Austal wins $670m contract

Austal will expand production capacity at its US shipyard after signing a $670 million contract with a major US defence contractor. 

The shipbuilder’s US division, Austal USA, was awarded the contract by General Dynamics Electric Boat, a major US submarine builder and fellow US Navy defence contractor.

The funding will be used to expand submarine module production capacity at Austal's shipyard in Mobile, Alabama, where its US arm is based, through the construction of a new facility. 

The new module fabrication and outfitting facility would support the US Navy's target of delivering one Columbia-class and two Virgina-class submarines annually, Austal said.

Construction of the new facility at the shipyard is tipped to be completed in 2026, and once fully operational is expected to support about 1,000 jobs.

Austal said the new building would provide capability to fabricate, outfit and transport submarine components.

“General Dynamics Electric Boat has recognised that Austal USA is a solid partner to deliver high-quality components for Virginia- and Columbia-class submarines,” chief executive Paddy Gregg said.

“This growing partnership demonstrates confidence in Austal USA’s commitment to meet the needs of the US maritime industrial base and support the most critical needs of the US Navy.”

Austal’s shares surged following the contract announcement, last changing hands at $2.65 a piece, up 18 per cent at 1.45PM AWST.