This follows the incorporation of satellite manufacturer, SunSpace into Denel in July in a move which combines the highly-advanced engineering and technology skills of both companies.
Riaz Saloojee, group chief executive of Denel says Spaceteq will strengthen the group's position as a leader in innovative and advanced aerospace systems and technology.
Space has been identified as one of South Africa's challenges and the Departments of Science and Technology (DST) and Trade and Industry (DTI) have identified satellite production as a high-technology manufacturing niche that South Africa should be pursuing.
"Denel Spaceteq will be able to play a central role in this national strategy," says Saloojee.
The new company known as Denel Spaceteq is part of Denel Dynamics which has been exploring opportunities in satellite and space engineering in collaboration with the South African National Space Agency (SANSA) and the DST since 2011.
Berthold Alheit, general manager of Denel Spaceteq says its first project is to develop a multispectral, high-resolution, earth observation satellite called EO-Sat1 for operation by SANSA by 2017. This satellite will be used to improve food security, urban planning and development, safety and security and support for disaster management.
Denel Spaceteq will represent South Africa at the 64th International Astronautical Congress (IAC), which is being held in Beijing, China from 23 to 27 September. The annual IAC's 2013 theme is: promoting space development for the benefit of mankind.
"While the space domain is a new frontier for the African continent and for Denel Spaceteq, the time is right to market South Africa's strong engineering capability and our culture of co-operation internationally," says Alheit. "Spaceteq's capabilities can be applied to the advancement of solving difficult and large engineering problems in the space field."
Denel Dynamics attended its first IAC in Cape Town in 2011 after teaming up with the Aerospace Industry Support Initiative (AISI) supported by the dti, and was involved in previous space programmes until 1996. It has a latent space capability, including key staff working for Denel on various programmes, as well as at the Houwteq satellite test facility near Grabouw.
The highly skilled and specialised engineers and scientists, absorbed into Denel from SunSpace, brought with them capabilities of their own including the SunSat and SumbandilaSat programmes. EO-Sat1 will be based on the strong legacy inherited from the development of SumbandilaSat.
Alheit says benefit of a local Space industry will be far reaching. South Africa's access to, and control over, its own satellites will ensure advanced surveillance and reconnaissance capabilities.
"Retaining and developing technology and engineering skills within the country's borders will have a much broader national technological benefit and inspire young talent in the much needed fields of maths and science," Alheit added.