Some two dozen interested parties attended a Friday open day at Denel PMP’s Pretoria West factory, including representatives from leading South African defence companies, who are responding to a call for Expressions of Interest (EOIs) to modernise manufacturing capabilities at the brass foundry.

A second open day, for interested international companies, was held at the facility on Monday 3 August. Denel, under Project Pearl, is looking for either strategic partners or investors to return the ailing ammunition manufacturer to profitability. They will need to modernise the brass foundry as well as secure and ensure reliability of supply from the foundry to the nearby PMP ammunition factory in Atteridgeville.

Partnership opportunities cover mobilising capital for infrastructure renewal; accessing modern technology and operational expertise; automating and enhancing plant manufacturing capability; sustainable skills development and skills transfer; improving productivity, efficiency and cost effectiveness; as well as appropriate risk sharing while preserving the company’s strategic mandate and control as a State-owned enterprise (SOE).

Coenie Delport, Acting Head of Manufacturing at Denel PMP, explained to interested parties on Friday’s open day that the Pretoria West facility includes the foundry, rolling plant, cutting plant, storage buildings, metallurgy laboratory, nitrogen and oxygen facilities, water and oil treatment plants etc. (A shooting range at the facility is being rented out to a client and is not part of the expressions of interest.) He added that all the buildings except the two storage buildings have overhead cranes with a capacity of 10 tonnes, and the floors on the storage buildings are strong enough to accept heavy machinery.

The Denel PMP foundry was established in the late 1970s and has been operational since then – the majority of machinery dates from that period, but Delport is confident it has well over a decade of life still left in it. At the foundry, zinc and copper are melted down to create brass blocks (in two melting furnaces, one induction/crucible furnace and one casting furnace). These blocks are typically 3 m x 42 cm x 13 cm in size. These blocks are then sent to the rolling plant, where they are rolled down into thinner sheets (the rolling mill can thin sheets down to as little as 50 microns for applications in printed circuit boards, for example). This brass strip is then sent to the cutting and cupping plant, which produces brass cups that will be turned into bullet casings and percussion caps (maximum capacity is 15 million cups a week). However, Delport emphasised that the rolling and cutting facilities can be configured to meet various commercial requirements for brass products.

The main Denel PMP campus in Atteridgeville is where bullet casings are filled and the entire round is put together – it is the second half of the PMP operation. Delport emphasised that there will always be demand from PMP’s Atteridgeville facility, which will remain a foundry client. However, this demand is not sufficient for the foundry to be profitable and so prospective investors will need to find additional clients to make a viable business case. Delport estimates the foundry would have to be running at 45-50% capacity to be profitable.

The foundry has a theoretical maximum capacity of 80 tons per day (if running on a 24/7 shift) but it is at present only producing a fraction of that (about 20 tons per month of case cups and 8 tons a month of bullet cups). Even if the PMP main campus in Atteridgeville was running at full capacity, the foundry would only need to be at 50% capacity to meet this demand. At present, the Foundry employs nearly 60 staff, but if producing at full capacity would require about 175 staff.

Given the huge global demand for ammunition as world military expenditure increases and conflicts drive up production rates, Delport believes PMP can be a ‘gold mine’ if sufficient investment is forthcoming. He said PMP is probably one of the few ammunition plants in the world not running at full capacity.

Companies submitting expressions of interest in the PMP foundry need to include a company profile, relevant experience, proposed partnership approach, technical capabilities, investment proposition and potential value contribution to Denel and the country. Submissions can be emailed to tenderresponse@denel.co.za with Project Pearl as a reference. Deadline is 10 August 2026 at 11:00 SA time.

Project Pearl is rolling out at the PMP foundry, and if successful will be expanded across the Denel group, including to the PMP main campus and various other divisions as part of Denel’s turnaround strategy.

The open days can be seen in relation to United States (US) defence and security firm Omusha making known it is pursuing a hundreds of millions of rand investment in Denel PMP to restore production, create jobs, modernise operations and ultimately export ammunition. However, PMP emphasised that Omusha does not have an advantage or lead in negotiations and is required to start negotiations with a clean slate alongside all other Project Pearl bidders.

Project Pearl falls within PMP’s turnaround plan. In 2024 PMP in cooperation with Solidarity and the Denel Board established a multidisciplinary task team to advise Denel’s executive management and board on a sustainable turnaround strategy for the division and its production of small calibre ammunition, for small arms (5.56 mm, 7.62 mm, 9 mm rounds) and cannons (20 mm, 23 mm, 27 mm, and 30 mm shells).

Source: https://defenceweb.co.za/industry/industry-industry/denel-pmp-hosts-first-open-day-for-potential-investors-and-partners/