Australian defence industry leaders say there are ‘endless’ export opportunities for domestic companies and have welcomed the Australian Government’s renewed emphasis on Australian Industry Content and Capability.
But industry members also believe that it is up to industry to earn the right to take part in the Defence supply chain and to collaborate with other Australian companies to be competitive and bring more value to the table. This approach will help open doors to domestic and global opportunities for decades to come, they say.
BAE Systems Australia Round Table: Securing Our Defence Industry's Future
A group of six leading CEO’s from Australian defence companies and SMEs recently attended a round table conversation hosted by BAE Systems Australia on the future of the domestic defence industry and the importance of maximising Australian industry involvement in manufacturing and sustainment for the Australian Defence Force.
Each of the companies is a potential supplier for BAE System Australia’s Land 400 Phase 2 Combat Reconnaissance Vehicle Program. The participants were Jake Dingle from Carbon Revolution, Karen Stanton HTA Group, Rohan Stocker Marand Precision Engineering, John Teager Ruag Australia, Les Zanati Mackay Consolidated Industries and Gerard Ogden Saab Australia. The round table was hosted by BAE Systems Australia Chief Operating Officer, David Bond.
With Defence spending increasing over the next three decades and competitive processes in place for programs such as the Future Frigates – SEA 5000, the LAND 400 army combat vehicle replacement program, the major upgrade to the Jindalee Operational Radar Network (JORN) as well as the world’s biggest defence program, the F-35 Joint Strike Fighter program to name but a few, there are many new opportunities for innovative businesses seeking to gain a foothold in the global defence industry sector.
Once there, the opportunities for successful Australian companies are ‘endless’ according to Karen Stanton, CEO of HTA Group which has offices in Sydney, Melbourne, Brisbane and Los Angeles.
"A really good successful Australian company can take their product to the US or to Europe or to almost any other nation and be successful, because you have fought hard for what you have got,” said Karen. “You’ve got your skills, you’ve got your capabilities and you’ve got that desire to succeed. And if you have done it here then the opportunities are endless for us."
These projects are not just about a dollar sign today, they are absolutely for the long term future of our country.
Karen Stanton, Director Corporate and Strategy, Heat Treatment Australia Group
Building Australian industry capability requires long-term planning
John Teager welcomed the Commonwealth’s focus on Australian Industry Content and Capability and highlighted the importance of long-term acquisition and sustainment planning as a significant opportunity to foster greater Australian capability. "Land 400 Phase 2 is the beginning of a 30 to 40 year opportunity for us to re-establish military vehicle capability in Australia. And I think we should not link our thoughts to only military vehicles, but how we can take some of the technologies that are emerging out of this project and apply them into other industries."
If we are going to spend billions of dollars on a national program like we are doing with Land 400 and other programs, there would be an expectation that Australian industry has an involvement in that and we generate some benefit for our people.
John Teager, Managing Director of Ruag Australia
Gerard Ogden, Saab Australia, describes the Land 400 Phase 2 program as "a cornerstone project for Australian Industry Capability" provided the AIC strategy is well articulated with long term planning.
"I think it is a great move forward, and if it is implemented correctly, it really will add value. But industry has got to step up and really commit to it.
"The encouraging thing about the Land 400 program is if you take the Government’s acquisition and sustainment approach and you put that together with the approach that BAE Systems has come up with and the collaboration as to how we are going to do it in Australia, then I think that is a turning point for Australian industry involvement."
David Bond agreed. "We are thinking about the next 30-40 years, and the type of partnership we need to establish with both our customer (Defence) and our suppliers for the long-term."
Jake Dingle said a long term well-articulated strategy was critical for smaller companies aiming to become involved in these sorts of defence programs.
AIC is a pathway to firstly diversifying into Defence and from that platform growing it into export markets.
Jake Dingle, CEO of Carbon Revolution
"Unless there is a clarity over what the potential is over a long period of time it is very difficult for smaller companies to put in the resources and to back that as a strategy. It’s that clarity of purpose and strategy over a long period of time that is critical to everything from resource deployment, funding and prioritisation within a company."
Early collaboration essential
Rohan Stocker highlighted Government’s role in collaborating with industry to foster the manufacturing industry. "Collaboration between government and industry, and industry to industry, is very important but it’s about true collaboration. We need government working with industry to help open doors between different sections of industry, to help with the right fundamentals and the policies to make it easier for companies to collaborate with research institutions and to get early engagement on things like Defence programs."
It’s about using Australian ingenuity, ideas and innovation and having that contribute to the overall value and the overall capability of the product.
Rohan Stocker, CEO of Marand Precision Engineering
Gerard Ogden explored the importance of manufacturing in Australia. "I’m a firm believer that if you are involved in the manufacturing of a product or a capability then the sustainment of that capability becomes a lot more efficient and becomes a lot more competitive. The benefit for the Commonwealth if you get that collaboration right then everyone benefits, and not only in the acquisition phase but also in the sustainment phase as well."
If technology transfer is done well and its done properly it is a great multiplier for industry.
Gerard Ogden, Head of Marketing and Sales, Saab Australia
Transitioning to an advanced manufacturing future
Les Zanati said that manufacturing in Australia was undergoing a transition to become more advanced and deliver more rapidly. "Manufacturing in Australia is undergoing a transition and you only need look at the automotive industry as an example of that, and it will fast become one that is very much specialised in niche areas, and defence being one area where companies that do offer advanced technologies will come to the fore."
AIC will drive more jobs, more exports and sovereign control
David Bond said that the next few decades are going to be very exciting and challenging times for the Australian defence industry. "Together we need to capture opportunities within major programs such as Land 400 and help maximise Australian capabilities by helping our small to medium enterprises be a part of these programs. This will help further develop, expand and strengthen the Australian economy and create more export opportunities."
Mr Bond added that BAE Systems Australia knows that it can competitively manufacture and build the AMV35 in Australia. "We always believed that the Australian supply chain was competitive but we went out and tested it to ensure we could get the right quality and the right price. We got a pretty clear answer that the Australian industry supply chain is competitive. So absolutely we are confident that by working with Australian companies we can come up with a very, very good value proposition for Australian industry and the Australian customer."
Karen Stanton added that Australian content to those of us who live here is "more important than anything."
"It means jobs, it means employing the people we already employ and adding to that list of employees. Australian content means we grow our skills base, we grow our capabilities and capacities so we can attack other projects as well. We are not just talking about one project, we are talking about expanding our businesses and our capabilities so we can perform other programs and do other work so that we can and expand globally. Australian content to those of us who live here is more important than anything."
Les Zanati said an important aspect of building capability in-country is sovereignty.
From the Government’s perspective it is sovereignty. It’s about having a capability reside in the nation itself.
Les Zanati, CEO of Mackay Consolidated Industries
Jake Dingle and John Teager
Gerard Ogden and Karen Stanton
Les Zanati and John Teager
- David Bond, BAE Systems Australia Chief Operating Officer
- Jake Dingle, CEO of Carbon Revolution
- Karen Stanton, Director – Corporate and Strategy for HTA Group
- Rohan Stocker, CEO of Marand Precision Engineering
- John Teager, Managing Director of Ruag Australia
- Les Zanati, CEO of Mackay Consolidated Industries
- Gerard Ogden, Head of Marketing and Sales at Saab Australia