Trade union Solidarity has sent a strongly worded letter to Denel’s senior leadership over the state of Denel Pretoria Metal Pressings (PMP), the group’s ammunition manufacturing division, warning that late salary payments and a lack of visible progress on a recovery plan have left staff in a state of ongoing uncertainty. The letter, dated early November, was addressed to interim board chair Tshidi Mokgabudi, chief executive Tsepo Monaheng and remuneration committee chair Louwressé Specht.
Written by Derek Mans, Solidarity’s defence and aerospace industries sector coordinator, the letter says PMP and Denel Land Systems staff again received salary payments late in October, repeating a pattern that has dogged the division for years. Solidarity has been raising concerns about pay delays at PMP since a public dispute roughly six years ago, and it told Denel that “Denel PMP cannot continue operating in an environment of uncertainty”, a position it has repeated as the division’s finances have swung between crisis and partial recovery. It is not the first such warning: in January Solidarity said it was deeply concerned about a growing salary and governance crisis at Denel.
A recovery plan without visible accountability
At the centre of the dispute is a PMP task team recovery plan approved in February 2025, which Solidarity says has not been accompanied by a clear account of funding, measurable outcomes or production targets. The union specifically wants a written breakdown of a R120 million recovery allocation and the task team’s recommendations, along with an explanation for the renewed late payments. It has also asked for a dedicated, ring-fenced PMP recovery plan rather than one folded into broader group turnaround efforts, and a formal steering or working committee that includes organised labour.
A separate frustration concerns Denel’s search for a strategic partner or investor for PMP, a process driven by National Treasury. Two open days were held for prospective partners in July, and Solidarity says it was told in August it would be consulted as the process progressed. As of late October, it says that engagement had not materialised. Its position is that compliance with a prescribed government process does not remove the need for accountability to the workforce. Denel has also said it is seeking R30bn in new orders to drive its recovery, Business Day reported in October.
A profit that masks underlying strain
The dispute lands just weeks after Denel reported improved group results to Parliament’s Portfolio Committee on Defence and Military Veterans on 9 October. According to the group’s 2025/26 annual report, revenue rose 15.8per cent to about R1.473 billion from R1.272 billion the previous year, while net profit came in at R156 million, down from R193 million a year earlier. The company also told the committee it is pursuing a pipeline of prospective business worth more than R30 billion as it tries to convert orders into sustainable cash flow. Our report on Denel receiving a ninth straight audit disclaimer despite revenue growth covers the group financial reporting position.
Solidarity argues the headline profit obscures the real picture, since it relies heavily on Denel’s share of earnings from Rheinmetall Denel Munition, the joint venture through which much of the group’s ammunition business is channelled, rather than from PMP’s own operations. The annual report also recorded an operating loss alongside the net profit, along with finance costs and liquidity pressures that the group’s own audit and risk committee flagged as a risk to sustainability, dependent on continued government support and execution of the turnaround plan. The group results are set out in Denel’s 2025/26 annual report, tabled in Parliament.
Why it matters for business
PMP is one of the few remaining large-scale ammunition manufacturers on the continent, and its stability affects not only Denel’s own balance sheet but also suppliers, skilled artisans and engineers whose retention Solidarity has repeatedly flagged as a risk, and the credibility of South Africa’s defence-industrial base with prospective investors. Repeated pay delays raise the risk of skills attrition at a facility that is difficult to restaff quickly, while an unresolved strategic partnership process leaves suppliers and potential investors without clarity on PMP’s ownership structure or long-term direction. The wider industry export record is covered in our report on the record R10bn defence export year.
Solidarity says it is not seeking confidential information and accepts that the National Treasury-led partnership search carries its own governance requirements, but insists that process compliance cannot substitute for direct engagement with organised labour representing PMP’s workforce.
What we could not confirm
- Denel and the Department of Defence had not issued a public response to Solidarity’s letter at the time of reporting.
- The exact amount of October’s late salary payments, and how many PMP and Denel Land Systems employees were affected, was not independently verified beyond Solidarity’s account.
- The current status of the Treasury-led strategic partnership search, including which parties remain in the process, could not be confirmed from a Denel or Treasury source.
