Defence skills and innovation key for small firms

Australian companies are hopeful their problem-solving skills would win contracts to supply the AUKUS submarine construction program if the focus was on novel and high-end products.

Render of the SSN-AUKUS nuclear-powered submarine. Innovative Australian companies are confident of being able to provide many useful solutions to the submarine construction project. Photo: BAE Systems

Australia’s small-to-medium-sized businesses supplying defence projects can find their sweet spot by focusing on complex and high-end products, says Al Jawhari, co-founder and group chief executive of South Australian defence manufacturer Stärke Advanced Manufacturing Group.

The Adelaide-based business is an advanced manufacturing company offering end-to-end complex manufacturing services in Australia and USA; its customers include Babcock, Kongsberg, Thales, Boeing, Bosch and ASC; and it has contributed to projects as diverse as weapons systems, missiles, periscopes and unmanned aerial vehicles.

It also has customers in other industries, including medical, resources and energy, and transport.

In particular, Stärke worked with the federal government’s Defence Science and Technology Group to develop the rapid ­response clamp, which is used quickly contain leakage from a damaged pipe in ships.

The clamp is five times faster to close off leaks than previous applications, prompting the US Navy to purchase 30,000 of them. Other ­navies have also invested in the state-of-the-art clamp.

The group was formed by bringing together several companies with different capabilities so it could win defence contracts, and it supplies parts and components to prime contractors.

“What we wanted to do is not just do a ‘me too’ part because that’s not what primes look for. Because if you were just going to deliver something that is a plain product, there is no know-how in it,” Jawhari said.

“We elevated our precision high-value offering from our companies through quality systems, highly skilled, highly trained staff and precision machines.”

Jawhari said that successful ­defence industry and advanced manufacturers in Australia offer solutions that no one else can provide.

“We can’t compete in volume so we have to compete in something that no one else can do. What we can do really well is high value, high quality precision across any industry,” he said.

“This is where we found our sweet spot and we started to gain more traction and become more commercial as well delivering those contracts.”

Stärke, which has a staff of 120, designs in-house the parts and components which it manufactures, which Jawhari said allowed it to optimise its products.

Jawhari said Australian companies had a unique approach to problem-solving and would be able to win contracts to supply the AUKUS submarine construction program if the focus was on novel and high-end products.

Under the AUKUS agreement, Australia has partnered with the UK to design and construct a new class of submarines, called SSN-AUKUS, at a forecast cost of up to $368bn at a specially built submarine construction yard at Osborne in Adelaide.

South Australian defence businesses are watching the program for opportunities to get involved in what will be the single biggest ­investment in the history of Australia’s defence capability.

Crystal Kennedy, chief executive of QMS NDT & NACE, says the company is preparing to be ready to win contracts to work on AUKUS projects.

The company tests the hulls of ships and submarines for defects when they’re being built and when they come in for maintenance.

“We make sure that everything is in line with the Australian standards and if it’s not, we do the remediation,” says Kennedy.

QMS has held the Collins-class submarines contract for the past 13 years and worked on air warfare destroyers, offshore patrol vessels and a lot of the Royal Australian Navy’s surface fleet.

The company has to train its own technicians to do non-destructive work in submarines because it is so specialised. “If you can imagine the inside of a submarine, we have to crawl around bilges and tanks. We have pipeline running through holes and there’s a lot of geometry that goes into doing that sort of work that you don’t find in normal non-destructive testing,” she said.

It is establishing a training school for in the US in Newport News in Virginia so that QMS can meet American standards and take part in the global supply chain for the AUKUS submarines. It will also set up in the UK.

“We’re doing the homework. We’re putting in the hard yards and we’re trying to explain that the old ways that we’ve been doing things are not how it’s going to be run whenever AUKUS comes to town,” Kennedy said.

“And we need to start putting these education systems in place for industry here. Then we can go ahead and start seeing local industry going into the global supply chain.”

Kennedy said South Australia had massive defence capabilities and some very good companies with a lot to showcase, and should be ready to take advantage of AUKUS.

In the shorter term, there will be infrastructure requirements.

“But the real opportunities are going to probably be a little bit ­further down the track,” Kennedy said. “They’re going to be huge and they’re going to hit us really quickly. If we don’t take this time, do a little deconstruction and re-engineering of what we’ve got going on, then it’s going to hit us and we’re just going to fall down and not get up.”

Steve Barlow, managing director of Airspeed, said there had been several changes to Australia’s submarine building program over the past couple of decades and he was waiting to see what sort of manufacturing opportunities would arise for South Australian companies as a result of AUKUS. Airspeed manufactures parts for submarines, ships and planes made of composite materials, some of which can be used to make temporary modifications to the craft. For example, it makes a “pod” which can be attached to the wing of an RAAF aircraft to mimic an Exocet missile to simulate an attack to train warships. When the training is finished the pod can be removed.

It also makes radar covers for aircraft and stump masts which allow for the transfer of fuel, munitions and stores from one ship to another while at sea. In 2019 the firm won a contract to supply them to BAE Systems.

The company has a team of 15, design engineers and composite technicians, and has been growing organically.

“I’m incredibly proud of what you can achieve with a small number of people when you take the positive outlook that we do,” Barlow said.