Industry helps power defence exports

THERE have been some notable events within the defence industry in the past month, underscoring the power of export markets and contributions of Australian industry.

Western Australia’s Austal hosted the commissioning of USS Canberra by the US Navy.

This is notable because the Littoral Combat Ship was designed at Austal in Henderson, built in the Austal factory in the US and commissioned at the Royal Australian Navy’s Fleet Base East in Sydney.

As described by Austal, the commissioning is a significant milestone for a ship, noting its ceremonial transition from a vessel to a warship in the US Navy.

This event was more remarkable because it’s “the first US Navy ship to be commissioned outside of the US in its near 248-year history”, according to Austal.

While I am sure there are many that would wish for the construction to occur in WA, Austal’s success with our US allies is evidence of the power and potential of the export market for Australian businesses.

The significance of hosting the commissioning ceremony in Australia is another touch point in a history of strong relations between allies.

In other significant news, Hanwha Defense Australia was selected as the preferred tenderer for Land 400 phase 3, for infantry fighting vehicles (IFV).

The Department of Defence outlines the original intention for the IFVs to “replace the current M113 armoured personnel carriers that have been in service since the mid-1960s and are no longer able to counter the current and emerging threats presented in our operating environment”.

When fully delivered, the new vehicles will enable the Army to successfully sustain mounted closecombat operations against emerging and future threats as part of a joint force.

The original tender was released in 2018 and closed on March 1, 2019.

The decision had been delayed due to a reprioritisation of defence spending, reducing the tendered requirement from 450 vehicles to 129, with manufacturing to occur at Hanwha’s production facility in Geelong.

Hanwha’s IFV is called The Redback.

The contract is understood to be worth between $5 billion and $7 billion.

Hanwha is a subsidiary of Hanwha Aerospace, which itself is a division of the Korean conglomerate, Hanwha Corporation.

Prime Minister Anthony Albanese has also announced Australia would provide a RAAF E-7A Wedgetail Active Early Warning and Control aircraft to Germany.

“The Australian Defence Force will deploy a Royal Australian Air Force E-7A Wedgetail aircraft to Germany for approximately six months from October to help protect a vital gateway of international humanitarian and military assistance to Ukraine,” Mr Albanese said.

“This deployment includes up to 100 crew and support personnel.”

The Wedgetail, based on a Boeing 737 next generation baseline, is designed specifically for Australia, and is in operation with Australia, Turkey and South Korea.

The UK and US have units on order.

Boeing Defence Australia and BAE Systems Australia were involved in the modification of the some of the fleet.

The Wedgetail will not be used in Russian, Belarusian or Ukrainian airspace but will be utilised to protect gateways for humanitarian and military assistance.

In another development, Australian company DroneShield has secured a US government agency contract for $33 million.

This followed news weeks earlier of a $9.9 million order from an unnamed ‘Five Eyes’ country (Australia, New Zealand, US, UK and Canada).

Between the announcement of those two orders, DroneShield also announced it had been assigned NATO stock numbers for several of its products.

The significance of this is that NATO militaries can purchase the items off the shelf, boosting DroneShield’s potential order book, which sits at $62 million with a further $200 million in potential deals in the pipeline.

These announcements and their impact on the company’s stronger share price and its pipeline value, further reinforce the impact of export markets for Australian defence businesses, and the importance of agencies such as the Defence Export Office.

• Kristian Constantinides is the general manager of Airflite, and was chairperson of AIDN-WA for seven years; the opinions expressed are purely his own.