BAE Systems issues call to arms for SMEs

The Australian, September 28, 2016:

Small Australian manufacturers are on the cusp of a golden ­opportunity to seize a greater part of the multi-billion-dollar global defence industry, according to global defence giant BAE Systems.

UK-based BAE is this week hosting an event in Canberra to bolster the credentials of about 200 small and medium-sized enterprises looking to tap into the defence industry supply chain.

Of particular focus are opportunities to become part of BAE’s global combat ship program, which is committed to building eight frigates in Britain for the Royal Navy and which is one of three designs being considered for the federal government’s $30 billion future frigates program.

Canada is also weighing up a purchase of the ships.

Fran Murphy, BAE Systems Australia’s director for strategy and business development, told The Australian the group already had a network of 1700 Australian suppliers that share in about $500 million a year in work.

That figure could triple if SMEs were able to win a greater share of the work up for grabs in the years ahead.

Ms Murphy said the defence industry represented a real opportunity for Australia to show its credentials in innovation and advanced technologies.

“One of the things about Australia is we’re not cheap, we can’t compete if it’s just about mass ­labour, but we have some really niche technologies in this country, some extraordinary technologies,” she said.

“Part of our job is to connect people who are creating things for an entirely different market, or creating something that is similar to what the defence ecosystem will need, and we teach them how to apply to the tenders and do a lot of mentoring and coaching as much as anything.”

For example, custom car seats built in Australia for use in motor sports had proved ideal for use in military vehicles and the control rooms of navy vessels.

One manufacturer in South Australia is building part of the tailfin that will be used in thousands of F-35 joint strike fighters around the world, while another group on the Victoria-NSW border makes the canisters in the Nulka missile defence ­system installed on every US Navy vessel.

While BAE is keen to demonstrate its local credentials as it bids for work on Australian defence tenders, Ms Murphy said using local suppliers also offered strategic advantages.

In the past, Australia’s military had struggled to secure spare parts when relying entirely on international supply chains.

“For quite a few decades our defence force, taken as a whole, has been highly reliant on particularly America for its military sales,” she said.

Australian suppliers also had a security advantage over many nations competing for a share of the global defence industry.

“Because we’ve been so safe for so long, our supply chain complies with high security or classification issues really well,” Ms Murphy said.