Australian Defense Industry Looks to the Future
2017-07-31 In a recent article by Andrew Tillett published in The Financial Review, the growth in Australian defense industry associated with the launch of new Australian defense programs is examined.
Australia has had some success stories. Thales’ Bushmaster vehicle proved its worth in Afghanistan by protecting soldiers from blasts and was snapped up the British and Dutch armies.
And Canberra’s CEA Technologies, which make radar and communications systems, has achieved $260 million in foreign sales over the past five years.
For many local firms, the JSF project has been their entree into global supply chains. Australian companies have about $800 million in contracts as a downpayment.
Varley has been supplying the Australian Defence Force since the mid 1980s and in 2004 won its first contract to provide maintenance equipment for servicing the JSF, beating Italian, Turkish and US companies.
Varley’s defence and aerospace general manager Victor Ugarte said this initial contract had opened the door to more work with US giants Lockheed Martin and Northrop Grumman.
“If we are performing well to expectations, there is work to come,” he said.
Likewise, Quickstep’s supply of composite parts for the JSF, as well as the Hercules transport plane, has amounted to an endorsement within the defence sector.
“We’ve been able to use these programs to demonstrate production and quality capability, and that we are globally competitive,” chief executive Mark Burgess said.
Over the past four years, the Bankstown company has grown from 120 to 220 staff, and plans to add another 30 by 2020 as production hits its peak.
“We can’t afford to find out when we manufacture something we’ve got it wrong,” business development manager Chris Isaacs said.
An additional recent piece looking at the upward trajectory for Australian defense industry was published on July 25, 2017 in Manufacturers’ Monthly.
Defence contractor Quickstep is anticipating further growth over the next three years as production of the Joint Strike Fighter (JSF) ramps up globally.
According to its latest quarterly report, the Sydney-based advanced composite manufacturer has more than doubled its production for the program during the past year.
The company supplies 21 JSF components to Northrop Grumman – a principle member of the Lockheed Martin-led project – including doors, panels, and skins.
“Quickstep’s long-term vision is to become a world leader in advanced composites manufacturing,” said Mark Burgess, Quickstep CEO. “The company is focused on expanding its business in the aerospace, defence, automotive and other high-growth sectors.”
An earlier piece in the same publication looked at the ripple effect from the F-35 program in Australia.
Meanwhile, more than 50 Australian companies have directly shared in more than $800 million in production contracts since the Howard Government elected to make the F-35 Australia’s fighter jet of choice 15 years ago.
The ripple effect will, it is said, indirectly benefit hundreds more Australian companies up and down the supply chain, with net government spend set to jump to $2 billion by 2023. It has become apparent, however, that the flight-path towards truly understanding what Australia companies can offer the defence industry is still in its infancy.
Research carried out by Graeme Dunk, manager of the Australian Business Defence Industry, shows that around five per cent of government (prime) contracts, by value, go out to Australian SMEs – averaging out at roughly $43,000 per contract.
“This analysis is from data on Australian tender, so only shows prime contracts – not subcontracts – and refers to the combined vale of acquisition and sustainment contracts placed by Defence to Australian-owned companies,” Dunk explained.
Air Vice-Marshal Leigh Gordon heads up the JSF Division within the Capability Acquisition and Sustainment Group (CASG); the DoD’s military equipment purchasing arm.
“Governments globally are looking for their dollars to go further and deliver more for their domestic economies,” he told Manufacturers’ Monthly.
“This presents Australian industry with an opportunity to be innovative in driving down the cost of defence capability inputs.”
This means, with production volumes increasing and the F-35 GSS maturing, defence and industry will continue to work closely together to optimise Australian industry participation in the F-35 Progam.
“There are some challenges ahead, which means Australian industry will have to stay internationally competitive by improving efficiency; driving innovation, supporting skills development and maintaining quality,” Gordon continued.
To do this, Australian companies will specifically need to develop associated intellectual property in Australia to market worldwide and enhance their design, manufacturing and maintenance capabilities.