Local manufacturing for the present and the future

Each submarine will contain more than a million components, which will be made over 50 years. Image credit: Naval Group

As preparations begin on the building of 12 Attack Class submarines in South Australia, the forecast for supply chain growth is looking promising. Caroline Tung finds out more from Naval Group Australia CEO, John Davis.

Marine equipment manufacturing is set to become a bigger player in the Australian economy, as part of the federal government’s $75 billion investment in maritime capabilities over the next decade.

Australia’s Marine Industry Capability Report, a 2017 KPMG report commissioned by the federal government, valued the industry’s contribution to the economy at $1.7 billion.

In 2016, the Australian Government selected Naval Group Australia as the preferred partner manufacturer for the 12 Attack Class Submarines for the Australian Navy.

Four years on, and in line with the Defence pillar of the federal government’s National Manufacturing Priorities, specialised equipment will be manufactured locally, including the steering gear system, weapons handling system and the main shaft line.

Naval Group Australia CEO John Davis said local industry will benefit significantly from the 50-year program.

“Building the 12 Attack Class submarines in Australia will deliver an estimated 1,700 direct jobs at Naval Group Australia, and support hundreds more through the new supply chain being built to develop sovereign capability and self-reliance,” he said.

“When we partner with a business in the enhanced Australian submarine supply chain, we also provide them all the technical assistance and guidance that they need to deliver what is required.

“The transfer of technology into Australian industry creates economic opportunities through the potential for improved productivity, capacity and innovation.”

The company has a dedicated team for delivering technical data, training an Australian workforce, providing technical assistance in Australia, and transferring intellectual property rights.

The Future Submarine Program aims to deliver a regionally superior submarine capability that provides the Commonwealth with enduring sovereign control over the operation and sustainment of the fleet.

Navel Group CEO, John Davis. Image credit: Naval Group

Davis said the pipeline of work generated by the project has the potential to underwrite the viability of related Australian manufacturing industries for decades.

“The Attack Class submarine program will also establish a sovereign manufacturing capability for complex submarine equipment and systems, some of which Australia has not previously had,” he said.

Each submarine will contain more than a million components to form the most advanced, conventionally-powered submarine.

“The scale of this project means that we need an incredibly large range of skills and manufactured parts,” Davis said.

Industry working together

Naval Group Australia has worked closely with a range of industry associations such as the Industry Capability Network, the Centre for Defence Industry Capability and Defence Teaming Centre to meet the needs of the program.

Lockheed Martin is the prime contractor for delivering the combat system for the future submarine, shipbuilding companies and educational institutions. The company is partnering with the Australian Department of Defence and Naval Group to design the system, maximising the involvement of Australian industry and local workforce.

“Currently, we have a very significant focus on skills and recruitment,” Davis said. “Naval Group Australia is seeking to double its direct workforce during 2021.

“We are looking for long-term relationships and partners who understand the defence industry environment. We need a long-term industry, and suppliers with diversity.”

Davis said the Attack Class program requires high standards in process and project control and supply chain management, as well as engineering capabilities and staff qualifications.

“Essential requirements for supply chain businesses wanting to partner on the Attack Class program include demonstrable capability and systems in the critical areas of quality, cyber and security,” he said.

The first local manufacturing package released by the Naval Group in October last year called for partners to design 23 specialised parts for the submarines, totalling $900 million.
Davis said more packages will follow with the aim of achieving at least 60 per cent of contract value to be spent in Australia.

Increasing the value of Australian made

Minister for Industry, Science and Technology, Karen Andrews, as part of the Ministerial Statement on Australian industry and manufacturing, reiterated the importance of building scale and capturing high-value areas through the Modern Manufacturing Strategy.

Recognising the need for increased sovereign capability during the COVID-19 pandemic, the federal government announced the $1.5bn strategy to create work for recovery, but also for future generations across Australia.

“It’s about harnessing strengths in key priority areas to help Australian manufacturers become more competitive, more resilient, and to scale-up,” Andrews told the in October last year.

“It’s about expanding value-added exports. And in the process, creating jobs and strengthening our supply chains in the interest of long-term national security.”

Underpinning the strategy is the belief that the strategy must be enterprise-driven, according to Andrews.

“Australian businesses have demonstrated more than ever during COVID-19 an incredible resolve and adaptiveness,” she said.

Ensuring that Australian businesses are given a leadership role, creating, and investing in policies to help them thrive, is at the centre of the strategy.

Local manufacturing at the forefront

In October last year, Minister for Defence Senator Linda Reynolds unveiled the plague to mark the opening of Naval Group Australia’s new base in Port Adelaide in front of 200 VIP guests and Naval Group Australia staff.

It is a significant milestone for both Australia and Naval Group Australia’s French parent company, where company chairman and CEO Pierre Eric Pommellet highlighted Australia’s commitment to delivering sovereignty along with their French colleagues.

The opening coincided with the first round of a number of local manufacturing packages, and the base will become home to the largest and most ambitious defence acquisition undertaken in Australia’s history.

“In September, we welcomed our 250th employee, and this new base is an important part of accommodating our growing workforce,” Davis said. “Port Adelaide has a strong heritage of waterfront industry and proximity to both Osborne and our Keswick office, and is an excellent location for our new base.”

The new offices will host up to 350 employees. By 2028, the company aims to increase the workforce to more than 1,700 direct jobs through its ongoing recruitment campaign.

Senator for South Australia, Simon Birmingham, said the event was not only about opening an office, but is a demonstration of sovereign capability for Australia by contracting work, which had not previously been done in Australia, to local businesses.

“What we’re celebrating is the fact that real jobs are begin created here. Australian industry is getting an even greater opportunity to buy into this project,” he said.

Hundreds of Australian companies have expressed interest in the project to develop capability to manufacture 23 pieces of equipment for the submarines.

Minister for Defence, Linda Reynolds, said she had every confidence Australian companies will be able to do the majority of the work required.

“We have 60 Australians currently in Cherbourg in France – they’ve been there for a couple of years, and their families – and they are learning the know-how and the know-why to bring that IP back to Australia so that we can design and build – not only assemble the submarine here but build as many of the components here as possible because we are incredibly capable in the job,” she said.

“This is all about our nation’s security, but it’s also about, multi-generations – fifty years – of work for Australians in this project.”

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