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Entrepreneur Spotlight : Ivor Ichikowitz - Africa Business Journal

October 10, 2009

Since its 1994 inception, the Paramount Group has steadily grown from being a reseller of South African defence equipment to a fully integrated systems and solutions provider. The Paramount Group has built up the ability to design, develop and produce its own platforms, developed when international sanctions against South African companies were being lifted. From the onset, Paramount Group specialized in supplying the needs of those countries and organizations engaged in peacekeeping, national defence, now with more than 25 international customers.

Initially, the Paramount Group linked international customers with surplus South African government available for-sale equipment. The refurbishment, upgrading and resale of Ratel vehicles was an important aspect of this activity, but the Paramount Group would soon outgrow the model, then supplying integrated solutions to accompany its equipment sales.

With these additions, the Paramount Group became a highly effective solutions provider, but in beginning it operations it mainly supported developing nations. Those markets became increasingly important with more and more countries taking greater direct security responsibility, as well as in part of multinational operations through the African Union.

Many nations are faced with small or inadequate defence. Paramount has expanded its financing capability, now specializing in providing innovative financing designed to help developing nations facilitate those acquisitions and that support.

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TABJ: In what way did you feel you could best impact the African continent in a positive light?

II: I’ve worked in Africa all my life and I realized very early on that the most important element to growth and development on the continent is to have a stable, secure environment. For many years the African continent has been plagued by both internal conflicts as well as cross border conflicts and I realized one of the ways to make the biggest impact on the future of Africa was to help government create secure and stable environments by building strong policing and defence capabilities. That is what Paramount has been committed to for many years.

TABJ: What defence solutions does Paramount provide?

II: For a long time, Paramount has been an investor for home grown African technologies. We believe a lot of the technological growth and development has been the result of a strong defence and aerospace industry. I personally believe the key thing that differentiates between a developing country and a developed country is access to technology.

TABJ: How does Paramount continue to build on these solutions?

II: One of the great benefits South Africa has had over the years is significant spending on research and development in the aerospace and defence industry. As South Africa has evolved politically and economically, that spending has slowed down. One can’t always rely on government to continue spending on research and development and, as a result, we believe we have stepped in where government has left off and as Paramount we are reinvesting a lot of our profit on research and development.

TABJ: Does the company have any partnerships in that industry?

II: In the aerospace environment, the strongest player on the continent is without a doubt Aerosud. They have for many years been Paramount’s preferred partners and we have done some major projects together over the years. The investment in Aerosud was a continuation of what was already a strong relationship that gave us an opportunity to have a far more strategic stake in the direction that both Aerosud and the aerospace industry in Africa is directed—investing significantly in new technology and new projects and, most importantly, developing skill.

TABJ: How would you describe the company’s comparative advantage?

II: This is a relatively unique concept in the aerospace and defence industry. We realized some time ago that the world was changing to the extent that the high value skills to design and development skills to a system being able to produce products close to the market. A lot of the technologies have been designed for portable production. Unlike most companies, we are very happy to share our technologies and enter into strategic alliances and joint ventures with manufacturing partners around the world. Expansion is as a result of choosing good strategic partners in key countries, building strong technology transfer agreements with them, building products appropriate for each specific market and manufacturing in those markets. So there is a sense of ownership.

Paramount is very unique in its approach. We are not a technology based company. We are a relationships based company. We’ve specialized over the years in developing partnerships with our customers, and sovereignty government. We provide solutions to those needs beyond the technical solution. When I started working in this field, one of the biggest challenges was bad relationship with contractors, so they spent a large amount of money on systems that they couldn’t afford to support. We make sure we are sustainable. We create credit for our customers. Previously they only had budget to buy pieces of a system at a given time. I measure our customers success by how successful we can get the second, or third or fourth generation of a customer.

TABJ: What is your passion for this business and for Africa?

II: I am in this business because it is a mechanism for me personally to make a difference in Africa. I believe it has such huge potential because of the uniqueness of the people that live on this continent. I got involved in this business because I could see this as a mechanism to make a difference, to create stability and affect the lives of every inhabitant of the continent.