DroneShield says Australian manufacturing has never been more cruical amid global conflict

Australia’s only maker of counter-drone equipment says domestic manufacturing has never been more important with global conflict entirely possible without much warning.

ASX-listed defence technology company DroneShield is doubling down on domestic manufacturing as it expands its counter-drone capabilities, citing national security and supply chain resilience as key reasons for keeping production local.

The group’s expansion comes as the Albanese government has pledged to boost sovereign capability and rebuild domestic manufacturing amid risks that global supply chains pose for critical defence and technology assets amid geopolitical uncertainty.

The Sydney-based company, which employs around 300 staff, including 200 engineers, has rapidly expanded its footprint, with deployments in Ukraine against Russian drones and operations across 70 countries including along the US-Mexico border.

“We see ourselves as a defence technology business, which is an intersection of about half a dozen different hi-tech hardware and software disciplines, all focused on ultimately saving lives,” DroneShield chief executive Oleg Vornik said.

“Our mission is the detection and stopping of nefarious drones, and we’ve built a significant capability to race alongside drone technology itself.”

DroneShield assembles its products in the centre of Sydney. Picture: DroneShield.

The ongoing conflict in Ukraine has become a proving ground for counter-drone solutions, with both Ukrainian and Russian forces rapidly developing offensive and defensive drone systems. Mr Vornik sees this as a key driver behind DroneShield’s technological advancements and strengthening global partnerships.

“We’re now living in a very different geopolitical environment where we don’t have the 30-year warning window we had after World War II,” he said.

“Global conflict is entirely possible, and we’re not going to get much of a warning. When that happens, global supply chains are disrupted, and you basically have to make do with what you have on the island that we have.”

Maintaining R&D and manufacturing operations in Australia, DroneShield insists, is a strategic necessity. The company relies on about 50 local suppliers, with 80 per cent of its capabilities sourced and made in the country. Components like microchips and batteries, however, are not yet produced domestically.

Most of its products are assembled in Sydney’s CBD, while it has smaller outposts in the Sydney suburbs and in Adelaide.

“In defence, outsourcing to China or similar places doesn’t work because of security of supply and backdoor vulnerabilities — on shoring is the theme now,” Mr Vornik said.

With rising international tensions, Mr Vornik said Australia must develop its own defence manufacturing base. “If a war breaks out, global supply chains are disrupted, and you have to make do with what you have — so local capability is critical,” he said.

The company’s hub occupies three floors in the centre of Sydney. Picture: DroneShield.

DroneShield sets itself apart with its deep focus on counter-drone technology, which has become more vital as drones grow accessible to state and non-state actors. “We have the largest engineering team in the world focused purely on counter-drone solutions — no one else has anywhere close to 200 engineers dedicated to this field,” Mr Vornik said.

“AI is at the core of our technology. The size and quality of your data sets are everything, and you can’t just buy them — they are proprietary to the business.”

DroneShield is a global leader in counter-drone solutions, supplying its technology worldwide including in Australia, the US military, and in Latin America where drug cartels are increasingly deploying drones.

DroneShield faces ongoing talent acquisition challenges, particularly in finding professionals with 10 to 15 years of experience. Mr Vornik said that while universities offer a solid pool of graduates, the company looks internationally for more experienced talent.

“We hire local every time we possible, but we also sponsor visas for a number of people. So, you know, you see probably a dozen of different nationalities on the floor. You see a dozen different nationalities on the floor, including Europeans, Americans, and Brits,” he said.

Despite the challenges, Mr Vornik said that DroneShield’s research-intensive operations make it less sensitive to the cost of manufacturing in Australia due to high margins in the defence sector, making it comparable to pharmaceutical development.

“Though our products are still expensive to manufacture with the amount of components, we’re less sensitive to cost of production, which makes Australia fine to manufacture in the defence space,” he said.

Products have been used in about 70 countries. Picture: DroneShield.

DroneShield is also gunning for a lucrative $300m-$350m contract to provide counter drone systems for the Australian Defence Force’s Land 156 project. Mr Vornik said being an Australian company gives the ADF more transparency and reduces the risk of software leaks.

“Foreign suppliers will always prioritise their home markets, so local capability is critical,” he said.

“Innovation in defence can move at a breakneck speed. We’ve seen in Ukraine that new types of drones are coming through every few months, so it’s critical that we stay ahead.”

DroneShield’s rapid expansion has also been reflected in its financial performance. The company, which is now part of the ASX 300 index, raised nearly $250m last year to bolster its R&D efforts. It is also the only publicly listed counter-drone company in the world.

“The ASX has been a good platform for us, and it has allowed us to fund our growth in a way that wouldn’t have been possible through traditional venture capital in Australia,” Mr Vornik said.

Originally published as DroneShield says Australian manufacturing has never been more cruical amid global conflict