At the last Avalon Air Show, Chemring opened their new facility
at Lara. The company invested $35 million in the factory that is part of the
10-year $160 million contract from the Commonwealth to produce all
countermeasures for the ADF. Two years on, the facility has ramped up
significantly. With turnover jumping
from $4 million to $40 million in the past six years, time has flown.
“Over the last two years we’ve been gradually commissioning and
ramping up production of the facility,” Michael Flowers, Chemring Australia’s
outgoing managing director said. “We hit full rate production in the
manufacturing facility in the middle of 2012 and at the moment we’re currently
producing at full rate countermeasures for both the Classic and the Super
Hornets.
“They are a round form factor of US origin countermeasure and
we’ll be shortly transitioning production to the square form factor which is
the UK form factor countermeasure which are used on rotary wing and large
aircraft platforms such as the C-130.”
The facility is fully up and running, said incoming managing
director Mark Hender. Hender took over from Flowers last month after a
transition period.
After seven years in the role, Flowers has seen the company grow
from a handful of people to 85 workers with a state of the art facility just
outside of Geelong. It is also a unique capability throughout the world in that
it can produce both square and round form factor countermeasures using the
various different manufacturing techniques.
“That allows us to make all the standard Magnesium-Teflon-Viton
or MTV countermeasures for the Royal Australian Air Force,” Flowers said.
The flare production process involves both explosive and
volatile compounds so the facility has been designed to be almost completely
automated to minimise the risks to employees. It was designed in conjunction
with Sage Automation using staff from Adelaide and Melbourne.
“There are no people in that part of the facility and that’s
really driven by the overall design parameter of the facility which is the
safety of our employees is the driving factor behind the facility,” Flowers
said.
ADM understands that similar countermeasure facilities world-wide
are looking at the Lara facility as a best practice model.
Long term investment
The massive investment that the Lara facility represents for the
company could not be undertaken without the long-term contract for ADF
countermeasures.
“We see this as an extremely good way of defence and industry
doing business in Australia where defence is able to give long term certainty;
that has allowed us to make a significant investment of around $35 million. As
an ongoing means of establishing global commitment to Australian Defence
Industry, it is this type of long term contractual certainty that will help
forge the business case necessary for foreign companies to invest,” Flowers said.
This long-term relationship for the countermeasures contract has
been seen as a ‘dry run’ by DMO’s Explosive Ordnance division for the refresh
of the ammunitions contract for the Commonwealth under the Domestic Munitions Manufacturing Arrangements (DMMA).
The DMMA contract will be slightly different in terms of government owned
contractor operated facilities, but the long term certainty of supply and
demand for product is a crucial part of the long term relationship between
Defence and Defence Industry. Chemring has teamed with Raytheon Australia and
Poonsang of South Korea for the contract and have been shortlisted along with
four other teams.
“It’s absolutely critical to have a robust investment process
embedded into the whole activity so that either the Commonwealth or the
successful tenderer of the DMMA can invest in capability or improve both
capability for the ADF and improve the commercial operation of those
facilities,” Flowers said.
“One thing we find with the long term contract we have with Defence,
that on day one some four years ago we had a list of 10 years worth of product
and quantities that Defence planned to buy. Whilst that looks good on day one,
on day 1,000 things change and we are continuously going through a process with
Defence to change the product mix, to change the quantities so that we can
ensure that what we are manufacturing and supplying to Defence always meets a
current need rather than meeting a need that was identified a few years ago.
Flexibility for the Commonwealth is important to address change
as needed; to be able to as operational circumstances change, change their
product mix. It is important from an industry perspective that there is a long
term ongoing basis of business although the specific nature might change.”
Not just the RAAF
While the RAAF is the main countermeasures customer in the ADF,
the Army and Navy are also customers through the contract that the RAAF manages
on behalf of the entire ADF. There is not a huge amount of difference between
the products used between the three services.
“In support of Navy we supply through one of our sister
companies in the UK a significant proportion of naval countermeasures that are
used on the bulk of the vessels,” Flowers said. “We are engaged with the RAN at
the moment looking at new types of countermeasures that could be supplied to
them to give greater protection to their vessels.
“We are also in the process of developing a new launch system
for countermeasures known as Centurion and we would be keen to pursue with the
Royal Australian Navy the applicability of that system to their current
platforms, both for standard countermeasures and potentially even the for the
Nulka system. That program is being developed and funded in house by our UK parent.
“It is what we call a trainable launcher. Traditional
countermeasure launchers are fixed on the ship which means they can only fire
in a fixed direction. The launcher that is being developed can rotate and the
launchers can adjust in angle of elevation so that rather than perhaps
repositioning the direction of the ship or having a sub-optimal protection
solution you can simply rotate the launcher to give you the best protection.”
The RAN has yet to show an interest as the technology is still
in the early prototyping stage but the company has high hopes for the Future
Frigate program.
Similarly under Ningaui JP154, the company in conjunction with
sister company, NIITEK, in the US have supplied the ground penetrating radar
element of that system. The significant element of the procurement was done FMS
but Chemring has been providing the project office here and directly in
Afghanistan with significant support with regards to field service
representatives, training, and other support measures. The company also hopes
to target more EW and cyber programs in Australia in the near future, drawing
on its global capabilities, particularly from sister company Roke Manor of the
UK. Given the nature of such programs, both Hender and Flowers were reluctant
to be drawn on specific program details.
“In the CBRN defence space we are establishing a relationship
with Northrop Grumman, who globally provide many of the CBRN warning and
reporting and information systems that complement Chemring’s chemical and
biological detection systems,” Flowers said. “We’re particularly interested in
pursuing the ADF’s forthcoming JP2110.”
JSF
The biggest opportunity the company has the on cards is as a
second source supplier of countermeasures for the Joint Strike Fighter program.
The JSF countermeasures program is worth hundreds of millions of dollars over
the life of the program and is probably in the top three of opportunities for
Australian industry by dollar value, according to senior JSF sources.
“We’ve been working very closely with the New Air Combat
Capability (NACC) project office and Lockheed Martin for the past six years,
and we’re now working with PMA 272 – the technical and procurement organisation
for the US Navy – and they have responsibility for development and supply of
countermeasures for the JSF on behalf of the global community,” Flowers
explained to ADM
“We are the second source supplier to the current US supplier
(sister company Kilgore). We would anticipate a contract to qualify our
facility and product for the JSF later this year with an ongoing production
contract aligned to the needs of the user community. The current timeline we’re
working to would see qualification activities in 2014/2015 and dependent upon
the overall progression of the program and the numbers of aircraft flying,
production contracts in 2016 through the life of the platform.”
As a second source supplier, Chemring would be guaranteed to
have a minimum order of work for the international JSF fleet to maintain the
facility and its capability. The current planning for countermeasure types (the
JSF has three different types on board) is based on IOC dates for various
partner nations but this profile will change as the jets become used in
training exercises and are possibly deployed.
“Chemring as a company has shown a strong willingness to invest
their own capital, effectively at risk, to build the business here. They have a
strong core business in Australia and a large business overseas that they can
continue to build on,” Hender said as to why he joined the company. “They have
shown a willingness to bring that business into Australia and establish
capabilities here to support their business.”