DAVID WILL PUBLISH - Photo is in South Africa, feel free to change

GABORONE, Botswana — South African defense industrial complex Denel has expanded its footprint by setting up a military factory in Hong Kong as a springboard into the Asia-Pacific market where it hopes to take advantage of rising defense budgets to sell unmanned aerial vehicle (UAV) systems, artillery systems, armored personnel carriers and advanced missile systems.

In a recently released statement, acting CEO Zwelakhe Ntshapo said Denel Asia was established through a joint venture agreement with VR Laser, a Hong Kong-based defense equipment manufacturer.

"This (Asia) is an important region for Denel to expand its business into and find new markets for our products, especially in the fields of artillery, armored vehicle, missiles and unmanned aerial vehicle (UAV) systems," he said. "We need a foothold in the region, and the establishment of Denel Asia with headquarters in Hong Kong will give us a strong presence and the ability to pursue opportunities."

Some of the possible markets to be targeted by Denel Asia are India, Singapore, Cambodia, Indonesia, Pakistan, Vietnam and the Philippines are some of the markets Denel Asia are considering.

Commenting on the new partnership, VR Laser's chief executive, Peter Van der Merwe, said the agreement gives Denel access to its expertise in production and support services in the field of armored personnel carriers.

"VR Laser has expertise in defense technology and an understanding of defense markets in Southeast Asia," he said.

The expansion is likely to strengthen Denel's foothold in a region where it already has multi-million dollar contracts, which include the supply of missile systems and turrets for APCs of the Malaysian army.