South Africa's Paramount receives orders for Mwari aircraft

PRETORIA (Reuters) - Private South African defence firm Paramount Aerospace Industries has received orders for nine of its Mwari aircraft - the first military aircraft to be designed and built in the country in nearly two decades, the company said on Wednesday.

The first of the propeller-driven reconnaissance, surveillance and precision strike aircraft will be delivered this week, Paramount announced on the sidelines of the Africa Aerospace and Defence show in Pretoria.

Paramount declined to name the two initial customers for the Mwari. But the company said it was targeting military clients in developing countries in Africa and Asia for sales.

"We have immense interest around the world," Paramount Group founder Ivor Ichikowitz said. "Our biggest challenge right now is going to be to set up production capacity quickly enough to meet the demand."

The defence sector once played a major role in South Africa's economy - a legacy of the racist Apartheid regime's need to produce locally due to embargoes - and boasted one of the world's most diversified non-aligned arms industries.

More recently, however, it has suffered from a squeeze on defence spending globally and a weak home market.

The Rooivalk - an attack helicopter developed by state-owned defence company Denel in the 1980s - was the last military aircraft designed and manufactured in South Africa. But it never reached large-scale production, and manufacturing ended in the early 2000s.

Development of the Mwari began in 2010. Paramount markets it as a relatively inexpensive alternative to pricy, high-maintenance military aircraft for surveillance, maritime patrol and counter-insurgency operations.

A base model costs around $10 million, with add-on options including high-tech optical pods, electronic intelligence gathering and night vision.

To date Paramount has invested around more than $250 million in the aircraft's development.

Ichikowitz said the plan was ultimately to sell modular manufacturing facilities allowing customers to produce their own versions of the Mwari locally. Paramount already uses a similar system to build land vehicles at locations around the world.

"Paramount pioneered the concept of portable production some years ago," Ichikowitz said. "What we have in South Africa is the first of the micro-factories that will ultimately be built around the world to produce this aircraft." (This story corrects to make clear that $250 million, not 750 million rand ($42 million), has been invested in the aircraft's development, after clarification from company)

($1 = 17.7103 rand)

(Reporting by Joe Bavier; Editing by Nick Zieminski)