Below I have posted a couple of interesting stories about Paramount Group and it’s background. As you can see from it’s Wikipedia page, it is heavily involved with a lot of areas of defense in Africa and they are the largest PMSC in Africa. So when Ivor Ichikowitz (the founder and executive chairperson of the company) talks about private security in Africa, I tend to listen.
I also posted a side deal about an aircraft they donated to help in the war against Rhino poachers. This is a great move by the company because poachers are destroying one of Africa’s top treasures–it’s animals. They also had a vehicle showcased in the popular TV show called Top Gear.
The last article I posted below was not about Paramount Group specifically, but about private security in Africa in general. It talked about the focus of other large companies like G4S in Africa, and it is a great compare and contrast article after reading what Paramount mentioned. If companies want to know what to focus on when delving into this market, it pays to study the market leaders of this continent. Check it out. –Matt
From the website
Paramount Group is the largest privately owned defence and aerospace business in Africa, providing fully integrated turnkey solutions to global defence, peacekeeping and internal security forces.
Since its inception in 1994, Paramount has built strong relationships with governments and government agencies in over 30 countries around the world, earning an enviable reputation as a trusted advisor in the industry.
The Group is a leading innovator in the design and development of state-of-the-art products that it manufactures in locations throughout the world. It is partnered with some of the world’s largest and most reputable organisations in the global defence community. The Paramount Group has the ability to understand its client requirements and to use its unique knowledge and experience to design cost-effective, future-proof solutions. As a result, Paramount has enjoyed strong growth and achieved an excellent track record of delivering successful projects.————————————————————
From Wikipedia
Paramount Group is a group of companies operating in the global defence, internal security and peacekeeping industries. It was founded in South Africa in 1994 and offers a range of armoured vehicles, military aircraft, equipment and training to governments.
The company was founded by South African entrepreneur and industrialist Ivor Ichikowitz. The Group is based in South Africa, with its headquarters near Johannesburg.
Paramount Group manufactures a range of armoured vehicles – the Maverick, Mbombe, Matador and Marauder – and in 2011 unveiled AHRLAC, a long-range reconnaissance and surveillance aircraft. AHRLAC is the first aircraft to be designed and built from scratch in Africa.
The business has government clients in 28 countries and partnerships with leading international defence and aerospace players, including Aerosud Holdings Ltd, its partner in the development of AHRLAC (Advanced High-Performance Reconnaissance Light Aircraft).
In February 2011, Paramount Group announced a joint venture with Abu Dhabi – based defence business International Golden Group to market and distribute Paramount Group’s products and services in the United Arab Emirates.
Paramount Group’s Marauder featured in an episode of the BBC’s Top Gear programme. Television show presenter Richard Hammond took the vehicle on a test drive in South Africa to put the vehicle through its paces in comparison to a Humvee in a bid to find ‘the world’s toughest car.’ The programme was broadcast in July 2011.
AHRLAC was launched in September 2011 and described by commentators, including the Wall Street Journal, as filling a niche for a versatile, low-cost aircraft.————————————————————
Security Is Key To Africa’s Economic Rise
By Ivor Ichikowitz, chairman of Paramount Group, Africa’s biggest private defence company.
Ivor Ichikowitz reports
22 November 2012
The most important single factor in boosting an emerging economy is a stable state. I believe that all things flow from this.
Capitalism is the most powerful driving force behind Africa’s economic development but businesses must be able to be run without the fear of suddenly losing all their assets in unexpected or undemocratic changes in government.
Criminals, terrorists and rebel groups further undermine economic activity across the continent and need to be effectively countered. It has been estimated, for example, that over 10% of Nigeria’s oil production is stolen between source and sale by criminal gangs, including groups who tap directly into long pipelines that are extremely vulnerable to theft in isolated areas.
Stability is crucial because the growing middle classes (up to a third of all Africans) will spend more money if they feel confident, they will feel more confident if they feel safe and this happy cycle will lift demand for countless goods and services. The boom is waiting to happen: Africans already spend more per head than Indians on goods and services.
The continent’s swelling youth, the consumers of the future, is not interested in the liberation rhetoric and anti-colonial slogans of the post-independence era. They are better educated than their parents and more exposed to the wider world, thanks to access to mobile phones and, increasingly, satellite television. I see proof of this on streets from Accra to Johannesburg every day.
Both of these factors drive demand for products which individuals might never before have dreamed of buying but they are fundamentally changing the relationship between governments and the people they govern. The old political elites are threatened by a youthful, growing middle class that has extensive aspirations and demands more of its leaders. I believe it is vital that these challenges are managed democratically and without a decent into insecurity.
Fruits of stability
The nuts and bolts of development are exponentially more difficult without stability. It is very hard to build a road when your workers are harassed by armed men, and the current emphasis of the African Union on a continent-wide programme to upgrade roads, rail, harbours and telecommunications will not be the boost it should be if instability and conflict intervene. Savers, a class of consumer many prejudiced eyes might think impossible in Africa, are keen to safeguard their futures, buoyed by the low levels of inflation brought about by peace and security. In Rwanda, a UN Capital Development Fund study found that half a million savers with an average account of just $57 added up to almost $40m in the country as a whole.
Foreign investment in Africa is booming. China has recently extended $20bn in credit. Brazil, India and Russia have been investing heavily in sub-Saharan Africa. The next stage will be to convince private investors that no sudden, unexpected or violent shift in government will make their funds disappear overnight. Development of national, regional or pan-African stock exchanges would further boost the economy.
Tourism has huge potential to bring new revenue to dozens of African countries, whose climates, wildlife and geographies are such fascinating contrasts to the developed world of North America and Europe. The vast majority of big-spending tourists are not the types of people to enjoy taking a risk with their family’s safety, so establishing a reputation for security is vital.
The proof of the theory is in the figures. The countries where stability and democracy have been strongest are those which have grown fastest. Ghana was the fastest-growing economy in the world last year (14% GDP increase); by one measure, South African GDP now outranks that of Belgium and Sweden; Ethiopia expanded more quickly than China in the five years to 2009. Overall, Africa’s collective GDP, at $1.6 trillion in 2008, is now roughly equal to that of Brazil or Russia.
Even in ravaged countries like Mozambique, the green shoots of growth are emerging from the devastation of its long civil war as peace spreads. In the markets of the Somalian town of Ras Kamboni, among others, trade is once again beginning to flourish after African Union troops flushed out the insurgents of al-Shabaab.
African peacekeepers solving African problems that the West was unable to crack for 20 years is proof that the continent’s leaders can now deliver efficient forces, are willing to send them to foreign countries and can justify that commitment to their own people. Internal strife in their own countries would have made that very much harder.
Strife leads to stagnation
The pattern is borne out in reverse: economic stagnation has set in where strife has continued. Along the South Sudan border, disputes have slowed the ability to tap precious oil reserves; in Nigeria, despite its vast wealth, the nation’s economy continues to be dogged by insecurity and mismanagement; and in the Democratic Republic of Congo, the vast wealth of its untapped raw mineral deposits (estimated at $24 trillion – equivalent to the combined GDP of Europe and the US) will not benefit its people until conflict is over.
We at Paramount Group have had the privilege to work with many African countries to strengthen the capabilities and capacity of their defence, police and peacekeeping forces. We have witnessed first-hand the benefits on economic activity, inward investment, regional stability and long-term growth that stability can bring. Among the external factors that have driven Africa’s renewed economic growth is the Washington Consensus of the 1990s, which saw the IMF and World Bank encourage African countries to adopt programmes to boost democratic reforms, good governance and respect for human rights and the rule of law in return for debt relief and budgetary support.
It was controversial at the time, and its implementation patchy, but has led to greater stability, more regular elections, peaceful transfers of power, greater transparency, the emergence of more institutions of democracy and more competent states in many parts of the continent. It is still a work in progress, but Africans are better off as a consequence.
It might seem like one-way traffic towards a brighter future but there are various and enduring threats to Africa’s security. Growing populations create more competition for scarce resources like water and violence can ensue. Weak governments, which may be well-meaning, can be unable to exercise control of their sovereign territories, leaving a power vacuum rapidly filled by warlords, jihadists and criminal networks that can undermine entire industries. Weak governments also mean weak institutions, making corruption more difficult to resist.
Africa’s progress in recent years has seen some threats overcome, only for new ones to emerge. Overall, however, the continent has advanced and is on the verge of accelerating this process, and is now better positioned than ever before to consolidate its economic growth. There is still a long way to go and there will always be a need for peacekeeping forces to deal with conflicts as they arise. What is new is Africa’s increasing desire and ability to deal with its own conflicts rather than relying on outside help.
Paramount Group is proud to be at the forefront of providing this capacity, as well as creating an indigenous knowledge-base for innovative solutions to the continent’s challenges through its defence engineering.
Africa’s greatest asset is its unique and innovative people but people cannot thrive in fear or hunger. Innovators and entrepreneurs need to be given the space to work unmolested by battles for power and uncertain security. They need to be given a chance to operate like entrepreneurs in developed economies, who can dare to see their ideas fail where defeat does not mean them or their families going without food.
Story here.
————————————————————Paramount donates aircraft to combat rhino poaching
04 December 2012
The Paramount Group today donated a Seabird Aviation Seeker light observation aircraft to South African National Parks (Sanparks) to help it fight rhino poaching.
The aircraft was unveiled at Skukuza airport in the Kruger National Park as part of a cooperation between the Ichikowitz Family Foundation and Sanparks, which will see the Paramount Group supply a number of anti-poaching solutions.
Ivor Ichikowitz, chairperson of the Ichikowitz Family Foundation and executive chairperson of the Paramount Group, said that, “Advanced visual reconnaissance and surveillance will provide game reserve rangers with robust intelligence in their tireless mission to confront poachers.
“We will equip the Seeker Seabird with a FLIR [forward-looking infrared] Ball infrared detector. This thermal imaging technology will deliver more enhanced and powerful observation capability to the Kruger National Park’s rangers, making it very difficult for poachers to hide. The plane demonstrates a high degree of flexibility in terms of utilisation, use of operation and reliability. It is capable of flying at high altitude and at slow speeds with 270 degrees visibility. It can be forward positioned on short dirt strips and requires very limited logistical support,” added Ichikowitz.
Kruger National Park (KNP) managing executive Abe Sibiya said the Seeker was only a part of the fight against rhino poaching. “It’s important that we view today’s initiative as one option available to us in this war,” said Sibiya. “This is not a war that’s going to end today or tomorrow, we are in this for the long haul.”
Speaking at the aircraft’s unveiling, David Mabunda, CEO of SANParks, said that, “We anticipate that by the end of this calendar year we will have lost about 650 rhinos throughout South Africa, 400 in the Kruger National Park. To date 598 rhinos have been lost to poaching, 364 in the KNP alone. South Africa is home to more than 80% of the world’s rhinos, while the KNP is home to about 60% of South Africa’s rhinos it accounts for 40% of the world’s rhino population.”
“Enough is enough; the mindless slaughter of rhinos in the wild has called for a multi-pronged strategy. We are actively enlisting and broadening our engagement with the private sector to protect and conserve wildlife. We will find the right solutions and fight this war.”
“Attitudes about the importance of wildlife in South Africa are changing. The grim realities of environmental crimes committed against wildlife and rhinos in particular are being recognised with calls for tougher law enforcement and penalties. Initiatives like these are critical to motivate potential consumers to quell demand for wildlife-based products by appealing to their pro-environment instincts,” said Ichikowitz.
“The days of talking about this problem are over – practical solutions such as this aircraft and its surveillance capabilities is the only way to make a real difference,” Ichikowitz added. “It’s time to take dramatic steps to rid this country of poachers and to save our rhinos.”
“Not only is the Kruger National Park home to the largest population of rhinos in the world, this National Park also remains the hardest hit by poaching with the park having lost 760 rhinos out of the 1369 grand total that have been killed in South Africa since January 2010,” said Mabunda.
“We’re honoured to join forces with the Ichikowitz Family Foundation because this surveillance solution gives our rangers just the right kind of support they need to win the war and it brings us one step closer to ending the devastation of our rhinos.”
Mabunda added that while arrests of poachers were certainly on the increase, the country still had a long way to go before rhino poachers would be eradicated entirely. By 27 November 2012, a total of 246 arrests had been made during 2012 with more than 640 arrests made since January 2010.
In September 2004 the Paramount Group ordered five Seeker SB7L-360 surveillance aircraft from Seabird Aviation Jordan, with options for a further five units. Four were subsequently supplied to the Ghana Police Service. The fifth aircraft was set to remain with the Paramount Group in South Africa as a demonstrator aircraft representing Seabird Aviation Jordan in the central and southern African region. Presumably it is this aircraft that was donated to Sanparks.
In September 2006 Jane’s information group reported that Seabird Aviation Jordan had appointed Paramount as the exclusive distributor of the Seeker SB7 observation aircraft in western, central, southern and east Africa and central Asia.
The Seeker has a cruising speed of between 65 and 112 knots, and can stay airborne for over five hours and loiter over its target, which is key to patrolling pipelines, monitoring power lines and performing border patrol work. The Seeker is powered by a Lycoming O-360-B2C engine, which produces 168 horsepower, driving a Hoffmann fixed-pitch pusher propeller.
The Seeker is operated by the Iraqi and Jordanian Air Forces.
Story here.Is private security taking over Africa?
By Richard Seymour
November 22, 2012
It is statistically true that we are living in the most peaceful and stable era in human history. It just does not feel that way. And if you live in a part of the world which is still racked with instability, the saying ‘Lies, damn lies and statistics’ may leap to your mind.
Even regions that had begun to take their safety for granted, such as Europe, have been struck by acts of terrorism and, now in the grip of recession and harsh economic austerity measures, civil unrest.
Conventional security forces such as national armies find themselves overstretched with so many calls on their resources and cuts to their numbers. As a result, the privatisation of security and risk management has gained momentum in recent years.
The industry was given a boost with the US-led invasion of Iraq in 2003. The US quickly began outsourcing the protection of public buildings, foreign businesses and the securing of convoys. This proved controversial. Private security firms were not bound by the same rules as military personnel and a number of high-profile incidents led to the accusation they were a law unto themselves.
The demand slackened in Iraq and Afghanistan as local forces took over responsibility. The private firms had to look to other markets. Since the trend for private security had taken hold, and there was no shortage of trouble all over the world, far from slipping into recession, the sector has flourished.
Africa, as it is for so many industries, is a region of potential growth when it comes to private security. Whether it is protecting government or private premises in the uncertain aftermath of the Arab Spring, securing ships in the Indian ocean from piracy, looking after NGOs as they go about their aid work, protecting oil executives from being kidnapped or defending Western embassies from attacks, foreign and homegrown private-sector alternatives to security are on the rise.
Even more so now that the US government has turned special attention to Africa as part of its foreign policy. In 2008, the US established Africom, which coordinates all US military operations in the continent.
Set up ostensibly to promote democracy and fight terrorism, officials have spoken openly about its primary role of furthering US interests and, according to Vice Admiral Robert Moeller, writing in Foreign Policy magazine, the ‘free flow of natural resources from Africa to the global market’.
In the spring of this year, Academi (formerly Blackwater), through one of its companies, International Development Solutions, won part of a $10bn US State Department Worldwide Protective Services (WPS) contract for providing security for American diplomats and personnel.
Ted Wright, Academi’s CEO, has said that he sees Africa as one region where they intend to increase their operations. He also predicts a period of consolidation for the industry as smaller companies, no longer needed in Iraq and Afghanistan, are taken over by larger ones.
G4S, the largest of all private security firms and the world’s second biggest employer of any kind, is looking to expand into Africa. It employs approximately 600,000 people worldwide, a sixth of them in Africa, sourced from 29 countries, making it Africa’s largest private sector employer. Currently, G4S secures embassies and provides protection for banks, telecoms, transport and also provides expertise in clearing mine fields.
However,the rapidly growing market in natural resources, from oil and gas to mining, in Africa provides just the opportunity the company is looking for. Countries such as Nigeria and Angola are being targeted by the British company as it seeks to diversify from providing manned security to risk assessment of a vital and vulnerable industry.
Speaking to Reuters earlier this year, Martin Fuller, G4S’s development director for oil and gas in Africa said, “In Africa we are moving towards delivery of much broader, integrated and sustainable security solutions to meet all the security risks facing major projects.”
Privatising public security?
There are a large number of major natural resource projects in Africa and the world’s private security firms are lining up to bid to protect them. South Sudan has an estimated 7bn barrels of proven oil reserves. Its problem is getting it out of the landlocked country. It recently struck a deal with Sudan, after a long period of deadlock over fees, to transport it through its northern neighbour’s land.
To reduce its reliance on Khartoum, the South Sudanese government has announced a 2,000 km pipeline, at a cost of $3bn, through Kenya to its port of Lamu. G4S is one of the companies vying to help secure this vital source of South Sudanese revenue.
It is also looking to enter, for the first time, markets in Libya, Tunisia and Zimbabwe, though South Africa, Nigeria, Kenya and Mozambique are among the countries it intends to expand most aggressively in.
Mining, oil and gas, and telecoms, all industries projecting major growth, are areas that private security firms are looking to establish themselves in over the next few years. Such rapid economic expansion has forced various African governments to face up to problems of capacity and an insufficient skills and knowledge base. The tendency therefore is to look to the private sector.
There is a sense, however, that the encroachment of private security in the continent needs to be checked. The South African government figures show that in April 2011, there were more than 8,000 privately owned security firms employing over 1.5m officers in the country. This, they considered, was an unacceptable threat to national security and a bill is on its way to parliament which will require 51% of a local subsidiary’s shares to be owned by South Africans, which, if the bill is passed, firms will have five years to comply with. There are a number of options open to private security companies, among them leaving the country. The key for them would be to become minority shareholders of their South African subsidiaries while at the same time maintaining overall control.
South Africa’s crime statistics have recently made good reading and the worry is that this change in the law may impact on that trend adversely. Addressing these concerns, an initiative convened by the Swiss government, the International Code of Conduct for Private Security Service Providers, lays out a set of guidelines based on human rights law, which covers such matters as a ban on torture, forced labour and human trafficking, and policies for the vetting, and training of employees. There are now more than 500 signatories to the code, but critics of the code point to the fact it is voluntary and that it means the industry is self-regulating. This perceived weakness, the ambiguity between private and public security and the need for clear guidelines is perhaps most obvious in Nigeria.
Nigeria is a country that is growing, in more ways than one, more quickly than it can keep up with. Crime is a particular problem there and, subsequently, the private security sector has boomed. In Nigeria, private security companies are sometimes given use of the police, which suggests at least a partial and informal privatisation of the police service. The military has also been used to protect the oil industry, paid for by the private sector.
A leaked report reveals that Shell spent, between 2007 and 2008, $383m securing just its Nigeria operations alone – one third of the oil giant’s total worldwide expenditure on security. The payments were split between those to the government for use of military forces and those to private firms and individuals.
Shell defends its spending on the grounds that it is working in a very dangerous region. In 2008, 62 of Shell’s employees were kidnapped and three killed. It suffers vandalism to pipelines and well heads and, it estimates, up to 20% of its oil is stolen by criminal gangs. But critics argue it is unethical to syphon so many millions of dollars into military groups for their alleged corruption and human rights abuses. What is really striking about the amount spent is that, despite it all, high levels of criminality continue.
Ethical controversies
With the parts of the world where the US traditionally gets its oil from unstable for a variety of reasons, it is turning its attention to West Africa as a steadier source. With Sierra Leone and Liberia coming on stream with their own deposits, securing the waters there has become a top priority. One is left to wonder at the prospect of a private or semi-private navy patrolling the west coast of Africa.
More infamous, the shipping lanes off the coast of East Africa, apart from being among the most important and busiest in the world, are the most dangerous. Somali based piracy has been responsible for the hijacking of around 170 ships since 2008. Not only has this resulted in the taking and often subsequent murder of hostages, but the cost to the world’s economy is an estimated $12bn per year.
National navies began patrolling the lanes but with such a vast area to cover, their effectiveness against tiny speed boats was limited. Shipping companies began hiring private security firms or Privately Contracted Armed Security Personnel (PCASP) to protect their crews and cargoes. And it is a fact that not a single ship protected by a private security contractor has ever been successfully hijacked.
2011 saw a reduction in the number of successful hijackings over the previous year, down to 28 from 49. Moreover, the number of hijacking attempts, successful or otherwise, fell by more than half over the same period.
Information about clients is difficult to come by as companies are reluctant to admit to employing lethal force. A leaked video which showed contractors employed by maritime security firm Trident Group Inc on board Eagle Bulk Shipping’s Avocet opening fire on suspected pirates highlighted the lack of rules of engagement at sea and drew criticism from some.
Trident’s president, a former US Navy Seal, Thomas Rothrauff, insisted the action was justified, but the industry itself is split on the matter. Some companies are squeamish about a shoot to kill policy while others are concerned equally with the possible damage to reputation. The UN’s International Maritime Organisation has issued guidelines but they are non-binding. The private contractors themselves are relied upon to enforce their own rules, but some reports suggest the rigour of this enforcement is varied.
Both the shipping and private security industries would benefit from a set of binding rules, but such a thing would be difficult to agree among so many jurisdictions. The lack of a code means there is a danger that less expensive, but also less skilled contractors will begin guarding ships, with inevitable consequences. Despite the legal difficulties and ethical controversies, the industry is only likely to grow. For the shipping companies it makes economic sense.
According to the Independent Maritime Security Association, the average cost of armed guards for a single transit is $50,000. However, bypassing the most risky waters would add 3,000 miles to each journey at a cost of $3.5m a year extra in fuel costs for a tanker and more for liners. Insurance premiums have skyrocketed from only $500 per voyage five years ago to $20,000 today. Not to mention the cost of paying out ransoms and the incalculable cost of human life.
Maritime traffic is set to increase in the coming years while navies are projected to shrink in size at a similar rate. In the short term, hiring private guards appears to be the only guaranteed solution to a far broader geopolitical mess.
Whether on land or sea, vast global interests in natural resources and shipping are opening up opportunities for private security firms all over Africa. The culture change which is seeing the private sector take over roles traditionally served by the state, such as policing, the running of prisons and, indeed, waging war, means that as the state steps back from its responsibilities the private security industry will continue to grow.
1.5m
The South African government figures show that in April 2011, there were more than 8,000 privately owned security firms employing over 1.5m officers in the country
Shell spent, between 2007 and 2008, $383m securing just its Nigeria operations alone – one third of the oil giant’s total worldwide expenditure on security.
Story here.