to run a major company|
Chonco unspikes his guns and comes out firing
NOT so long ago, July to be exact, Seshi Chonco, then acting managing director of Denel, flatly ruled out any speculation that he would be the new chief at the arms manufacturer following the sudden resignation of then MD Johan Alberts.
"I am not a natural successor nor aspire to the position," Chonco said at the time. "If I am offered the position, I will not accept it."
Last week he was offered the position and accepted. So why a change of heart? There is a long silence at the end of the line before Chonco says: "In all honesty I did not want the job.
"I had a sense of doubt about my ability to run the company and I did not think the position would have been offered to me, precisely because of my self-doubt. But I have managed to run with the company through recent difficulties and it has stabilised.
"I realised I had been too rough on myself and after much thought, as well as support from the board and staff, I accepted the position. I am excited about the challenges."
Indeed, the last financial year has been the most difficult and trying for the group, as reflected by its results for the year to March 1997.
During the year, the arms manufacturer cancelled a number of controversial foreign orders, including the R2-billion sale of G6 mobile artillery pieces and anti-aircraft missiles to Syria, following enormous political pressure. This decision clearly affected Denel's profitability and profit after tax came in much lower at R84-million compared with R392-million in the year to March 1996.
And prospects are not looking good, either. Chonco expects a turnaround in the financial performance only in the 2001/02 financial year, but even that depends entirely on proposed export sales.
There are pending deals at various stages of negotiations: a sale of Rooivalk helicopters to Malaysia; a R2-billion sale of 70 to 80 heavy artillery systems to Saudi Arabia; and a R1-billion artillery deal with India.
Chonco says Denel continues to do well in the Pacific Rim and Asia. "Our products and systems have performed very well there and we have cultivated respectability in the market place."
The thrust now is to pursue the European and Middle East markets aggressively - these markets are potentially very lucrative, but controversial because of the political sensitivities in the region. In two weeks Chonco leaves for London to establish a marketing office as the base for future deals in these areas.
Denel, however, is not merely an arms manufacturer - there are about 18 subsidiaries in diversified industrial fields.
Chonco is keen to change Denel and has initiated a review process, called Denel 2000, to determine core areas and sketch its long-term structure. He expects the review to be finalised by the end of November.
Among the various divisions, the G5 and G6 armoured artillery, the Rooivalk helicopter, the property arm and its IT division are the group's star performers.
The IT division, now renamed Ariel Technologies, has been commercialised, rebranded and repositioned to compete in a segment of the IT market worth an estimated R6-billion. Chonco says that Ariel, subject to government approval, could be partially privatised.
Chonco also backs the partial privatisation route for Denel as a whole. "For Denel to succeed in the competitive international arms industry it will need capital and technological innovation. It cannot exist in isolation."
But he cautions that privatisation should only proceed once the manufacturer and the state have identified those areas which are "alienable and inalienable" to the security interests of the country.
Privatisation must also be accompanied by opportunities for black empowerment to legitimise the industry in SA.
Chonco was previously an executive assistant to the chairman of Caltex Oil. In November 1996 he was appointed deputy managing director of Denel.
An avid reader, Chonco also enjoys gardening.