Malaysia Concludes Biggest DSA on Record

Defense News

04/28/08

Malaysia Concludes Biggest DSA on Record

BY WENDELL MINNICK KUALA LUMPUR — The Malaysian government signed 14 contracts and several agreements with for­eign and local defense companies during an April 21 ceremony, part of the 11th Defence Services Asia Exhibition and Conference (DSA) here.

Held at the Putra World Trade Centre, the signing ceremony for the agreements — worth $360 mil­ lion — was overseen by Deputy Prime Minister Najib Razak, who is also Malaysia’s defense minister.

Most of the agreements were with local defense companies for pro­curement of more than 100 infantry vehicles. Among the agreements, however, was a letter of acceptance worth more than $50 million for three AgustaWestland AW139 heli­copters for the Maritime Enforce­ment Agency; a contract with Lock­heed Martin for a $14.6 million up­grade for the C-130; and two three­ year contracts worth more than $3.5 million with Britain’s Kelvin Hughes for continued servicing of the navi­gation radar and combat system on four Laksamana-class corvettes.

The April 21-24 DSA, the largest triservice show in Asia, has grown from 389 exhibitors in 1988 to this year’s 712 from 49 countries. Orga­nized by the DSA Exhibition and Conference Sdn. Bhd. in partner­ship with the Malaysian Ministry of Defence, the show hosted more than 200 foreign government offi­cials from 60 countries and more than 25,000 visitors.

The exhibition included a four-day Battlefield Medical Live Demon­stration, with presentations by Britain, Germany, Norway and the United States; the Training and Sim­ulation Seminar on April 23, organ­ized by the European Training and Simulation Association and the In­ternational Training and Simulation Association; and the show’s April 23-34 conference, “Partnership in the Defence Industry: Challenges and Lessons Learned.” DSA 2008 featured 23 country pavilions, including China, India, Iran, Russia, Turkey, the United Kingdom and the United States. However, Iran was ejected from the show after U.S. and several Euro­pean officials complained to DSA organizers that Iran’s presence vio­lated the United Nations arms ex­port-import ban on Tehran.

With the exception of Raytheon and L-3, the U.S. presence consisted mostly of smaller companies. One U.S. defense contractor said the show was a disappointment, with no major procurement tenders of in­terest.

Offsets and Home-Cooked Arms

Offsets and promoting indigenous industrial development is taking a more important role in Malaysia.

Numerous local companies intro­duced new products, including GIG Technology’s Flying Hovercraft for special operations reconnaissance. Priced at $350,000 for a basic craft, it seats six, can be outfitted with a variety of weapons and has a 400­ kilometer range at a speed of 38 knots. It has a hover mode and can fly two meters above the water. In production since 2006, it looks very similar to the U.S. Navy’s Universal Hovercraft UH-19XRW Hoverwing. “The Malaysian Army has ordered 10 for reconnaissance and intercep­tion missions,” a GIG official said. “So far, we have delivered four. The Philippines procured one platform and it is being used in Mindanao.”

Malaysian company DEFTECH, which builds military vehicles, signed four contracts April 21 to supply the country’s military with 48 Adnan ACV 300 infantry fighting ve­hicles, eight ACV-S 120mm mortar carriers and 87 3-ton, four-wheel­ drive Hicom Handalan II GS Cargo vehicles, and to refurbish 21 Scor­pion tanks and 13 Stormer vehicles. DEFTECH is preparing to begin production of the AV4 four-wheel­ drive Light Armored Wheeled Vehi­cle, which it has been developing since 2003.

“This is our own development in cooperation with South African partners,” a DEFTECH source said. “All the installation is done here in Malaysia, with design and collabo­ration with Industrial and Automo­tive Design SA company, but we build here. ... We took the vehicle to Brunei and they are considering it. We plan on taking it to Timor Leste later this year to show them.” Both the Malaysian Army and po­lice plan to buy it, he said.

“The police want a different vari­ant for border patrols and riot control.” “Malaysia takes a long-term view of her defense needs and force planning, and is building a defense capability that gives us the best val­ue for the resources that we have invested,” Najib said. “In this con­text, our approach to defense pro­curement is clear, and we will no longer just purchase technology off the shelf. We will seek to have a greater industrial role in what we purchase. We want our defense in­dustry partners to offer value-added investments, not just industrial off­sets, and we want to explore as well shifting resources from mili­tary and commercial programs to meet our needs.” Tan Sri Asmat Kamaludin, chair­man of the DSA Exhibition and Conference Sdn Bhd, cited the im­portance of facilitating more offsets and indigenous industrial develop­ment.

“With many countries now re­quiring offset programs and trans­fer of technology, domestic defense industries in the region can look forward to spill-offs from increased defense,” he said in a news release. “Countries will look at maximizing suppliers through transfer of tech­nology and offset programs and also to reduce costs where possible through locally produced items and services.”

Russia’s Malaysian Space Cadet

One recent offset resulted in a unique deal with Russia for new Sukhoi fighters in exchange for sending Malaysia’s first astronaut into space.

Russia’s large pavilion had booths representing 25 companies. Russian sales to Malaysia have been small but successful. The Royal Malaysian Air Force flies MiG-29 and new Su-30MKM fight­ers, along with Mi-17 helicopters. The Malaysian astronaut joined a Russian space mission as part of a $900 million deal in 2003, in which Malaysia procured 18 Su-30MKMs. Deliveries should be completed by the end of the year.

Malaysia’s interest in Russian equipment was the subject of an April 22 news conference here by Rosoboronexport. Referring to the Sukhoi deal, Anatoly Isaikin, director-general of Moscow’s state-­run defense export-import arm, spoke in positive terms about po­tential future sales.

“We hope our military relation­ship with Malaysia will improve,” he said. “We can provide total so­lutions such as training, support and licensed production of military equipment such as the MiG-21 and Su-27. If foreign customers de­mand a total solution, we can pro­vide it.” Russia is promoting the Buk­M2E midrange air defense system for Malaysian’s air defense needs, said Mikhail Petukhov, deputy di­rector of the Federal Service for Military-Technical Cooperation.

However, a Malaysian Ministry of Defence source said his coun­try’s mix of Western, Russian and other foreign weapon systems is causing integration headaches.

China Challenges Russian Influence

Russia might have competition in the Asian market from China, which has created an industry by copying and improving upon a va­riety of Russian-designed arms. There have been unconfirmed re­ports that China is negotiating an agreement with Malaysia for li­cense manufacturing of FN­6 MANPADS, and Malaysia has ex­pressed interest in the Chinese ­made KS-1A medium-range sur­face-to-air missile system.

Chinese exhibitors here dis­played a variety of arms for export. China National Precision Ma­chinery Import and Export Corp. (CPMIEC), Beijing, displayed its new GPS/INS guided FT-1 Preci­sion Guided Bomb, which can de­liver a 500-pound bomb within a circle of equal probability of 30 meters. CPMIEC also displayed its portable air defense missile opera­tion and command system, the TH­S311A SmartHunter Plus.

Of special interest among the ex­port products displayed by China North Industries Corp., Beijing, was the new self-propelled LD2000 Ground-based Close-In Weapon System, a low-altitude air defense system armed with a seven-barrel, 30mm 730B gun, firing at a rate of 4,200 rounds per minute.