New man at the helm of SA's arms manufacturer has his work cut out for him.

Denel‚ the embattled South African arms manufacturer and contractor‚ has a new boss.

The public enterprise ministry along with Denel's board announced on Thursday that Daniel du Toit had been appointed as CEO.

The ministry said Du Toit's appointment was part of a plan to stabilise the flailing state-owned entity.

"He will be able to build on the turnaround strategy for Denel that was introduced this year‚" said the ministry.

Du Toit‚ who begins his new job on January 14‚ leaves his position as MD at the German arms technology firm SAAB Medav Technologies.

Denel board chairman Monhla Hlahla said the board looked forward to working with Du Toit‚ who would "provide direction" to the business and its divisions.

She said the reputational damage Denel had suffered over the past two years had led to a loss of confidence from stakeholders‚ including the banking and investment community‚ who in turn were unwilling to extend credit facilities to the company.

"The turnaround is meant to arrest the current decline in the company’s performance‚ including instituting sound internal controls and to restore the company’s position as a strategic national asset and industry leader."