significant orders received towards the end of the year, Reutech looks set to deliver a strong performance.

The South African National Defence Force (SANDF) has indicated a renewed interest in naval hardware, notably the procurement of patrol craft, and heightened its emphasis on border protection and regional humanitarian support, which is expected to impact positively on Reutech in the short to medium term. Similarly, the awarding and installation of renewable energy projects is likely to contribute positively to the business, with Reutech positioning itself to become a major service provider in this sector.

Reutech’s environmental performance during the year remained relatively unchanged, apart from a sharp rise in water consumption at Fuchs due to the battery plant coming on line again after inactivity in 2010 and a modest decline in diesel and petrol consumption.

Reutech acknowledges that much work lies ahead in transforming its workforce profile. Spend on employee training and development declined from R1,6 million in 2010 to R1,2 million this year as a result of cost pressure. This is set to increase in 2012 in line with the improved prospects for Reutech.

  Peter van der Bijl (55) 
  • Chief operating officer: Reutech
  • MSc (Elec Eng) Wits, MSc (Aerospace) Cranfield UK
  • Appointed to the group on 17 July 2008