Paramount Group was founded in 1994 and has evolved over those 25 years of operation but Ichikowitz said: “We’re 25 years young. Somebody pointed out to me that I've been at this for 25 years and I don't feel a day older than I did 25 years ago.”
Ichikowitz said that what Paramount Group has achieved over that 25 years mirrors what Africa and South Africa have achieved.
“Everybody thought that in 1994, the defence industry in South Africa would die,” Ichikowitz said. “And exactly the opposite has happened – we've innovated, we've stayed world leaders, we've become more agile and we've learned how to be less dependent on our domestic customer, which was a huge thing.”
He added: “We've gone out and shown that you can create a defence industry infrastructure without being dependent on your home customer. And in order to become an export-focused business, we had to learn to listen to our customers.”
“Every single piece of intellectual property that Paramount has developed over the last 25 years was designed to solve a customer problem,” Ichikowitz said.
Value for money
Ichikowitz explained that Paramount’s previous experience with the domestic market is now serving the company well as customers globally focus more on value for money.
He said in the past, Paramount’s technology has always been developed for customers that didn't have a lot of money.
“One of the characteristics of Paramount is that we never had first-world customers so we always had to make value-for-money products. Whether we were building aeroplanes or ships or vehicles, value for money was always the priority.
“And what we're now finding is that the first world is now starting to take a value-for-money approach. There was a time when you came into the Middle East and the customer bought according to the price – the more expensive, the better the product and the quicker you did the sale. This has changed because governments today [all] have financial pressure and our product, approach and philosophy are becoming relevant all over the world.”
Aerospace and defence are increasingly about collaboration, and this approach is in line with Paramount’s strategy.
Ichikowitz commented: “I've said for many years that this industry is going to become about collaboration and partnerships. Consolidation in the defence industry is absolutely essential. Without consolidation, without collaboration, without partnerships, this industry will slowly but surely die – specifically in places like South Africa.”
Paramount has partnerships in South Africa with its sub-supplier base and other collaborators.
“This has led us to a philosophy and approach that has evolved our portable production policy,” Ichikowitz said, explaining: “So Paramount for 20 years has been designing products to produce in customer countries, in partnership with governments who want defence industrial infrastructure. So we evolved the portable production philosophy and that portable production philosophy was shunned by everybody. Everybody said: ‘You can't do this; it’s impossible.”
Specifically, critics suggested the technology was too complex, factories too expensive and that transferring the intellectual property (IP) would be too hard. Skills were also flagged as a major issue which would mean that the portable production policy wouldn’t work.
“Well, we do [it] every single day,” Ichikowitz said. “Today, we have several factories around the world that we've done on this portable production basis. We have proven that we can take technology, transfer it into production in a customer's country and eliminate this whole complex offset requirement because we add massive value in-country, train people, get production up and running in a very short space of time and make it sustainable. And we do this in many countries around the world.”
He added: “And that is where our growth is going to come from. We are very proudly African but our growth isn't going to come from Africa.
"Our growth is going to come from the rest of the world and we're going to grow in the rest of the world through portable production."
Ichikowitz said that Paramount is starting to look at opportunities in the United States, which would have been “unthinkable” five years ago, as well as in Europe and the Middle East, where the company is already signing “substantial contracts”.