A$160 Million Defence Contract Awarded
21 Nov 2008
Chemring is pleased to announce that its Australian subsidiary, Chemring Australia Pty Ltd (“Chemring Australia”), based in Victoria, Australia, has been awarded a long-term contract for the supply of countermeasures and pyrotechnics to the Commonwealth of Australia. The contract is worth A$160 million over an initial ten year period.
In announcing the contract signing, The Hon. Greg Combet AM MP, Parliamentary Secretary for Defence Procurement, said, “the establishment of an in-country manufacturing capability positions Chemring Australia to demonstrate the capacity to manufacture these items for the JSF project and this will allow them to compete for work on the global fleet. The long-term contract, under which annual minimum order quantities are guaranteed, assists in smoothing production throughput leading to increased efficiencies in manufacturing. The contract will also lead to a more efficient supply of flares and chaff which are often sourced from offshore,” Mr Combet said.
“The contract reinforces Chemring Australia’s role as a key element of the National Support Base supplying munitions to Defence, and will provide ongoing employment for approximately 40 additional skilled workers.
As part of the arrangement, Chemring Australia will invest A$18 million in the establishment of a new, state-of-the-art manufacturing facility near Melbourne, as well as creating a research and development centre for the design of future products. Construction of the new facility will commence shortly and is expected to be completed in 2010.
The new manufacturing capability will also enable Chemring Australia to bid for the second-source supply of countermeasures for the Joint Strike Fighter, and the additional production capacity will be utilised in Chemrings’ global supply chain to satisfy export flare requirements.
Dr David Price, Chief Executive of Chemring, commented: “This contract establishes Chemring as the principal supplier of countermeasures and pyrotechnics to the Australian armed forces. The new state-of-the-art manufacturing facility will allow Chemring Australia to meet Australian operational requirements and will provide additional manufacturing capacity to satisfy the increasing demands of our global export customers.”