Securing Domestic Manufacturing Capability for Australian Defence Force Munitions
(Source: Australian Department of Defence; issued June 29, 2020)
Hundreds of Australian jobs will be secured for another decade after Defence signed a new agreement with Thales Australia for the continued management and operation of Australia’s munition factories in Benalla (Victoria) and Mulwala (New South Wales).

The $1.1 billion agreement provides surety of supply of key munitions and components for the Australian Defence Force (ADF), and demonstrates the Morrison Government’s ongoing commitment to maintaining a domestic munitions manufacturing capability.

Minister for Defence, Senator the Hon Linda Reynolds CSC said today’s announcement means the manufacturing sector can retain local skills and expertise.

“It’s vital that we continue to enhance the readiness of the ADF and ensure we have the necessary sovereign depth for sustaining key capability and materiel such as the surety of supply of munitions,” Minister Reynolds said.

“This agreement with Thales Australia will continue to maintain a safe and compliant operation, and increase our domestic capacity to manufacture key munitions in support of ADF operations.

“Mulwala and its sister facility in Benalla are the home of munitions manufacturing in Australia, generating vital job opportunities in regional New South Wales and Victoria.

“This new agreement not only reinforces the 20-year strong partnership between Defence and Thales Australia, but also provides job certainty for more than 650 highly-skilled workers at these factories. The Government’s effort to ensure job security, especially in regional areas, is vital for the recovery of the Australian economy.

Minister for Defence Industry, the Hon Melissa Price MP, said the Morrison Government had identified munitions and small arms as a critical capability for a sovereign defence industry.

“We’ve developed and implemented a plan to grow munitions and small arms capability in Australia, as one of our Sovereign Industrial Capability Priorities,” Minister Price said.

“It’s about identifying critical capabilities for the ADF, strengthening our defence industry, and creating new opportunities.

“Thales Australia has an excellent track record of working with local small businesses and I have no doubt they’ll continue to utilise the skills and ingenuity of small businesses right around Australia.”

The new agreement underpins the renewed strategy of multi-tenancy at the Benalla and Mulwala factories and ensures access and support to other companies, particularly small to medium enterprises for munitions manufacturing.

It will also support key Federal Government initiatives including export opportunities as part of the Defence Sovereign Industry Capability Priorities.


Strategic Defence Partnership to Secure Hundreds of Australian Jobs
(Source: Thales; issued June 29, 2020)
Thales and the Australian Government have signed a decade long contract worth more than AUD 1 billion * that guarantees the Australian manufacture and supply of strategic munitions to the Australian Defence Force.

This contract demonstrates that Australia’s sovereign defence industry is vital to delivering a capability advantage to the Australian Defence Force (ADF).

The continued long-term partnership between Thales and Defence reinforces the Government’s commitment to maintaining a world leading, competitive and safe domestic munitions manufacturing capability in Australia.

Thales continues to build long-term relationships with hundreds of Australian suppliers, building Australia’s self-reliance and the capability of the broader Australian manufacturing sector.

Thales’s recent supply chain study with AlphaBeta Advisers proved that there is a strong correlation between Sovereign Industry Capability and benefits flowing to Australian suppliers.

In 2019, Thales spent AUD 113 million with its Australian suppliers for munitions and small arms, supporting 414 direct jobs in the supply chain.

This contract will enable Thales to secure more than AUD 450 million in export and non-ADF orders over the coming 10 years, demonstrating Australia’s world leading munitions manufacturing capability.

The Group has invested more than AUD 20 million in research and development and AUD 25 million in capital infrastructure over the last 10 years at the Benalla and Mulwala facilities and will invest further to develop new and world leading products for the Australian Defence Force.

Thales employs approximately 650 highly skilled staff between its two Australian Government owned facilities in Benalla and Mulwala. It exports products to 17 countries globally.

“We have worked closely with Defence to manufacture munitions for more than 20 years, using our deep technical expertise to provide urgently required munitions to the Australian Defence Force whilst on operations,” said Chris Jenkins, Chief Executive, Thales Australia.

“Everything is about trust. Especially when it comes to Defence. This historic contract with the Australian government builds on our trusted partnership with Defence for the long term supply of essential equipment,” said Christophe Salomon, Executive Vice President, Thales Land and Air Systems.

* Of which around AUD 300 million will be booked in 2020.

Thales in Australia is a trusted long-term partner of the Australian Defence Force and is also present in commercial sectors ranging from air traffic management and ground transport systems to security systems and services. Employing around 3,900 people, Thales in Australia recorded revenues of more than A$1.39 billion in 2019 and export revenue of over A$1.6 billion in the past 10 years.

Thales is a global technology leader shaping the world of tomorrow today. The Group provides solutions, services and products to customers in the aeronautics, space, transport, digital identity and security, and defence markets. With 83,000 employees in 68 countries, Thales generated sales of €19 billion in 2019 (on a pro forma basis including Gemalto).


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