Australia aims to boost local arms production

Defense News features an article on a government initiative aimed at enhancing Australia's ability to produce long-range weaponry, with Caliber.Az reprinting the piece.

As the CEO of DefendTex, an Australian company specializing in precision-guided weapons, rockets, and loitering munitions, he is optimistic about a government program aimed at enhancing the domestic industry's ability to produce long-range weaponry. However, he faces a challenge in securing the financial support anticipated from the Australian government’s Guided Weapons and Explosive Ordnance Enterprise program.

According to a local analyst, large defense contractors, particularly those from overseas, are being favoured. “There’s a tendency by the government to default to the major primes. Everything must go through companies like Lockheed Martin, Boeing, and Thales. We should see what SMEs (small and medium enterprises) can do regarding long-range missiles,” said Malcolm Davis, an expert in capability development and military technology at the Australian Strategic Policy Institute. “Give them a chance to actually demonstrate their capabilities.”

For several months, DefendTex has been seeking a yearlong AU$70 million ($46 million) loan from Export Finance Australia, the government’s export credit agency, to acquire financially troubled Avibras in Brazil. Reddy emphasized his reliance on government support, as domestic banks have refused to provide loans to his weapons manufacturing company.

DefendTex's exclusive negotiation period with Avibras has reportedly ended, as it was set to expire at the end of June. Meanwhile, Chinese defense industry giant NORINCO is making moves to purchase the business, offering an incentive by proposing to manufacture Chinese weapons in Brazil.

Reddy argued that Australia could significantly benefit from Avibras' extensive expertise in guided weapons, acquire valuable intellectual property, and rapidly establish manufacturing facilities in Australia. “We know that within 24 months, we’d achieve full-rate production in Australia: the full IP suite, the seeker, propulsion system, the whole box and dice.”

Highlighting the increasing geopolitical tensions in the Asia-Pacific region, Malcolm Davis pointed out the government’s slow progress on initiatives like the Guided Weapons and Explosive Ordnance (GWEO) Enterprise. “At the moment, it seems to be moving very much at a snail’s pace on a small scale, a very hesitant approach on the part of government, which I don’t understand given the very adverse strategic outlook we’re facing,” he said.